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Dáil Éireann díospóireacht -
Tuesday, 7 Dec 1999

Vol. 512 No. 3

Financial Resolution No. 5: 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 provisions in connection with finance.
–(Minister for the Environment and
Local Government.)

This is one of the most ambitious budgets in the history of the State. With the exception of some heavy smokers, everyone gains. It places a strong emphasis on social inclusion, as well as giving a more substantial reduction in the personal tax burden than it has ever been possible to do before. Many taxpayers on fairly average incomes will be at least £20 to £30 per week better off. The budget carries forward the process of radical tax reform. However, in mapping out a future modern tax system for those in the workforce, we will have to be attentive to the balance which needs to be preserved between spouses who work outside the home and spouses who bring up children or care for dependants at home.

It is normal when Members are reading that they circulate a text of their remarks to other Members who do not have an opportunity of reading.

That is the intention. There has to be a sense of fairness, vis-à-vis not just carers in the home but the low-paid and other disadvantaged categories of the population, and it is the responsibility of the Government to ensure over the next period that resources are equitably distributed.

Before discussing some of the issues surrounding the budget, we need to remind ourselves how this year's budget builds on the success of the Irish economy, which has been at the top of the OECD charts through the 1990s. We are at the end of our sixth successive year of phenomenal growth. Unemployment is falling rapidly and, in absolute numbers on the live register, is below 172,000. We have rolled it back to where it was in November 1982. However, relative to the hugely increased size of the labour force, the percentage of unemployed is now down to 5.1% and is likely to fall below 5% next year. Net employment is at its highest level ever and growing rapidly. It was less than 1.1 million in 1987. Next year it will be heading towards 1.7 million. There has been a dramatic reduction in the depth of poverty. The result of the buoyancy in growth and employment is that the Government finances are in their healthiest order ever, with the general Government debt-GDP ratio set to fall to 46% in the year 2000 and rapidly thereafter. We no longer have to borrow for capital investment. Apart from about £3 billion in EU funding, we are able to fund out of our own resources the major infrastructure programme in the national development plan costed at £41 billion and put money aside for the future funding of pensions. Last July, the OECD report on the Irish economy described us as a world leader in a number of aspects of economic performance, a performance which it described as "peerless", contrasting it with the mid-1980s, when we were described as "the sick man of western Europe".

None of this has happened of its own accord. The primary credit goes to the working people of the country, but there also had to be a positive policy framework. While there are long-term factors involved, including a consistent industrial policy over a period of 40 years and free secondary education introduced by Donogh O'Malley in the 1960s, there are more particular explanations for the vastly improved economic performance since 1987 and the phenomenal sustained growth experienced, beginning in 1993-94. I would list four factors in this regard. In 1987, a determined policy of financial stabilisation combined with social partnership against a favourable international background created a new confidence in the economy and soon had nearly all the indicators pointing in the right direction, setting up a virtuous circle. We successfully negotiated substantial Structural and Cohesion Funding over a 20 year period, for investment and social inclusion from the EU, with the two Delors packages and more recently Agenda 2000. When the public finances improved, we started to reform the tax system and lower the tax burden, while also strengthening the social safety net. While we lost the battle on devaluation we won the war, setting a credible exchange rate heading into EMU which saw Irish interest rates tumble. The impetus gave us a competitive momentum over a number of years, which was not lost through higher inflation. Finally, we have under this Government been able to prolong this unique period of high growth by prudent budgetary policies, controlling the growth of current expenditure and giving back to people more of what they pay in tax, far beyond what most parties envisaged as possible during the general election of 1997.

The success that enables us make so many improvements together has come because as a country we stopped putting the cart before the horse. Only if we drive economic development forward and provide proper work and business incentives will we generate the funds to tackle social exclusion more comprehensively. It is all about doing things in the right order and not assuming economic growth and competitiveness will take care of themselves while we spend and redistribute the fruits of labour.

By virtually every criterion the budgetary policies of the Government have been spectacularly successful. Opposition leaders claim that when they were in Government they never had as much money available and that is of course true. However, they rarely acknowledge that it was the current Government and other Governments in which Fianna Fáil has participated since 1987 that have the largest share of responsibility at political level for creating the extra space and the extra resources.

The social content of the budget is large: £485 million has been provided for additional social inclusion measures, going well beyond any previous package. Partnership 2000 committed the Government to spend £525 million on a full year cost basis over the three year period on social inclusion measures to protect the real value of social welfare payments during the period of the partnership. We have gone way beyond that. This year's budget on its own is only £40 million short of that target. The general social welfare increases, averaging 5.5%, should this year keep pace with the increase in average earnings, not just inflation. The old age contributory pension has been increased by £18 under this Government compared with half that amount during the three rainbow Government budgets. It will be worth well over £100 when we complete this term of office. Those who call the current £7 increase paltry have obviously forgotten the £1.80 given in 1995. Even on child benefit, which was the main focus then, we have done better this year with increases of £8 and £10.

Those organisations who look after the mentally and physically handicapped are very pleased with this year's budget. Former Labour Party adviser Fergus Finlay, who has a special interest in the sector, wrote in The Examiner on Thursday that the Minister had done “a tremendous day's work under that heading”. The director of REHAB has called it “a major breakthrough” and “a message of hope for the many thousands of people with disabilities”.

The centrepiece of any budget is changes in taxation. No one can dispute that the £942 million given in tax relief far exceeds any given in the last three budgets. We have already, at the end of three years, reached the upper range of where we considered we could be in terms of the overall cost of tax packages at the time of the last general election.

We have acknowledged the importance of increasing tax-free allowances, which was one of the arguments made at the last election. Our introduction of the tax credit system has ensured that disproportionate benefit no longer leaks up to those on the top of the scale. The tax-free allowances have been increased by £1,800 for a single person and double that for a married couple over our three budgets. This compares with a total of £550 or just under a third in the three rainbow Government budgets. The tax free allowance now stands at £4,700, which will take 50,000 out of the tax net. The proposal to introduce a minimum wage was also an initiative of this Government.

Fulfilling the mandate given by the people is an important principle. We promised the electorate we would cut tax rates, and we have done so by 4% on each rate or 8% in all since 1997. This compares with a 1% reduction only in the standard rate during the period of the rainbow coalition.

There is bipartisan agreement across the House on the necessity and desirability of cutting corporation tax rates to 12.5% which has had a huge spin-off in terms of stimulating business. Corporation tax revenue will have almost doubled from just under £1.7 billion in 1997 to over £3 billion in 2000, in the space of just three years. The Minister for Finance said how revenue from his heavily contested halving of capital gains tax in 1997 has increased from £132 million to £343 million. How is it that we are prepared to cut business tax rates, essentially for the sake of the economy, but are resistant to cutting them for the hardworking people on PAYE ?

The most controversial part of the budget by far has been the plan to implement the other plank of our tax policy, which is to reduce drastically the numbers paying tax at the higher rate to 20% or less. We are taking 125,000 out of the top tax rate this coming year. It goes a long way towards acknowledging the additional costs of child care for families where both parents work outside the home. It is fundamentally inequitable that many newcomers to the workforce, who are young single people, should have to pay the higher rate of tax at below the average industrial wage. That situation has been condemned for years on all sides of the House, but until this year not much that is effective has been done about it. The current tax system also clearly discourages the married woman in particular from a return to work outside the home by in most cases imposing over 50% deductions on her pay. If one adds to that in many instances the cost of child care and other costs, it may simply not be worth her while working. What we can do to help those at work is severely constrained if the bands have to be doubled, regardless of circumstance.

The concept of individualisation of tax bands, for which there are strong equity arguments, is contained in an ESRI booklet published last October on budget options and in an interdepartmental report published last August on the treatment of married, cohabiting and one-parent families under the tax and social welfare systems. The Combat Poverty Agency, in a statement issued last Thursday supported individualisation and restriction of the transferability of bands, but urged a series of accompanying measures. I accept the view of the president of Congress that the context of the change is as important as the principle of it.

Fianna Fáil policy in recent years, recognising the huge social changes that have taken place, has been to balance support for the carer in the home and the right to gender equality in the workforce. The current system is weighted against the spouse who chooses to work outside the home. I would point out that the budget has introduced a much needed carer's benefit, but that is just one necessary step. This is only the third of five budgets, and how we achieve the necessary balance over the remainder in broad terms will be a subject of both political discussion in the Government and negotiation with the social partners.

The Fine Gael Party, which has been loudest in its opposition to the change, proposed something with a similar effect in its recent economic policy document. One of its aims was also to reduce the number of persons who pay tax at the higher rate "so that women at home are encouraged to rejoin the labour force". Fine Gael proposed to introduce an earned income tax credit, which would, to use its words, produce "tax reductions at different levels of income for single, married one earner and married two earner taxpayers". A married couple both of whom are earners, for example, would save substantially more tax than the one earner couple. What is more, in footnotes Fine Gael states that its policies are not negotiable with the social partners, only the timing. I would like to suggest in the light of this document that the furore created by the Fine Gael leader is arrant bluster and hypocrisy. Fine Gael is overtly trying to push married women at home out into the workforce, whereas the budget simply sought to remove the positive discouragement to workforce participation contained in our current tax system. It is important to note that despite a strong impression to the contrary Fine Gael is also promoting a differentiation between one earner and two earner couples.

I acknowledge the real concerns which have been expressed about the budget plans regarding the method chosen to achieve a major widening of the band. I thank all those people who have contacted me and who have expressed their points of view to my colleagues over the past few days. Of course, we listen to what they say and try to take account of it to the best of our ability.

The Government has no desire to dictate personal choices to any group of citizens, least of all to the family. Our objective is, as far as possible, to provide a level playing field in terms of fundamental fairness, equality of opportunity and personal freedom of choice, but we also have to respond to social change. If we accept that people should pay tax in their own right, especially above a certain income level, at an effective rate proportionate to their income, it is for further discussion the level of relief that is appropriate to take account of any individual or couple's domestic or family circumstances, and the supportive measures that are necessary to support such a change, particularly when it goes further down the road.

In launching the negotiations on a successor to Partnership 2000, I made clear that the Government accepts the analysis in the recent National Economic and Social Council strategy report which, inter alia, attaches a high priority to increases in personal allowances and significant priority also to increasing the level at which people become liable for the higher rate, and the need for measures other than the increase in child benefit to address the issue of child care availability and supply. I underlined my belief that the vision in the NESC report can be made a reality. I equally underlined the Government's view that implementation requires a realistic approach to the pace at which progress can be made and a sense of balance between the various elements of the vision. The budget came at an unusual point in the course of the negotiations. The norm has been that budgets have come after the conclusion of the negotiation of particular agreements and can be clearly seen in perspective. The budget contains much that has been rightly welcomed, in particular in reversing the discrimination suffered up to now by single workers who entered the higher tax bracket far too soon, and by married couples who both worked outside the home and whose additional burdens because of that had not been recognised.

Because it is one budget, it has not been possible to identify clearly or fully the balance that is essential, in particular for carers who work at home, and to underpin our ongoing commitment to those who are the least well off.

I am taking the opportunity today to say that the Government will take steps over the remainder of its term to ensure the necessary balance in the implementation of Government policy. We will be listening carefully to proposals put forward in the negotiations on a successor to Partnership 2000.

Will the Taoiseach yield?

I use the word "consensus" deliberately because significantly different views are held—

Could I ask the Taoiseach to yield under the procedures which allow it?

He does not have to.

The Taoiseach has the right to accept or—

I know, but I think he would wish to allow me to put a question to him.

Once the Deputy does not take from the two minutes remaining to me.

The Order allows that. In regard to carers working in the home, the Taoiseach said he proposes to discuss their position in the negotiations on the successor to Partnership 2000. Has it occurred to the Taoiseach that those people are not actually represented in those negotiations by any of the organisations?

They do not have to be.

People who work in the home are not members of any organisation that is represented in these talks, so what means is the Taoiseach proposing to take to discuss their situation with them or is he proposing to ignore them completely?

We now have the answer as to the reason Deputy Bruton stated he will not discuss anything other than timing with the social partners. He will just dictate to them. The social partners form a broad consensus of what happens in Irish society. My colleagues in the Government parties have listened extensively to the men and women who expressed their concerns and views. The Government parties, Fianna Fáil and the Progressive Democrats, will reflect those views in the discussions with the social partners.

Will the Taoiseach yield?

Acting Chairman

The Taoiseach to continue. There is no provision for a second question.

Parents in the home are not represented in the social partnership.

Acting Chairman

The Taoiseach to continue.

I speak for the Government, and as far as I am concerned all of my colleagues who were elected to this House in the last general election represent people in the home, and they will continue to do so based on what these people say.

The people in the home do not think that.

We will listen carefully to proposals put forward in the negotiations on a successor to Partnership 2000. I use the word "consensus" deliberately because significantly different views are held by different social partners. The strength of the social partnership process over the past decade has been the capacity to agree on a shared vision and a consensus on the direction of measures necessary to implement that shared vision.

I will meet the social partners again tomorrow to explain the Government's view on how to achieve balance in giving effect to the NESC vision and to listen to their views. If it transpires that the essential balance requires more years to be worked through at the realistic pace I referred to earlier, then the Government will be prepared to work with the social partners on that basis. The Government will listen to the people, and the reasoned arguments put forward by them or on their behalf.

I propose to share my time with Deputy Quinn and, if time permits, with Deputy Deenihan.

Acting Chairman

Deputy Bruton and other speakers have 30 minutes.

The Taoiseach has just stated that all members of Fianna Fáil are elected and they will speak, in the social partnership negotiations, for those who are most adversely affected by this budget, namely, the men and women who are doing unpaid work in the home and those who are on low pay who are not getting a sufficient exemption from tax. While it is the case that the trade union movement represents those on low pay, although many of them are not members of unions, unfortunately for them, there is no way in which it can be said that any of the social partners who are participating in the negotiations represent men and women working on an unpaid basis in the home. They are not represented in any of the discussion groups taking part in the negotiations. For the Taoiseach to say that members of Fianna Fáil and the Progressive Democrats represent them is false. In the last election Fianna Fáil proposed that it would tilt the tax balance in the opposite direction to what the budget is now doing. Fianna Fáil proposed that an additional tax free allowance would be given to people in the home so that those one income families would have a more generous tax treatment on a given level of income than would a two income family to the extent of an allowance of £2,000. So to the extent that the Fianna Fáil Deputies in this House have any mandate, it is a mandate that goes in the opposite direction on this point to the one the Government is now pursuing.

The principal difficulty the Government faces in trying to introduce individualisation is that it has no mandate from the people for this. The introduction of individualisation into our tax system is a profound change by any standard. It is so profound a change that the people deserve to have been consulted about it. It is profoundly dishonest for Fianna Fáil to come in here, given that its election manifesto committed it to tilt the balance in one direction, to move dramatically in the direct opposite direction and it is a negation of democracy. It is not democratic to go in the opposite direction.

I would also remind Fianna Fáil, which is, to its credit, the authors of our Constitution, that the approach it is now taking in introducing individualisation goes against the letter and the spirit of our Constitution. The Constitution, in particular Article 41, does not look on Ireland as a nation solely of individuals. It looks on Ireland as a nation of families as well as a nation of individ uals and the recognition is given in the Constitution to the authority and the separateness of each family in the way they decide to distribute their resources. There is no mandate in the Constitution for individualisation, for treating families differently depending on the choices they make within their family structure. Under the Constitution, the authority of the family to make decisions as to who should or should not go out to work is recognised.

If a family has infant twins, for example, and the mother has to stay at home for one, two or three years to look after those children, is the Minister for Finance saying that he has a right under the Constitution to penalise that family, because they are a one income family, and ask them to pay more tax than a two income family would pay with the same income? I believe he does not have the constitutional authority to do that. The issue of whether a mother or a father should stay at home to look after twins or triplets is a decision for the family under the Constitution, and no tax incentive should be introduced which undermines the authority of the family to make that decision.

Likewise, a family with four children, one of whom is a profoundly disturbed teenager who may have behavioural problems at school or who may be getting in difficulty with the law, might decide that the father, who can manage the teenager slightly better, should take two or three years off work while the son is going through the particularly difficult teenage period when he might be at risk of breaking the law so that he can be home in the evening when the teenager comes in and will be able to keep an eye on what he does. A family has the perfect authority, under our Constitution, to make that decision for itself and I do not believe it is constitutional, let alone politically wise, for the Minister for Finance to introduce a tax disincentive which penalises a family because it decides, in its own interests, that one partner – in this case the father – should stay at home to look after a particular child or children. The Minister for Finance has not any right, under the law or in terms of political authority, to make the change he is making to adversely affect such a family, because it was not put to the people and it is not allowed under the Constitution.

I will refer to another situation which may occur in a family. A father and mother could both work and earn a good income but the grandmother could become ill and require care. The family may decide that it does not wish to put the grandmother into long-term care because she is not accustomed to being away from her family and that one of the couple will stay at home to look after her. A family is entitled to make such a decision. From the perspective of IBEC and the economists, that the mother may withdraw from the workforce to look after her mother-in-law could be perceived to constitute a loss of a valuable trained resource and could cause difficulty for the company which employs her. However, there is a more serious value here than the company's interests, namely the interest and the right of the family to make what it considers to be the best decision. One of the partners should be able to withdraw from the workforce to look after an elderly relative without suffering a tax penalty. I do not believe the Government has any right, moral, political or constitutional, to introduce individualisation in these circumstances.

The current treatment of married couples, which treats couples equally, regardless of whether they are in a single or double income family, derives from the Constitution. A Government must always act in accordance with the Constitution. It is regrettable that the Government has a view of society which is so driven by monetary and business concerns and companies' ambitions to make profits. This Government is blind to all work which is not paid work. Anyone who could introduce a tax penalty for unpaid work in the home is blind to all work other than work for which payment is made. This Government does not believe that unpaid work carried out by someone in the home counts. Because it does not figure in GDP figures or company balance sheets, it does not count in the eyes of the Minister for Finance.

Ministers for Finance tend to move in certain types of company. They tend to meet the managing directors of companies more often than they meet carers of elderly people or parents of disturbed children. They may well receive more coherent economic analyses from the managing directors of companies than from carers of elderly people or of disturbed children. They may receive more polished budget submissions from managing directors than from carers or people with more than three or four children who must stay at home to look after them. Parents who stay at home are obviously not in a position to produce slide shows and other presentations through which they can dazzle the Minister for Finance with their professionalism. Neither are they able to afford the assistance of lobbyists. However, their case is still a valid one.

I was very saddened by the omission in the Taoiseach's speech where he spoke about reconsidering this matter in the context of negotiations with the social partners. This Government does not regard parents in the home as social partners. Those parents are "non-persons" in the eyes of this Government. People are merely looking for equality. I am not advocating that people who stay at home should receive any more than those who go out to work but people should be treated equally across the board.

Perhaps the Leader of the Opposition would give way to me for a moment?

Of course.

In regard to Deputy Bruton's recent comments, Fine Gael proposed to introduce an earned income tax credit which would produce "tax reductions at different levels of income for single, married – one earner and married – two earners taxpayers.". For example, a married couple in which there was two earners would save substantially more tax than a couple in which there was just one earner. Is it the Fine Gael Party's intention to change its economic policy document?

The Fine Gael proposal for an increase in the PAYE allowance would confer a benefit of approximately £572 on a family in a double income situation whereas the Government's proposed change will create a discrimination of £6,000 between double income and single income families. That is ten times of a difference.

It is the same principle.

Furthermore, Fine Gael proposes a child benefit payment of £25 per week for children under five years whereas the Government only introduced an increase of £2 per week in child benefit.

Is Fine Gael prepared to change its policy document?

It is very difficult to understand how a Government could have got it so terribly wrong. This Government has more funds available to it than any previous Government. It has shown such political incompetence that not only has it made women – those who are already at home or those who would like the option to look after their children at home – feel trapped and undervalued, it has also succeeded in aggravating the largest trade union in the country by the mean-minded manner in which it has treated the low paid.

The Minister for Tourism, Sport and Recreation, Deputy McDaid, was kind enough to draw attention to Fine Gael's proposals, one of which is that all workers earning less than the minimum wage of £170 per week would not pay any tax at all. This Government has only raised the threshold, below which people would not pay any tax, from £100 to £110. That says all that needs to be said about the difference between Fianna Fáil and this side of the House. This side of the House stands for social justice. Fianna Fáil stands for those who are already well off. The budget drawn up by "K Club Charlie" represents the values of the K Club – privilege, congratulating oneself on one's golf handicap, the number of times one is able to take a holiday each year and the turbo charged power of one's fourth motor car. Those thrusting, profit seeking values have colonised Fianna Fáil.

Some would say that Fianna Fáil is a party which had a revolutionary past; it certainly had a past of social radicalism. The party is still a radical one but in a very different way. Where it was radical in the past on behalf of those who had little, it is now radical on behalf of people, many of whom already have far too much.

Give us a break.

A number of people in this Chamber have had the honour to be Minister for Finance – the present Minister is not here and I hope that does not augur badly for his future prospects – but of the other two, including myself, it is fair to say that no Minister for Finance had the opportunity to make such an impact on society as the present incumbent. The sheer scale of the amount of money that still remains with this Government is an indication of how extraordinarily well-equipped was this Minister.

The current budget surplus that happened by accident when the Minister for Finance, Deputy Ahern, left office in December 1994 was a mere £50 million. It was not planned for but was very welcome. This year the current budget surplus projected for the year 2000 will be £4.85 billion. That is the scale of economic transformation that has come about. To refer to increases of certain volumes of money as if they were dramatically bigger than what was there in previous years misses the big picture. This country is no longer poor. The State is no longer impoverished. For years people were told the resources were not available to achieve what they wished but that is no longer true. In addition to that surplus, money will be put into a pension fund, the concept of which we support, although how it will be utilised has not been specified. Against this background of wealth and opportunity the country is up in arms at the manner in which the Government has bungled the greatest financial opportunity this century.

Hear, hear.

It is incomprehensible to the ordinary punter in the street and to commentators who have looked in amazement at how this Government got it so wrong. Perhaps they should look at the track record of the Minister in question. This is the man who gave us the dirty dozen, who outraged the nation in his first budget and had to be rowed back to ensure the terms and conditions of Partnership 2000 which had not been negotiated by Fianna Fáil and the Progressive Democrats could be put back on course. He has been let loose again and what has he produced? In the words of Colm Rapple, it is closer to Thatcher than to Dev. He is right. What is frightening is this was not a mistake. Deputy McCreevy did not make a gaff. He believes this kind of distortion and that is why we are so opposed to this budget.

A budget is about establishing priorities. As I said in my first budget speech in 1995, it reflects choices and affirms values. It is an indication of the type of society we want for ourselves over the next 12 months and beyond and it contains some at least of the means to bring that about. The budget is only part of the overall picture. The estimates, which we waved through earlier today, contain the vast bulk of the spending. The additional amounts of money indicated on the day of the budget are quite small. What has the Government done? Perhaps last Friday night the Taoiseach gave an indication of the philosophy that animates Fianna Fáil. At the Cáirde Fáil dinner in the Burlington Hotel he said Fianna Fáil intends that this country would move towards a low tax, high enterprise society that generates ample resources to fund better public services and more comprehensive social inclusion.

Where have the tax breaks started? We have resources on a scale such as we never had before but instead of taking people earning under £10,000 a year – which is just over the minimum wage now projected to be at £170 per week – out of the tax net which the Minister could have done and which could have been a strong platform for negotiating a successor to Partnership 2000, he gratuitously took 2% off the top rate and 2% off the standard rate and did not seriously affect the low paid in any meaningful way. If this budget goes through in its current form, and I doubt it will, there are many people whose incomes will not be substantially affected at a time when they could have expected a substantial alteration.

On that basis this budget should be rejected. It should be returned out of the House by the backbenchers who support the Taoiseach and who have been going to the plinth at the behest of his office, it is alleged, certainly at the behest of the Fianna Fáil press office, to undermine support for this budget. The one concession the Taoiseach made in his speech this evening was when he said: "I acknowledge the real concerns that have been expressed in many quarters about the budget plans in regard to the method chosen to achieve a widening of the band. The Government has no desire to dictate personal choices to any group of citizens and least of all the family."

That is rubbish.

That is what he is doing.

That is what the budget does. The Taoiseach has, de facto, dictated a choice and he has kept people in the tax net when he could have removed them from it. This budget will not bring equity into the system or advance the equality agenda of our society. The Taoiseach should listen to people such as the Combat Poverty Agency who said the bottom 10% of the population who need it most and are dependant on the State more than any other sector got an increase of 0.7% and the top 30% who need it least got between 3% and 4% of what they already have. Where is the justice in that? Was this the view from the swimming pool in the south of France? Was this how Ireland looked from that happy tax-free corner of the world? What kind of values are animating the Fianna Fáil Party when this is allowed to happen? And happen it has at a time of unprecedented wealth.

There are many other items in this budget that have slipped through because of the furore about the assault on the low paid. As Deputy McDowell rightly said, the Minister has responded to the understandable concern of people about being forced out of the family home if one of their parents died and they inherited. He said that if people can demonstrate they have been living there for a number of years no tax would be payable on the family home. I welcome that. But from where did they get the mandate to unilaterally make all CAT taxable at 20%? From what article of republican faith that is left in Fianna Fáil did that free present for the wealthy in society come? We will deal with all the other provisions that are set out in the CAT when the time comes. This is a wealthy person's budget at a time when they are already wealthy and at a time when we had an opportunity within our grasp to eliminate poverty, adult illiteracy, homelessness and so on. Instead, what the Minister for Finance has done at the behest, we can only presume, of the Progressive Democrats wing of the Fianna Fáil-Progressive Democrats Government is to drive him into this particular approach and he said he will come back and look at it.

I will make a prediction that the budget in its present form will not be the one enacted by the Finance Bill when it comes to the floor of this House some time in February or March of next year. I would prefer if we had the opportunity to vote on it now and not wait for the distorted and bastardised form which will arise. For that reason, I wish to formally move, under Standing Order 64, that the motion on this matter be now taken.

Acting Chairman

I must advise Deputy Quinn that, in view of the fact that neither the Ceann Comhairle nor the Leas-Cheann Comhairle is in the Chair, I do not propose to accept such a motion.

That is not a reason under Standing Orders, Sir. If the Acting Chairman feels he needs to take advice, I can cite the relevant point for him.

Acting Chairman

Under Standing Order 64(3), the Cathaoirleach is empowered to reject the motion.

The Acting Chairman said that because the Ceann Comhairle is not here, he cannot accept it. If he is saying he has the authority to reject it, then I propose it be taken now.

Acting Chairman

Neither the Ceann Comhairle nor the Leas-Cheann Comhairle is in the Chair to decide on the issue. I am not in a position to decide on it.

Ask the Taoiseach.

Acting Chairman

I am not empowered to accept the motion.

This is an effort to try to cut a budget debate which has only started. We lost an hour and ten minutes because people wanted an extended debate but less than one hour later, they want to end the debate. This is the greatest show of parliamentary hypocrisy I have ever seen. Deputies have already been told there will be a lengthy debate. We can see now what people are at. They do not want a proper debate but to try to call a vote.

We want to vote on the budget.

I take it, Acting Chairman, that you are not accepting this motion.

Acting Chairman

I am not accepting the motion. I call Deputy Deenihan, who has about two or three minutes remaining.

We live in a time of extraordinary economic and social potential. Standards of living have been rising for most of those in employment and income per head will reach average EU levels soon. While accepting and rejoicing in the good news story, we must not forget those who are not doing well or who are not benefiting to any great extent from our buoyant economy.

Successive UN human development reports have highlighted the reality of poverty in Ireland. In 1999, a report by the UN again highlighted that among industrialised countries only the US has a higher percentage of its population in poverty. A substantial number of people live in poverty in this country. The number of long-term unemployed is still problematic and access to appropriate accommodation is becoming more difficult for large numbers of people. Adult illiteracy levels remain a scandal and the drop-out rate from second level education is storing up problems for the future. We have to view this budget against this background.

The budget introduced by this Government is socially divisive and politically inept. No Government has had resources at its disposal on budget day which the Government had. Yet it failed to address the real needs of all the people. Low paid persons received very little from the budget – £4 per week on an income of £10,000. There is nothing special about the provisions for old age pensioners, widows or widowers and child benefit has increased by only £2 per week for the first and third child. There are no effective provisions for child care. As Fr. Sean Healy of CORI stated, this budget is anti-family, anti-children, anti-women and anti-poor.

The proposal to individualise the standard rate tax band is a travesty. When the Minister's scheme is fully implemented a family on one income will move to the higher rate of tax when its income exceeds £28,000 while a family on two incomes will not move to the higher rate until their incomes exceed £56,000. This approach to taxation reveals a Government which believes it is running an economy rather than a country. It believes society should be based on individuals rather than on families or communities and this matter was borne out in last Sunday's editorial in the Sunday Independent. It confirmed, more or less, the sentiments expressed by Deputy Noonan in his budget speech.

The Combat Poverty Agency and the ESRI analysed the distribution impact of this budget. It said that in budget 2000, the richest 10% of households will benefit six times more than the poorest 10% of households which will benefit from a 0.7 % increase in income. The richest 10% will benefit from a 4.2% increase in income while the middle 20% of households will benefit by an average of 2%.

That says it all.

There were great expectations—

That sums it all up.

—in the area of child care but these were not delivered on. The Minister upset not only the stay at home spouse, but also her working counterpart.

That is right.

The emphasis was on increasing-—

Acting Chairman

Deputy Deenihan is taking some liberty with time.

—supply with tax concessions to providers while the expectation of a large increase in child benefit proved overly optimistic. The increase in child benefit will cost £105 million in a full year but against expectations, it seems derisory. From the point of view of tax reform, this budget has not measured up. I had a longer speech which I have not had the chance to make. Perhaps I will be able to make it in the future.

I would like to share my time with Ministers of State, Deputies Molloy, Flood and Jacob.

In the present controversy, we seem to overlook that everyone has gained in budget 2000 and that nobody has lost; some have gained more than others. This Government has looked beyond the immediate and is planning towards a better future for all. We are addressing the needs of pensioners, carers and people whose circumstances depend on Government support.

This budget does not stand alone. It is part of a structured plan of a Government determined to bring a better quality of life to every citizen. More importantly, the Minister for Finance's three budgets all contained measures designed to improve the position of older people in our society as regards pensions. In An Action Programme for the Millennium, the Government promised it would bring the old age pension up to £100 per week over the lifetime of this Government. This commitment has been emphatically delivered on. This latest budget provides for a £7 increase in the personal rate of pensions for people over 66 years and for those over 65 years on retirement and invalidity pensions. This follows on the unprecedented 5% increase in the Minister's first budget and a further £6 increase in his second budget. People with selective political memories should not be allowed to forget that it was not so long ago, 1995 in fact, that Deputy De Rossa, as Minister for Social Welfare, gave pensioners a meagre £1.80 increase.

The effect of the increases under Fianna Fáil and the Progressive Democrats is that the rate of old age contributory pension will stand at £96 per week. This represents a 20% increase on the rate payable when the Government came into office compared with a total increase of under 10% over the lifetime of the rainbow coalition. Under the rainbow coalition, old age pensions stood still compared to the growth in earnings. This Government has increased them well above the increase in average earnings. When the increase in qualified adult payment is included, a contributory old age pensioner couple, both over the age of 66, will receive £166.60 per week from next May compared with £133.40 in 1997.

This Government has also significantly improved the assistance available to those with disabilities. I would single out the measures contained in the budget that address the needs of those with an intellectual disability. Additional Revenue funding of £35 million has been made available to provide hundreds of new residential, respite and day places as well as focusing on office and support services and additional specialist support services. This is just one part of an overall package for people with disabilities spread across a number of Departments and illustrates the Government's commitment to improving the lot of all sectors of society.

It is the Opposition's duty to criticise and oppose. Democracy is strengthened by strong effective Opposition and the Opposition parties have targeted, as the Opposition always does, perceived weaknesses in the budget. If I was in Opposition I would do the same; I would concentrate on attack. If I was working in public service journalism I would not, nor should I. I have been a strong supporter of RTE, our public service broadcaster, at all times and have always respected its independence. When representations or complaints are made to me regarding programmes transmitted by the station, I respond by pointing out that programming is a matter for RTE. It is not my function as Minister to intervene in programming matters and it is only right in a democracy that that is the case. Yet there have been times when I, as a viewer, have been personally annoyed or infuriated by something I have seen or heard on RTE or when I have disagreed with the interpretation of a particular story. Those responses fall within the normal diversity of reactions to the normal diversity of opinions, analysis and programming one would expect from the national public service broadcaster. The functions and responsibilities of journalism in public service broadcasting in this country are to provide objective and impartial reporting of the news of the day. It is the duty of the RTE Authority to ensure its current affairs programming is fair to all interests concerned and is presented in an objective and impartial manner, in accordance with the Broadcasting Authority Acts. In this respect the Authority has the responsibility to ensure its national broadcasting services are not used as a platform for the expression of personal views by any of its employees on any topic.

An aspect of the budget that impacts on my Department is the section 481 provision, which has proven to be a fundamental instrument of Government policy in the development of the film industry in Ireland. First established as section 35 of the Finance Act, 1987, the scheme was reviewed on a three-yearly basis up to 1999. At that time, the film industry strategic review group, chaired by Mr. O.J. Kilkenny, had issued an interim report recommending the continuation of the section 481 scheme. However, in anticipation of the group's final report, the Minister for Finance agreed to extend the scheme for a year up to April 2000. However, some people read this as signalling not an interim arrangement but a preparation for the withdrawal of section 481 altogether in the year 2000. Section 481 has enabled Irish film producers to establish themselves and develop the international relationships which are essential to this industry. A small number of major international projects have also been attracted to Ireland, providing opportunities for Irish professionals to work alongside world class international technical and creative talents. These projects have given Ireland wide international publicity as a venue and centre of excellence in film making.

The Kilkenny report was published last August and I moved quickly to put proposals based on its recommendations to the Government. The Government approved my proposals and I will shortly give a composite statement setting out the strategic plan for the industry. I warmly welcome the provision in the budget which will extend the section 481 investment incentive scheme for five years. This will strongly underpin the strategic plan and I am satisfied these steps will put in place a policy framework for the new decade and offer an unprecedented period of confidence and stability for the industry. This commitment to extend the measure for five years will send a powerful signal to both the Irish and international film and investment communities that Ireland is committed, in the long-term, to film production. It will also help to stabilise career options for those entering the workforce for the first time and for those seeking to transfer their skills to this sector. However, I stress that it is for the industry to avail of these opportunities in a constructive and strategic way. I am confident that progressive elements in the industry will realise and seize this opportunity for consolidation and growth which the five year extension of section 481 and a co-ordinated strategic plan for the industry will provide. There is a real danger that negative attitudes within the industry itself will be only to the detriment of the industry here. While I do not expect comment to be uncritical, there is no doubt a pervasively negative tone is no good for the industry and undermines international confidence.

The Progressive Democrats Party has never been afraid to give taxpayers back more of their hard-earned money. In three budgets we have been part of a Government that has given back more than £2 billion to taxpayers. We have addressed some of the key concerns of employees and employers alike and have sought to take real measures towards the creation of a fairer society. Amid all the controversy, it is too easy to forget the huge gains for ordinary workers, the record increase in the old age pension, the record increase in child benefit and the record amount now being spent to improve the plight of people with disabilities, both physical and intellectual, in this budget.

I am proud that the Progressive Democrats Party has made an input into taking the burden of tax off the workers of this country like never before. Clearly, as we develop a fair and reasonable tax system for a modern workforce, we must seek to balance the needs of spouses who work outside the home and spouses who rear their children or care for other dependants in the home. My party is also committed to easing the tax burden on the low paid and it should be noted that in its three budgets to date and within a space of less than two years, this Government has raised the level at which workers enter the tax net from £71 to £110. Much more needs to be done and my colleagues and I accept this; it is our firm intention to do so in forthcoming budgets.

This is only the third of five budgets and I fully support the initiative to take more than 80% of people out of the top rate of tax by the year 2002. This Government's ambitious plans are a far cry from the mere tinkering with tax which was carried on by the Labour and Fine Gael rainbow coalition when it was in office a short time ago.

If further evidence was needed that housing is right at the top of this Government's agenda, the budget and the Estimates provisions for next year provide it. Significantly increased resources have been provided in this budget to improve the housing conditions of those who are most in need, including the disabled, the elderly and the home less. The housing provisions include significant improvements to the terms and conditions of the disabled persons grant scheme; a substantial increase in the effective maximum grant available under the essential repairs grant scheme; extra funding for the provision of hostel accommodation for the homeless; an additional £1 million funding for the Task Force on Special Housing Aid for the Elderly; substantially increased funding for the Irish Council for Social Housing which will support the drive to increase output from the voluntary housing sector; and tax changes which will not only simplify the tax code in relation to housing but will further encourage the sale of land for housing and help to develop and encourage stability of tenure in the private rented sector.

The disabled persons grant scheme is a well-targeted scheme which enables local authorities to grant aid necessary adaptation works to a house to meet the needs of a disabled person. The terms and conditions of the scheme were significantly improved in last year's budget and I am pleased that this year we have gone even further. The effective maximum grant paid by local authorities was increased from £12,000 to £14,000 and very significantly, the grant can now cover up to 90% of the cost of the works, compared to 75% previously.

The essential repairs grant scheme, which again is administered by local authorities, enables basic repairs to be carried out to certain houses so that they can continue to provide an acceptable standard of accommodation for the occupants. The effective maximum grant under this scheme has been increased to £6,000 from £4,500. In total, an extra £5.7 million has been provided in the budget for disabled persons and essential repairs grants next year.

The Task Force on Special Housing Aid for the Elderly is specifically designed to enable elderly persons living on their own to enjoy decent housing conditions. It provides for the carrying out, at no cost to the occupier, of basic works to prolong the useful life of the house so that it can continue to provide, for as long as is necessary, an acceptable standard of accommodation for the occupants. In addition to the £1 million increase in funding provided for the task force in the Abridged Estimates for 2000, a further £1 million has been allocated in the budget, bringing the total provision for the scheme in 2000 to £8 million – the highest level of funding ever provided to the task force and twice the level of expenditure on the scheme in 1997.

The budget also provides a significant boost to the funding available for homelessness. High support accommodation for homeless people with addictions is a critical element of our range of responses to homelessness. The Government has recognised this by providing £5 million over the next two years to enable Dublin Corporation to provide two high support hostels for homeless people suffering from addictions. This is a clear demonstration of the Government's commitment to respond effectively to the needs of homeless people and is additional to the provision of £4 million contained in next year's Estimates for the provision by local authorities of hostel accommodation for homeless persons.

I am particularly pleased that the Irish Council for Social Housing, the umbrella organisation for voluntary housing bodies, will be allocated £150,000 towards its running costs for next year. This increased funding will enable the ICSH to enhance its developmental role and to meet additional administrative and other costs, which inevitably will arise from the Government's drive to increase output from the voluntary housing sector to 4,000 units per annum.

I welcome the changes to the tax code introduced in the budget with direct benefits for housing, particularly the assistance provided to those living in private rented accommodation. The amount of rent relief available against income tax has been increased by 50% for single, widowed and married people who can currently claim relief at the standard rate. In addition, the exemption threshold for stamp duty payable on residential leases has been increased from £6,000 to £15,000.

The changes announced to mortgage interest relief will assist widowed people, simplify the system and ease the burden of mortgage repayments for many house purchasers. In particular, the introduction of mortgage interest relief at source will mean that from April 2001 borrowers will have the benefit of making only net – after tax relief – payments on their home purchase loans.

The introduction of a 20% rate of tax on the sale of residential land for companies and individuals who would have been liable for higher rates previously will further encourage the release of land for residential development. This is a helpful change in the context of the Government's drive to increase housing supply. The significant reductions in income tax generally announced in the budget will increase every household's disposable income and will greatly assist affordability of house purchase or rental for those aspiring to set up homes.

The housing measures contained in the budget have been carefully targeted at those in our society who are most in need, but by no means do they tell the full story regarding the Government's investment in housing. The increased expenditure in the budget will bring total housing expenditure to more than £800 million in 2000 – an increase of 50% on last year's Estimate. Furthermore, local authority and social housing programmes will be allocated £432 million – an increase of 60% – to enable local authorities to meet existing commitments as well as providing for an enhanced programme of 22,000 local authority housing units under the four year multiannual programme due to commence in January next year. I recently advised local authorities of their starts for the years of the multiannual programme. I urged them to immediately commence the preparation of schemes to ensure a streamlined delivery of housing output over the four year period. I have also asked the authorities to front-load their programmes as far as possible where local authority housing needs have increased significantly.

The inclusion of housing in the National Development Plan for the first time also reflects the priority that the Government has given to this issue. The provision of £6 billion, which averages more than £850 million per annum over the life of the plan, is more than double the £2.4 billion invested in housing over the period of the previous plan. The £6 billion housing investment will ensure the social housing needs of more than 90,000 households will be met with Government assistance over the period of the plan.

Such levels of investment represent a real response to current housing need and clearly demonstrate that housing is one of the Government's top priorities. Our housing programme will continue to focus on action – action on behalf of all those who have a housing need.

I welcome the opportunity to speak on the budget. RTE's coverage of the budget last Wednesday was outside the station's remit of objective and impartial reporting and analysis. We witnessed a hysterical rant against the budget, which made the Opposition appear almost pro-budget. In attacking the budget, the members of the Opposition were doing their job, but some RTE employees were not. Elements of this budget have proven to be controversial, but my concerns about some RTE coverage are in no way related to that specific controversy. In certain instances RTE did not meet its obligations and that would be my belief if this budget had not raised a ripple of controversy. I am bitterly disappointed at the way some of RTE's coverage and analysis of "Budget 2000" veered to the highly individualist rather than the impartial.

As I drove about doing my work as a Minister of State last week, I had the opportunity to listen to some of the phone-in shows on RTE radio. I am very concerned about one presenter who almost invited a caller to vote against Fianna Fáil or to go out and march. That did not represent fair and impartial management by the radio station in regard to that show.

At a time of unprecedented economic growth with labour shortages in several areas, social inclusion remains a crushing problem in many of the disadvantaged communities. At a time of economic boom, this may widen the poverty gap due to the weak capacity of the socially marginalised to meet the increasingly sophisticated demands of employment. For that reason the Government will make a major investment, totalling more than £14 billion to address social inclusion. Of that sum, £1 billion will be spent via the regional operational programmes in a special sub-programme for social inclusion and of that sum £420 million will be directed to continue and augment the valuable work carried out under the aegis of my Department by the area based partnership companies, the community groups, local drugs task forces and the young people's facilities and services fund. This provision represents a 50% increase over the levels of expenditure available to existing programmes in these fields.

The existing partnership programmes under the operational programme for local, urban and rural development have made significant achievements in combating social exclusion and disadvantage. For example, up to the end of 1998 some 24,000 people were assisted to obtain employment or to set themselves up in employment and some 35,000 young people have been assisted under preventative education measures. Further area based intervention programmes will build on these successes in providing outreach to long-term unemployed people participating in second chance education and training initiatives and in dealing with the important issue of early school leaving.

The national drugs initiative established in 1997 has achieved a considerable degree of success in combating the scourge of drugs that affects many urban areas. The primary focus of the national drugs strategy has been on the areas experiencing the highest levels of heroin abuse and this focus will continue in the years to come. The Government has invested considerable resources across a range of agencies to tackle the drug problem. For example, £10 million was allocated in 1997 over and above the funding available to the State agencies to support the implementation of action plans, which were prepared by the task forces, and a further £15 million was allocated over the following two years to enable those plans to be updated.

The young people's facilities and services fund was established by the Government in 1998 to assist in the development of preventative strategies in a targeted manner through the development of youth facilities, including sport and recreational facilities and services in disadvantaged areas where a significant drug problem exists or has the potential to exist.

An Exchequer contribution of more than £34 million has been provided over a three year period for this purpose, of which £25 million has been targeted by the Government at the 13 local drugs task force areas to support almost 300 projects as part of the integrated plans prepared locally.

We recognise the drugs problem is not confined to the task force areas in Dublin and Cork city and the Cabinet Sub-Committee on Social Inclusion provided £2.3 million to urban areas outside the task force areas where a serious drugs problem exists or has the potential to develop. The primary focus initially on the major urban areas include Galway, Limerick, south Cork city, Waterford, Bray and Carlow.

The funding provided in the national development plan must be taken into account when analysing the budget as both will lay the foundations from which the country will build future growth and prosperity in the millennium. Social inclusion has been correctly signalled as a fundamental issue in the plan that needs to be achieved if all our citizens are to reap the benefits of the country's economic prosperity.

I am conscious of the need for appropriate structures to be put in place at local level to optimise the benefits that will come from the new programmes. Careful planning will be required to integrate the work of the various agencies and to achieve the best use of resources, both financial and human. I strongly urge all the relevant Departments to use the experience and expertise derived from initiatives, such as the integrated services process, in the planning and delivery of the new programmes.

Partnership 2000 stated that social inclusion would be a strategic objective in its own right. The targeted initiatives taken and the relevant programmes developed over a wide range of areas for the period of Partnership 2000, underpinned by an allocation of resources almost double what was promised, confirms the Government's commitment to tackling disadvantage. The disadvantaged individuals, families, children and communities continue to pose a collective challenge for us and we will be rightly judged as a caring society by the adequacy of our response.

Our objective is to ensure that the most vulnerable sections in our society get their fair share of the benefits in our successful economy. We have made significant progress towards achieving that objective, which this budget and the national development plan will consolidate. For those reasons, I commend the budget to the House.

I was gratified to hear the Taoiseach mention the balance which is required and to state that the Government is prepared to work with the social partners to achieve that balance. It will also listen to the people and to reasoned argument put forward on their behalf.

I published a Green Paper on sustainable energy last September which was well received. It makes a significant contribution to the debate on how we are to meet our obligations under the Kyoto Protocol. The Green Paper proposes a framework for energy efficiency in Ireland and sets out our policy both for limiting energy related CO2 emissions and the use of renewable energy sources over the period of Ireland's compliance with the Kyoto Protocol.

Emphasis is given to highlighting measures which will promote energy efficiency among targeted consumers. There is also a major emphasis on the role which can be played by electricity generated from renewable sources. In the Green Paper I have set an ambitious target of 500 megawatts of additional installed capacity from renewables. In recognition of the fact there are constraints, I have established a renewable energy strategy group, under strong independent chair manship, which will examine all aspects relating to the deployment of renewable energy sources. The group has been mandated to examine issues related to wind energy in the first instance and has been asked to report in approximately six months.

I am also pleased that a key priority of the national development plan is to identify those areas of expenditure which will assist us to meet our Kyoto obligations. A provision of £146 million has been earmarked in the development plan for energy measures. The first tranche of £6.2 million has been provided in the Department's Estimate for 2000, the bulk of which is aimed at enlarging the resources and role of the Irish Energy Centre. The intention is to establish the Irish Energy Centre, currently a unit within Enterprise Ireland, as a statutory body under the direction of a board as soon as possible. I am pleased the Green Paper, allied with a positive commitment by the Government in terms of funding, will not only complement this national strategy but will enable it to be prepared in a more constructive way.

My Department is preparing draft legislation to transform Bord Gáis into an public limited company to give it greater flexibility in its affairs and to allow it to develop into a multi-asset, multi-customer organisation which would make use of its existing assets and expertise to diversify into related markets either at home or abroad.

There have been a number of reports in the media in recent weeks concerning the supply of gas for electricity production. I want to set the record straight by outlining my plans. Having considered the response to a public consultation on the issue, I have decided that capacity should be allocated through a selection mechanism based on an evaluation of planned commissioning dates for power plants. In order to ensure independence in the allocation process, I have asked the Commission for Electricity Regulation to conduct the allocation scheme.

The Attorney General has advised that any scheme to select parties to whom the limited capacity should be made available should be put on a statutory footing. This morning the Cabinet agreed to the general scheme of a Bill to provide for such a selection mechanism. I hope to introduce this Bill to this House as soon as possible. In the meantime my Department will issue a policy paper and response to the public consultation.

This brings me to the issue of new gas supply infrastructure which will be needed within the next four to five years. There are a number of possibilities. The gas find off the west coast by Enterprise Oil and its partners, Statoil and Marathon, looks promising but has yet to be declared commercial by the consortium. I have decided for the time being to wait and see whether the Corrib field is to be developed commercially before considering a proposal by Bord Gáis to build a second Scotland Ireland interconnector.

Earlier this year my Department published a wide-ranging review of the road haulage industry, which highlighted an urgent need to develop advisory support and market information services for the sector. As part of the Government's commitment to a strong and viable road haulage sector, the budget includes provision of a special grant of £100,000 to assist with the setting up of these services. The grant will permit the introduction, as a matter of urgency, of an implementation plan covering areas such as the promotion of information technology use, the facilitation of inter-firm co-operation to promote efficiency, the provision of financial and costing information and the development of market information systems. It is hoped these measures will encourage a more forward looking approach among hauliers to increase efficiency and profitability.

The first complete seabed survey of the Irish offshore territory was approved by the Government in April 1999. The Geological Survey of Ireland, an agency of my Department, has responsibility for managing all aspects of this seabed survey, the object of which is to produce a series of topographic and geological maps of the seabed. It will provide an accurate basis for seabed maps of value to policy makers, fishermen, engineers, biologists, oceanographers and geologists. The maps will assist in studying seabed resources, such as gravel, minerals etc., natural hazards, preferred environments for living resources and the present and future environment of our seabed. Products will be available in paper and digital format as soon as possible.

This first detailed knowledge of the Irish marine territory of 900,000 square kilometres, which is ten times the national land area, is anticipated to yield great benefits in relation to policy for the sustainable development of all our marine resources and the conservation of our marine environment. The total approved cost of this survey is £20.7 million, which will be spent over seven years, starting in 2000.

I wish to share my time with Deputies Broughan and Rabbitte.

Is that agreed? Agreed.

There is general agreement on both sides of the House and outside it that last week's budget is deeply unfair and socially divisive. That message has come across loud and clear from the public and from a number of the social partners and it has been received loud and clear by the Independent Members of the House who prop up the Government and by many Fianna Fáil backbenchers.

I welcome the debate this unfair budget has generated on the airwaves and, for a limited period, in this House. It raises issues of the most profound political nature and it is time we had such a debate. Those issues are threefold. First, they concern how we make decisions about the distribution of our national wealth and how best we can use its distribution to improve the welfare of all citizens. It also raises the issues of how we view the role of families and the importance we attach to the needs of children. Finally, it raises the question of the influence of powerful vested interests on politics and their input into Government decisions.

The Minister, Deputy McCreevy, and his colleagues, like Thatcher before them, have often tried to claim that ideology is dead. This budget has proved that is not the case. It has flushed out the Minister and shown him for what he is, an unashamed, ideologically committed free marketeer, a person who believes that the individual is here to serve the economy, that community is about serving the economy, not the other way round. Most people believe that developing the economy is not an end in itself, that people put in effort to get the economy right to reap benefits for the entire community. They believe that the economy should be subservient to community. The Minister, Deputy McCreevy, has turned that idea on its head. He has adopted the values of the free market and is happy to let that market dictate how we live our lives and the value we place on families and children.

The Minister is of the attitude that we should leave it all to the free market. Unfortunately, because of his ideological views, the Minister does not believe that the State has a role in ordering and improving society for the good of all. That is the key. The Minister does not appreciate the principle of the common good and has thrown it out the window in this budget.

The ideology to which the Minister subscribes is one in which those who are better off should get more. That is what this budget does, it lets the powerful win over the weak. It sees people as mere economic units and completely disregards their other needs and responsibilities. Most significantly, it is an ideology which seeks to give huge pay-backs to people involved in property speculation who are already raking it in at the expense of ordinary people who are trying to provide homes for themselves.

The most interesting aspect of the public reaction to the budget is that people writing to the newspapers and telephoning TDs of all parties and radio programmes, who stand to benefit by as much as £50 per week, are saying that this is wrong, that they do not need the money and would prefer to see it being used to tackle our serious social problems, to eliminate child homelessness, to give a hand up to those living on low incomes. They want to see everyone have a stake in the economy and society and want the fruits of the economic boom to be shared equally. People are not simply individuals interested in their own concerns. Irish people are interested in Irish society. They know the depths of poverty-related social problems and they want the Government to solve those problems.

Regrettably, this Government has failed miserably to tackle those problems and to use the rising tide of economic growth to lift all boats. People were promised that when the tide rose, everyone would be lifted. There was an opportunity to do that. Last year, in fairness to the Minister, he took the first steps to enable the tax system to be used to help everyone. He was given credit for introducing a system of tax credits so that this year the mechanism would be in place to assist everyone equally, to give £500 to every individual. Unfortunately he has ignored the progressive moves made last year and has reverted to type, deciding to reward those who are doing well while penalising those on low incomes.

The figures illustrate that. A couple trying to survive on £14,000 – I would like the Minister to explain how it is possible for a couple with two children to survive on £14,000 – benefit to the tune of 2.9% of their income, while a couple with similar responsibilities but with a joint income of £50,000 see their financial situation improve by more than 7%. In financial terms those on low income get a mere £400 extra per year while those on £50,000 get an additional income of £2,500. There is no social justice in those economics.

I welcome the fact that some of the social partners have stated that they are not prepared to accept what the Government is doling out and have made it clear that the Government is flying in the face of the principles which underline partnership. It has dispensed with those principles, saying that it is no longer interested in working toward a partnership where everyone gets a share of the cake. I welcome the leadership Des Geraghty has shown on the issue. He is no longer prepared to go along with the cosy consensus that has passed for social partnership in this State. He is standing up for those he represents, people earning £12,000 who will get a meagre increase from this budget, while those lucky enough to earn £70,000 are handsomely rewarded by the Government.

I welcome the response from decent people to the Minister's proposals to individualise the taxation system. It is interesting that the arguments used in favour of individualising the taxation system have not been applied to the social welfare system. There has been public demand for the individualisation of social welfare payments to lift those at the bottom of the heap who are trying to survive on £70 per week. There are good reasons for the individualisation of the social welfare system, but the Minister, Deputy McCreevy, chose to ignore those people and instead proposes to individualise the taxation system.

This move has shown up the Minister and his economist friends, such as Dr. Seán Barrett, for what they are. They are out of touch with the real world and do not realise what being part of a family means. They do not realise the responsibilities which go with rearing children. We have heard many examples of a parent in the home caring for someone with a disability or a dying relative. Those are the extreme cases. I am concerned about those who realise the needs of their family members. I heard Dr. Seán Barrett refer to this debate in a radio interview in which he said that women want to be paid for sitting at home knitting. How dare people disregard the needs of children in this manner? How dare they tell people who are doing work in the home that they are not doing valuable work?

This budget will come back to haunt the Government. In view of the reaction of the Fianna Fáil Party backbenchers, the budget is dead in the water and the Minister's position is untenable. I move the adjournment of this budget debate and I hope it will resume tomorrow.

Debate adjourned.
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