FG members say they must get credit for any USC cut in budget

Fine Gael TDs and senators fear such a cut would be a 'win' for Fianna Fáil if Finance Minister Michael McGrath introduces it

Fine Gael members of the Oireachtas say they must be associated with the removal of the unpopular Universal Social Charge (USC) if Finance Minister Michael McGrath includes that in Budget 2024. 

Fine Gael TDs and senators have said they must be associated with any significant reduction in the USC in the upcoming budget.

A special budget parliamentary party meeting heard fears expressed that Finance Minister Michael McGrath would make the cut and that would be a win for Fianna Fáil.

The meeting also heard calls for an increase of more than €12 for pensioners, a significant intervention to retain landlords in the market and for workers to keep more money in their pockets.

It is understood TD Damien English and Senator Garret Ahearn both said there is a need for Fine Gael to be associated with the abolition of USC over a number of budgets as it is believed Mr McGrath will move to cut the unpopular tax.

Senator Ahearn said the USC was introduced by Fianna Fáil and Fine Gael should have “ownership” of getting rid of it if that’s Mr McGrath’s plan.

He said it has been noted that when Mr McGrath was recently asked about it, he didn’t rule it out and he used a “delay tactic” and said he would have to wait until the Summer economic statement. There were also calls for an increase in the weekly pension payment in a bid to help people with grocery bills. Others were supportive of the abolition of the USC over a number of budgets.

Public Expenditure Minister Paschal Donohoe told the meeting that the budget will focus on tax, housing and family support and services such as childcare.

He said while the State surplus is big, the constraints that are there are the decisions that were made in the past.

Taoiseach Leo Varadkar said both a tax and spending package — while also setting money aside — can be achieved this year. He said it is important not to fuel inflation, a mistake previous administrations made by having too big a package.

Mayo TD Alan Dillon called for foster carers to receive an increase in their weekly payment. He said the standard weekly rate of €325 hasn’t been changed since 2019.

Senator John Cummins said the party needs to ensure there is a “significant intervention” to retain landlords in the market. He suggested extending the rent-a-room relief and said there needs to be a move on the taxation of rental income which has to be a “big bang” or else it won’t land. 

He also called for threshold changes to the fuel allowance scheme for single people. The Waterford senator also said there is a need to “widen the gap” between jobseekers and people in employment because workers are frustrated. This got broad support from the meeting, sources said.