Budget talks: Fianna Fáil seeks USC cuts

Fianna Fáil is seeking reductions in inheritance tax and USC cuts focused on lower- and middle-income workers in exchange for supporting the budget.

Measures to equalise tax rules for the self-employed, expected to be included in next month’s budget, could cost around €40m.

Social Protection Minister Leo Varadkar has said there will be no “giveaway budget” and called on all parties not to engage in “auction politics”.

Fine Gael ministers are expected to meet their Fianna Fáil counterparts this week, as the nuts and bolts of the budget are discussed between the parties, as agreed in the Government support deal.

Finance Minister Michael Noonan will meet Michael McGrath, with changes to the USC and a delayed sugar tax will be discussed.

The confidence and supply agreement between the parties states there should be “no surprises”. Department of Finance sources expect Fianna Fáil will have full knowledge of the budget.

The Independent Alliance is meeting today to discuss the budget before talks with Mr Noonan later in the week. The grouping has yet to agree on a number of budget positions, including the level of USC reduction.

Meanwhile, Public Expenditure and Reform Minister Paschal Donohoe met a number of his Cabinet colleagues last week, including those in Education, Health, Children, Transport, and Social Protection, in a bid to cut down their wishlists.

Ministers have put forward €3bn worth of requests, but the Government only has €1bn available to use on a combination of additional services and tax cuts.

Mr Donohoe will also meet with a number of unions and representative bodies this week.

Mr Varadkar yesterday refused to say if Fianna Fáil’s demand for a €5 rise in the weekly pension would be in the budget. There would be “significant measures” around childcare announced, he said.

He also told RTÉ the most important thing is that the budget is “prudent”.

“There is a risk in the coming years at some point that there will be a downturn again, there is also Brexit. We don’t want to be left in the same position that we were by the last government,” he said.

The budget priority is to improve services and taxation and restore some social welfare payments, he said, though it would definitely “not be a giveaway budget”.

Mr Varadkar said he doesn’t want to see parties engage in an auction around these issues.

“There are choices and that means anything you do, you can’t do something else,” he said.

Elsewhere yesterday, the Green Party launched pre-budget proposals that include a reduced rate of Vat on the repair of consumer and electronic goods to encourage a move away from a ‘throwaway’ economy. It also wants public banks set up, modelled on ones in Germany, to stimulate regional and rural economic development.