herald

Monday 16 December 2019

'Green' rebrand plan to avoid carbon tax backlash

Pashcal Donohoe
Pashcal Donohoe

The carbon tax could be rebranded the green tax as the Government seeks to avoid a repeat of the water charges debacle.

Finance Minister Paschal Donohoe is veering away from a €10 hike in the tax in the Budget, despite repeatedly warning he must take action.

Instead, the rise is likely to be around €6 to €7 per tonne of carbon, which will see a litre of petrol and diesel rise by close to 2c.

A number of Fine Gael ministers are deeply worried the increase could spark a public backlash ahead of a general election.

Mr Donohoe was expect- ed to raise carbon tax in last year's Budget, but blinked at the last minute following intense lobbying from rural ministers and backbenchers.

Consensus

On Budget Day, he cited Brexit and the need to secure a political consensus as the reason for not hitting carbon.

Mr Donohoe has already stated that any monies collected through the carbon tax will not be treated in the same fashion as other Exchequer takings.

The Green Party has suggested every worker and social welfare recipient should get a "carbon tax dividend" by way of a cheque in the post.

Fianna Fail, which will have a strong say in the formation of the Budget, will fight against the long- predicted hike of €10 in favour of a lower hit combined with a longer-term trajectory.

Fianna Fail finance spokesperson Michael McGrath said the party wants the income to be looked on as an environmental fund to be used to help reduce Ireland's carbon footprint.

"Some people say you should send it back as a cheque in the post or an electronic transfer into the bank account of every household," he said.

"But from our perspective, we believe there should be, in essence, a carbon budget within the overall fiscal budget."

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