FG reignites row with Cowen over taxes

Fine Gael has reignited the row with Taoiseach Brian Cowen over his claim Enda Kenny was seeking to deceive the electorate on the issue of taxation rates.

In his keynote speech to the Fine Gael ardfheis in Citywest at the weekend, Mr Kenny said that, in government, the party would “return the public finances to stability by 2012 – without increasing the standard and current top rates of income tax”.

In response, Mr Cowen told Irish media at the EU-US summit in Prague yesterday that his opposition counterpart was “trying to cod people”.

“The deterioration in our public finance position means we have to take some strong actions and it has to be including the revenue side, and any suggestions to the contrary at home are simply trying to cod people,” Mr Cowen said.

Responding on RTÉ's The Week in Politicslast night, Mr Kenny referred to his party's proposal for a "temporary solidarity tax" of 2 per cent on incomes over €100,000 and 4 per cent over €250,000. When it was put to him that he had not referred to this in his ardfheis address, he replied: "I didn't have time to mention a lot of other things either."

Fine Gael’s finance spokesman Richard Bruton today claimed it was Mr Cowen who is "codding the public if he thinks the Government can tax its way back to recovery”.

He said the Government’s “misguided approach” of raising taxes would take the economy down a road to ruin. “It would stifle our recovery, damage job creation and impose further hardship,” he claimed.

Mr Bruton said Fine Gael’s priorities in government would be to cut public spending by 20 per cent, protect Ireland’s tax competitiveness and invest in recovery.

Mr Bruton criticised what he said were limited chances for public or Opposition input into the budget.

“At the moment we have Brian Lenihan or whoever the Minister for Finance is, almost cast as a magician who, hey presto, pulls the Budget out of the hat in the Dail,” said Mr Bruton. “There is absolutely no meaningful consultation whatsoever along the way, either with social partners or Opposition parties.”

Mr Bruton claimed the Budget is almost entirely devised in Government buildings by about half a dozen officials and economists. “With the current system, there are no targets set and no political accountability if those targets are not achieved.

“The traditional Budget methodology is not even fit to run a corner shop, nevermind a country,” Mr Bruton said.

Fine Gael’s spokesman on children Alan Shatter said the Government was directly responsible for the current situation.

“The inconvenient truth is that the State’s structural deficit is nothing other than the profligate public expenditure debt for which Brian Cowen as Minister for Finance and as Taoiseach is solely responsible and which has imposed an unprecedented financial burden on everyone who resides in the State including their children and grandchildren,” he said.