‘We believe the wider public would accept increased taxes’

Political editor Harry McGee analyses Sinn Féin’s proposals for extravagant spending.

LAST December, Sinn Féin presented its annual pre-budget submission at a press conference (it's the only party that bothers to undertake this exercise).

That morning, its TDs took a terrible pasting from RTÉ's Cathal MacCoille, who filleted the submission because the numbers did not simply stack up (he was probably the only reporter who bothered to parse the policy paper properly).

Maybe it's the memory of that that prompts Caoimhghín Ó Caoláin to suggest its economic policies may not be the finished item.

"We are realists. We do understand that there may well be aspects of Government that we have not been exposed to," he says.

Sinn Féin's policies contain an ambitious (and extravagant) spending programme. On the other hand, it is one of only three parties in the Dáil (the Greens and the Socialist Party are the others) which is prepared to openly call for increases in taxes. The spending will certainly cost billions. But the specifics of what taxes will pay for it have been worked out for now, the party says it will undertake a comprehensive review.

"We believe that the wider public would be prepared to accept increased taxes in a number of areas, in order to have improved and equitable access to services, in relation to healthcare delivery for example," says Ó Caoláin.

So what are the core increases Sinn Féin would consider in such a review process? "The first is that anybody on or below the minimum wage should be taken out of the tax net," he replies.

"We also believe that consideration could be given for the introduction of a third tax band for income in excess of E100,000.

"We also believe that the 12.5% (Corporation tax) could be revisited. Employers' PRSI is another area that can be revisited." (Sinn Féin has called for it to be increased to its previous 12% level).

The party's 2002 manifesto and 2003 pre-budget submission also called for capital gains tax (CGT) to be increased from 20-40%. Ó Caoláin qualifies this: "We were quite specific. We will not implement it across the board. We quite particularly target the area of speculators' involvement in house and property prices.

"For them, we have called for an increase from 20-40% and a suggestion of further increase to discourage people from making excessive profits in the property speculation area."

He does add that devising those changes "is something that we have to work out and properly cost."

There's no denying that the Government is spending more on health care than at any time in the past. But we have deficient services. Any solution must be based on the ending of the current two-tier system."

SF has called for universal health care that is free at the point of delivery. As a first step the party has called for health spending to be increased to 9% of GDP, which would cost E3 billion per annum.

To the charge it would cost billions each year, O Caolain responds: "It's part of a significant package of reforms. We do not agree with the scaremongering argument that it's banal and beyond the reach of the exchequer.

"We have to take on board that real reform is necessary. That entails an end to private health and the potential for people to give [to the State] what they contribute to private health care currently."

But will it mean greatly increased taxes? "People are involved in an open and transparent process to ensure the best services," he replies.

"I do believe that they would be prepared to pay for a proper service and the fundamental right to proper health care."

He readily concedes, however, a degree of fallibility, namely that some of their policies may not stack up.

"Neither I nor any of my colleagues have had ministerial or government experience," he says. "There is undoubtedly a learning curve involved. We are learning to lay out our stall in a comprehensive way.

"We are not as fine tuned in this areas as we would like to be. As spokesperson on finance I would be the first to acknowledge that."

But he counters by contending that the Government have also got it wrong in their costings. "Let's get real about this. When we asked Mr McCreevy last year to give account of the costs of various tax breaks on the property side, his Department had no idea as to the costs."