€2bn in cuts ‘the strategy of a repeat coalition’, say Social Democrats

Any likely new Fine Gael- Labour coalition would “not have a cent available” to invest in services, and would be forced to impose up to €2bn more frontline cuts if it was to push ahead with plans to remove the universal social charge if returned to government.

The Social Democrats made the claim at the launch of its election campaign yesterday, accusing the outgoing coalition of causing confusion over available monies.

Hitting out at the situation as his party outlined a series of policies aiming to reduce the cost of living without risking the recovery, Wicklow TD Stephen Donnelly said removing USC entirely would take €4bn-€5bn out of the tax net.

While Fine Gael and Labour have claimed the money available is €12bn, before clarifying it may be closer to €6.8bn, the rate has been strongly contradicted by the independent Irish Fiscal Advisory Council which claimed the true figure was €3.2bn.

As such, Mr Donnelly said any space available to further develop the economy would be wiped out if the hated tax was to end, as planned. “Dare I say it? The fiscal space. Let’s call it potential new money. If you subtract €4bn to €5bn from €3.2bn, not only do you not have a cent available, you will have to continue to disinvest in services.

“You cannot have US taxes and European services”, he warned, alleging health, transport, and childcare would all suffer as a result.

The comment came at the launch of the Social Democrats election campaign at the Chartered Accountants House in Dublin city centre.

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The campaign is based on 12 separate measures and the recently-formed party says it will cost €500m to €600m but will help to reduce the cost of living for people — an issue it says is three times more expensive than the EU average — without risking any adverse impact on the recovery.

The plans include extending, and providing paid parental leave, to a full year; halving prescription charges for the majority of people who hold a medical card, spending €103m on making schoolbooks and school transport more affordable, reducing public transport costs by restoring subsidies to providers, and ensuring rent is linked to the cost of living.

The party has also said it will scrap the €260 water charges completely, with Mr Donnelly saying the current system in effect just pays for the collection of the charges and is “tantamount to asking every household to go out into the front garden with €260 and set fire to it”.

Meanwhile, Catherine Murphy and Roisin Shortall have refused to rule out any party at this stage in the election campaign, saying they will consider if they can have any impact on government before deciding whether to join a post-vote coalition.

They were speaking after Taoiseach Enda Kenny told RTÉ Radio he will not seek the support of Independent TD Michael Lowry or any other Independents, before appearing to row back by saying he will publish any deal with Independents should they be needed to support a coalition.

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