Finance Minister Michael McGrath said that he will not allow Fine Gael to “bully” him on what will be contained in October’s budget.
It comes amid reports that tensions are growing in the coalition over perceived “solo runs” from Fine Gael in recent days.
On Monday, Junior Ministers Jennifer Carroll MacNeill, Martin Heydon and Peter Burke all called for the budget to contain tax breaks of up to €1,000. On Tuesday, Taoiseach Leo Varadkar announced that there would be an increase in pension rates.
READ MORE: Taoiseach promises pension hike in budget and says elderly will be looked after
The moves have caused anger within Fianna Fáil, with some predicting major rows in the coalition over the comments.
Minister McGrath attempted to downplay the rows, stating that Fianna Fáil and Fine Gael are continuing to work well together.
However, he insisted that he would not be bullied by Fine Gael when it comes to the budget package.
“Certainly not [I won’t be bullied]. Anybody who knows me well enough will know that I can be as tough as anybody else when it comes to negotiations.
“I will always be conciliatory and polite, but I can be as firm as they need to be. I will be designing the tax package and it will be done following close consultation with all of our colleagues across Government.
“That work will be finalised in the coming months.”
Minister McGrath said that there is a commitment in the Programme for Government – agreed upon by Fianna Fáil, Fine Gael and the Greens when they entered Government in June 2020 – to index tax credits. This involves increasing the threshold for which people have to pay a higher rate of tax. The entry point to the 40% tax was increased to €40,000 in the last budget.
The Cork Minister committed that the budget would contain both a tax package and a social welfare package, but would not be drawn on what either would contain.
“When I look at the overall issue of taxation, I also have to consider what the other needs might be.
“For example, can we do more for renters? We have said that we will examine but we haven't made a commitment in relation to mortgage interest relief. I've signalled a commitment to introduce new measures to bring stability to the rental sector.
“Even within the whole taxation area, there are lots of different strands that have to be considered.
“What I can signal clearly is there will be a further reduction in the burden of income tax in the budget.
“But beyond that I'm not in a position to get into any specific detail.
“The measure that was set out in the article [the Fine Gael Ministers]`, depending on how you design it, how you blend changes and credits and bands, could cost anything up to €1.5bn.”
Minister McGrath said that there will be “lots of kites flown” over the next four-and-a-half months but that he and Public Expenditure Minister Paschal Donohoe will sign off the budget closer to October.
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