Cuts to USC set for budget

Fianna Fáil is now confident of securing further cuts to the universal social charge (USC) and an extension to the Mortgage Interest Relief scheme in next month’s budget.

Cuts to USC set for budget

It comes as budget tensions mount between Finance Minster Paschal Donohoe and the HSE over hospitals claiming that they cannot afford the latest public pay deal and have overspent.

Mr Donohoe told an Oireachtas committee yesterday that every other department had “absorbed” costs for the pay deal and that the health services had more money than ever.

Budget talks will continue between Mr Donohoe and government partners the Independent Alliance today, as the latter seeks a hike in the gambling tax and incentives to keep senior citizens working.

The Alliance wants the betting tax on company turnovers increased by at least one percentage point and for the money accrued to go on addiction services.

Government sources told the Irish Examiner the reduced welfare costs for senior citizens being forced to retire and the higher betting tax are part of the Alliance’s plan for revenue-raising measures to fund its own budget ideas, including a restoration of the €850 bereavement grants.

Fianna Fáil’s negotiators over the budget are confident their demands to cut USC and keep the Mortgage Interest Relief scheme will be met.

This follows meetings between its finance and public expenditure spokesmen, Michael McGrath and Dara Calleary, and Mr Donohoe yesterday.

Sources suggested the key demands contained in the confidence and supply agreement “will be honoured”.

As a result, Fine Gael’s desire to increase the entry point at which people begin to pay the higher rate of tax may be deferred until next year, but could be signalled by Mr Donohoe on budget day.

The major sticking point is said to be where Fine Gael will raise taxes in order to pay for additional spending commitments.

Meanwhile, tensions are mounting between Mr Donohoe and health officials.

Government sources have described relations between the Department of Health and the Department of Public Expenditure as “toxic” over the funding crisis.

Meetings between officials from both departments in recent weeks were said to be “very tense”, with a fundamental disagreement as to how to contain the overspend, running at €100m.

Health Minister Simon Harris, yesterday said no additional funding would be provided for any overspend by the HSE in delivering commitments set out in its National Service Plan.

Mr Donohoe told the budgetary oversight committee that every other department had “absorbed” wage changes.

More in this section

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.