Cantillon: Ibec rushes to defence of USC

About the only thing the various political parties appear to agree on ahead of the yet-to-be-called general election is the need to address the issue of the Universal Social Charge.

Some want to abolish it altogether: others merely to take a proportion of workers out of the net. Either way, there is a general acceptance that the tax – introduced in 2010 as the Government battled to raise tax revenue and largely detested – is a political liability.

Standing in the way of such heady consensus has made for some strange bedfellows. A day after Central Bank governor Philip Lane suggested any incoming government might be better served using surplus revenues to cut debt rather than cut taxes, Ibec chief executive Danny McCoy above has warned that any cuts to the USC will leave Ireland "vulnerable and exposed".

When a group that spends most of its time citing “taxes on labour” as the single biggest hindrance to adding jobs starts arguing to retain such taxes, it is time to sit up and take notice.

The Government coalition will be particularly sensitive to the Ibec attack. Parties that are presenting themselves to the electorate as guardians of stability and responsible economic growth will not appreciate McCoy’s characterisation of the pre-election shuffling as a scramble to narrow the tax base in “a race to repeat past mistakes”.

Alongside his comments about the wisdom of tax cuts in a still fragile economy, he is dismissive of some of the the decidedly vague plans for investment.

The business leader notes that the higher education system is in the midst of a funding crisis, the physical infrastructure of the State remains far from complete, “and no one seems to have a comprehensive solution to the housing crisis”.

His verdict at a time when there is increasing concern about the health of the global economy: “We have not learned one of the really obvious and crucial lessons of Ireland’s economic crash.”

McCoywas speaking ahead of debate on the key business issues in the election, between senior representatives of the main political parties, at an event run in association with this newspaper.