FG favours €3 in cuts for every €1 in extra taxes

FINE GAEL favours making €3 in spending cuts for every €1 raised in extra taxes.

Labour, meanwhile, has accepted that taxes are “going up”, but insists it can devise a package of cuts and tax hikes that is fair.

Further detail on the respective stance of each party came over the weekend as they prepare to enter talks with the Government on the possibility of a consensus on budgetary strategy.

Fine Gael finance spokesman Michael Noonan said the party was working on the basis of a 3:1 ratio between spending cuts and tax hikes. The party is also seeking deep “structural reform” of the public service rather than piecemeal efforts to slim it down, he told RTÉ Radio.

Fine Gael is “not taking anything off the table” in terms of cuts for now, he said. The party would arrive at a “definitive position” once it had obtained the necessary information from the Department of Finance.

Mr Noonan and Labour finance spokeswoman Joan Burton are meeting department officials today as that process continues. Once fully briefed, Fine Gael and Labour are expected to meet with the Government later in the week to explore the possibility of an agreed approach to the four-year plan to cut the deficit. But Fine Gael communications spokesman Leo Varadkar said a four-year growth plan would be needed in addition to the deficit plan.

“Cuts, tax increases and retrenchment alone will not resolve Ireland’s economic crisis,” he told an economics conference in Kenmare. “Indeed, they could push Ireland deeper into recession. That’s why we need a four year growth plan as well as a four-year budget deficit plan.”

Labour leader Eamon Gilmore, meanwhile, said everyone knew taxes were going up, but insisted this could be done in a “fair” way – such as a third rate of tax of 48% on single incomes over €100,000.

Speaking at a party conference in Mayo, Mr Gilmore said he would not promise to reverse every cutback if Labour were returned to power.

“I cannot promise every cutback will be reversed, because it won’t... What I can say is this: we will go to work every day to make jobs the number-one priority of Government.”

He dismissed the possibility of consensus emerging from the talks with the Government.

“(The Taoiseach’s) invitation to Labour restates his Government’s constitutional right, and duty, to bring forward the budget alone,” Mr Gilmore said. “This will not be a budget by consensus. It is clear this appearance of bringing the opposition leaders into the fold is more about providing political cover for Fianna Fáil as they go about clearing up the painful mess they made than the national interest.”

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