‘Populist’ and ‘nuts’ – bitter Coalition row as Fianna Fáil hit out at Fine Gael’s €1,000 tax-cut ‘kite-flying’

Fine Gael is pushing for considerably larger tax cuts for workers on the average household income than in previous budgets amid projections of record surpluses over the next four years.

The call for tax relief of more than €1,000 for full-time workers on an average wage of €52,000 would cost the Exchequer around €1.5bn a year, according to Fine Gael.

Mr Varadkar also confirmed in the Dáil yesterday that there will definitely be an increase in the old age pension this autumn, but the exact amount is yet to be determined.

Fianna Fáil, meanwhile, was caught by surprise with the call for more tax relief – which Mr Varadkar is understood to endorse – made in an opinion piece written by three Fine Gael junior ministers and published by Independent.ie.

Finance Minister Michael McGrath described the move as an “unusual approach”, and, publicly and privately, Fianna Fáil figures are furious with their coalition partner’s tactics.

Minister of State Niall Collins said: “The only show in town in terms of an op-ed is the Programme for Government, which was authored by the three party leaders and their respective parliamentary parties.”

Fianna Fáil senator Lisa Chambers, who is the Government’s Seanad leader, was even more scathing last night. “I think there was a lot of eye-rolling yesterday when we saw three Fine Gael ministers looking for big tax cuts, when they never deliver in that space,” she said.

“It is remarkable to see Fine Gael looking to use corporate tax receipts to fund tax cuts when government ministers are well advised that they should not be used for permanent expenditure commitment.

“Obviously €1,000 in everyone’s pocket sounds lovely. But it’s populist and not costed. They should be asked, how do you justify using corporate tax receipts to fund a permanent change in Exchequer spending? It’s playing to the base, that’s all it is.

“It’s just surprising, they put themselves forward as the party of prudent finances and managing the economy – that doesn’t line up with this proposal.”

A Fianna Fáil source claimed the party hierarchy was “really angry” and in “total disbelief” over the call made nearly five months in advance of Budget 2024, describing it as “an opposition manoeuvre”.

One Fianna Fáil minister said: “We’re trying to build houses, can we not just look at the job in hand and look at the Budget in the autumn? It’s nuts to have a debate now.”

A second Fianna Fáil minister said: “We’re getting into silly-season stuff where people fly kites and get themselves airtime floating ideas.”

A third minister was withering about the three Fine Gael ministers: “I am glad they have time not to be on their briefs.”

One of the authors of the piece, Minister of State for Farm Safety Martin Heydon, defended the move, saying it was “about having an open debate” on the opportunities and challenges presented by a projected surplus of €10bn this year and €16bn next year.

“It’s something we feel very strongly about, it does need to be focused, on the squeezed middle,” the Kildare South TD said.

Mr Heydon wrote the piece with Junior Finance Minister Jennifer Carroll MacNeill and EU Affairs Minister Peter Burke. In it they argued that “tax relief in the next Budget has been well-earned”.

Mr Burke insisted that their intervention was “prudent and timely” and that Fine Gael “is of the strong belief that we should be rewarding work and rewarding enterprise as that is the engine that drives our economy”.