Taoiseach Leo Varadkar has defended Fine Gael ministers who wrote an op-ed calling for tax cuts in the autumn budget.
Mr Varadkar, leader of Fine Gael, said the party was committed to reducing income tax as part of its efforts to take care of “central Ireland”.
“We were very clear that our basis for participating in this government is that Central Ireland is taken care of, and that is looking after working people, taking care of business, promoting things like home ownership,” he told the Irish Times.
“So we would be very clear in this government that we want income tax to be reduced. We believe that middle-income earners pay too much income tax.”
In an op-ed published this week, Secretary of State Martin Heydon and two other Fine Gael ministers – Jennifer Carroll MacNeill and Peter Burke – called for a full-time worker with a wage of €52,000 to get back €1,000 in tax relief in the next budget.
As the upcoming budget will come from Fianna Fail’s Chancellor of the Exchequer, Michael McGrath, the piece caused tension between the coalition parties.
Micheal Martin, leader of Tanaiste and Fianna Fail, said on Friday that all coalition parties had signed up to cut income tax as part of their government programme.
He added: “I think the government needs to act with cohesion and collective cabinet responsibility.”
Minister of State Martin Heydon (PA)
The Taoiseach confirmed he had prior knowledge of the article and its contents, but said the choice to support ministers in publishing the piece was not an attempt to associate Fine Gael with the tax cuts in the minds of potential voters.
“Well, see, you come up with some clever PR or political strategy for this. There isn’t,” he said.
“These are three ministers of state who chose to write an article, and they did, and they made me aware of it before it was published. That’s what happened. There is no cunning strategy behind this”.
However, speaking of the demands of the various parties to join the coalition, he said that Fianna Fail would not raise the retirement age, despite this being the “fiscally prudent” option.
“Fianna fails [was] very clear on the pension reform, that they didn’t want to raise the retirement age, despite the fact that IFAC (Irish Fiscal Advisory Council) and others said it was a fiscally sensible thing to do,” he said.
With the level of tax cuts proposed by the secretaries of state estimated at more than a billion euros, Mr Varadkar said the overall tax package may need to be increased in the forthcoming budget.
“I believe so. I think we should have a tax package in the next budget that is as good or bigger than the last one,” he said.
Mr Varadkar added that despite his outspoken approval of the ministers’ proposals, he would not commit to any specific policy.
“For the sake of clarity, the three ministers of state have made a concrete proposal. I’ve been very clear that I’m not tying myself to any specific policy, I’m tying myself to the government commitment program, which is that we index tax brackets and credits. If we can afford it, I expect that commitment to be honored,” he said.
