Tánaiste and Minister for Foreign Affairs Simon Coveney admitted last night [May 17th] that tax increases are a possibility should negotiations between Fine Gael, Fianna Fáil and the Green Party lead to the formation of a government, although he reiterated his party’s desire that increases to income tax and Universal Social Charge (USC) should not be part of government policy.

Speaking on RTÉ’s The Week in Politics, Coveney said that “Fianna Fáil and Fine Gael have agreed that in a new government we are committing not to increase income tax or USC. That is because we don’t want to tax employment as we are trying to help an economy to recover.”

“We have given a commitment in relation to income tax and USC, nothing else. A new government needs to negotiate the approach in all other areas, and of course that is what a budget will be about later on in the year”, he continued.

Referring to Richard Boyd-Barrett, who was also a guest on the programme, Coveney stated that his “economics of just spending, spending, spending, spending is not the way to do this. We are not going to have another period of austerity here, but what we are going to do is focus on being credible in terms of helping businesses”. He later said that he foresees the potential next government “borrowing for capital expenditure to get this economy back up on its feet”.

When asked about the planned public service pay increase in October Coveney was coy, responding that “Paschal Donohoe to my understanding has committed to doing that, but we are not the only party that will be part of the next government.”

Fianna Fáil TD Darragh O’Brien suggested we will be looking at a “different type of recovery”, with his party’s policy being a “countercyclical approach” to “invest in infrastructure” and to “invest in jobs over the next few years”.

Regarding Fianna Fáil’s commitment to keeping income tax and USC at their current level, he said “That is absolutely our intention, that there will be no new taxes, and that we will look at spending as well. But we’re in the middle of trying to negotiate a programme for government, and the main thing with that programme for government has got to be that it is deliverable.”

Richard Boyd-Barrett of Solidarity-PBP, suggested that we all “certainly need to be” socialists during the economic downturn. He suggested that “some of those who are making super profits in the midst of the pandemic should pay some type of solidarity tax, COVID-19 solidarity tax” in order to “see some of that wealth redistributed through the tax system to invest in our health service, to support people who have lost their jobs and incomes, and to have the stimulus package that Tom McDonnell [Co-Director of the Nevin Economic Research Institute] rightly says we need.”