Labour’s taxation plan comes under attack from other parties

LABOUR’S tax agenda came under strong attack during a hard-hitting Dáil debate on the economic crisis.

The Government warned that Labour’s plans to split tax rises and spending cuts on a 50/50 basis in order to cut the deficit would damage the economy.

And Fine Gael — Labour’s expected partner in Government should the two do well in the election — warned a new tax rate for high earners announced by Eamon Gilmore could be counter productive.

The move highlighted a widening gulf between the three main parties over how big the budget “correction” should be and how to split the burden between taxes and cuts.

Labour insisted it had the fairest plans to deal with the emergency as Irish bond rates continued to soar, pushing up the cost of borrowing.

With the cabinet meeting again today to try and get a grip on the deteriorating economic situation, Justice Minister Dermot Ahern accused the opposition of words rather than action plans to rectify the gap between state income and spending.

“Talk won’t fill that gap, nor will vague political declarations about locating uncosted waste. Ireland needs concrete proposals,” he said.

In an often fractious and bad tempered debate, Fine Gael’s public expenditure spokesperson Brian Hayes branded the Dáil a “doss house”, insisting that Government and opposition TDs were crushed by their party machines.

Reacting earlier to a hard-hitting attack from Fine Gael’s Leo Varadkar, Finance Minister Brian Lenihan indicated prosecutions against bankers whose reckless lending plunged the country into financial crisis would occur.

Stung by accusations the Government had let bank bosses off the hook, he insisted files are being prepared by gardaí for submission to the DPP in order to bring charges against them.

The news came after Fine Gael energy spokesperson Leo Varadkar compared reckless bankers to “subversives” and insisted the Taoiseach must intervene so that the state moved against them, as they had done more damage to the economy than the IRA.

“The public are furious that none of these people have been brought to book and they are right and we cannot move on until they are prosecuted,” he said.

However, party colleague Michael Noonan said that while Mr Varadkar represented a widely held view it, would be wrong for the Taoiseach to intervene personally in the investigation. Mr Noonan said the Minister for Justice has ways of contacting gardaí and that he should get a report into the probes into the banking crisis and relay its findings to the Dáil.

While admitting that the Irish justice system was not as “sharp” as the American one, Mr Lenihan said both gardaí and the Office of Corporate Enforcement had been investigating alleged wrong-doing in financial institutions.