Simon Harris, the anticipated new taoiseach, is expected to face internal pressures from his party to hasten the movements towards business aids before the summer. This is as part of an effort by Fine Gael to bolster support from small businesses and their proprietors.
There is a private belief within the party that Mr Harris may need to diverge from usual practices and propose tax alterations ahead of the budget, which could include specific VAT cuts and employer’s PRSI reductions for certain strained sectors.
As well as emphasising the implementation of a €250 million rate reimbursement by the Coalition, Fine Gael ministers and backbenchers are pushing Mr Harris for actions beyond those previously planned. They are the subjects of employer disapproval over escalating business costs attributed to recent government interventions in sick pay, minimum wage, and the upcoming initiation of pensions auto-enrolment.
Ministers anticipate a necessity to change operation costs which have been elevated by Government actions. Tax changes could be enacted prematurely in the budget cycle by proposing a finance Bill sooner than typically seen post-budget.
One Minister privately shared the belief that there is an opportunity for change in the middle of the year, saying, “we could bring a finance Bill into the summer.” Another concurred that there were political justifications to do so, but it would depend on the proposition.
Plans of this nature would likely encounter opposition from finance department officials who are traditionally against variations from established budget processes.
Dublin Mid-West TD Emer Higgins, a potential junior minister, expressed that introducing changes pre-budget would be “ideal,” and that this commitment should be provided in advance. Senator Tim Lombard of Cork southwest emphasised the need for a long-term policy to scrutinise PRSI’s impact on small businesses, and proposed segmenting the VAT rate for accommodation and food and beverage, with a reduced rate assigned to the latter.
Senator Lombard has suggested that if the proposed changes cannot be enacted in the upcoming months, they should be prioritised in the budget. Meanwhile, Mr Harris indicated on Monday his willingness to reconsider the forthcoming hate speech legislation, which has been a subject of discontent among backbenchers. He acknowledged that there are “genuine inquiries” concerning its substance, which he anticipates will see “modifications”. A call for reevaluation of the legislation was endorsed on Monday by Charlie Flanagan, the previous justice minister, advising it “needs to be returned to the brainstorming stage”.
Implementing measures that are more amenable to SMEs and reducing taxes has been an enduring ambition of the Fine Gael parliamentary party. However, the unexpected rise of Mr Harris has instigated optimism among backbenchers that a fresh drive may yield results. His meeting with Minister for Public Expenditure Paschal Donohoe in the next two weeks to discuss macroeconomic issues and political and policy strategies is highly anticipated.
As Mr Harris finalises his support team, expectations rise for former adviser Joanne Lonergan to make a comeback, along with an economic policy advisor. This practice was followed by Enda Kenny but discontinued by Leo Varadkar. There’s also talks of creating a part-time role, potentially from the academic realm, with economic professors Stephen Kinsella and John McHale amongst the potential candidates being considered.