Social Democrats claims abolishing USC not viable for Fine Gael-Labour coalition
The Fine Gael-Labour coalition will "not have a cent available" to invest in services and will be forced to impose up to €2bn more front-line cuts if it pushes ahead with plans to remove the universal social charge during the next government.
Opposition party the Social Democrats made the claim at the launch of its election campaign today, accusing the coalition of using confusion over the fiscal space available to the next government to lie to the public.
Hitting out at the situation as his party outlined a series of policies aiming to reduce the cost of living in Ireland without risking the recovery, Wicklow TD Stephen Donnelly said removing USC entirely would take €4-5bn out of the total tax net.
While Fine Gael and Labour have claimed the fiscal space 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 said on Sunday the true figure is just €3.2bn.
As such, Mr Donnelly said any space available to further grow the economy would be wiped out if the hated tax ends as planned.
"Dare I say it? The fiscal space. Let's call it potential new money. If you subtract €4-5bn 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 was made at the launch of the Social Democrats election campaign at the Chartered Accountants House in Dublin city centre.
The campaign is based on 12 separate measures the recently formed party says will cost €5-600m but will help to reduce the cost of living for people in Ireland - 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 parental leave to a full year, halving prescription charges for the majority of people who hold a medical card, spending €103m on making school books and school transport more affordable, reducing public transport costs by restoring subsidies to providers, and ensuring rent are linking 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 whether they can have any impact on Government before deciding whether to join a post-vote coalition.
Speaking after Taoiseach Enda Kenny told RTE 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 need to support a coalition.
