Budget surplus ‘must be used to abolish the Universal Social Charge’

By David Young, PA

The budget surplus must be used to abolish the Universal Social Charge, the Rural Independents have urged.

The grouping of opposition TDs said the cost of scrapping the USC would total around €4.4 billion a year.

But they insisted the measure was always meant to be temporary and the multibillion-euro surplus generated from corporation tax receipts now provides the Government with the headroom to axe it.

The proposal was included in the Rural Independent Group’s alternative budget plan, which it outlined on Wednesday.

The USC was introduced in 2010 amid the fallout from the financial crisis.

Fine Gael has previously pledged to abolish the charge.

There have been suggestions ministers are considering changes to the tax in next week’s budget, but there is no sense that the Government is poised to cut it entirely.

Group member and Tipperary TD Mattie McGrath described the USC as a “punitive” tax, as he accused Fine Gael of “disregarding” previous election pledges to scrap it.

“It’s a punitive and cruel tax and it must be abolished,” he told reporters at Leinster House.

The group has also proposed a €30 increase in all core social welfare payments, including the pension.

It is also advocating the establishment of a national savings plan that would offer 6.6 per cent tax free interest on up to €50,000 saved over five years.

Kerry TD and group member Michael Healy Rae said: “The Government have clear choices to make in this budget because they have money to spend – they can help people or they can continue to hurt them in the ways that they have been doing already.

“We have to recognise that on a Friday evening mom’s purse is not well, and whatever about the Department of Finance, when mom’s purse is not in order on a Friday evening, the economy of Ireland is not in order. Everything stems from there.”