Universal Social Charge cannot be abolished, says Donohoe

Minister for Finance Paschal Donohoe has said that the Universal Social Charge (USC) cannot be abolished.

On Newstalk’s Breakfast show, Mr Donohoe denied that the charge had been introduced as a temporary measure.

“I never said it was temporary. It was the integration of two levies. The USC will remain an important part of our tax system,” he said.

The charge could not be removed because if that was done it would have to be explained where else to generate the money it collects every year, he added.

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The Minister also defended the measures introduced to address increases in the cost of living, particularly the universal energy rebate, saying it would bring support quickly to those who needed it most.

He said the Government had been determined to get the balance right: “These measures will help families. We are using this money to respond to the real challenges people are facing.”

Mr Donohoe acknowledged that there were some who had experienced wage growth, but the majority of the measures were geared towards those who needed the most help. “The style of the social welfare system is that it is geared to help those who need it most.”

The 20 per cent cut in fares on public transport was a significant measure, he said, and the rationale behind the measure was to make a difference, but for it to also be sustainable.

“This is a reduction of a fifth, it will be executed well and it will make a difference to those who use public transport.”

On RTÉ radio's Morning Ireland, the Minister for Public Expenditure Michael McGrath also defended the universal energy rebate. He said it would help those who fall outside social welfare thresholds.

The Government recognised that the measures would not meet everyone’s needs or would solve all the financial problems people were facing, he said.

Earlier on Morning Ireland, Dermot O’Leary of the National Rail and Bus Workers’ Union (NRBU) had expressed concern that the 20 per cent reduction in public transport fares would have an impact on wages of his members.

Mr McGrath said that the fare reduction was an important initiative and moved to reassure the NRBU that it would not be at the expense of workers but would come from additional funding.

Green Party leader Eamon Ryan defended the universal energy support package saying that its main benefit was that it would go directly to those who needed it and would be done quickly.

“We wanted to do something fast that people would see immediately. This goes straight to the consumer, that’s why we picked this route.”

The Government’s finances were secure at present, but that was not guaranteed in the future which was why the Government had to be careful about how it managed finances.

“It’s easy for the Opposition to say we’ll give you billions and billions, but where would it come from?”