Coalition at odds as budget looms

Coalition in-fighting ahead of the looming budget ripped into the open as Labour’s chairman accused Fine Gael of “naïvety” in trying to “shelter” high earners from tax hikes.

Colm Keaveney’s charge gave voice to demands from his party’s backbenchers for a bigger squeeze on those earning €100,000 and over.

The outspoken chairman also insisted a full review of all financial benefits enjoyed by tax exiles needed to be included in the budget as a matter of urgency.

He branded Fine Gael’s “right-wing” attitude against tax hikes for high earners as “naïve” ahead of what Taoiseach Enda Kenny has claimed will be the worst budget of this parliament, comprising €3.6bn worth of cuts and tax hikes.

“The argument from Fine Gael’s right-wing that any tax increases on incomes over €100,000 will put off businesses from opening seems somewhat naive concerning the incomes that business start ups are capable of generating,” he said.

“Those intent on opening such businesses will not be discouraged by a higher tax on income that they, like most in our economy are unlikely to achieve, particularly in the short-term.

“It is simply unjust that the only effect that last year’s budget had on a person on a TD’s income was €105. This while we ask those on middle and lower incomes to bear the brunt of the crisis through cuts to services from which those on higher incomes are sheltered by their wealth.

“Middle Ireland cannot be expected to carry the entire burden of addressing our current difficulties.

“They must see that those higher income groups, who have been so far sheltered for the most part from any consequences of our fiscal adjustments, are also taking up their fair share of the burden,” he said.

Huge financial resources were being allowed to escape from the country via the treatment of tax exiles, he claimed.

The remarks came as junior Labour minister Joe Costello called for Richie Boucher, Bank of Ireland CEO, to be hailed before the Dáil’s finance committee again following a widely criticised appearance last week.

“He stonewalled a lot of questions in the committee and I don’t think that it’s good enough for anybody, who is working in a bank where €5bn of taxpayers’ money had been injected towards recapitalisation, should not be prepared to answer questions as the elected parliament has put them to him.

“I think that it is absolutely unacceptable that he should behave in the way that he did behave.

“I think that the parliament has been insulted by his behaviour,” Mr Costello told RTÉ’s The Week In Politics.