Government accused of biggest policy u-turn in decades over USC

Sinn Féin says plans to scrap the USC were "never based on reality and designed simply to win votes"

Government accused of biggest policy u-turn in decades over USC

File photo, Sinn Féin finance spokesperson Pearse Doherty outside Leinster House, 12-04-2017. Image: Sam Boal/RollingNews

Fine Gael has been accused of performing one of the biggest policy u-turns in decades over its plans for the Universal Social Charge.

The Minister for Finance Paschal Donohoe yesterday effectively confirmed that the government will abandon its plan to scrap the charge - introduced following the financial crash.

Minister Donohoe said the charge will no longer be scrapped - but instead will be merged with PRSI.

The commitment to scrap the USC was included in the Fine Gael election manifesto - while the Programme for Government includes a pledge to phase it out over time.

Clear u-turn

Speaking today, Sinn Féin's finance spokesperson Pearse Doherty said the government has performed a clear u-turn on the issue since last year's election.

"Look at the images on RTÉ, you know, Leo Varadkar walking down the streets with the placards 'we will abolish the USC, keep the recovery going,'" he said.

"Paschal Donohoe had those same placards as did many of the ministers today.

"So it is an embarrassment, it is the biggest U-turn in my lifetime anyway in terms of the financial cost of it."

Sinn Féin support

Sinn Féin is supportive of the decision to retain the tax base provided by the USC - and Deputy Doherty was keen to point out that Sinn Féin has consistently said the country could not afford to scrap the charge entirely.

"It is €4bn per year; €20bn over the lifetime of a government so it is a major, dramatic reversal of a policy and it is something that, as I said, we welcome," he said.

"So it vindicates our position and I am sure that the minister didn't like the fact that we were proven correct on this issue."

Policy review

In the Dáil yesterday, Minster Donohoe claimed the new policy did not contradict previous promises and insisted the government is entitled to review policies from time to time - especially now that there is a new Taoiseach and Finance Minister in place.

He said his focus is on reducing income tax for low and middle income earners adding that "in this regard, the end result is more important than the means of achieving this outcome."

Deputy Doherty said the pledge to scrap the USC was "never based in reality and was designed simply to win votes."

He called on the government to focus on fixing the crises in housing and health services and accused policymakers of remaining "determined to cut taxes for some of the wealthiest in this state."

“It is clear that this is a government for high earners with little or no commitment to seriously tackling the issues that are causing hardship for the majority of people,” he said.