The Fianna Fáil leader Micheál Martin has signalled difficulties ahead with Fine Gael over the Budget, saying his party will insist on cuts to the USC for lower earners, as stipulated in the confidence and supply agreement.

In recent days Fine Gael has signalled strongly that it will reduce taxes for middle income earners by raising the threshold at which people pay the higher rate of tax.

However, speaking at RTE’s Morning Ireland at his party’s pre-Dáil think-in in Longford, Mr Martin said he will insist the Government sticks to its commitments in the confidence and supply agreement to reduce the USC on lower earners.

He also appeared to reduce the scope for tax cuts, saying: “I don’t think you can do both”.

“Both parties are agreeable and have signed up to a reduction in USC - our view is that to reduce the 5 per cent to 4.4 per cent of USC would help a lot more people than Fine Gael had been suggesting should be done.

“In that regard the confidence and supply agreement is there, Fine Gael have signed up to it, we’ve signed up to it, there was limited implementation of it last year in terms of USC reductions, we believe we should continue with that this year.”

“We’re clear - what is in the confidence and supply agreement is what we will be adhering to.

“We don’t believe the resources are there go beyond that because housing has to be dealt with,” he said.

Mr Martin’s move signals a potentially serious refit between the two parties three weeks before the Budget on October 10th.

Fine Gael needs Fianna Fáil’s support to pass the Budget through the Dáil.

Mr Martin also wants the Government to prioritise housing and health, telling RTÉ the public is angry about the problems in public services and that this situation cannot go on.

On the issue of housing he said there was no need for “any more plans or glossy brochures”. “They need to get on and get it done.”

Mr Martin said he wanted to see more Local Authority house building and for waiting lists to be reduced. He also wants to see an increase in the mental health budget.

He dismissed a recent opinion poll which indicated an eight point lead by Fine Gael. “We don’t take individual opinion polls very seriously.”

He said the party was happy with their progress since the local election since 2011 and the general election in 2014 when they doubled their number of seats.

“We aim to be the leading political party in the next general election.”

The issue of affordable housing is the most important one facing the Government, he added. Local authorities should be building affordable housing and providing loans to allow people to buy their own home.

Mr Martin said Fianna Fáil will support the Alcohol Bill when the Dáil resumes. “We need to ensure it passes. Public health and minimum pricing were key issues, he added.

“It is time to get on with it and get it passed.”