Taoiseach Leo Varadkar has insisted tomorrow’s budget is “not an election budget” despite a flurry of leaks confirming it will focus on key voter groups Fine Gael needs to stay in power.
Mr Varadkar denied charge at Fine Gael’s presidential dinner at the Burlington Hotel in Dublin on Saturday just 24 hours after the Government revealed an extra €1.1bn in corporation tax has been unexpectantly found.
Speaking to reporters before giving a key note speech to an audience of party members, Mr Varadkar said four times in 11 minutes that the budget will “put money back in people’s pockets”.
However, despite also referencing income tax threshold rises, USC cuts, across the board welfare rises and other key voter moves, he denied the budget is designed to safeguard Fine Gael for a potential snap election the moment Brexit is resolved.
No, I wouldn’t see this budget as an election budget, I would see it as one that is very much in line with our budgetary and economic strategy for the last number of years.
“It’s actually much more in line with previous budgets, which are about reducing the deficit and investing more in public infrastructure and giving people more money to put back in their pockets. If it was an election budget we’d probably be running a massive deficit or something, which we wouldn’t do.”
During the same press conference, Mr Varadkar also sidestepped a question on how many more budgets will take place under the confidence and supply deal — which is due to run out once all parts of the budget are passed.
Asked specifically about how many more budgets can be passed, he said: “Let’s hope we get one more done on Tuesday.”
Claims that tomorrow’s budget will effectively become a giveaway general election-focussed financial package have grown in recent days after it emerged the State’s corporation tax income will be €1.1bn higher than expected this year.
All this against a backdrop of a creaking confidence and supply deal between Fine Gael and Fianna Fáil which is set to run out once all aspects of the budget are passed — unless an extension can be struck.
While both Mr Varadkar and Fianna Fáil leader Micheal Martin have been keen to publicly stress they do not want to force an election before Brexit, a number of TDs in both parties - the latest of which was Fianna Fáil TD Fiona O’Loughlin late last week — have said no new deal should be agreed.
As such, it is widely expected tomorrow’s budget will be the final financial plan before the next general election, stoking up preparation between both parties.
While Mr Varadkar, Finance Minister Paschal Donohoe and Education Minister Richard Bruton have said in recent days the budget will be prudent and not a “giveaway” deal, it has also been noted tomorrow’s budget will specifically benefit a series of key voter groups that are vital to any Fine Gael re-election bid.
They include, but are not limited to, changes such as:
- The universal social charge to be cut from 4.75% to 4.5%
- The entry point for the highest rate of income tax, a situation that directly affects the so-called squeezed middle, to be increased
- The 100% return of the Christmas bonus for social welfare recipients
- An increase in the self-employed tax credit
- A 2% DIRT tax cut
- Mortgage relief measures
- A €5 across the board increase for pension and social welfare payments
- The planned appointment of up to 800 new gardai next year
While the confidence and supply deal stipulates that there should be a 2:1 ratio between tax intake and spending levels in order to limit any attempts to effectively by people’s votes, it has also been noted tomorrow’s budget is likely to be closer to a 1:1 ratio. After the €1.1bn extra corporation tax figure emerged, Labour leader Brendan Howlin said the windfall “should not be a licence for €10-a-week income tax cuts that will only benefit the top 20%,” adding: “It should all be invested in house-building. It would build 5,000 homes.”
Similar calls have also been made by Sinn Féin, the Social Democrats, and left-wing parties due to concerns any extra money will be misused to ensure the current Government remains in power.