Financial Resolution No. 6: General (Resumed).

Debate resumed on the following motion:

THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.

–(Minister for the Marine and Natural

Resources, Deputy Fahey).

Mr. Naughten

I thank my colleague, Deputy Hogan, for sharing time. The budget speech by the Minister for Finance, Deputy McCreevy, highlighted six U-turns he has taken on last year's budget. There has been a complete turn around in policy. He gave numerous commitments not to borrow for the budget, yet he borrowed, begged and stole from every source he could in order to make up the accounts for this year's budget. In last year's budget he reduced VAT by 1%. This year he increased it by 2%. Last year he gave a commitment not to increase the price of low sulphur diesel. He increased it by 5p a litre this year. Last year he introduced several measures to deal with inflation. This year he introduced inflationary measures which will cause huge problems in the first half of next year. The employers PRSI reduction is a turn around on the policy he implemented last year. Interest relief on rented residential property and stamp duty rates for investors is a turn around in policy and is, I am sure, extremely embarrassing for the Minister for the Environment and Local Government who made numerous solo runs on the issue.

I will focus on each of these six U-turns by the Minister yesterday. The first relates to his no borrowing commitment. Everybody on both sides of the House would agree that the 1977 budget was disastrous for the economy and the country as a whole. It took us 15 years to rectify the mess which followed. The Minister, Deputy McCreevy, has now introduced another 1977-style budget to buy votes for the general election. The sole purpose of yesterday's budget was to buy as many votes as possible in order that the Government can go back into power after the next general election, and to hell with the economy.

The Minister proudly announced that his budget shows an Exchequer surplus of 170 million. This surplus is a three-card trick. He robbed 635 million from the social insurance kitty and cashed in on the once-off benefits from the Central Bank to get another 610 million, money which belongs to the general public. The Minister is using this money, which people have not put into circulation and which may be lying around the place in certain quarters, for his budget. This money belongs to the ordinary Joe Soap in the street. If it is ever returned to the Central Bank, the bank will cough up but, at the end of the day, the Exchequer will have to repay those moneys again to the Central Bank to redeem outstanding payments.

The capital services redemption fund has generously given up another 500 million. When we exclude the Minister's accounting tricks, his Exchequer surplus of 170 million becomes a deficit of 1.6 billion this year. When the advanced payment of corporation tax is included, this brings the deficit to 2.4 billion, rising to 3 billion next year.

Where will the money come from for next year? Typical of his past actions, we see from the introduction of reduced betting tax that the Minister is again gambling with the economy. This time it has serious repercussions for the future growth and development of the economy. The 3% reduction in betting tax will not assist the Minister to save us from the downturn he is now forcing on the economy or from the increase in next year's budget deficit. The Minister is like a Santa Claus who gives every child a gift at Christmas but looks for it back in the new year. While some sectors will benefit this year they will have to pay for it with interest in the not too distant future.

What is the real net value of the increase in VAT of 2%, and the increase in the price of petrol and diesel of 5p and 6.8p per litre, respectively? In euro, this translates into a 26.5 cent increase in a gallon of petrol and a 36.5 cent increase in a gallon of low-sulphur diesel. The money the Minister is giving out, both in social welfare payments and tax reductions, will be clawed back through the 2% increase in VAT and through the increase in excise duties on petrol and cigarettes.

The VAT rate is actually being increased by 2%, not 1% as the Minister stated here yesterday. This will claw back much of the benefit of the budget. That 2% is made up of the 1% announced yesterday and 1% which, as the Minister claimed in the House yesterday, was not passed on to the consumer last year. Even though VAT was reduced by 1% last year, the fact that it was not passed on to the consumer means that the additional 1% VAT added on this year will actually mean that the VAT rate will now be 22% because that is what the consumer will have to pay. While the Department might be clawing back only 21%, in reality that is what it means to the consumer. This is a major U-turn on the harmonisation of VAT rates throughout the European Union.

The Minister stated in his speech yesterday that he was cutting betting tax from 5% to 2% to prevent jobs and revenue in this sector moving off-shore. The problem is they have already gone. William Hill already announced the loss of 200 jobs in Athlone and many of the other big players in this sector have moved their jobs and operations off-shore. Therefore, there will be no net benefit to the economy in saving jobs and protecting that sector.

The Minister ignored e-commerce, a sector which has been badly hit in the past 12 months. This completely contradicts the policy outlined by the Minister for Public Enterprise and the initiative announced yesterday to make Ireland an e-commerce hub. The average VAT rate throughout the European Union is 19.5%. The Minister pointed out in his Budget Statement last year that there were two reasons for reducing the rate of VAT, the first of which was to alleviate pressure on the consumer price index. The second reason was to encourage the development of e-commerce. Ireland has prided itself on the fact that it has been a low tax economy and has attracted foreign investment and promoted the development of indigenous industry on this basis. In spite of this, the rate is still above the EU average. That is why Fine Gael believes that e-commerce should be encouraged, developed and promoted in Ireland which should become the European e-commerce hub. We should aim to reduce VAT below the EU average initially and, ultimately, reduce it over time to 15%.

That should have been done in the budget to achieve Ireland's aim of becoming the European centre for e-commerce. Instead, the Minister has upped the VAT rate and contradicted his statement in this House 12 months ago that he was reducing the VAT rate to encourage e-commerce. Software and digital services are easily traded over the Internet. Unless Ireland has a low VAT rate, VAT payments will not be made to the Exchequer because it is difficult to trace such transactions. If we had a low VAT rate, we could ensure that such payments were made.

Another issue is the difference in the VAT rate applied to digital products within the EU and outside it. An Irish company must pay VAT at the Irish rate if it exports digital products for sale in the US, yet VAT is not applied to US products sold over the Internet to Irish and EU customers. Straight away, Irish companies which are selling over the Internet are at a competitive disadvantage to their US counterparts and the same applies throughout the EU. Ireland has one of the highest rates of VAT within the European Union and is, therefore, even at a disadvantage within the European Union. If the Minister wanted to save jobs and promote employment, he should have changed the VAT rate rather than the betting tax rate. The only one who will benefit from the reduction in betting tax is the Minister, Deputy McCreevy, when he goes to the Curragh or Fairyhouse. There is no benefit in it for the economy or for employment.

Last year I asked the Minister to give a commitment that the 1% VAT reduction would be passed on to the consumer and I was given assurances that the Competition Authority would rigorously enforce it. The Minister admitted that the Competition Authority was not competent to ensure the reduction took place because he admitted openly to the House yesterday that the reduction was not passed on to the consumer. This raises serious questions regarding enforcement by the Competition Authority. The Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, came into the House today and spoke on the budget. She never once addressed the issue of resourcing the Competition Authority. I can guarantee that within six months we will once again have a rapidly increasing inflation rate.

Unless we are prepared to adequately resource the Competition Authority, we will have serious difficulties early in the new year. The authority can, under its powers, regulate the VAT increase and ensure that it is passed on to the consumer. This did not happen last year. Despite assurances from the Tánaiste, who told the House she was giving additional resources to the authority, the Minister admitted that it failed dismally to address the issue.

Diesel price increases represent another Government U-turn. In last year's budget debate the Minister said:

I am anxious to encourage the use of low-sulphur diesel for environmental reasons. While the current excise reduction of six pence will apply to all diesel at present, I propose that this lower rate will apply to low-sulphur diesel only.

The Minister has increased the price of low-sulphur diesel by 5p. I know the Road Haulage Association is looking forward to meeting Fianna Fáil Party Deputies to grill them because the association realises the Minister for Finance has done a U-turn and left it high and dry by overturning his decision of last year. Transportation costs in Ireland are the highest in the EU partly because of our pathetic infrastructure. The Government has had five years to invest in it, but not one kilometre of additional motorway has been built.

Insurance premia are to increase dramatically across the board, but in the haulage industry renewals will increase by between 30% and 100%. In 2001 the cost of insuring a vehicle for continental transportation was between £5,000 and £7,000. This is due to increase in 2002 to between £10,000 and £12,000. This is an increase of almost 100% in 12 months and it will have to be passed on to manufacturers and consumers. It puts pressure on the competitiveness of Irish manufacturers in the EU.

The Minister's budget provided for a 5p increase in diesel, which translates into a £60 increase in the cost of a full tank. The changeover to low-sulphur diesel from 1 March 2002 will mean an increase of a further £22, but hauliers will have no option but to change due to financial implications. Between now and March the price of diesel will increase by £83 per fill. For an average haulier with ten trucks, this means a weekly increase of £683. The additional cost of refining low-sulphur diesel over ordinary diesel is 1.5p per litre. Including VAT, it is 1.8p per litre, or 36.5 cent per gallon, and not 26.5 cent as we were led to believe yesterday. This was hidden in the detail of the budget. While petrol will increase by 26.5 cent, by 1 March, diesel will cost an extra 36.5 cent. The increased cost of fuel and a 30% increase in the cost of car insurance will have a dramatic impact on every household budget, but no alternatives are in place. Many of us will grow old as we wait for the Luas to hit Dublin streets. This is an anti-rural policy because people who live in rural areas have no option but to use their cars.

The decision to increase the cost of petrol, diesel and cigarettes will put pressure on inflation as will the euro changeover on 1 January 2002. Russia this week announced its intention to restrict the production of oil, which will increase the cost of oil and cause inflation to rise. In February the new tax on plastic bags will be introduced while in March a 1% increase in VAT, a 1.8p increase in the cost of diesel and a £15 per tonne landfill tax will be introduced, which works out at £22.50 per average household. This is in addition to the dramatic increases in the cost of car, household and employer insurance. The best case scenario is an inflation rate of 4.5% next year, which is double the rate of our major competitor, the UK. When one looks at all the implications, it is clear we will be in serious difficulty next year, as we were last year, in relation to inflation. However, the Government has ignored the problem and buried its head in the sand.

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

I am delighted to commend the budget to the House, the fifth budget introduced by this Government. It is many years since a Government introduced five consecutive budgets. There have been dramatic changes in society over the past five years and there have been huge improvements in the level of social services over that period.

When we came into office in June 1997, there were 254,000 people on the live register. Despite the current problems faced by the world economy, that figure has been reduced by more than 100,000. Some 100,000 people who would have been on welfare are now in good jobs. The lower rate of child benefit was £30 per month. Next year, as a result of this budget, it will be £92.50, or 117.60, an increase of over 200% with a further increase to come in the next budget. The old age contributory pension was only £78 per week and we promised to increase it to £100. As a result of this budget it will stand at £116 per week, or 147.30. This is an increase of almost 50%, well ahead of inflation and increases in average earnings. Consistent poverty will have fallen by half by the time the Government leaves office. These are some examples of the dramatic improvements the Government has made.

This year's budget was framed in very different economic conditions compared to more recent budgets. The world economic downturn has led to a significant slowdown in the Irish economy and to job losses. The budgetary position is much tighter than it has been since the Government took office. Some commentators argued that social spending would have to be cut and that only minimal increases should be given in the budget. The Fine Gael Party, despite all its extravagant expenditure plans, attacked the Government for overspending, but the Opposition parties have a poor record in this area. The rainbow Government of the mid-1990s was harsh on the poor and harshest on the social welfare system. Thanks to social partnership, put in place by Fianna Fáil led Governments since 1987, that Government had a considerable amount of money to spend on health and social welfare. Over the period 1991 to 1995, the economy grew at a rate of almost 5% per annum, which is over three times the EU average. In 1995, the growth rate was over 7%. The rainbow Government had, for the first time in several years, the funds to provide real reform and improvements to help the least well off but the wealth was not spread to the poor and the needy. The opportunity to reform the social welfare system, with Deputy de Rossa as Minister and Deputy Quinn as Minister for Finance, was simply not availed of. Unemployment and poverty remained high despite the booming economy.

We had the so-called socialists in the Labour Party and Democratic Left – do we remember the Democratic Left? Going through some old papers recently I came across an interesting newspaper and I quote from a letter which appeared. It is headed "Here to Stay" and it is signed by the press officer of the Democratic Left in that particular year. It refers to an article by Drapier that apparently appeared earlier. It reads:

Drapier would no doubt like to see Irish politics revert to the two and a half party system which made such a mess of this country for so long but I can assure him that Democratic Left has no intention of folding up its tent and heading off into the political sunset. We are here to stay as an independent, democratic, socialist party and Drapier had better get used to it.

Within months the party was gone but here comes one of them now and this press officer is now part of the two and a half, or should I say the one and two halves, party system.

Mr. Rabbitte

The Minister should not take too seriously what I said last night.

Mr. D. Ahern

I am taking very seriously what the Deputy said and I will repeat it to him. His press officer promised a number of years ago the party was here to stay and would not fold up its tent, yet it did. Now the tent is long folded and the party has succumbed to the two and a half party system.

Mr. Rabbitte

My tent is in fine shape.

Mr. D. Ahern

That is one thing that came back to haunt the person who wrote the letter and the Deputy's comments last night may also come back to haunt him.

The so-called socialists in the Labour Party and Democratic Left had the best chance ever in the history of our country to redistribute the wealth but what did they do. They gave a miserable £1.50 increase to old age pensioners representing no real increase in the value of the pension.

I absolutely reject the arguments that social spending should be held back. This Government is committed to supporting those who are the most disadvantaged in our society. That is why, despite the economic and budgetary downturn, we have provided a record amount of investment in social welfare in each of the last two budgets – £850 million of extra expenditure per year, well over 1 billion and almost four times the level of the largest social welfare budget package brought in by the previous Government.

In the last 24 hours I have listened to some of the radio comments and what one person said stood out for me. He said, "One of the good things about this budget is the significant increases in social payments". That was said by none other than Deputy Noonan. He then went on to say "the individual detail in this budget is not the issue".

Mr. Rabbitte

The Minister has very selective hearing.

Mr. D. Ahern

There is the difference between us and Fine Gael. As far as we are concerned we look after the individual. Many individuals have been ringing up and complimenting the Minister on the budget and in particular the social welfare changes. This again confirms that our position is looking after individuals rather than looking after the general position. Deputy Noonan welcomed the increases in his radio interview and he suggested that it was his party who encouraged us to bring forward the child benefit increases. His record does not bear this out. In the last budget of the Government of which he was a member only £1 was added to child benefit. That was in 1997. Last year we gave 25 times that amount and another 25 times this year. I know the truth is bitter but the reality is that for all the Deputy's palaver he is clinging on to the commentators. He hopes that at the weekend the commentators will berate the Government. The reality is that when the Opposition was in office it gave a family with three children an extra £7 in child benefit per month. For the last two years we have given £80 per month to that same family.

The social insurance fund was established 48 years ago, in 1953. For all but the last five of these years contribution income to the fund was insufficient to meet demands on the fund. During the first 43 years of the fund's existence, the shortfall in income has been met from Exchequer funds. In other words, it was met by transfers from funds raised from general taxation, that is, the taxpayer.

Since 1997, inflows to the social insurance fund have exceeded outflows. This remarkable turn-around of a decades old pattern of Exchequer subvention is a result of this Government's prudent management of the economy, with the result that the social insurance fund now enjoys an accumulated surplus of over £1 billion or 1.4 billion even after paying out this sum. In these circumstances, it is entirely appropriate that a part of this surplus should be returned to the source from which earlier shortfalls were met – the value in real terms of transfers in the opposite direction since 1953.

This year's social welfare budget package is equal to last year's record amount – £850 million. In a year when the public finances are so tight, it would not have been possible to achieve this level of social spending without recourse to borrowing if the transfer from the fund had not taken place. Are Deputies suggesting that instead of doing this we should have given lower increases in pensions? Are Fine Gael and Labour saying we should go back to the days when old age pensions were only increased by £1.50 per week and child benefit was increased by only £1 per month? Or are they suggesting that we should have left the money sitting in the social insurance fund and resorted to borrowing?

Labour has reached new heights of hypocrisy on this issue. Last Sunday, the Prada-Meinhoff party planned a raid of no less than £815 million on the pension reserve fund. Not only that but Labour's financial terrorists threatened to raid the entire £5.5 billion in the fund which has been put aside for old age pensioners. Yesterday – three days later – Deputy McDowell opportun istically objected to the transfer of a much lesser amount from the social insurance fund to the Exchequer despite the fact that Deputy McDowell admitted that the social insurance fund also goes to pay future pensions. In that respect he was inconsistent in his submission.

The facts are that, notwithstanding this transfer, the social insurance fund will remain in a very healthy financial position. Deputy McDowell in his press release of Sunday said:

In view of the projected deficit figures facing the Minister this year Labour believes it is not sensible for the Minister for Finance, Deputy McCreevy, to meet his commitment to set aside 1% of GNP to meet pension requirements. We call on this contribution to be set aside to pay for the capital programme.

Shame on Deputy McDowell and on the Labour Party for raiding money that is set aside for old age pensioners.

This morning Deputy Quinn referred to some of the newspapers and to a certain extent I would view that as a sign of somebody with a paucity of views on the budget. Again that just confirms what happened last night. It is often said in this House that when the Dáil finishes early on budget night, as it did last night, it is a good budget. Deputy Quinn mentioned, as he called him, the left wing economist, Moore McDowell and he quoted from him. I can quote from another economist, Colm Rapple. By no stretch of the imagination could he be regarded as a right wing economist. I compliment him for his intuitiveness. Last Sunday in Ireland on Sunday he wrote an article wherein he exhorted the Government to do exactly as it did. He said that logically the surplus should be used to improve existing benefits, introduce new ones and perhaps even subsidise improvements in non-contributory social welfare benefits.

He also said this would enable the Minister for Finance to provide better social welfare improvements because now was the time for the PRSI surplus to pay back on its earlier subsidies. I compliment Mr. Rapple, with whom I do not often agree, on his comments about the social insurance fund.

Even after the changes in this year's budget are taken into account, the projected accumulated surplus in the fund at the end of 2002 will be more than £1.2 billion. The House will agree that the Government's prudent and successful management of the economy over the past four years has provided the foundation upon which the healthy state of the social insurance fund rests.

Mr. Kenny

Nonsense.

Mr. D. Ahern

Mr. Kenny

The Minister is doing the hoodwinking.

Mr. D. Ahern

Fianna Fáil in Government massively increased spending on social welfare from £4.5 billion in 1997 to £7.4 billion next year, by almost two thirds in five years. Spending has increased in real terms taking into account inflation.

Mr. Kenny

Nonsense. Fine Gael did as much.

Mr. D. Ahern

Pension rates for old people have increased dramatically over the same period. When we took office in 1997—

Mr. Kenny

The Minister cannot get away with saying that.

Acting Chairman

Deputy Kenny must curb his enthusiasm and allow the Minister to continue without interruption.

Mr. D. Ahern

When we took office in 1997, the old age contributory pension was £78 and we promised to raise it to £100 by 2002. We have delivered on that target in advance and delivered a further £10 increase to bring the pension to £116. We promised that all social welfare pensions for older people will be raised to £100 per week by 2002 which we have also delivered on in this budget. Now all older people receive a pension of at least £105. Under previous Govern ments, pension rates were allowed to fall back compared to average earnings and we ended that.

Mr. Rabbitte

What about the poor monitoring unit?

Mr. D. Ahern

Mr. D. Ahern

The Chair must be fair. That Deputy is there for one purpose. He will have a chance to speak and I will not interrupt him. I will not even be here to listen to him.

The qualified adult allowance for a person over 66 was increased from 72% of the old age pension to 77% and now represents 85% of the old age non-contributory pension. As I promised in last year's budget, this will be increased in coming years to the full non-contributory pension rate to benefit women in the home who do not qualify for a contributory pension. These increases are in addition to a series of other measures introduced in recent years designed to enable more people to qualify for pensions, which include the introduction of a special half-rate pension for self-employed and pre-1953 contributors who narrowly failed to qualify for a pension. Non-contributory pensioners have also benefited from the new arrangements to assess capital under the means test for non-contributory pensioners.

In last year's budget I gave a commitment to increase the widow's and widower's pension for those over 66 to the full rate of contributory pension and we have moved further on that with a special increase of £12 for them. The needs of younger widows and widowers have not been forgotten either. People with children can experience particular financial difficulties at the time of the loss of their spouse. In recognition of this, in December 1999 we introduced a special widowed parents grant to help bereaved parents with financial costs at this very difficult time. In this year's budget we are increasing this grant to 2,000 – almost doubling the payment from its current level of £1,000. This increase came into effect from budget day.

Over the period from 1997, general social welfare increases have increased well ahead of inflation and indeed ahead of increases in gross average industrial earnings. In this budget, despite the difficult times caused by the world economic downturn and the resulting pressure on resources, we are giving very significant increases to those who are least well off. Indeed the increases being provided this year are greater than last year's record amounts.

We are providing a general increase of £8 per week in respect of social welfare customers under pension/retirement age. In percentage terms, the £8 increase is between 7.4% to 9.4%, depending on the payment concerned; this is between 3.1% and 5% ahead of inflation. This is unlike when Fine Gael and Labour were in office. They gave no real increase in those payments. In addition we are providing a special increase of £9.50 for those on the lowest rates of social welfare – supplementary welfare allowance and short-term unemployment assistance. This brings the lowest social welfare rate up to £93.60 – 118.80 .

(Interruptions.)

Acting Chairman

The Minister without interruption, Deputy Carey.

Mr. D. Ahern

This increase of £9.50 is in line with the majority recommendation of the Social Welfare Benchmarking and Indexation Group, which was established under the PPF and reported last September.

There is considerable merit in raising all payments, as and when this is possible, with the objective of ensuring a reasonable relationship, in due course, between the average living standards in the community and the level of social welfare payments.

Not only have we made substantial progress towards the PPF target of £100 for lowest social welfare payments, we have almost reached this target this year and I have no doubt but that the target will be exceeded in the remaining budget in the period of the programme. This budget is fully in keeping with our commitments under the PPF.

It has been a source of some complaint in the past that social welfare increases used to come into effect later than budget changes. We were all berated that increases were announced in December and not delivered until much later. Last year, I brought forward the implementation date of social welfare weekly rate increases to the start of the tax year, that is, 6 April. Now that the tax year has moved to the start of January the budget increases in weekly rates of payment are also being brought forward to 1 January at a cost of £80 million. This means that in 2002, social welfare clients will be paid their increase for the full 52 weeks of the year compared to 29 weeks when we came into office in 1997.

When we came to office in 1997, the level of child benefit was £30 for each of the first two children and £39 for each of the subsequent children. Last year, we announced the most substantial increases in child benefit in the history of the payment. This year I am delighted to announce that we are again giving record increases of £25 per month for the first two children and £30 for subsequent children – bringing the rate of payment to £92.60 for the first two children and £116 for subsequent children – 117.60 and 142.30, respectively.

The rates of payments have been increased threefold over our period of office and we have already achieved in full the child benefit commitment set out in the PPF. To illustrate the scale of these increases I refer Deputies to 1997 when the former Government gave a family with three children an extra £7 in child benefit per month. Last June, we gave similar families an increase of £80 per month and in this budget we have again given them another £80. The effective date of payment for the child benefit will go from September in 1997 to effective from April in 2002, the earliest date from which it was administratively possible to introduce these increases. I am also making a change in the arrangements for entitlement to child dependant allowances to people getting short-term weekly social welfare payments. Currently these allowances are lost as soon as the young person reaches their eighteenth birthday. but from next April this will be extended to the end of the academic year in which the young person reaches the age of 18 years. This is a first step towards increasing the age limit to 22, as promised in the Programme for Prosperity and Fairness.

This Government has promised time and again to continue to develop the types of services which recognise the value of the caring ethos in this country and to develop supports which provide practical assistance to people who devote their time to improving the duality of life for others. Over the last four budgets we have fulfilled this promise. As a result of changes introduced in these budgets, the number of carers receiving carer's allowance and carer's benefit is up by a massive 107% and, to date, expenditure is up by 184% since this Government took office.

The means test for the carer's allowance has been eased significantly in recent budgets with improvements in the income disregards. I am again moving further and increasing the disregards so that a single person can have a disregard of 191, £150, and a couple can have a joint income disregard of 382, £300. This measure will be of benefit to 5,700 carers.

In addition. I am increasing further the respite care grant for carers, which we introduced in June 1999 by 127, £100 to 635, £500, and to 1,270 £1,000, for carers who are caring for more than one person. This payment will be made in June 2002 to recipients of carer's allowance, carer's benefit and carers who are providing full-time care and attention to those in receipt of a constant attendance allowance or prescribed relatives allowance.

This Government has introduced a number of dramatic improvements in the free schemes during its time in office. The schemes have been made available to all people resident in the State aged 70 years and over, regardless of income or household circumstances. This important change reinforces this Government's commitment to supporting older people in their wish to remain in the community.

This year I am delighted to announce that I am implementing a further three recommendations from the review of the free schemes. The principal one is the introduction of a household benefits package.

An Leas-Cheann Comhairle

The Minister has one minute remaining.

Mr. D. Ahern

With all due respect I was heckled and interrupted. I ask for the leave of the House because I have more to say.

An Leas-Cheann Comhairle

Is it agreed to give the Minister a few more minutes injury time?

Mr. Rabbitte

I have no objections provided he does not abuse it.

Mr. D. Ahern

I will not abuse it. Contrary to recent media reports, which led to concern on the part of some groups representing older people, this measure does not involve the abolition of the free schemes in favour of a single cash payment and I would not favour such an approach. There was a totally erroneous media report which said that we were going to give a cash allowance to people instead of the free schemes. That is not correct. We are streamlining the entire free schemes into the household benefit package. The streamlining of the electricity allowance, telephone allowance and free TV licence scheme into one combined household benefits package will ensure that all recipients will receive the full range of schemes available under these three schemes. In other words, the qualifying conditions for the free schemes will be standardised to ensure that where a person qualifies for one of the free schemes, they will qualify for all the free schemes. This measure will strengthen the community care objectives of the free schemes and will introduce simplicity and clarity.

I am also increasing the value of the electricity-gas allowance. This allowance was last increased in 1972 to the current 1.500 units each year. From February 2002 I am increasing the allowance to cover up to 1,800 units of electricity per annum, in addition to normal standing charges and VAT. This improvement recognises that households now use more electrical appliances and that overall electricity consumption has increased over time. I am conscious of the role that the fuel allowance plays in assisting to alleviate poverty.

In last year's budget I extended the duration of the fuel season by three weeks and this year, in addition to improvements in primary payment rates, I propose to increase the basic fuel allowance from £5, 6.35, per week to £7.09, 9, with effect from the 1 January 2002. This is the first time since 1985 that the basic fuel allowance has been increased. It is estimated that 294,00 people, mainly pensioners, long-term unemployed and lone parents will benefit from this increase at a cost of £17.46 million, 22.17 million, per annum.

There are a number of measures in the budget which helped to increase the issue of employability by ensuring that people who have skills will be able to take up new jobs. On the issue of poverty and social exclusion, the numbers of people experiencing consistent poverty has fallen from 15% in 1994 to 8% in 1998. I expect that the figures due out soon will show a significant decline in that figure. In the overall reaction to the budget, it is not often that we get compliments from organisations. Some of the references in the press statement from the Combat Poverty Agency give the budget a broad welcome. They commend the policy direction for increasing social welfare payments in line with wages. It is particularly pleased with the proportion of spending dedicated to social welfare measures in this budget and it says significant progress has been achieved towards helping the less well off. It says the budget will make significant progress in reducing poverty. Over the years the differential between the tax package and social welfare package has been skewed in favour of tax. For the first time in many years, the social welfare package is well ahead of the tax package.

I have other points to make on this and perhaps I will have an opportunity to do so next week when we are dealing with the legislation in relation to some of the changes. There will be a second Bill, mainly to address the child benefit changes, in the new year. I commend the budget. For the fifth time in a row, I am delighted to be able to say that I have been successful in securing the largest social welfare package ever.

Mr. Rabbitte

It must have been very difficult for a man like the Minister for Finance, Deputy McCreevy, who prides himself on telling it as it is, to struggle to the end of his Budget Statement yesterday. Whatever else he delivered yesterday, he certainly delivered a terminal blow to his reputation as a straight talker.

Whoever holds the Finance portfolio in the next Government, it will not be Deputy McCreevy. What a suicide pass he has dispatched to his successor by attempting to disguise the alarming deterioration in the public finances by claiming a phoney surplus of 170 million. It is reminiscent of the fiddling engaged in by his nemesis, Mr. Haughey. However, thanks to EU requirements, he must give the projections for the two succeeding years. They betray the scale of the manipulation in which he has engaged and the size of the poisoned chalice being handed to his successor.

The budget projects a deficit in 2003 of 2.98 billion and in the succeeding year, 2004, of 3.682 billion. They are enormous deficits predicted by the Minister. That is the line in the budget that will most worry people who are concerned about the health of the economy, not to mention the people who will inherit this from the Minister. He is forecasting an enormous 3 billion deficit in the year after next. Nobody in the House, including the Minister, Deputy McCreevy, believes that the 170 million predicted for next year will happen. If he was as far out as a lighthouse this year, how could anyone reasonably believe he might be within scoring distance next year? Given that he has forecast a 3 billion starting deficit for 2003, it indicates the scale of the problem we face.

The Minister for Finance is more resentful of criticism than he acknowledges. Determined to finish five budgets on a no borrowing note, he instructed his officials that the budget be prepared on that assumption. Money had to be looted from wherever it could be found and special legislation will need to be introduced retrospectively to permit it. The piggy bank had to be raided in Dame Street and the poor box had to be raided in the Department of Social, Community and Family Affairs.

My colleague, Deputy Quinn, brought in the first budget surplus in modern times in 1997. Given the boom then under way, which continued up to the beginning of 2001, no Minister for Finance who succeeded Deputy Quinn, no matter how profligate, could do other than continue to bring in successive budgets in surplus. It is not a matter to boast about or something for which one deserves plaudits. The buoyancy in taxes over these years and the revenues during the unprecedented boom meant that Robin Hood could not have contrived to bring in budgets in deficits. Yet, the Minister sought yesterday to make a virtue of it.

It was imperative for his self-image to pretend that his last budget continued the no borrowing supposed achievement. In his Budget Statement he said, "We promised five budgets and we have delivered five budgets and without borrowing. My five budgets to date are the five chapters in my first book." As Deputy Quinn said this morning, he is well equipped to write a book on fiction anyway, although I am not sure I would agree with Deputy Quinn that it would win the Booker prize.

Having instructed his officials to prepare a budget above the line that is notionally in surplus, it became necessary to fiddle the figures, manipulate the accounting, cook the books and raid any fund lying around. The business group editor of Independent Newspapers, Brendan Keenan, concluded this morning that the cumulative raids on the social insurance fund, the Central Bank reserve fund, the Central Bank's windfall from the euro changeover and the taxing on a current year basis of employers for corporation profits tax purposes amount to “a grand total of 3 billion”. That is the real scale of the manipulation in which the Minister engaged to produce the effect that fits in with his self-image of the man who never borrowed when he was in Merrion Street.

Moore McDowell, an erstwhile supporter of the Minister, Deputy McCreevy, at least on economic matters, this morning called it "borrowing in all but name". He continued, "In reality we have a budget deficit of well over £1 billion" and he concluded, "In political terms, his conduct of the budget has completely undermined his reputation."

Not only has the Minister manipulated the figures, but also major areas of policy. He has been caught looking both ways. The most dramatic reversal is the provision in housing where people are suffering so much in hugely overpriced rented accommodation and are despairing in lengthening queues for public housing. The Minister has reversed his position in this regard and also the Bacon proposals on mortgage interest relief in what I believe is a vain hope of addressing the crisis that already exists in the private rented sector. It is a straightforward reversal of what he did only a couple of years ago. He produced a crisis and he thinks he can turn it around by simply reversing engines. However, this will not seep through for a long time and hardship will continue to be endured by people in private rented accommodation, where people are being evicted or put into very inadequate hostel or bed and breakfast accommodation because they cannot pay the rent.

Did you, a Leas-Cheann Comhairle, think you would see the day when a poor quality three bedroom house in my constituency would cost £800 a month? A woman, who returned from Coventry two years ago, came to see me a couple of weeks ago. She is renting such a house, but a couple of weeks ago the landlord increased the rent by £100. That is the difference between her being on the side of the street and being able to stay in the house. That is repeated all over the city and I suppose it is not much different in other cities. That is the effect produced by the combination of Dr. Bacon, the Minister for Finance and the Minister for the Environment and Local Government. The Minister thinks that by reversing it now, it will have an impact before the general election. It will not. Many of these people have put their money into property outside the State, as the Minister of State at the Department of Health and Children, Deputy Moffatt, knows. It will not be reversed in that time. As a sole attack on the housing problem, it will produce the same effect again in terms of the first time buyer.

This is the second major 180 degree turn by the Minister for Finance in the housing area of public policy. Having threatened developers hoarding land with punitive capital gains tax two or three years ago, the Minister undid himself last year at the point when housing output was beginning to decline and when an incentive was necessary to keep supply up and to end the drip feed of building land into the marketplace. The Minister reversed himself last year and the hoarding of land has resumed. Major developers, who have an umbilical close relationship with the major party in Government, did not believe he would introduce the punitive capital gains tax. He could have left it on the books as it would have had some effect. However, he removed it last year.

It is not just that the Minister is bringing in the type of budget for which he long condemned his once leader, Charles Haughey, but he is engaged in several contradictory policy stances. I have given housing as an example of one such contradictory policy stance. Another example is the reduction last year of the standard rate of VAT from 21% to 20%. This year he did the exact opposite on the extraordinary make-believe rationale that the "reduction was not being passed on". What evidence does the Minister have for that statement? It seems an extraordinary statement for a Minister for Finance to make that a VAT rate of 20% was not passed on to customers, that traders, retailers and others were improperly and illegally profiting from it, that he knew about it but did not do anything and that this justifies reversing his decision of last year from 20% to 21%. Nobody believes that. We have a more educated consumer population now than we had in the past. It is a preposterous argument by the Minister that people believe they were being charged 21% VAT. It did not happen.

As regards income tax, the Minister spent four years cutting rates and boasting that he had a mandate to do so. He is largely right. However, he has now reversed engines and targeted the moneys he raided from the social insurance fund on personal and PAYE allowances and on broadening the tax bands. He spent four years deriding this side of the House for advocating such targeting on the lower to middle income earners but, confronted with the inevitability of meeting the people at a general election, he does another 180 degrees turn and targets minimal resources on the lower to middle income bracket. The Minister and the Tánaiste have made a living from and dined out on how they cut tax rates and the fools on this side of the House, who tried to advance a principled argument that cutting tax rates was not necessarily the way to reform the tax code or to benefit low to middle income earners, were derided both here and in the south of France. They now come in here and have the cheek to tell us that is what they were in favour of all the time. When the Minister meets people outside the K Club, he will find out that has not gone down as well as he thinks.

The Minister argues it would be unconscionable not to continue to invest in the new national pension reserve fund. However, at the same time, he mounts a smash and grab raid on the pension fund which is in place. Apart from the legality and propriety of what he proposes, it is accepted by the Government that there will be increased demand on the social insurance fund in the years ahead. He has already provided for a rise in unemployment. Most economic commentators agree with him. There may be a difference in terms of the extent of the rise in unemployment but it appears, and we know from redundancies already notified, that there will be a significant rise in unemployment. Neither the Minister or I know when the downturn will bottom out and things will lift off again. There will be a greater demand on the social insurance fund. Yet he chooses this time to raid a fund which is provided for in law and the purpose of which is stated in law. These are the social contributions of workers and employers which were not intended for the purpose of digging the Minister out of a hole he has created for himself. It is a shame that the Minister is using the raid on the social insurance fund to provide a pre-election sweetener for his backbenchers. It is highly suspect and at least improper and immoral to use workers' and employers' social contributions in this fashion.

The fifth contradiction by the Minister is that last year he came into the House and promised to leave low sulphur diesel at the low rate. However, this time he comes in and, without batting an eyelid, adds 5p to it. Hauliers, who are already up in arms, do not understand that another 1.5p will be added to it in March. Yet, the Minister does not have any difficulty reconciling the two positions, just as he does not have any difficulty reconciling the extraordinary decision about cider. Of all the areas where he might have levied some additional revenue given the hole he is in, why did he choose cider? I heard the director of the company talking on the radio today about the fact that the Tánaiste and the Taoiseach visited the plant in Clonmel. He said he believed that both of them had an understanding of the labour-intensive nature of the plant at Clonmel, the indigenous nature of the industry. Yet they put a huge 21p increase on the pint of cider. I am at a complete loss to understand that.

The Minister for Finance has permitted publicans – the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Tom Kitt, has facilitated him because he is the acceptable face of public relations – to increase the price of the pint by whatever they like at any time they choose. Ministers for Finance have not put excise duty on the price of drink since 1993, yet 21p was put on an indigenous drink from Clonmel. Although Deputy Quinn might have had his tongue in his cheek to some extent when he said this was vindictiveness against the people of South Tipperary for the manner in which they rejected Fianna Fáil on two occasions, it is beginning to look a bit like that.

Most amazingly of all given the duration of his contribution, there was not a word in the Minister's Budget Statement to explain how he got himself into this hole. This time last year, he forecast a budget surplus of 3.2 billion. Additional income from the sale of State assets was a positive embarrassment since, as the Tánaiste memorably put it at the time, "The country is awash with money". How many here remember the phrase? In selling off the ICC, the TSB and the ACC, what did we need the money for? The Tánaiste's political soul mate, the Minister for Finance, told us to have a party. Headlines referring to Champagne Charlie who said we should all party were commonplace. Where did all the money go? It was this atmosphere of champagne and partying that led to the daft proposal for a vanity project at Abbotstown where £1 billion was to be spent on the construction of a stadium which would hold the population of western Europe. It was this upbeat mood that allowed us to proceed with the construction of a monument to the country's best known sports fan. The Department of Fin ance must be horrified. Is it going to permit irrevocable contracts to be signed before a new Administration comes into office? That is the question that must be answered.

It was like the final days of the court of Louis XIV. Champagne Charlie partied on and the good times were going to last forever. People were doing so well that there was never going to be a downturn. As the Taoiseach said, "The stadium will not cost £1 billion but, if it does, we will build it anyway". In a classic pass out to the wing, which would do justice to the best rugby centre, the poor Minister for Tourism, Sport and Recreation, Deputy McDaid, has been left to carry the ball as the whole thing comes crashing down. Now the Taoiseach will not answer questions on the issue in the House, diverting them instead to Deputy McDaid. The Minister has done his best to be loyal and I can understand why, but it is a daft vanity project and he knows that. What a mess has been created.

Minister for Tourism, Sport and Recreation (Dr. McDaid)

The Deputy is reading the mood all wrong.

Mr. Rabbitte

The Minister need only wait until he goes out on the doorsteps. We will see about that.

How did this 3 billion surplus disappear like last year's snow? We have not been given any explanation as to how this happened under the stewardship of the hard man of finance, Charlie McCreevy, the man who has no time for bleeding-heart liberals.

An Leas-Cheann Comhairle

It is appropriate to refer to Ministers by their correct title.

Mr. Rabbitte

I beg your pardon. I shall not do it again. For the remaining three or four months the Minister is in office, I will be delighted to honour the convention.

The latest household budget survey reveals that in the third quarter of 2001, 1,786,600 persons were at work, a figure that has been increasing annually by 48,700. That is a splendid performance by any yardstick. It shows that those who have been losing their jobs have been finding alternative employment. The numbers in employment have not only been maintained, they have expanded. In that case, where has all the revenue gone? Where is the 3.2 billion? There was not one word or a single line in the Budget Statement to explain how it evaporated. I do not know how the Minister permitted such a huge surplus to be frittered away. We have not received any explanation from the Taoiseach or any other Minister. Imagine the howls of derision in his heyday from Deputy McCreevy, as he was in Opposition, if a Minister from these benches had presided over a 50% increase in public spending in three years together with the disappearance of a 3.2 billion surplus. Imagine how the Tánaiste and the Minister for Finance would have reacted in Oppo sition if confronted with that set of figures. They would have had a ball.

This budget is not about consistency, good management, prudence or equity, it is about presentation in the face of the coming electoral contest. Fianna Fáil knows about power and, as history shows, no Charlie in the party could ever refrain from fiddling the books to buy the people's votes if that was what it took to stay in power. The party does not worry about the debris to be picked up after the election because engines can be reversed. The only important thing is to retain power. Remember the man who campaigned in 1987 on the premise that health cuts hurt the old, the sick and the handicapped. He directed you, a Leas-Cheann Comhairle, to make the most savage cuts between 1987 and 1989, from which the health service has never recovered. Fianna Fáil is now in campaign mode, indeed, some would say the Taoiseach has not stopped canvassing since 28 June 1997. When it comes to campaign mode, distortion of reality is grist to the mill.

In his contribution today the Taoiseach claimed authorship in Opposition of the concept of a national minimum wage and further claimed to have persuaded me to promote that during the rainbow Government's term in office. Nothing could be further from the truth and, unfortunately for the Taoiseach, I have dug out what he actually said at the time. On 28 October 1995, the then Cork Examiner, under the headline “A National Minimum Wage is not the Answer says Ahern”, quoted the then Leader of the Opposition as follows:

The Fianna Fáil leader, Bertie Ahern, last night delivered a strong attack on the call by the Minister for Social Welfare, Proinsias De Rossa, for a minimum wage. Young people, he declared, should not be deprived of a chance of having a job by misguided legislation designed to save the Department of Social Welfare money.

That is actually what the Taoiseach said, yet he came into this House today and said he persuaded me of the merits of a minimum wage. As with so many things affecting this Taoiseach, it was precisely the other way around.

The income tax changes are modest and I understand why in the present climate. The 634 million provided for in a full year is almost balanced out by the 592 million the Minister is taking from roughly the same people through petrol, cigarettes, cider and VAT changes. Combined with the effect of the next phase of the pay round, the effect of the tax changes is fairly neutral. There are certainly no windfalls to taxpayers, no matter how the figures are presented. The legacy the Minister for Finance will bequeath to his successor ought to be compared to that left by Deputy Quinn. Despite facing a general election, Deputy Quinn introduced a sound budget showing a surplus for the first time in modern history. Forecasts for succeeding years were for healthy surpluses, which, in the event, were realised beyond what anyone could have imagined at the time. An additional 80,000 people were at work that year and the economy was in full flow.

For the incoming Minister, Deputy McCreevy, it must have seemed like a dream. No Minister for Finance had ever been handed such a strong economy and such propitious finances to enable him to make a permanent impact, enhance fairness and equality and address needs in society. The Minister proceeded for four years to distribute wealth upwards and now bequeaths a most difficult scenario to any new Administration. The four years were not intended to end in grief, but perhaps it was inevitable they would. Prior to the intervention of foot and mouth disease, the Taoiseach had perhaps hoped he would be safely back in Government before the chickens came home to roost. At the expense of his reputation as a straight talker, the Minister for Finance has attempted, by raiding the poor box, to conceal the true state of the economy. He has failed and someone else will be left to pick up the pieces.

As the Minister, Deputy McCreevy, pointed out yesterday and on other occasions, £3 billion was earned in foreign revenue from tourists in Ireland in 2000. While the agricultural, industrial and information technology sectors are very important to any island economy, large subsidies and grants are given to agriculture and millions of pounds are used to persuade multinational companies to locate here and enter the information technology area especially, visitors to this country spend money in various communities, a certain amount of which eventually ends up in the Exchequer. Some £3 billion in foreign revenue was earned in 2000 through the tourism industry.

Earlier in the year we had to put in place emergency measures to prevent the spread of foot and mouth disease. These measures, together with the adverse publicity abroad, impacted severely on the tourism industry. The Government took swift action by giving me additional funds to run a 12.7 million reassurance campaign in all our major markets, and it worked. Initial forecasts of a 14% decrease in visitor numbers were revised downwards to 4% and all the evidence pointed to a bumper fourth quarter for the industry.

Then came the tragic events of 11 September. The tourism industry throughout the world has borne the brunt of the terrorist attacks. However, as I have said many times before, we have a very vibrant industry and the fight-back has begun. The provision of an additional 11 million for tourism marketing in yesterday's budget shows the Government's commitment to playing its part in the recovery. When taken together with the provisions in the departmental Estimates, the total Exchequer tourism budget for 2002 will be close to 110 million. The additional funding will be used to enhance promotion of the regions, increase the successful sports tourism initiative and provide additional finance for all-island marketing. I welcome the fact that key tourism industry groups have already endorsed these additional measures.

I am extremely pleased with the additional funding for regional tourism provided in the budget. It matches our policy of ensuring that the benefits of tourism are spread throughout the country. Although all regions have benefited from tourism growth in the past 10 years, it is evident that some areas have not done as well as others. In this regard, I am also delighted that, after intensive negotiations, we have received EU clearance for the 127 million tourism product scheme. Under the scheme, funding will be available for tourism projects which enhance the potential of less developed tourism areas by supporting the development of significant attractions or clusters of attractions in such areas.

Tourism Ireland Limited, the new all-island tourism marketing company established under the Good Friday Agreement, and Bord Fáilte, which retains responsibility for product, niche and regional marketing, have recently announced details of their programmes for next year. These plans incorporate the use of the new all-island tourism brand promotional material launched in Dublin and Belfast on 7 November. The Government has also recently approved the amalgamation of CERT and Bord Fáilte to create a single strong development agency for the tourism industry. This change in the institutional arrangements will underpin the future development of the industry.

Next year, two high profile sporting events will take place here as a result of the sports tourism initiative which I introduced two years ago. The Seve Ballesteros Trophy which is played between Britain and Ireland and the rest of Europe, and the Amex world golf championship which carries a prize purse of $5 million, both come at a very opportune time for the industry. This highly successful initiative has put Ireland on the map for major sporting events. Under the provisions of the budget its funding has been increased to 7.62 million and extended to 2007 to enable longer-term commitments to be made by Bord Fáilte. Looking to the future we can also anticipate hosting the Ryder Cup in 2006.

We have had nine remarkable years of uninterrupted growth in tourism. We have a strong and vibrant industry with an excellent product base and I am confident that we will overcome recent setbacks. Yesterday's budget announcement will give a welcome further boost to that confidence. Being the first Cabinet Minister with responsibility for sport, I am extremely proud of our record in promoting and developing the profile of sport in this country, from local level participation in sport right up to our training services and support for elite athletes, and support for the national governing bodies of sport.

During the year the Irish Sports Council formulated a new high performance strategy which will be launched next week. The ISC took on board the concerns expressed by the sporting bodies. We now have a high performance strategy which will compare more than favourably with the strategies of countries worldwide who have continued success in international sport.

Since the Government took office, it has allocated grants totalling 133 million to over 2,000 different projects. The Government has invested in sport which is continuing to reap the rewards. Funding of 3 million is being provided in the budget to the Irish Sports Council for the implementation of the high performance strategy.

After the Sydney Olympic Games I asked the Irish Sports Council to undertake a review of the performance of the Irish teams. This was done and a central theme coming through from the national governing bodies of sport, with whom I met to hear their views, was the need for additional investment in coaching and training services as well as support for elite athletes and the national governing bodies of sport.

Over 2,000 clubs and community groups in nearly every town, parish and village in the country have benefited under the sports capital programme. In the recently published Estimates for 2002, the provision for this programme, which runs in parallel with other major programmes, has increased by 31%. The record of the previous Government on sporting facilities is, sadly, not one to boast about. The vast majority of its members, particularly on the Fine Gael benches, had no interest in sport. They managed to allocate a mere 21.5 million under the programme over their three years in office. I am delighted to see, however, that Deputy Noonan has experienced a Pauline conversion to sport at this late stage. I hope he will be able to continue if he ever gets the chance.

Mr. Perry

He fully intends to.

Dr. McDaid

Much has been achieved in this area but more needs to be done. It is my intention that, in 2002, we will continue to support sporting organisations with the provision of modern, well equipped and well managed facilities throughout the length and breadth of the country.

In 2003, the biggest sporting event in the world will be held in this country. In preparation for the Special Olympics summer games work is progressing apace on the development of the National Aquatic and Leisure Centre in Abbotstown. The 50 metre swimming pool is almost completed and we will be ready to welcome the athletes and make the games one to remember for all involved. I look forward to that night in Croke Park when 80,000 people from all over the world will attend the opening ceremony of the Special Olympics.

Mr. Perry

With a Fine Gael Taoiseach.

Dr. McDaid

I doubt if they will manage it with the Deputy there. I welcome the increased Exchequer resources for the Department of Tourism, Sport and Recreation in 2002. This funding reflects the continued commitment of the Government to tourism and sport, and is part of a wider, balanced and prudent budget that takes no risks with the economy and looks after the least well off in our society.

Mr. Aylward

I welcome the budget's provisions. I have been a Member of the House for almost 25 years during which time we have had many strange kinds of budgets and mini-budgets. This is a first, however, because never before has the same Minister for Finance introduced five consecutive budgets. That is a record and a remarkable achievement. The Minister will definitely go down in the record books as having presented the best set of budgets in the history of the State.

I have listened to many contributions to this debate and I am amazed at how short some people's memories are. I recall budgets of the 1980s when on a number of occasions more than one budget was presented in the course of a year. Governments fell because of various issues that arose from the budgetary provisions. I remember when we were taking taxes from people all the time; we had tax rates of 65% plus on the high rate, and in excess of 30% on the lower rate. At one time, things were so bad we were waiting for the International Monetary Fund to step in to look after our affairs.

I cannot understand it, therefore, when I hear people talking about bad times in relation to our present position. These are certainly not bad times and yesterday's budget proves that. I heard people say that the Minister for Finance should have recommenced borrowing, and they also criticised the manner in which he acquired funds. I would not like to return to borrowing and I compliment the Minister on his decision not to do so. He knows from experience the disastrous consequences that arose from borrowing in the past and, therefore, he has shied away from that course of action.

One can recall the massive emigration in the 1980s and the level of social welfare increases that did not remotely approach the rate of inflation. Miserly figures were offered for children's allow ances at the time. We can now see the economic turnaround that has occurred along with five generous budgets, without any borrowing, for which the Minister is to be commended.

I welcome, in particular, the budgetary provision of 100,000 for the oldest agricultural show in Ireland, at Piltown in south Kilkenny. I could not let this occasion pass without thanking the Minister for that contribution.

Within the past few days, the Minister for the Environment and Local Government has announced an agreement with the Irish Farmers Association for the acquisition of land for the provision of motorways under the national development plan. That is a job well done and it will expedite the acquisition of lands and the development of motorways which are very necessary.

The budgetary objectives, as outlined in the Minister for Finance's speech yesterday, are laudable and include the development of our infrastructure. Other budgetary objectives are aimed at improving public services and promoting equity as well as encouraging private enterprise and investment, creating additional jobs and doing so in a way that sustains fiscal policy. The budget safeguards the vulnerable in our society, prioritises our needs and continues to invest for the future.

Debate adjourned.

Dáil Éireann debate - Thursday, 6 Dec 2001