Finance Minister Paschal Donohoe has predicted the public will face €6 carbon tax hikes every year over the coming decade despite the looming “significant threat” to the economy posed by a no deal Brexit.
Mr Donohoe made the prediction during a post-budget briefing which saw him repeatedly warn of the damage a crash out Brexit will cause and confirm next year’s budget will mirror this year’s due to the looming political and economic crisis.
Speaking to reporters at Government Buildings on Tuesday night, Mr Donohoe said if he is Finance Minister next year he and his party “will be committed” to imposing a second €6 carbon tax hike.
And he added that the majority of other parties are likely to take the same step, predicting €6 carbon tax budget increases are expected to become the new normal every year.
“I believe that if I had the opportunity to do another budget or budgets I would definitely be making the move. Fine Gael will be committed to making the move in the next Dail if we have opportunity to serve in Government.
“And at this point in time my assessment is there’s a reasonably good chance of a €6 carbon tax being included in most budgets to come across the coming years,” Mr Donohoe said.
The Finance Minister made the prediction as he rejected opposition claims the Government’s carbon tax announcement is a “cash grab”.
He said next year’s money will go to people affected by climate issues (€34m), protecting affected jobs (€31m) and the remainder spent on “sustainable forms of transport”.
Mr Donohoe was speaking during a press briefing which saw the Finance Minister and his key economic advisors repeatedly warn of the “significant threat” facing the country if there is a crash out no deal Brexit.
Asked about the economic outlook facing the country after the Department of Finance’s chief economist John McCarthy warned the situation is “grim”, Mr Donohoe admitted:
“The early part of dealing with a no deal Brexit for our country will be very, very challenging.
“And while my expectation is we can get through it, and will get through it, I think it is also important to be honest that the economic challenges of that will be challenging, but is the very reason this budgetary outlook today.
“If we end up in a no deal setting next year’s budget will look a lot more like this year’s budget than previous budgets.”
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Mr Donohoe was also asked if he was concerned the decision to break his and Taoiseach Leo Varadkar’s previous promises of tax cuts for middle income earners in this year’s budget is likely to damage Fine Gael in the imminent general election.
In response, he said “it is my strong judgement that it would not have been right to do this [cut taxes] in this budget”, adding:
“I remember the budgets in 2007 and 2008, when decisions were made with the best intentions and a belief economy is growing, I know there is a significant threat to our economy potentially weeks away.
“I need to be focussed on protecting people’s jobs, so it is the right decision to make.”
Mr Donohoe said a number of times during the 50 minute press conference that he believes this is “the last budget of this Dáil” and that a general election is likely to take place in late spring or early summer next year.
“It’s the last budget of this Dáil, that it is the last budget of this Dáil is evident to me in some of the efforts to get to this point. But I believe that inside this Dáil it is a budget that is really, really appropriate for where we are now in our economic cycle.”
Source: Full Feed