FG deficit reduction plan means higher taxes

TAX hikes will take up a much bigger slice of Fine Gael’s deficit reduction plan than expected, it emerged yesterday.

The party’s finance spokesman Michael Noonan said levies would take about a third of the €9bn fiscal correction package, rather than the previously stated one quarter share.

The move brings Fine Gael much closer to Labour’s position on tackling the economic crisis, but Mr Noonan said the change was due to drastically reduced growth levels estimated by the Central Bank since the budget.

Mr Noonan said taxes would now make up about €3bn worth of the financial shake-up over the next four years, with cuts accounting for about €6bn.

The switch in position came as the party insisted it could slash 30,000 jobs from the public sector without hitting services or introducing compulsory redundancies.

Leader Enda Kenny made the pledge as he launched Fine Gael’s election bid based on the party’s five point plan for recovery.

Mr Kenny promised to create 20,000 jobs per year, introduce a high quality, universal health service based on the Dutch model, and reform politics by cutting TD numbers by 20 and abolishing the Seanad.

He dismissed Fianna Fáil jibes that an FG/Labour administration would be a “tug of war government”. Mr Kenny said people had complained at the last election that the two parties had put forward a joint set of policies because it robbed them of choice.

Mr Kenny said voters could now decide which party had the best ideas to lead the country out of the slump.

The FG leader said his was the only party promising not to raise income tax, and as well as controlling the deficit by 2014 a government led by him would balance the budget by 2016.

The FG plan, called Let’s Get Ireland Working, outlines a €7bn investment package to create 100,000 jobs in five years.

Mr Kenny said political reform was also “essential” for the country’s recovery.

“Government must become smaller and government must perform better. Government has to deliver better value in order to reduce the deficit, avoid job-destroying tax increases and protect frontline services,” he said.

He said 145 state bodies and companies would be abolished under FG and the HSE would be dismantled.

The Fine Gael leader also vowed to reduce hospital waiting lists by setting up a special delivery unit reporting directly to the Minister for Health.

Later, in a rousing start to his national tour to meet voters, Mr Kenny told supporters in Cavan that he would try and restore their faith in politics by making job creation his priority and stemming the flow of mass unemployment.