Budget 2024: TDs at Fianna Fáil think-in believe USC cuts are on the cards

At the Fianna Fáil think-in at Horse and Jockey in Co Tipperary, TDs discussed the forthcoming budget, and there was a strong sense among deputies that cuts to the Universal Social Charge (USC) are on the cards.

Many Fianna Fáilers expect that they might be more likely to get credit from voters for USC cuts, while Fine Gael has repeatedly proposed adjustment to the entry point to the top rate of tax.

Taoiseach Leo Varadkar told reporters in Belfast the Government had made “a lot of progress on tax reform and reducing income tax and USC in past number of years,” saying someone earning €40,000 today pays €3,000 less income tax and USC than in 2014.

“The basic principle that we’ve agreed in the programme for Government – all three parties have agreed to it – is that we will index tax bands and tax credits [and] bring about tax reforms that make sure that people getting a pay increase this year – and most people will get a pay increase this year – don’t lose half or even more than half of that in income, USC and PRSI. Exactly how we do that, there are many ways to skin a cat.”

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But concerns on the spending side remain, with both the Fianna Fáil Minister for Finance Michael McGrath and the Fine Gael Minister for Public Expenditure Paschal Donohoe telling colleague ministers that their spending demands are unsustainable.

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At the Fianna Fáil event, Minister for Health Stephen Donnelly acknowledged that there would be a large overspend of his department’s budget this year. He said that it was running at about €600 million at the half-year point, but he said that measures had been taken to bring that number down. Government sources fear that the end-of-year figure could reach €1 billion.