FINE GAEL has claimed that Fianna Fail has been converted to its tax policies after Mr Bertie Ahern said yesterday that raising the personal allowance from £2,900 to £4,500 was "desirable when, and if it can be afforded".
In a statement on taxation yesterday, Mr Ahern said that his party's economic policy document, to be published tomorrow, would state: "One obvious reform is to eliminate over a five year period the gap between tax exemptions and tax allowances." This reform would involve increasing the personal tax allowance from £2,900 to £4,500.
While describing such a move as "desirable", Mr Ahern said: "I am not prepared to add to our carefully costed manifesto commitments in the heat of election battle."
The proposal would involve adding more than £700 million to the £1.5 billion tax package on offer from Fianna Fail.
Such a reform was not included in the Fianna Fail manifesto, published last Friday. It is, however, a central part of the taxation policies put forward by the Government parties in recent days.
A Fine Gael spokesman said last night that this statement showed Mr Ahern had "bought into" Fine Gael's and the Government parties' tax proposals. "A few days ago he was decrying our position on bands and allowances. Now he is in favour of increasing personal allowances over five years. His problem is that he is locked into a set of other proposals in his manifesto, so he can't afford to do what he admits is desirable."
Earlier, there was confusion over what Mr Ahern had said, following reports that he had actually committed his party to such an increase in the personal allowances. The Tanaiste, Mr Spring, accused him of "panicking" over taxation, while the Minister for Justice, Mrs Owen, said that he had performed "an outrageous U turn".
However, a Fianna Fail spokesman pointed out that Mr Ahern had not made a commitment on the issue.
A Labour Party spokesman said that the Fianna Fail leader was trying to have it both ways - saying that he favoured the proposal to increase tax allowances but not committing himself to doing it.
As taxation remains centre stage in the election campaign, Fianna Fail and the Progressive Democrats have claimed that there are major gaps between the taxation policies of the Government parties.
The PD leader, Ms Mary Harney, called on all parties to submit their taxation proposals to the Department of Finance for independent assessment. "It's time to end the phoney war on taxation. Let's ask the experts whose tax package is best", she said.
Mr Ahern accused the Government parties of producing four different tax policies: "A Government one, which tells us little, and which commits the Government to practically nothing, and one each from Fine Gael, Labour and Democratic Left."
He maintained that Labour and Democratic Left had a "veto" on Fine Gael's plan to lower the higher rate of tax, which would "still be reached at a very early stage compared to other countries".
The PDs' finance spokesman, Mr Michael McDowell, also suggested that Labour and Democratic Left had a "veto" on Fine Gael's plans.