FF announces pre-budget submission

Fianna Fáil wants to introduce a new ''fat tax' in the budget - along with an increase in the taxes on alcohol, cigarettes, and gambling.

The party is proposing a 5% levy on alcohol sold in off-licences; a 10c per pack increase on cigarettes excise duty and a levy on foodstuffs with high sugar content.

It has also suggested a 'modest rebalancing' of the motor tax bands and an average increase of 5% in the duty.

The party has launched its pre-budget submission today and is backing the Government's plan to take €3.8bn out of the economy in the budget.

"We concur with the overall adjustment figure of €3.8bn in 2012, though the composition of the adjustment must be achieved in a way that maximises job retention / creation," the party said.

"In this regard, we propose a smaller cut in the capital budget with a corresponding larger decrease in current expenditure."

It wants greater reductions in public sector pensions, but is opposing the planned 2% VAT hike and any cuts in child benefit.

"Fianna Fáil proposals for Budget 2012 do not include the 2% VAT increase planned by the Government," said FF finance spokesperson Michael McGrath.

"We believe retail sales and consumer confidence are too fragile and the Government risks a severe contraction in demand."

The party also proposed that reduction in pension entitlements for retired senior civil servants, public servants and politicians be increased to impact on pensions greater than €75,000.

Other measures proposed by the party include:

- 224,000 to be exempt from the universal social charge (USC) by the raising of the earnings threshold to €8,000, while increasing by 2% the rate for those earning €115,000 or more;

- €250m more for capital expenditure in 2012 for labour intensive projects;

- The scrapping of the private pension levy in favour of a €5.6bn investment stimulus;

- Accelerated implementation of savings under the Croke Park Agreement;

- The establishment of an Economic Advisory Council;

- A doubling of the budget for County and City Enterprise Boards;

- The completion of a review of bankers’ pay in guaranteed banks;

- The provision of 20,000 extra local employment scheme places.

But Deputy McGrath admitted that it will take time before people again start to take his party's economic policy seriously.

"Over time, if we keep coming forward with good, sensible ideas that are grounded in reality, people will begin to listen to us again," he said.

"People will take a second look at Fianna Fáil."