Tax cuts are number one priority in Budget, say FG branches

INCOME tax cuts of around €200 a year for middle income earners will form the cornerstone of Leo Varadkar’s first Budget as Taoiseach.

An overwhelming majority of Fine Gael politicians and constituency branches have told Mr Varadkar that the widening of the income tax band should be the number one priority.

In relation to spending, Mr Varadkar has been called on to increase the old age pension by €5, restore the telephone allowance and to raise the weekly social welfare payment for the disabled and carers.

The demands have been sent to Fine Gael headquarters by every constituency branch at Mr Varadkar’s request.

Fine Gael officials began collating the Budget items last night.

They will present a report to Mr Varadkar and Finance Minister Paschal Donohoe.

Highly placed Government sources say the Taoiseach is determined that the Budget closely reflects the proposals submitted by his parliamentary party and constituency branches.

A large number of constituencies placed the widening of the income tax band as their number one priority.

These include Sligo/Leitrim, Dublin North West, Dublin Rathdown, Louth, Limerick City and Galway East.

Laois, Offaly, Cavan/ Monaghan, Dublin Bay South and Mr Varadkar’s own constituency of Dublin West also selected this option.

The move would see the point at which workers enter the high rate of tax increased by €1,000 to €34,800.

It would save the average middle income earner around €200 a year.

In terms of the Exchequer, widening the tax band by €1,000 would cost €178m.

According to the survey results, a much smaller number of constituencies called for the Budget to include a reduction in the USC.

The constituencies that said they favour this approach include Kildare North and Longford/Westmeath.

But last night, Fianna Fáil warned that easing the USC burden forms a key part of the Confidence and Supply Agreement and that it must be honoured.

The party’s finance spokesperson Michael McGrath said Fine Gael will have to spell out where it intends to find the money if it chooses to widen the tax bands.

“The agreement provides for a reduction in the USC and we have been clear to the Government that this needs to be honoured,” the Cork South Central TD told the Irish Independent.

“If they want to go beyond that on the income tax side and do something else, well, they will have to spell out where that money will come from,” he added.

The survey results also included various different infrastructure projects that members want the Government to prioritise, including the Metro North, the Limerick-Cork road and the East Link between Sligo and Dundalk.

There was also a strong consensus that the Budget must provide more money for public and affordable housing.