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Dáil Éireann díospóireacht -
Wednesday, 8 Dec 1999

Vol. 512 No. 4

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.)

Deputy Shortall was in possession and she was sharing her time with Deputies Bruton and Rabbitte.

I wish to share my time only with Deputy Rabbitte.

I want to draw the attention of the House to a statement issued on behalf of the Minister for Finance today, which contained two serious untruths. The first untruth referred to states that the budget allowed the Government to target resources on the lower paid. That is manifestly untrue. The budget primarily benefited those who already have considerable wealth – the old golden circle. It did this by essentially dismantling our capital taxation system and after that, it disproportionately favoured high earners who are already very well off. Relative to those two groups, it did little or nothing for those on low income.

The second untruth referred to is that the measures introduced in a panic today will be of greater proportionate value to lower income families. Again, this claim is completely and utterly untrue. This new tax relief announced today gives no assistance whatsoever to those families with an income of less than £10,000. It seems the Government values the work of a parent in the home where the family income is in the middle to high range, albeit to the tune of a derisory £12 per week, yet it places no value on the work in the home where a family income is low and, arguably, financial assistance is most needed.

In addition, by his activities today, the Minister has introduced a significant disincentive to work. A parent in the home will get a tax allowance of £3,000. If this parent decides to seek a part time job, he or she will lose that £3,000 allowance and gain only a £1,000 PAYE allowance. In other words, they will lose the first £600 of whatever money they might earn on taking up a job. That is the reason everyone, except the two Government parties, said the way forward was to substantially increase child benefit or to introduce a universal parental payment. Unfortunately, the Minister failed to grasp this basic point and he has now made the budget even more anti-child than it was.

I want to develop two points in the limited time available to me. The first is that the vicious discrimination in this budget is against low earners and the poor. The second is that the reckless ideological drive of the Minister for Finance has put social partnership at risk.

I understand the hullabaloo kicked up as a result of the manner in which women working in the home have been denigrated by the Minister's budget. However, that discrimination must take second place to the discrimination against people on low incomes and on no incomes or on social welfare. What happened in the budget in relation to one earner households should not have happened, as the Minister has now admitted. However, it is entirely unjustifiable and a serious injustice of this budget that in the special conditions of 1999 the Minister, who never had so much cash to give out, could have distributed it in a fashion that gives three times more to the highest earners than to the lowest income workers. It is a more serious injustice than the denigration of the one income household, which I deplore.

The real injustice is to low paid workers who find themselves in receipt of just over 2% compared to almost 7% for high earners. I will take a fair example – one can use statistics to prove anything – of a typical single income married couple on approximately the average industrial earnings, which is £17,000 per year. They will get £7.15 per week from this budget. The manager in the same plant who is in receipt of £50,000 per year will get £31.17 from this budget. One can back that up with an array of tables, some of which are more extreme because not everyone in the economy earns £17,000 per year. The lower the earnings, the more serious the discrimination.

The Minister has flown in the face of the consensus which ranges across the economy from employers to trade unions to community organisations. That patiently won consensus is probably best expressed in the NESC report. It has the allegiance of farmers, employers, trade unions and the Government. The Minister for Finance signed off on the NESC report. The thrust of that report could not be more clear. It is to focus the tax reductions on the lower paid and to mount a drive against poverty and exclusion in this society. Aiming tax reductions at the lower paid does not mean that no benefit accrues to the higher paid. It means that the higher paid do not benefit as proportionately as they normally would.

The Minister's action flies in the face of the NESC report, national consensus and social equity. He could scarcely have structured a more biased budget against people on low incomes. The downside of the row is that it serves to conceal any serious debate on how discriminatory this budget is to people living on low incomes. People who welcomed the individualisation of the tax bands do not understand that couples will not benefit if their joint income is less than £28,000. The change is deliberately designed for the highest earners.

The scale of the Minister's unfairness has put social partnership at risk. On "Six One News" on the evening of the budget I made the point that the Irish Congress of Trade Unions would, in the cold light of day, have second thoughts and would have cause to revisit its original response. It is not surprising that that revisitation has since taken place. It is great that we have had job expansions over the past six years, but low pay is a problem in the economy. In a trade union such as SIPTU, there are 70,000 members on low pay, while in trade unions such as MANDATE and that representing the lower grades in the public service, the majority of members are on low pay. Their voices have now begun to be heard as a result of them examining the budget after the storm which was created and which threatened to sweep the Minister from office.

Never in the history of the State had a Minister so much money to give away and then managed to distribute it in such a manifestly unfair way. Because the Minister chose to reduce the top rate of tax by 2%, which costs £156 million, and to target the optimum relief over the higher middle income earners to the high income earners, he was only able to give a derisory £10 per week increase in the personal allowance. This is where everyone agreed that progress should have been concentrated. That £10 per week compares to the Minister's figure of £21 per week on the personal allowance last year. The people who suffer most as a result are those on low wages.

The result of this refusal to address the personal allowances means that a worker on income as low as £109 per week is dragged into the tax net. That £109 per week must be seen in the context of this Government's espousal of a national minimum wage which will work out at less than £200 per week, depending on the number of hours worked. If it is considered that the minimum income on which one can live is around £200, why is someone taxed after earning £109? That is the most serious inequity in this budget.

It is difficult to see how the trade unions can repair the damage which has been done to social partnership, particularly if one looks at the private sector. In the private sector this was the opportunity for low paid workers to catch up. Unless there are extraordinary terms to the advantage of the lower paid enshrined in the social contract, I cannot see how unions like SIPTU or MANDATE, which have traditionally supported social partnership, can sign on to another social contract. It was much easier to structure positive advantage for the lower paid into the tax code. It will be very difficult to do that in a social contract because it is a deal done on the generality. There are well paid workers who are trade union members with only a limited tolerance of how much can be done to bias the contract in favour of the low paid. That is the difficulty the negotiators will have and that SIPTU and MANDATE will have in getting sanction from their membership to conclude another social contract. The Minister has worsened the position.

As for the renovation of the budget which took place today, it does not make the slightest difference to the situation of those on low incomes. By definition, it only comes into effect for medium to high income earners, never mind that it is standard rated. That was a great line in the press release, which came from the same press office that guided Deputy McGuinness and others when they organised against their Minister and budget on the plinth.

At least some of us have our own minds.

The statement is that the tax relief will go to all one income families on the standard and higher rates of tax at all income levels but will be of greater proportionate value to low income families because it is standard rated. For people who do not earn the requisite salary level or who do not have children, the measure will have no impact. We can be sure – let Deputy Noel Ahern and his rebellious colleagues bear this in mind while they pat themselves on the back when heading home this weekend, believing that not all the credit should go to Deputies Healy-Rae, Fox and others – that by the time the Department of Finance introduces a proposal to this House in the Finance Bill to give expression to what happened today, eligibility will be so circumscribed that it will be of even less value than people think.

Today's attempt to save the budget and to save the Minister can only help households on middle or higher incomes. Even at that, the benefit will be approximately half what it should be – Deputy Fleming knows that well. The standard rate is £660 compared to £1,320 for the people benefiting from the individualisation of the tax bands announced in the budget. Mná na hÉireann should not cheer about what they were told on the plinth by Deputy Hanafin and others, such as Deputy McGennis who thought it was a great budget last week. Tonight they told mná na hÉireann they have won a great battle and that they will get a substantial income. There was much laughter in this House when Deputy Garret FitzGerald proposed £9.60. This is just a little more than that, and the House will recall the difficulty Fianna Fáil had with that £9.60. It did not know whether to scorn it or make it £9.80.

What about VAT on boots and shoes?

That party, 15 years later, puts forward this proposal and says this a great victory for the people.

The Minister for Finance has made a dog's dinner of the budget. Members of the Government have been nodding and winking behind his back and seeking to absolve themselves from liability for the Minister's gaffe. There are other Ministers and Deputies going around the House saying "You know what the Progressive Democrats are like". Tonight we see the spectacle in the other House of the Progressive Democrats Party tabling a special motion recommending the budget. The Senators are closing the stable door long after the horse has bolted.

The parade onto the plinth reminded me of the duck which used to hatch out on Leinster Lawn until a few years ago. She used to lead the parade of ducklings across the lawn every year. That was what the Fianna Fáil Deputies resembled, led by Deputy Roche in the role of mother duck. It was not a pretty sight.

I am very glad to have the opportunity to speak on this budget. It is an even-handed budget but it is also radical and forward thinking. As we move into the new millennium it is appropriate that we bring forward a budget like this to set the foundation for our future.

In the past our economy went through some very difficult times but our economic progress during the 1990s has been outstanding. GNP grew in real terms by an average of 7.6% per annum between 1994 and 1999. This growth has led to a significant increase in employment, with numbers employed increasing by over 30% and unemployment falling from 15% in 1993 to just over 5% today.

At the same time, as a result of some sound budgetary management, our debt-GNP ratio has fallen from 120% in 1988 to 47% this year. This has raised standards of living for huge sections of society. In 1999 our GNP per head is 90% of the EU average, compared with only 79% in 1994.

Some sections of the community, however, may not have benefited as much from this rising tide as others. With its innovative package of tax and social welfare measures, this budget is be commended for redressing that imbalance.

The change in personal allowances and the tax exemption threshold will remove 50,000 individuals from the tax net entirely, and the expansion of the standard rate band will remove 125,000 taxpayers from the top rate of tax. An individual earning the average industrial wage will gain £20 per week as a result of these measures. The aim over this and the next two budgets is to reduce the percentage of taxpayers at the top rate to 17% by 2002. This is an enormous and welcome change in our tax system and will be of great benefit to many people in rural areas.

This will be helpful to farm families, where total income has been boosted in recent years by the increasing trend for the farmer or spouse to work off-farm for at least part of the year. The national farm survey shows that on 43% of farms either the farmer or spouse works off-farm. This trend is rising as our growing economy offers rural householders new and more flexible work options.

A measure which will put more money into farmers' pockets is the increase in the flat rate VAT refund. In this budget the rate has been increased from 4% to 4.2% with effect from 1 March 2000. It will be worth £3.6 million in 2000 and £5.3 million in a full year.

In this budget the raising of the thresholds for capital acquisitions tax, in particular the class 1 threshold applying to parents, will have an impact on the transfer of agricultural assets to young farmers. When taken in combination with the 90% agricultural relief this means that virtually all family farm transfers will be exempt from the tax. For example, a qualifying farmer may inherit a farm worth up to £3 million from a parent without the transferee becoming liable for the tax.

The extension of the stamp duty for young trained farmers to December 2002 is also welcome. This relief significantly reduces the cost of the transfer of agricultural assets to young farmers and further enhances land mobility. There is a range of other measures aimed at encouraging the early transfer of farms. Installation aid has been available since 1986 and has provided valuable support for 7,250 young trained farmers. This year alone almost £2.5 million has been paid to 431 young farmers. Over 9,000 farmers aged between 55 and 66 years have availed of the early retirement scheme since it was introduced in 1994. This year's budget for the scheme is almost £69 million. It provides a generous retirement pension of up to £10,000 per annum for participants. In addition, 100% stock relief is available for young trained farmers while farmers who lease out their land on a long-term basis are exempt from income tax on the rental income arising, up to a limit of £4,000 on a five to six year lease and up to £6,000 for a lease of seven years or more.

The budget also sees an increase in the threshold for retirement relief on capital gains tax. This relief is allowed to individuals aged 55 years or more on the disposal of business assets owned for ten or more years. Disposal to a child is already relieved in full, so the increase in this relief will assist in the transfer of assets to non-connected persons. The relief has been increased by 50%, from £250,000 to £375,000.

What about the tax treatment of milk quotas?

That will be addressed. New legislation for milk quotas will be introduced.

It will be like another mini-buget, similar to the one we had today. What about falling farm incomes?

A 20% rate of capital gains tax will now apply to disposals of those assets which were still liable to the 40% rate, that is, the disposal of non-residential development land and the disposal of residential development land to connected persons. This will be of direct benefit to farmers who sell land for non-residential development purposes, which is quite common in many areas as industry expands.

Farm incomes are down by 17%.

Deputy Creed, allow the Minister of State to proceed without interruption.

Deputy Creed is not reading the CSO reports. Maintenance and enhancement of our environment has been a key feature of policy in the past and will continue to be a priority in the future. I am, therefore, glad the special capital allowance for farm pollution control, which was due to terminate on 5 April 2000, will be continued for another three years to 5 April 2003. In addition, the expenditure limit for the scheme will be increased from £30,000 to £40,000, with up to £20,000 claimable in the first year. This is a targeted measure, costing only £0.3 million in a full year, but it gives significant relief in cash flow for those farmers investing in pollution control works. It is a very welcome enhancement to the previously existing allowance.

Social welfare improvements will cost almost £400 million in a full year – by far the largest social welfare package ever. The House will recall that the Government introduced the farm assist scheme in last year's budget to assist low income farm households. The scheme has been successful, with 9,200 applications to date, including 2,500 new applicants. Under the budget individuals benefiting from the scheme will receive an increase of £4 per week and persons with a dependent adult will receive an increase from £116.70 to £124.60.

The only thing the Minister of State can do for farmers is to give them social welfare benefits. It is a disgrace.

The most welcome part of the budget has been the proposal to decentralise to country and provincial towns. I look forward to the transfer of many of the North-South bodies to some of these towns.

Decentralisation has been the hallmark of the Government. Since we took up office we have proceeded with it across the country.

What about north Cork?

Allow the Minister of State to proceed without interruption.

We do not address the north Cork issue. There must be decentralisation from congested areas. There are no more congested areas than those in the capital city and we cannot allow further developments there. I look forward to country towns, such as Macroom, being part of the decentralisation programme.

Is that a commitment?

Food safety promotion and other activities can be decentralised in the future. The Government is very conscious of the needs of rural Ireland. Decentralisation must be welcomed as a major policy plank of the budget.

The budget sees the enhancement of the corporation tax regime, especially for small and medium sized enterprises. The standard rate of corporation tax for trading income is being reduced from 28% to 24% from 1 January 2000. This is part of a phased reduction in the standard rate of corporation tax for trading income to a single rate of 12.5% in 2003. The Finance Act, 1999, also provided for a 25% rate of corporation tax on non-trading income from 1 January 2000. To assist small and medium-sized enterprises, the 12.5% corporation tax rate will apply from 1 January 2000 in certain cases. This is very significant from the food industry point of view. It should give extra breathing space for start-up companies to find their feet and it will also help to secure the future of the very many small and medium-sized enterprises in the sector.

The food industry continues to make an extremely important contribution to the overall economy. The current development strategy for the industry – the food sub-programme – covers the 1994-99 period and has been instru mental in the industry's strong performance over recent years. Over the first five years of the strategy, output increased by £2.2 billion and exports by £1 billion. Despite problems on the pigmeat and sheepmeat markets, the overall outturn for 1999 will be in line with previous progress. The year has witnessed a strong increase in the value of beef exports and continuing growth in the high value prepared consumer foods and food ingredients sectors.

If the food industry is to prosper in the future, it must recognise and respond to the opportunities and challenges that lie ahead. As the Food Industry Development Group indicated, the key to future growth is the industry's ability to maximise its competitiveness and market orientation. The specific relevant initiatives outlined in the national development plan and the related indicative public funding allocation of £282 million bear this in mind. These will allow the industry to build on its recent satisfactory performance and to address general and sectoral-specific issues that could hinder progress.

The factors that will influence the food industry's future environment are many and various. These include the increased concentration at retailing level, the growth in the food services sector and the further trade liberalisation that is likely to result from the next round of world trade negotiations. The food service area is expanding and in the future all concentration must be in that area because we are well aware of what is happening in North America and various other places where more than 50% of people eat outside the home. That area must be addressed and the food industry is well poised to take advantage of it in the area of exports.

The prime consideration will, however, remain the wishes of the consumer. In this context, it is essential that the future development of the food industry be underscored by continuing attention to food safety and quality issues. The current development strategy has played a key role in the enhancement of standards. The initiatives outlined in the national development plan will help to ensure that the necessary focus is maintained.

The food sector's recent success has been achieved in the face of many difficulties. It is evidence of an adaptable and resilient industry. These qualities will continue to serve it well and, allied to the support provided under the national development plan, engender confidence for the future. I appreciate fully that we must ensure that such confidence is not misplaced. To this end I assure the House that, as has been the case under the current development strategy, the industry's progress will continue to be closely monitored and, where appropriate, support mechanisms will be adjusted. I am satisfied that such a discipline will assist the maximisation of the industry's contribution to the national economy and its substantial relevance to the agricultural sector and overall rural development.

A great deal of heat has been generated by the budget. At least one of its proposals has been controversial. It has given the Opposition parties a rare opportunity to exercise their undoubted talent for posturing, pomposity and rabble-rousing. Indeed, Deputy Rabbitte ably displayed all these aspects. When he referred to mother duck leading the ducklings onto the plinth he appears to have forgotten the many days he spent on the plinth. He did not have many ducklings behind him because there were not many in the ranks. He was quick to change his political coat. There is safety in numbers, so he also changed his political beliefs.

None of this can take from the fact that the budget laid before the House operated within limits. On the one hand, we must take note of possible overheating in the economy while on the other hand we must ensure the prudent use of resources to ensure that the country's successful progress continues for the ultimate benefit of all. Given this, the budget has addressed in a praiseworthy and substantial fashion the demands made by many sections of our society.

The success of the budget can be gauged by the inordinate amount of attention the Opposition gave the one area that required further consideration. In this I am mindful that we are here to tease things out in sober debate and establish fully what the Minister intends. I will not be swayed in my pursuit of facts by the baying of Opposition parties, which seem to be more intent on cynically manipulating public concern than on establishing the thinking behind the Minister's proposal. In this regard I welcome the further positive addition to the budget announced today, namely, the £3,000 allowance and the referral of the further individualisation of the tax code to the social partners for further consideration. This reply to the concern expressed publicly by many is an indication that this is a caring Government, one that is willing to listen, to change for the better and to move on, taking everyone's views into consideration. The Minister is entitled to have the opportunity to explain and the public are demanding an explanation. He should have explained more fully, perhaps, at the beginning but I believe the matter has been adequately dealt with.

The Deputy should take Deputy Healy-Rea with him next time.

The Minister has said this is the first of three budgets over which he will address anomalies and inadequacies in our tax system. Given the extraordinarily positive steps he has taken in this and the previous budgets, I am confident that he will do that.

Extraordinary is the word.

In reply to Deputy Creed, I will take to the plinth any time I feel like doing so. It might be a lesson for the Opposition Deputies to exercise their own minds and not be led by the nose through many of the issues. That is what the Deputies are doing tonight.

Deputy McGuinness sat on his hands last Wednesday.

I am surprised only three Opposition Deputies came to listen to this debate and that none of them has the courage to stand up for anything. They have little to offer in relation to this budget. I am very pleased the Minister had the concern of the general public at heart and was willing to do something constructive about it.

The Deputy went out when the call came.

There was no call except for the call from my constituents. I have no difficulty in stating the one factor which is already quite plain. The family is the cornerstone on which this nation was built. It has a particular and unique place in our hearts. I will not countenance any degrading of that position, any reflection on those who choose to stay at home to raise their children or any course which promotes one method of raising a family over another. I do not believe this was the Minister's intention. I suspect the exercise he is undertaking is both complex and necessary if we are to get our tax system working properly. Any change must be adequately explained to all of us here and to the general public. During that process of explanation and consultation I will ignore the smoke and sand the Opposition is using to cloud the issue and confuse the general public.

Did the Deputy say that in Kilkenny last week?

I did indeed, because I am willing to stand by my convictions, unlike some of the Opposition Deputies. I congratulate the Minister on the many beneficial changes he has made in the budget. The increase in tax allowances is a very positive step. His handling of the inheritance of family homes has taken a burden from the shoulders of many and the increase in the old age pension, the largest ever, has been well received. We should not forget the positive results he has achieved by bravely lowering the CGT threshold and I have no doubt his action with regard to gift and inheritance taxes will yield the same positive results. The Minister has a clear understanding of what is needed and I feel certain he will satisfactorily resolve the remaining issues without difficulty over the next few budgets.

With regard to the development of the regions and particularly with regard to health issues, I ask that the Department of Health and Children take a particular interest in ensuring not only that the plans undertaken by the health boards are funded but that they fit into the national plan and that health boards are encouraged to complete their plans in an efficient and true manner. The running down of Kilcreen Hospital when the Opposition was in Government should now be examined. Perhaps that unit can be funded so that a home for the elderly can be established on the site. I recognise the contribution of the Minister for Health and Children to my constituency. His development of St. Luke's Hospital and the announcement of an acute psychiatric unit for that hospital is welcomed in the constituency and the region. It is a recognition that the constituency of Carlow-Kilkenny has, for many years, trailed behind the national trend in relation to developments in this area.

Was that to silence the Deputy?

Much more needs to be done and I ask the Minister to encourage the health board. A member of Deputy Creed's party was on the health board when the running down was taking place but he has not the courage today to accept responsibility for it. Much needs to be done in many constituencies. Some have fallen behind and I hope the budget and the national development plan will bring those up to the level of others.

Given the worldwide connectivity, there is a need to connect the regions to this system so that industry, indigenous and otherwise, can be encouraged to grow and sustain jobs in the region. I refer particularly to the two advance factories in Kilkenny and, now that they are finished, every effort must be made to ensure that they are given the proper connectivity to play their role in the development of the information age, the digital age and e-commerce. I ask the Minister to take note of the self-help ethos established in the constituency which is growing in spite of other developments and that the necessary costs be met by the Department to enable us to play our part.

I recognise the need for reform of local government. In all we do in this House we must take into consideration the local government process by which the imposition of local government charges can cancel out the extra payments made to old age pensioners and the low paid by central Government. Every effort must be made to continue to raise the level of old age pensions, as has been done in this budget. Old age pensioners are the people who built the successful economy we have today. Despite the measures in the budget, they do not enjoy the same comfort as we do. In every budget, we must ensure these people are rewarded for their contribution to building the economy.

I welcome the budget. I acknowledge that much more must be done but I know the Government, over the next number of budgets, will play its part.

It is a privilege to speak in this debate.

It must be a relief to speak tonight.

I was happy to support this budget on the day it was announced and I am still happy to do so. Next April when people get the benefit of the new tax regime and in May when they get the increases in social welfare payments, the country will be smiling too.

And in October when they get the increased child benefit.

This is the largest funded budget the country has ever seen. With today's announcements, more than £1 billion has been given in tax concessions. Some £0.5 billion has been given through the social welfare code. The Irish people have received a return of their money through the tax and social welfare codes of £1.5 billion. That is an average of more than £1,000 for every household.

I have listened to the debate in the last half hour. When Deputy Rabbitte was speaking I wondered what planet he has been on for the past week. He spoke about the injustice to low paid workers and everybody else. This budget has not done an injustice to a single person in the country.

Except where only one partner is working.

Every person in the country is better off as a result of this budget. That has never happened before in the history of the State.

That is not the point.

That is an achievement of which we can be proud. There is no logic in the argument that an injustice has been done to any worker in our society or to anyone in receipt of social welfare. Everybody is a winner and that is an achievement of which we can be proud.

It is Thatcherite.

As a member of the Fianna Fáil party, I am delighted that on last Thursday morning I was able to talk to the Taoiseach and the Minister for Finance and to meet the Minister with some of my colleagues on Thursday night and put to him the case for one income families with children. That question has been given due consideration as a result of pressure from Fianna Fáil backbenchers. I am delighted to be the first member of the Government party to place on the record of the House that the commitment given by Fianna Fáil in its 1997 general election manifesto to give a £2,000 tax free allowance at the standard rate to every family where one of the spouses is working in the home looking after children or old or handicapped people has been met in its entirety today. We did that today; in fact, we did better than that and increased it by 50%. The Government has given an allowance of £3,000 although the commitment in the election manifesto was for £2,000.

Why was it not done last week?

It comes into force next April regardless of when it was announced. People will receive the benefit of that extra tax free allowance on 6 April next year and they will see the benefit of the Fianna Fáil Party implementing the Fianna Fáil election manifesto. We went before the people with that manifesto two years ago and we are happy to implement it today.

You made a hames of it.

I am satisfied that during the next round of negotiations on a national wage agreement, the successor to Partnership 2000, low paid workers will be one of the key issues on the agenda. The Government, in consultation with the social partners, will ensure that people who are on the minimum wage of £4.40 per hour, which is to be introduced next April, will be able to earn substantially more money without coming into the tax net at the first instance.

Ten pounds per week.

That will be part of the negotiations early in the new year.

The measure announced today will benefit 180,000 households; 66,000 of these households—

Write that down.

People, not households.

—are households where the single earner earns more than £28,000. A total of 114,000 households where the spouse earns less than £28,000 will also benefit. Those figures expose the lie and hypocrisy of Deputy Rabbitte's comments earlier when he skitted that this measure was not of benefit to lower income families. A total of 114,000 lower income families will benefit from this announcement compared with 66,000 families with incomes of more than £28,000. This measure is focused on the family, children and people who work in the home. That is the record of which Fianna Fáil is proud. We are delivering on that record. Next April these people will benefit when they receive their new tax free allowances for the new tax year.

It is a tremendous day when a Government party can show that not only has it honoured in its entirety its election manifesto commitment in two years but has done more than that. There are still two more budgets to be introduced and they will be delivered. They will give further increases to people at every income level, be they social welfare recipients, members of the workforce or people working in the family home. We will deliver on that commitment in the next two years.

It is a particular pleasure to point out that 50,000 people have been removed from the tax net as a result of the budget and 125,000 people have been removed from the top tax rate. The single band will increase from £14,000 to £17,000 and the standard rate personal allowance has been increased by £500 in the case of a single person and £1,000 in the case of a married person. Above all, it should be repeatedly pointed out that the standard rate of tax has been reduced from 24% to 22% and the higher rate has been reduced from 46% to 44%.

This is the lowest level of income tax in my lifetime. I remember when the Opposition parties were in Government that people were paying an effective tax rate of more than 60%. That was penal, unjust and wrong. It was anti-work, anti-people and anti-everything. At the end of this Government's term of office, 88% of all income earners will be paying tax at the standard rate. Only 12% will pay tax at the higher rate. At present, more than 40% of people pay tax at the higher rate. In the next two budgets there will be a dramatic improvement and many more people will pay tax at the standard rate, which is as it should be.

I am pleased that personal allowances for the aged, blind, widowed, dependent relatives and incapacitated children have been doubled. I am delighted that the income tax exemption for people of 65 years and more has been increased by £1,000 in the case of a single person and £2,000 for a married couple. That is most important. People over 65 years of age can now earn £15,000 tax free. That is the type of respect we should accord the people who built up this country. This is payback time for them and they are getting it from this Government.

I am particularly pleased with the increase of £7 in the old age pension. That is the biggest single increase ever. In the last two budgets it was increased by £5 and £6 respectively. The old age pension will be in excess of £100 when we are debating next year's budget. We gave a commitment to increase the old age pension to £100 and we are more than three quarters of the way to achieving that target. It will be delivered in full in the first budget of the new millennium when the old age pension will be more than £100 per week. People are pleased with that.

I welcome the increase in child benefit of £8 per month for the first and second children and £10 per month for the third and subsequent children. Another caring measure that was introduced was the insurance based carer's benefit for people who leave employment to look after persons in need of full-time care and attention. That measure is included because Fianna Fáil is a caring and listening party. We listened to representatives of the carers' association—

They listened to you yesterday, all right.

—and the independent living fund and we responded. We will continue to respond. I have been happy to speak on this excellent budget. It was the best budget in the history of the State and after today's announcement it is even better.

I wish to share my time with Deputies Ulick Burke and Creed.

Carlow-Kilkenny): Is that agreed? Agreed.

This budget is the most talked about budget in recent years because it is so uncaring, anti-social, anti-family and anti-women. I do not know how the Minister got it so wrong. The budget favours the well off to the disadvantage of lower income groups. It has the hallmarks of Progressive Democrats influence. The Tánaiste and her Ministers have a heavy burden of responsibility to bear as a result of the backlash from the public. It is not the first time her party got things wrong – some years ago it wanted to remove God from the Constitution. Now it wants to dismantle the family.

Make no mistake, the low paid are the sufferers under this budget. The Minister raised the income limit to only £110 per week before a low paid worker comes into the tax net. The budget is three times more advantageous to the high earner than to the low earner. Before the introduction of the budget, Fine Gael proposed an income limit of £170 per week before a worker entered the tax net. When the Minister introduced this budget he saw an economy rather than a society and that was his mistake.

His actions with regard to the serious discrimination against women working in the home, in effect, dumped the constitutional provisions protecting those women. How did he think he would get away with allowing a tax free allowance of £56,000 to a double income couple and an allowance of £28,000 for a couple in which both people work but one works in the home, over three years? Our society is based on the family and this proposal was anti-family.

There is a belief that this ill thought out proposal could be contrary to Articles 41.2.1º and 41.2.2º of the Constitution. Article 41.2.1º states:

In particular, the State recognises that by her life within the home, woman gives to the State a support without which the common good cannot be achieved.

Article 41.2.2º states:

The State shall, therefore, endeavour to ensure that mothers shall not be obliged by economic necessity to engage in labour to the neglect of their duties in the home.

Until today, the Taoiseach, the Tánaiste and the Minister for Finance wondered what the problem was. They stated there would not be a climbdown. The Minister said he was not for turning. However, facing the reality of the loss of the Independent Deputies' support and, perhaps, that of some Government backbenchers, the Minister is for turning today. At least, he has half turned in a concession to women in the home looking after children and granted them an additional £3,000 in their tax free allowance. This is only a partial solution as a couple, both of whom work outside the home, will have £34,000 tax free compared to £31,000 for a couple, one of whom, usually the wife, works in the home. What is the position where there are no dependent children remaining in the house? Where does a couple in this situation stand in the Minister's attempt to solve the crisis in the Government? A married couple without dependent children and both of whom work outside the home will receive the benefit of £34,000 tax free this year or £58,000 in three years. Will discrimination continue against a couple without dependent children and one of whom works in the home?

The rearguard action by the Government is not motivated by concern for the families against whom the budget discriminates, rather by the fear that the backbenchers or the Independent Deputies supporting the Government might vote against it and cause an election. It is certain that the Taoiseach, the Tánaiste and the Minister for Finance do not want to fight an election on this issue. I will be surprised if the Independent Deputies who support the Government accept this feeble attempt to solve the problem. Their support is assured by other cynical means, such as concessions concerning matters in their constituencies. One should expect announcements shortly for sanctions for new roads or bridges in south Kerry, or perhaps a school in Wicklow, or perhaps the licensing of the television deflector transmitters in Donegal. If the Independent Deputies strike a hard bargain, perhaps they may also obtain a Government commitment to a referendum on abortion. This is their best chance because the Government is concerned about avoiding a general election.

The concession of favours to supporting Independent Deputies is a cynical exercise and will avoid an election on the budget in the short-term. In the long-term it will have a devastating effect on the Government. How long will the Fianna Fáil backbenchers in the same constituencies as those Independent Deputies tolerate the situation where the Independent Deputies have a strong hold on the Government? How long can the Government take Deputies Keaveney or Coughlan for granted? Will these concessions create more trouble in south Kerry for the already worried Minister, Deputy O'Donoghue? What about poor Deputy Roche in Wicklow who appears to have been very agitated recently and has been a regular visitor to the plinth? How much longer will the Government Deputies in those constituencies tolerate the Government buying the support of the Independent Deputies? As has been said, watch this space.

It is a strange feature of the budget that it took many Deputies a long time to spot the serious anomalies, with the exception of the Fine Gael spokesman on finance, Deputy Noonan, who instantly spotted the serious flaws in it. This was a budget to suit the rich and aimed to please Progressive Democrats supporters and the sector in the community which contributes generously to Fianna Fáil. On closer examination, it can be seen that the budget discriminates against the lower paid and vulnerable section of the community. How can the Government propose to tax income after £110 per week when next April it proposes to introduce a minimum wage of £170 per week? The budget has already raised serious questions about the renegotiation of a new partnership programme. How can the Minister justify an increase of only £8 per month in child allowance and wait until September of next year to introduce it? What about the miserly £4 per week for carers under 66 who must wait until May 2000 for it?

The Minister for Social, Community and Family Affairs made great play in his contribution of his concern for carers. The budget represents one of the greatest disappointments for the thousands of family carers throughout the country who have experienced injustice. Not one additional carer will qualify for the carer's allowance after the budget fiasco. The year 1999 has seen a huge increase in the carers' movement in Ireland. They thought their time had finally come and that the huge contribution they make by their work at home 24 hours a day would be recognised. Sadly, the Government failed to understand the huge level of frustration and anger they felt that so few carers qualify for the carer's allowance.

The single biggest grievance, the means test, has remained unchanged. The lives of over 90% of Ireland's carers will not be improved one whit as regards the carer's allowance. The Carers Association has called on the Government to wake up to the reality of carers' lives and to amend the proposal in the Social Welfare Bill which will be published in a few weeks. If this fundamental grievance is not addressed by the Government now when times are good, what can we expect at other times?

The Minister for Social, Community and Family Affairs praised himself for extending the free electricity and television allowance to carers. Why is he delaying it for 12 months? It is the same with the extension of the free schemes to people over 75. They will not come into effect until October 2000. Some of those people may not live to get the benefit. The Minister might as well have left it until next year's budget rather than raising their hopes now.

I have made the case for the past two and a half years on behalf of carers who become widows. There is a serious anomaly in the situation of a woman caring on a 24 hour basis in the home for a member of her husband's family. She qualifies for the carer's allowance if her husband's income is less than £150 per week. If she becomes a widow, she loses her husband and the benefit of his income. While she qualifies for the widow's pension, she loses the carer's allowance, despite the fact that she continues to be a carer for 24 hours a day, 365 days a year.

This is a scandalous situation and I have tabled numerous parliamentary questions on it. I have written to the Minister, I have raised it at various Dáil committees and I was told by the Minister two and a half years ago to make a submission to the review body which was considering changes in the carer's allowance. The body reported to the Minister earlier this year and we have just had another budget with no move made to correct this grave injustice to widows who are carers. I have been fobbed off in every way possible. I was told it could cost £15 million. This is false. My colleague, Deputy Creed, was informed in a reply to a question he tabled that, from the commencement of the carer's allowance scheme nine years ago to 15 September 1999, the number of persons refused for being in receipt of social welfare payments was 214. I estimate the number of carers per year who become widows to be no greater than ten and it would cost no more than £40,000 per year, less than half the Minister's salary, to cater for those widows against whom such serious discrimination is being shown.

I make a final and absolute appeal to the Minister to find this miserly sum to recognise the sterling work of those carers. Perhaps he could also examine the anomaly whereby the carer's allowance can become a taxable income if the spouse of the carer is in the tax net. How can a carer be taxed for caring for 365 days a year?

The storm of protest unleashed by the budget proposals of the Minister, Deputy McCreevy, to favour two-income households over families where only one partner works is unprecedented. Those who think that storm has passed are mistaken. Coming at a time when massive funds are available to the Minister, it indicates clearly his inability to handle fairly the resources at his disposal.

The budget has done much more than exclude sections of society from a fair deal. It is divisive, it has disappointed low paid workers, divided families and dismantled partnership in the area of pay agreements. The unions have withdrawn and the social partners are concerned. This will have serious consequences for the future prosperity of the economy and far-reaching consequences for the funding of areas of greatest need, hospital waiting lists, housing shortages and the elimination of poverty from within our community.

The greatest reward in the budget goes to doubling-income families and high income earners. The budget was unfair because it failed to use the resources available to eliminate income poverty. Those who are already better off gained more than those who are poor, and those people will remain poor as a result of the budget. It is anti-family because it favoured single people and gave little benefit to the families where one parent decides to stay at home. It is also anti-women because it discriminates against women who wish to stay at home.

Today's mock repair efforts in response to the fear of the Independents and the many Government backbenchers is a further indication of how poorly our economy is being managed by the Government. The Government could have eliminated poverty for low income wage earners and made a realistic effort to solve the child care problems. A sum of 26p per day will do nothing to help. One in ten people in Ireland are consistently poor despite rapid economic growth. Ireland's expenditure on social welfare is the lowest in Europe apart from Portugal, with expenditure decreasing from 27% in 1996 to 23% in 1999. At the same time the number of recipients of social welfare has increased. A single person earning £20,000 per year gains six times as much as a person who is long-term unemployed. Even greater disparities are found at higher income levels.

The Government has done nothing to alleviate or eliminate rural poverty; it is blind to this concept. There is only a two-line reference to agriculture in the Budget Statement. The Government has totally abdicated its responsibilities towards the farming community, particularly towards farmers in the west. There are no additional funds for grant aid for pollution control or dairy hygiene. There is no forward planning for agriculture other than to tell the farming community to find off-farm income. Agriculture is no longer viable under this Government.

In a previous budget the Minister for Finance introduced a pilot scheme in the upper Shannon region as a designated area. It was a great disappointment that this scheme was not extended to the remainder of the Shannon basin and to south-east Galway where there is already serious rural decline. Within this south Galway region there has been a decline in population of 10% between the 1991 census and the 1996 census, a decline which is continuing unabated. The national average workforce in agriculture is 15%, but in this region it is 39%. Many of the families in this area are caught in a rural poverty trap and nothing in the budget indicates that the Government cares about the situation which is replicated in many other rural communities in western areas. Will the Minister in the Finance Bill extend the designated area to include all other areas in the Shannon basin, excluding those areas covered by SFADCo? There is no evidence of a rural development strategy and it is clear from the budget that there is little if any future in investment for agriculture for many farmers. Report after report has been produced and commissioned, all of which have been left to gather dust.

The Fianna Fáil election manifesto of 1997 gave an undertaking to grant-aid small abattoir owners to upgrade their premises to EU standards. The Government has failed to deliver on this over the past two and a half years, and many repeated promises during that time have failed to materialise. A decline from 900 to 400 abattoirs is an indication of the serious situation which exists. There are only six abattoirs left in County Galway, with none in Galway city in private ownership. Is the Government going to continue to allow this decline? The simple remedy seems to be based on the idea of survival of the fittest while the rest must go. It is important to remember that the larger factories and processors got all the assistance to upgrade in response to the 1989 regulations. No assistance was provided for small abattoir owners who also had to upgrade from their personal resources. Will funds be made available to aid this group which is in decline? If so, when will this be done?

I welcome the provision of £2.5 million for flood alleviation in south Galway. When will the Office of Public Works be able to prepare plans and environmental studies so that the concern of the communities in these areas can be addressed? These communities are threatened on a constant basis, and I hope immediate plans are put in place to have the flood alleviation plans commenced.

I welcome the programme of decentralisation as long as it is implemented fairly so that most county towns have the benefit of a fair deal. I am talking about towns such as Ballinasloe, Loughrea and Gort which have been bypassed by industrial policies of the past. I hope on this occasion the Government will redress this by decentralising some State or semi-State agencies to these towns.

I thank my colleagues for sharing time with me. I spoke to Deputy Noonan prior to last Wednesday's budget and I almost felt sorry for him given the task confronting him. The Government was about to embark on the greatest give-away of all times and it seemed a thankless task to have to reply to it. Little did we realise, however, how much an opportunity the Government was about to present us with in terms of the incompetence with which it handled that give-away. The Government showed how to make a sow's ear out of a silk purse, how to make a hames of giving away £1,000 million.

It is difficult to know where to start because of the numerous failings in the budget, but perhaps the south of France is a good place. During the summer of 1999 the Minister, Deputy McCreevy, and the Tánaiste had ample time as they relaxed in a chateau to dream up a budget which would screw the needy and give most of the benefits available to those who least needed them and least expected to benefit to such an extent. It is a Thatcherite budget. I think it was after Nigel Lawson's budget of 1988 that Margaret Thatcher said there was no such thing as society, merely a collection of individuals. Given the treatment meted out in the budget and the clinical calculations about stay at home spouses and spouses who go out to work, as though these were cogs in a great industrial machine rather than human beings, one gets the picture painted and machinations planned in the south of France.

Given the benefit of the doubt, the manner in which the vast majority of Fianna Fáil and all Government backbenchers reacted last Wednesday to the budget would suggest they did not understand it, but I wonder in their heart of hearts if they thought this was a Progressive Democrats led, Thatcherite Government, with Fianna Fáil abandoning its core principles. It must be recognised that there has been a significant and principled commitment by Fianna Fáil to the underprivileged in the history of the State. Many would have argued that the failure of the development of a real labour party in Ireland since the foundation of the State was because that position was largely usurped by Fianna Fáil. However, this budget is a watershed in Irish politics as it underpins a left-right divide. The Government set out to deliver the spoils of a successful economy in an unfair and skewed manner which gave most to those on high incomes while giving minimal benefit to those who have perhaps contributed most to the successful economy.

If one looks at the number of issues which faced the Government in terms of how to maintain the successful Celtic tiger economy, perhaps one of the most significant problems facing it is the shortage of labour. The IDA is concerned about that matter and is unable to attract industry to certain areas because there are insufficient workers available. That is the reason the IDA has been making soundings to the Government and the Department of Enterprise and Employment about adopting a more liberal approach to immigrants with work permits.

If that is the real issue what was the Government's policy response? It deliberately adopted the stick rather than the carrot approach as regards people entering the workforce. The Government had the capacity to provide a proper child care service so that those in the home, perhaps not altogether from choice, could go out to work. Rather than provide adequate support through child benefit, investment in crèches and tax write offs for companies that provide such facilities, it hit on the head with a big stick those who stayed at home because it alleged they are lazy and did not want to join the workforce. They do work it does not value. The real and lasting damage caused by the budget was the signal it sent to people in the home. Many people choose to stay at home for reasons other than economic ones. They may do so in what they consider to be the best interests of their children, they may have a handicapped child or be looking after an elderly relative. Some people have no choice but to remain at home because of their personal circumstances. They may be disabled and so on. What is the consequence of the U-turn by the Government on those who have no choice but to stay in the home?

The figure of 60,000 households was mentioned. This is a clinical approach. People are not mentioned, only households and statistics. When the Finance Bill is published it will be seen in the small print that this is a mirage and the benefit will not be as significant as the Government backbenchers and Independents seem to think it is.

I was disappointed to hear the Minister of State at the Department of Agriculture, Food and the Marine contribute to the debate without acknowledging the huge crisis in agriculture. He referred to the fact that many people would be taken out of the tax net by virtue of the Government's action on taxation but many farmers will be taken out of the tax net by falling incomes rather than anything the Government did in the budget. The Minister referred to the farm assist scheme. If ever there was a scheme of smoke and mirrors designed to confuse and provide the Government with a fig leaf in terms of falling farm incomes, this is it. In the forced realignment of beneficiaries from small farm-holders assistance to farm assist, numerous farm families have become ineligible for benefit they previously received. There is marginally increased expenditure on the farm assist scheme relative to what was paid previously under small-holders assistance. How could the Minister of State contribute to the debate without referring to the crisis in agriculture and falling farm incomes of 17% over the past two years? They are the facts as presented in the farm survey. Of the £940 million given away on budget day, without reference to the U-turn today and possible further U-turns between now and the Finance Bill, £3.8 million was ear-marked for farming. That is a salutary lesson for the farming community on the Government's real commitment to agricultural matters.

There is reference to increased capital allowances for investment onfarm. There is no investment as there are falling incomes. Some farmers have pollution problems but there are not any grants available to deal with them. These are serious problems. The deserved media concentration on issues such as the discrimination against stay-at-home spouses has masked one of the other great travesties of this budget and that is the treatment of the low paid. It is incomprehensible that the Government should set as a laudable target a minimum wage of £4.50 or £170 a week and then say in the budget £110 of it should be taxed. That is a disgrace.

The Deputy should look at his own party's record.

There has never been a Government that has had so much money to give away and has focused the vast majority of it on those who did not really expect to benefit. For those who are not earning £30,000 or £40,000 but are taking home £150 or £200 a week the tax exemption was increased from £100 to £110. It speaks volumes about the Minister's and Government's commitment. One of the specific issues on which the agricultural community looked for relief in terms of tax treatment was how milk quota that is purchased is treated as opposed to that which is leased. There are big changes on the way in the milk quota regime. There is much uncertainty in agriculture and I implore the Minister, when preparing the Finance Bill, to revisit this issue. This would indicate, in some way, that the Government is listening, understands the plight of farmers and is committed to doing something about it.

I wish to share time with Deputy Dennehy and the Minister for Health and Children, Deputy Cowen.

We are now experiencing sustained economic growth. The Government is determined that this welcome growth will not be to the detriment of the natural environment. We have taken a number of initiatives to intensify the pursuit of environmentally sustainable development through, for example, the establishment of Comhar – the national sustainable development partnership – through the new pilot eco-auditing scheme for Government policies and the introduction of a sustainable development philosophy into planning legislation.

Strengthened environmental protection requires commitment and effort from everyone. I am delighted that, in the budget, we are providing additional resources to promote and secure higher public awareness and responsibility in relation to the environment. Funding of around £2.2 million will be available for a number of purposes in this regard compared with some £1.3 million in 1999.

Later on this week the Minister, Deputy Dempsey, will launch a new multi-media environmental awareness campaign. The increased allocation will allow us to intensify our activities in this area over the coming year. A recent survey carried out for the European Commission indicated that a majority of Irish citizens felt they were not well informed on how to protect the environment in their daily lives. The new campaign should change this. We need to get across the message that each individual can make a difference. In our daily lives we impact on the environment in many ways, through our mode of transport, use of water and energy resources, the goods we buy and the materials we discard. It is in our interests and the interest of future generations to use resources in an eco-efficient and environmentally friendly way.

I am also pleased that funding of £200,000 is again being provided for the environment partnership fund in 2000. This is an important collaborative effort under which my Department with the local authorities supports awareness-raising projects by community and environmental groups. It represents an active and committed partnership.

Although progress has been made in some areas, litter remains a widespread problem which must be addressed through the initiatives at both national and local level. With the extra funding provided in Budget 2000, we intend to continue the Government's programme of targeted anti-litter measures. These include the development and implementation of the national litter pollution monitoring system which will measure and assess local authority litter pollution and control activities. The funding will support National Spring Clean, the An Taisce led partnership against litter, and it will provide grant aid for local authority anti-litter initiatives.

I hope that by undertaking these measures, combined with the recently announced increase to £50 from January 2000 of the on-the-spot fine for littering, there will be a significant reduction in the unsightly and unacceptable levels of litter pollution we continue to see.

Apart from the extra provisions in the budget, we have provided greatly increased resources for the Environmental Protection Agency in the 2000 Estimates. The provision for the agency is increased by 42% to £12.4 million and this reflects factors such as increased staffing, extra responsibilities in the waste and other areas, research and development needs and the expansion of laboratory services.

The work of the EPA is central to ensuring that economic development and growth are not at the expense of our environment. An effective, well resourced EPA can make a huge contribution to environmental management and protection, implementing and enforcing high standards for industry and waste activities, monitoring the quality and condition of the environment and supervising the environmental performance of local authorities.

The increased funding for environmental purposes provided in this year's budget, together with the record environmental investment already identified in the national development plan, clearly indicate the Government's strong and continued commitment to environmental protection.

I welcome the opportunity to contribute to the debate. We have witnessed some extraordinary turnarounds since 1987, the scale of which could never have been anticipated. When Ray MacSharry gave his budget speech that year, we faced a budget deficit of £2 billion, the top rate of tax was 58% and 70% of all taxpayers were saddled with that penal rate. For those lucky enough to be on the standard rate, that was 35% and tax free allowances were at a paltry level.

We are now halfway through the lifetime of this Government and the difference is remarkable. Top and standard rates are now down by 13% and 14% respectively. In the same period, the number of people at work has risen by 700,000 and it is no coincidence that these two phenomena have occurred. Tax reductions at all levels reduce poverty traps, increase the incentive to work and fuel economic expansion. Some people belittle the work ethic and make theoretical arguments about social inclusion, but if some people are not earning the money and the Government does not collect a fair share of it, there would be nothing to redistribute for social inclusion or any other programmes.

I would be interested in an assessment from the Economic and Social Research Institute as to the relative change in economic well-being here vis-à-vis our European counterparts. I would be confident that no other country in the history of the European Union has seen such an unprecedented acceleration in the wealth of its citizens.

In relation to the social welfare changes in the budget, one point which seems to have been missed is that the increases will be paid a month earlier this year. That will cost a great deal of money. The Minister has indicated that he will bring forward the payment date to April in next year's budget, which will coincide with the increase in taxation. On a historical point, I would remind the Fine Gael Party that in the dying days of its Government in 1987, it proposed delaying the payment of social welfare increases to November – questions were asked about that in the past few minutes. This is an issue that the elderly and indeed others feel strongly about, but in next year's budget those increases will be brought forward to April, despite the major cost that will entail.

The welfare changes are significant and well above the rate of inflation in all cases. The improvement in pensions is particularly welcome and keeps the Government on course to meet its manifesto promise of a minimum £100 per week State pension during its term in office. Before they were put out of office on the last occasion, Fine Gael and its socialist partners gave pensioners an increase of £1.30 per week, or 17p per day. Whenever I challenge people in Fine Gael on that, some of whom are friends of mine, they invariably say the money was not available to do any better, yet on Wednesday night its finance spokesperson stated that when the party went out of office, the country was booming. There is a contradiction in those two claims. I do not want to turn this debate into a political slagging match, but there are many other issues on record which are historical facts.

Other historical incidents show Fine Gael's different approach depending on whether it is in or out of office. I do not have time to deal with them but it was interesting to hear Deputy McCormack make an impassioned plea for carers. He said that for two and a half years he has been fighting this case and raising questions, but why did he not raise it three years ago when his party was in office? That is the type of approach we see from Fine Gael. We all like a bit of argy-bargy and to tease out our difficulties, but we should try to be honest at the same time.

In many ways this budget is only half of the Government's financial plan for the year. Taken with the measures announced in Estimates of receipts and payments, the budget represents a comprehensive series of measures to further develop the country's infrastructure and to underpin the economic growth we have enjoyed in recent years. While the comments, suggestions and participation of interest groups and our partners is essential, the bottom line is that the people who have to put the whole act together in a balanced and sustainable way are the Taoiseach and his Ministers. Others, including backbenchers like myself, have the luxury of concentrating on our priorities as we see them. The Government's job is much more complicated, and it is getting the balance right in almost all cases.

A difficulty arose with one item in the budget but full credit is due to the Minister for Finance and the Taoiseach who dealt with that in a speedy and positive fashion. Previous speakers have outlined the measures in the budget and I will not go into those, but it is worth noting that the changes being implemented will be at a cost of £125 million. They are not teasing at the edges, as the Minister, Deputy McCreevy, said was done in the past.

I have contributed to eight or nine of these debates since 1987 but this is by far the most successful occasion. Several colleagues outlined the figures in relation to the money that is going back to the people who worked to create the wealth. Those people deserve credit, recognition and some return. Many of the major issues will not arise until the Social Welfare Bill and the Finance Bill are published. We will not see many of the benefits from the funding allocated by the Minister for Health and Children until January, February or March when the health boards announce the major changes taking place. As a member of the Southern Health Board, I am looking forward to spending the £6 million or £7 million allocated for mental health care and all the other areas identified. For a long time we did not get the correct amount of money. There were substantial increases in the past two years, but it is working on a backdrop of three or four years. I said that last year and I will repeat it for as long as I am a Member of this House. The money flowed into Limerick but Cork was ignored. We are now trying to reverse that situation. I pay tribute for that to the Minister for Health and Children, Deputy Cowen, who is in the Chamber. We are getting the money but we will not really see the benefits in many cases.

As a politician, I have personal views, as we all have, on how the available money should be spent. That is the case regardless of our political backgrounds or party affiliations. I was glad to hear Deputy Creed saying that Fianna Fáil was the natural home of working people over the years.

I have been concerned for many years about the plight of various groups of people such as the handicapped, carers, the elderly and widows and widowers. I will continue to make a case for these needy and deserving groups, irrespective of how much money is allocated to them. I have also argued for many years that parents who choose to stay at home and raise their families should have their work recognised. My wife and I made that decision. Under the criteria laid down by CORI and others, I would have been described as a wealthy man. We had seven children and I was responsible for feeding nine people on one wage, paying 58p in every £1 in tax. I worked seven days a week and often five nights a week in order to feed my family. I am proud that my wife stayed at home to rear our family and I want her work to be recognised. Until now, the only person who made any attempt to gain recognition for women in the home was Garrett FitzGerald who received tens of thousands of votes for his effort. He did not deliver the money but he recognised the need. The money is now being delivered and I congratulate the Minister for Finance on that. That was an element of our manifesto and because of the little blip we experienced, it has been increased by 50%. I welcome the implementation of that promise. We must work on behalf of needy target groups.

The overall policy informing the Minister's tax measures over the course of his five budgets is the introduction of a system in which it will be easier to identify target groups. The Minister is the first Minister for Finance who had the courage to stand up in this House on day one and say that the budget he was presiding over was the first of five. I recall the guffaws of the Members of the Opposition which greeted his statement. When he delivered his second budget, there were only a few chuckles and last Wednesday there was hardly even a smirk. Members knew the Minister meant what he said. That is the way to do business.

Government Departments, local authorities and others are informed that they must draw up multi-annual budgets which will cover a four or five year period. Yet, past Governments operated on a year to year basis. The Minister had the ability and foresight to put a five year programme together. There was one weakness in the Minister's approach, namely that he flagged what he intends to do next year and the following year. It is easy for Members of the Opposition to try to play the trump card. It is easy to know what way the Minister is heading; that is the type of man he is.

The credit system introduced last year will assist us. I look forward to the next two budgets because I believe we will continue to move in the direction in which we have been moving. People wonder why an additional 700,000 people are working; they are working because they are securing proper work conditions. They are not boarding planes or ships to get out of the country. It may be of interest to Opposition Members that nine out of every ten graduates now secure their chosen job. That is a big change from three years ago.

The Minister has provided for more than £940 million in personal tax reductions and has taken 50,000 people out of the tax net. His next priority must be low paid workers. Former Minister for Finance, Deputy Albert Reynolds, commenced a process of taking people out of the net and that is the way we should proceed. People should not have to pay tax up to a certain level. The Minister has taken 50,000 people out of the tax net altogether this year, 125,000 people have been taken off the higher tax rate and the bands have been increased by the largest amount ever. The Minister's changes have my total support. I have paid my dues. My wife and I would have benefited from tax concessions for people who stay at home but we did not receive them. I worked long and hard to support my family and I appreciate that tax breaks are now being provided.

I spoke to a local representative – not a member of my own party – on Monday night whom I thought would welcome the budget provisions. He and his wife are professional people and I said to him "we have played into your hands, you're happy with us.". He turned to me and asked "what about the crowd on £250,000 a year? They're getting a lot more.". That question revealed to me the greed of the present day and it served as a salutary lesson.

I join my Government colleagues in welcoming this budget and recognising the considerable and strategic reform of the income tax system which it has inaugurated. In regard to the controversy which has surrounded aspects of this budget, I would like Opposition Members to explain to me what they consider to be the alternatives. The structural problems in the income taxation system are not recognised, neither is it recognised what would occur, as a result of a status quo system, if the Minister for Finance and the Government did not take the measures they took.

We are currently operating against a very benign economic background, thanks to the implementation of very successful policies by this Government. GNP is expected to grow by 7.5% this year, broadly in line with the average of exceptional growth since 1994. It is estimated that employment for the year as a whole will have increased by 74,000 or 4.5%. Employment levels have risen by more than 150,000 over the past two years. The unemployment level has fallen and now stands at 5.1%, compared to 10% when this Government took up office. The most socially inclusive budget is one which can provide the type of employment creation opportunities which are providing more and more people with the opportunity to earn a living and meet their families' ambitions. Only a few years ago, some long-term unemployed people felt they would never be reintegrated into the workforce. Their reintegration is to be welcomed.

Too often, because of the sloganising which occurs – which, unfortunately, has been little short of namecalling in some instances – we have allowed the debate on this budget to be demeaned. A budget is part of an overall financial and economic programme which must be viewed in the context of the manner in which this Government is operating, the priorities of the Minister for Finance and the reasons for those priorities.

On the income taxation issues which have arisen, we must be clear that what we delivered in this budget – cuts in tax rates, fewer taxpayers on the higher rate and reductions in the tax burden – is what we promised the electorate during our election campaign. The voter remains the ultimate arbiter of the budget and the democratic mandate is a basic principle we must respect. Let us be clear about one thing. We have a basic problem with our income tax system which arises from the doubling of the standard rate band for married couples. This occurred in 1980 when we introduced a tax system in response to the Murphy judgment. That judgment required us to treat two earner married couples no less favourably than two co-habiting single persons. Since the unfairness arose then because of the availability of just one tax band for all taxpayers, all that was required to follow the Murphy judgment was for the Government to double the tax band for two earner married couples. Instead, for good and sufficient policy reasons at the time, the band was doubled for all married persons and the married personal allowance had been already doubled to single allowance since 1978.

The result is that when we want to take single persons off the top rate of tax on a £14,000 per annum salary, we have to double this for all married earners at any income level irrespective of their needs. Is the Opposition suggesting that it is reasonable that a one earner couple on £50,000 or £60,000 benefits on the double from a policy intended to help those individually earning £15,000 per annum? Slowly but surely and inevitably, the percentage of taxpayers on the higher rate has increased from 37% in 1996 to 38% in 1997, 39% in 1998, 44% this year and would increase to 46% next year if nothing was done. One thing is sure, the percentage would soon be over 50% and the top rate would have to be renamed the standard rate.

Can anyone defend a tax system in which nearly one of every two taxpayers pays tax at up to 50% of every extra pound they earn when levies and PRSI are taken into account. That is the reality which this budget seeks to address and which is not being addressed by the Opposition which is not putting forward an alternative.

Last year to great acclaim from all sides of the political spectrum, the Government standard-rated the basic personal allowances and made them of equal value to all taxpayers. The Government did this not for the kudos but for what we thought was a fair and proper system. It allowed us to target resources on the lower paid, which we did again this year. The consequences of this policy move, however, is that personal allowances no longer act to keep taxpayers off the top rate of tax. The only way to get the numbers in the top tax rate down is to widen the standard rate band. The best way to widen the tax band is to put this band on an individual basis and tax persons on what they earn as individuals whether single or married.

Individualisation, as the Minister for Finance pointed out, is not a new concept. It is already there in relation to the PAYE allowance. Having set out that strategic plan to reduce the numbers on the top rate of tax, which would occur if we were to allow the status quo to continue and of which presumably the Opposition is not in favour, we have now reached a situation where, under the budget proposals, the number of taxpayers on the top tax rate will fall by 125,000 next year, the percentage of taxpayers on the top rate will fall from 46% to 37% and, by the end of the process, it is envisaged that some 350,000 taxpayers will have been removed from the top tax rate, a reduction from 550,000 to 196,500. The percentage on the top tax rate will come down from 46% to 17%, or to 12% when one includes those exempt from tax on low incomes.

The benefits the Government sees from this policy initiative are clear. It recognises that we need a modern tax system for a changed society. It treats taxpayers as individuals based on what they earn and not on their marital status. It rectifies the imbalance in the tax system against most taxpayers who are single or two-income earners, it takes a great number of middle income taxpayers off the top tax rate, it gets many single workers – 90,000 next year alone – off the top tax rate and it puts up to £20 per week in the pay packet of those on average earnings. It treats married one-earners and two-earners on a more level basis, which is an important point. It is not true to compare one earner on say £40,000 per year to a married couple on £20,000 each. Both married people face costs associated with working which the single earner family does not, particularly where child care arises. The incomes may be the same but the resources available in both cases are not the same. I realise this is not an easy concept to get across, particularly in the face of a reaction based on a perceived lack of equity.

Here are the facts which have been ignored. Married couples with one income up to £28,000 – these represent the majority of married one income families – would gain the same and, in many cases, more from this budget than a married couple with two incomes. A married couple with one income and two children gets a 4.5% increase in net income on £10,000 compared to 4% for a married couple with two incomes and two children. On £20,000, the gains are 3.2% and 2.9% in both cases. These figures include child benefit increases and family income supplement where relevant. All single income married couples benefit very significantly from the budget – for those on £17,000, £10 per week; £20,000, £11 per week and £25,000, £12 per week. These are among the biggest gains we have seen for single income married couples.

If one looks at Fine Gael which seeks to champion, as it sees it, people who it claims are being victimised under this budget, it put forward a proposal for an earned income tax credit – I can only base my credibility on its policies and, presumably, it is not walking away from them. That would be available only to those who worked outside the home. There must be consistency. It is either opportunistic or does not have a view on where the income tax system could go. Clearly, from the level of criticism and the mode of argument used over the past week, it simply does not know.

I recognise, as does the Government, the strength of feeling which has been generated on this issue and on what taxpayers perceive as an unequal approach to working at home spouses and two income families. The Taoiseach and the Minister for Finance have made our intention clear on a number of occasions since the budget. It is intended to ensure, as a transition towards individualisation of the tax bands proceeds, that the right balance is maintained between those going out to work and carers in the home.

I am very pleased, as are all members of the Government and those who support it, that we can bring forward a £3,000 per annum tax allowance at the standard rate for taxpayers in respect of those spouses or married one income families who work in the home caring for children, the aged and handicapped as it fulfils a promise we made on 4 June prior to the last election. We are standing over our budget and are bringing forward this further measure which puts another £25 million on top of the £964 million income tax reform brought about by the budget – an unprecedented amount in excess of £1 billion for income taxpayers. The business tax incentives, the simplification of capital taxes and the insurance of the exemption of the family home from capital taxes are fundamental to ensuring that all members of society and the workforce benefit from the improved economic environment in which we live.

In the social area, Deputy Dennehy pointed out, as he has done on many occasions, the real improvements in health, the largest social welfare package in the history of the State and the other issues, of which I am proud as Minister for Health and Children, which we will see in the service plans as we go through 2000, backed up by a trebling of the capital provision which will see a modernisation of the health service in line with Fianna Fáil policy and, indeed, the policy of the Government.

May I share my time with Deputy Clune and Deputy Bradford?

The Deputies have half an hour.

Unusually, I will start by saying I have great respect for the Minister for Finance, Deputy McCreevy, and I mean that sincerely. He has been a good Minister and has done some good work in recent years. I listened to the Minister for Health and Children, Deputy Cowen, but he and his Government did nothing about the speculation in recent months. People such as the Minister, Deputy Cowen, and other Ministers told the people how much of a budget surplus we had. It is because of these statements from people such as the Minister, Deputy Cowen, that so many people were expecting to gain from this budget, but there was much disappointment.

I respect the Minister for Finance and have time for him. He is a Minister who is not afraid to say what he thinks or to take on the Civil Service. When he makes a decision, he stands by it. However, I was disappointed in him this week. I have been in the House for only five years, but this is the first time I witnessed such a furore after a budget. We have seen good and bad budgets, but this one was disastrous. I have never seen a Minister who has outraged so many women in such a short time. In one week he upset two categories of women, women staying at home to look after their family and women going out to work, and he has done so again tonight with this turnaround.

Deputy Dennehy spoke about five budgets in the lifetime of this Government. Last week we had three budgets, but within a week we have a new budget. Between now and the weekend, we could have the fifth budget because the Independents are still humming and hawing and wonder what to do. The Minister of State, Deputy Ó Cuív, was on TG4 blaming the mix up in Government on the fact that the Progressive Democrats were in Government with Fianna Fáil and that it was PD policy. The Minister of State, the Independents, the Fianna Fáil backbenchers, the Minister for Finance and the Progressive Democrats all have problems. Last week I listened to Fianna Fáil backbenchers saying: "You are all very quiet over there." Do they remember that? We were very quiet, because we expected a Minister with so much money to give away would make it difficult for us to attack the budget. However, this week we were saying: "You are all very quiet over there." On Tuesday, Charlie Bird said it was his first time since joining RTE to see Fianna Fáil backbenchers beating each other to the plinth to condemn the budget. That has happened in a week. Last week was the third budget, today was the fourth budget and no doubt there will be a fifth budget between now and next week. Perhaps it will be the last budget in the lifetime of this Government.

He will be a quiet Charlie when Deputy Ring's constituency colleague is finished.

That is another matter. I would always stand by a politician, though I give out about them here. There was a big furore last week about tax, but my colleagues have dealt with that. I will deal with people who have been badly treated.

There was an expectation that the budget would go a long way towards the £100 pension promised in the election manifesto, but £7 was a disappointing increase. I thought we would get more, but maybe we will get that next year, or next week, when there is a new budget.

Those on social welfare got an increase of £4. I ask Fianna Fáil Members what one would get for £4? Santa is coming next week, but he will not bring much for £4.

He is early in Mayo.

People will buy for Santa next week, but £4 will not go far for people on social welfare. These people were forgotten in the furore over tax. They have no voice in this House, and certainly not in the Government; anyone who would offer a £4 increase given the money that is available is a disgrace. Many families will feel the pinch this Christmas and for many Christmases to come. The £4 is to be paid out in May, which is a month early. That is great. However, to be just, it should be paid this week.

We have heard much about the £8 increase in child benefit. What £8? Some people say it is £2 per week, but there are five weeks in many months, so it could average out at £1.60 per week. What is £1.60 to a family rearing children? One will not buy a pair of shoes or runners for £1.60, nor would one get much for dinner with £1.60. This Government has shown what it thinks of women and those on low incomes and on social welfare. I have been a long time in local politics, but I have not ever received as many calls as I have about this budget. How many calls have Fianna Fáil Members received? One could see how many by the way they ran out on to the plinth this week.

We are lucky to get two weeks of sunshine a year in Ireland and for the past few years we did not even get that, particularly in the west. However, there was not an increase in the £5 fuel scheme. This amount has not been increased for some years and this was the opportunity to increase it. We have bad weather for 50 weeks a year, but what fuel would £5 buy? It would not buy a bale of briquettes and it is wrong that that allowance was not increased. It should have been increased to £10 per week and extended to 52 weeks per year. If we cannot look after the elderly, the cold and the sick, who can we look after when the economy is going well? It is a disgrace that this fuel allowance was not increased. It was wrong and mean.

This Minister for Social, Community and Family Affairs has probably been the meanest Minister to hold that office ever. He is a Minister who has attacked pensioners. I have many constituents whose husbands and wives had to leave this State when it could not provide a living for them. We were glad then that they were returning so much sterling into the economy. Those people emigrated many years ago and they now live here and receive English pensions. A previous Minister was known for meanness, but this is the Minister for meanness and when people in Achill and Belmullet were getting English pensions and half portion Irish pensions, he sent social welfare officers to means test them, and took money from them. What did he do when sterling was weak? Nothing. Shame on him and his Department.

In 1989 and 1990 we had many social welfare officers because of our high unemployment figures, but we now have even more social welfare officers than we had then. Why? To attack the poor people of the west of Ireland and the rest of the country.

Last Wednesday the Minister for Finance introduced a budget, but we find today that that was not the budget at all. We now have a second budget, as the budget had not been cleared by Fianna Fáil backbenchers, or was it by the Independents? Was it a Government budget we heard last week? Were the Government partners involved or was it a Fianna Fáil budget? We had a semi-u-turn today in addressing the concerns of women who stay at home. I have not had such a reaction to an issue since being elected in June 1997 and I can only imagine what Government Members experienced in phone calls, e-mails and calls to clinics. We have all been inundated with representations and people's wrath was seen today at the Fianna Fáil parliamentary party meeting.

Last week the Minister for Finance made a statement about women in the home and their contribution to society. That statement was that the work they have done in building up this society – and the family is a foundation stone of our society – was useless and not worth recognition. Instead of encouraging women to go out to work, which we would all like to facilitate, the Minister attempted to force women to do so. Today we had a semi-u-turn. I call it that, because the Minister failed to recognise that many women may have child dependants. I have not seen a definition of what he means by the word "dependant". If a mother is in receipt of children's allowance, I am sure that would be a qualifying criterion. Some women who have worked in the home and cared for their children were debarred from the workplace when they got married. They have supported their families at home and contributed in a meaningful way, but now they find their work is not recognised and they are being forced to go out into the workplace. Some of them do not have child dependants or may not be caring for an elderly or disabled person. This category of women are mostly unskilled. Their skills lie elsewhere, not in IT, office skills or working on the factory line. They need to upgrade their skills. It is difficult for a women in her mid 40s or mid 50s to face into the workforce. That takes a good deal of courage and commitment and many women do not want to return to the workplace.

The debate has not taken account of the valuable contribution many women make by way of community work. The worth of that work is not recognised. I refer to people who provide meals on wheels, visit the sick and the elderly, are members of the Society of St. Vincent de Paul, raise funds to build community halls or run school raffles to raise funds for the building of extensions to local schools. While I do not want to fail to recognise the contribution made by others, the contribution towards most of this work is made mostly by women. They contribute enormously to the worth of the community and that work is not recognised. Are we running a society or an economy? The Minister for Finance believes he is running an economy. If we force all those people who contribute enormously to our society into paid work, where will that leave us? The Society of St. Vincent de Paul has advertised that people should volunteer to do at least two hours community work a week, but if all those eligible to work are working full-time, people will not have time to do valuable community work that is needed in our society.

A major debate opened up last week not only on income tax and the tax bands, but about where we are going as a society. That has not been grasped fully by the Minister. He insulted these women not only financially but in the hard statement he made about their contribution to society. There has been much media debate on this matter during the past week. From everybody's point of view, this debate has been worthwhile. It is important to explore our consciences to see where we are going and what we want.

The Government has not devoted much attention to the need for child care facilities. The budget provided a capital allowance of 100% for expenditure on construction or refurbishment in this area. Child care is a low profit business. Some constituents who work in this area, told me during the past week, that they do not make enough money to avail of the capital allowance. They cannot afford the necessary buildings, refurbishments or investments to avail of the capital allowances. Child care cannot be compared to the building of multistorey carparks or apartment blocks. It is a much broader than merely buildings. The provision of child care facilities necessitates an examination of planning requirements, as it is difficult to obtain planning permission for a child care facility.

There are many other facets to child care. Those working in the industry also need encouragement. It is a low paid industry for many reasons. One of the recommendations of the child care working group is that the workers in the industry should be singled out for payment of a special allowance to encourage more people to enter the industry. I am disappointed a provision to that effect was not contained in the budget.

Children's allowance was increased by £8 per month for the first and second child and by £10 per month for the third and subsequent child. Deputy Noonan pointed out last week that £8 would not cover the cost of a packet of Pampers disposable nappies. Such an increase is meaningless in terms of assistance towards the cost of child care. Fine Gael proposed a payment of £25 per month for every child under five. That figure is much more realistic in terms of the cost of child care. The cost of caring for one child per week can range from £80 to £100. That is a major burden for young people with young children who have to repay a mortgage. The two partners have to work to pay the bills and their child care costs increase when they have a second child. They feel their burden has not been recognised and there was no break in the budget to address their child care needs. There are many other issues and I hope to have an opportunity to address them in the Finance Bill.

It is proposed that a minimum wage of £4.40 a hour will be introduced in April, yet the Government will seek to tax £60 of that income. That is a disgrace. There is no point in the Government introducing a minimum wage if it intends to take back a portion of it in income tax. I had hoped that would have been addressed in this budget. There is also a good deal of negative reaction to that point.

I welcome this interesting debate on, what one might call, budget part 2. If the budget has done anything, it has put politics back centre stage. For almost the past decade people have complained that there is literally no difference between the political parties and at election time they have said that they do not have a choice. The debate that arose from last week's budget demonstrates that argument is redundant. What the Minister, Deputy McCreevy, his Cabinet colleagues and the Taoiseach did last week, offers the clearest political options facing this country in the period up to the next general election. Given the difficulty faced by the Government at backbench level, we are not sure when there will be a general election. There could be one in a month, six months or two years' time. There is a clear divide in the House between the politics and policies and economics pursued by the Government not only in last week's budget but over the course of the past three budgets and what was previously pursued by the rainbow coalition Government.

I hope we will have a real political debate and a real debate on the economic choices facing the public because, in a sense, that debate was started by the Government last week. No U-turns, such as that we witnessed today, can hide what the difference is between the parties in Government. The Progressive Democrats and Fianna Fáil lie in the same political bed and there is no point in one partner blaming the other because not only last week but over the course of their three budgets to date they have used every possible device to make the rich richer and to keep the poor poor. That message was exemplified in the proposals put forward by the Minister, Deputy McCreevy last week, but last week was not a once off. It was the culmination of the policies pursued over three budgets and the people at the upper end of the scale – and I do not begrudge them a penny – have pulled further and further away from the people at the opposite end of the scale. That is what is being practised by Fianna Fáil and the Progressive Democrats in Government. Much of this side of the House worked very well in the previous rainbow coalition Government and there is a political lesson in this for us. We must work more closely to show the people there is a realistic political and economic alternative to what they saw last week.

I laughed when I heard the Minister for Health and Children question the consistency of Fine Gael's economic policies. How can a Minister speak about consistency when within a week of introducing the budget he has amended it to suit the political tide? I vividly recall the cheers and applause of the Fianna Fáil and Progressive Democrats backbenchers last Wednesday evening when the Minister for Finance announced his budget. Yet shortly afterwards they ran to the plinth to tell us about their difficulties with certain budget proposals which they wanted changed. If they had such difficulties with it, why did they rush through the lobbies last Wednesday evening to support it? Why did they not use their vote to highlight the problems? Did it take the weekend's newspapers or Deputy Noonan's speech to highlight what the Minister had done through his policy of individualisation? I am not impressed by those Deputies who ran to the plinth in recent days. Their conversion leaves a lot to be desired.

The club of 20.

The club of 20 is growing by the day. However, it might not exist when the people have an opportunity to give their verdict.

The budget was a unique occasion because for the first time in the history of the State the Minister had options. He had almost £1 billion to give away, an opportunity for which every Minister since the foundation of the State would yearn. There were high expectations the Minister would use that bonanza to build a better, fairer and more just society. The vast majority of the people would like that money spent on building a better Ireland. However, that will not happen unless we look after those people at the lower end of the financial and social spectrum. It is bizarre to give a person with a salary of £30,000 or £40,000 an extra £1,000 or £1,500, while a person on the minimum wage only gets £100 or £150 per week. That is not the way to build a fair society, yet the Minister and his Government colleagues supported that last week.

We should be able to speak here tonight about people's improved quality of life as a result of the Minister's package. People are worried about traffic, the price of houses, the state of the nation's health services and child care facilities. However, the Minister's proposals will make the housing situation worse because we are not giving the extra hundreds and thousands of pounds to people who need it to take out their first mortgage but to those who will use it to build their second or third house.

The Minister for Health and Children lectured us tonight, yet there is nothing in the budget to reduce hospital waiting lists.

The Deputy should pay attention to what is going on .

The Minister of State at the Department of Health and Children said the waiting lists have been dealt with. Any Minister or Minister of State who says that is totally removed from reality.

The Deputy should check his facts and find out what is happening.

It is a joke because the waiting lists are at record length in every hospital. It is a shame for any Minister to say the matter is being dealt with.

The Minister of State at the Department of the Environment and Local Government, Deputy Dan Wallace, represents a Department which has responsibility for housing policy. The budget proposals will make the housing situation worse. There was nothing in last week's package to deal with the crisis at local authority level. Extra funding was not provided and the accelerated programme will result in fewer houses being built in 2000 than were built in 1985 during a grave economic crisis.

The Deputy should check with his local authority.

Those statistics were made available by the Department of the Environment and Local Government. Perhaps he is not aware of them.

I am aware of them as I announced them last week.

Perhaps part of the problem is that some Ministers are not aware of the problems in their Departments. The housing industry is in crisis in terms of the price of private houses and the lack of local authority housing. Something should have been done in last week's budget to address this problem.

Deputy Clune mentioned the child care issue. We expected something to be done because of the money which was available. However, this was a lost opportunity. The £8 increase in child benefit will not produce the results required. It is unbelievable, grotesque and bizarre that a Minister who had £1 billion to give away got it wrong. The agenda for the next election has been set and it will divide the country. I know how the country will vote.

I hope the women are not left holding their breath.

I wish to share my time with Deputies Ardagh and Browne.

I am glad to have the opportunity to support the budget. I am astounded at the level of criticism levelled by some of the Opposition speakers at the old age pension provisions over the past three years.

The Government could have hit the ton.

The commitment is to hit the ton during the life of the Government and there is no doubt that will be delivered. It is interesting to note what has been delivered. In his first budget the Minister announced an increase of £5. In last year's budget he announced an increase of £6 and this year the increase was £7. He is moving rapidly towards achieving the objective of £100. It is no harm to remind ourselves that the former Minister for Social Welfare, Deputy De Rossa, proposed an increase of £1.80, which contrasts unfavourably with the record of the Minister for Finance over three years. Much of the criticism levelled at the pension increases has come from Fine Gael, which seems to be removing itself from the impact of a budget introduced by a Minister from another party.

Another area which has been put under the microscope by people who consider social inclusion issues is that of child benefit. The child benefit rate in the three budgets of the rainbow coalition was £30 for the first and second child and £39 for third and subsequent children. Those rates have been increased to £42.50 and £56, respectively. There have been substantial increases during the lifetime of the Government under the Minister for Finance whom Opposition speakers attempt to portray as uncaring and anti-family.

The Minister has delivered on the promises in the manifesto on income tax. While some were being left to next year, the changes announced today go a step further than was promised in the 1997 manifesto for the life of the Government.

I welcome aspects of the budget which have not been mentioned. One such aspect is the proposal to create 750 places in the support employment programme for disabled people. The programme will cost £4 million in 2000. The Minister did not mention the cost for subsequent years but there is no doubt there will be an ongoing and probably increasing cost for at least the three following years. It is an area which many Governments have neglected in the past. This is a move which will give dignity to those who have got a bad deal. I welcome the scheme.

I also welcome the scheme for employers to train employees who become disabled while in employment. There are many difficulties for those people. It is often forgotten that a person in that situation can be the family breadwinner and the financial difficulties which the family face following such an occurrence can be enormous. I am glad this element was introduced in the budget. It is very positive. The doubling of the widows and parents bereavement allowance is also welcome. It is an important measure which takes account of the tremendous blow to family structure which occurs after a bereavement.

I look forward to the inclusion of the full range of carers' benefits in the Social Welfare Bill for 2000. I raised with the Minister in the millennium committee, the issue of the provision of £1 million for the construction of hostel accommodation at the National Rehabilitation Centre in Dún Laoghaire. As a result of an accident to a member of my family last year, I visited it daily for four months. I saw the enormous stress and financial difficulties imposed on parents and relatives of people who had suffered accidents. The medical staff encouraged family members to be present as far as possible but the financial strain on them was horrendous. I took that up with the Minister and the Minister of State at the Department of Health and Children, Deputy Moffatt, and I am delighted that it has been included in this programme. There are many people who sadly will have reason to use the hostel accommodation while visiting family members. Post-operative patients will also be able to avail of out patient facilities in the hostel. I thank the Minister for this. I hope I have no further reason to use the centre myself but for those who do, it will be of enormous benefit.

Publicity has centred on the Fine Gael attack on a very small provision of the budget. I was astounded, however, to discover yesterday that there is a Fine Gael document which contains an economic policy which sets out to encourage women at home to rejoin the labour force. Fine Gael would introduce an earned income tax credit resulting in tax reductions at different levels of income for single, married one earner and married two earner taxpayers. It is extraordinary that the Fine Gael finance spokesperson should tout this policy while simultaneously attacking the Minister Deputy McCreevy. These attacks go far beyond what is acceptable in personal terms. There is hardly a more incongruous sight in politics than that of Deputy Noonan affecting to be concerned about the welfare of women when one bears in mind his record as Minister for Health during the hepatitis C scandal in particular. When that record in office is examined alongside this deeply buried policy document, the depth of the hypocrisy is nauseating.

Some commentators have been fooled in the short-term by what has been said. It will be interesting to see, when people have studied the entire budget carefully, who will be seen to have delivered. Deputy McCreevy has been in trouble fairly frequently, sometimes within his own party.

Sometimes with his own back benchers.

He has often been pilloried and he has often suffered. Amazingly, however, he has always survived and he has always been proved right. He will see off the hypocrites with some style on this occasion as well.

Claptrap has been talked about a woman's choice between a role in the paid work force or working at home. It would be worthwhile to establish how many women in the home would wish to work in paid employment full-time or part-time. There are even more who are forced to be in paid employment who would dearly love to work in the home. There is an onus on employers to develop a more worker-friendly atmosphere for women. Taxation issues are irrelevant to the choices of the vast majority of these women. We should establish how many women are in each situation and what measures could be introduced which could improve both their lots. Flexibility in employment, not taxation, needs to be addressed.

Decentralisation has been mentioned by other Deputies. This policy has been very successful in Ennis in my constituency. Many of us would like to see that extended to other centres in the county. The Shannon River corridor scheme for hotels was also mentioned. As Deputy Ulick Burke said, this could be extended to south County Galway and to north east Clare, where there is a crying need for that sort of accommodation.

In the course of the three Rainbow Government budgets, 38,000 people were removed for the tax net. In the first two budgets presented by Deputy McCreevy, 85,000 people were removed from the tax net and this year's budget will remove a further 50,000. Taken with the impact of the minimum wage, this is a move in the right direction for the low paid. During the Minister's tenure, 161,230 people have moved from the high rate to the standard rate of income tax.

This budget is the third budget in a programme of five. We are going the right way.

What about the fourth budget?

The fourth budget will be introduced next year.

That was the fourth budget today.

The fourth budget will be presented in 2000 and the fifth will be presented in 2001. Unless there is an early budget in 2002, there will only be five budgets in our term of office. We will ensure that the State will continue along the same path over that period. We will then come back for the sixth to tenth budgets.

I have been looking at the report of the National Economic and Social Council. Some points about our time in Government and the financial stewardship of the Minister for Finance, Deputy McCreevy, are worth noting. In the period since 1994, and I accept the other side of the House was involved in that period, employment has increased by 335,000 to 1.6 million people. This year there are five workers in Ireland for every four workers there were in 1994. Unemployment rates have fallen from more than 10% to 5.2%. We are very proud of that. The Irish standard of living has increased from 58% of the EU average ten years ago to 93% in 1998. We are probably at more than 100% of that average now. It certainly will be when the full effects of the budget take effect next year.

How many thousands are living in poverty?

That number is getting smaller and smaller.

Not after this budget.

The increase of £1.8 given to old age pensioners by the previous Government was an insult by comparison with the increase of £7 provided this year. The increase in the real take home pay of married people was 7.5%, the highest increase indicated by these figures, which go back to 1986. By contrast, the increase for single people was only 5%. There is a need, therefore, to increase the take home pay of single people. In view of this I understand the action taken by the Minister to ensure that single people at work will have a reasonable amount of money in their pockets when they come home on Friday or at the end of the month.

I congratulate the Minister for the announcement today of a £3,000 allowance for the non-earning member of a married couple who stays at home to look after children, whether they be normal or disabled. Every cloud has a silver lining. In the constituency I represent, which includes the areas of Walkinstown, Drimnagh, Crumlin and the inner city, there are very few family units earning £28,000 or more. The debate about a £6,000 allowance for double income families did not apply to my constituents, yet when the rí rá agus rúille búille occurred they wondered if the resolution of the problem would give them anything. Thank God it did because the increase of £3,000 in the tax allowance for married couples means that the tax allowance of £10,400 for the single earner of a married couple will now be £13,400. In every married couple with children the single earner can now earn £257 per week before a penny of tax is applied to their income. There are many happy people in Walkinstown, Drimnagh and Crumlin as a result of today's announcement. I applaud the Minister.

Fianna Fáil stands on values like those of the family. The country is based on the family unit. It is the building block of our society, and the Minister's action reinforces this.

The reason for our success and for the Celtic tiger is because of the baby boom of the 1970s. It did not happen in any other European country. Those children were nurtured and provided with an education, including a free secondary school education introduced by Donogh O'Malley. They are now highly educated, technologically minded high earners and they pay good taxes. That is driving our economy and is helping to maintain the standards it has now achieved.

As legislators it is our responsibility to look forward 20 to 30 years, not to think in the short-term of our existence in the Dáil over the next two years. The children being nurtured today at home by the mothers of Ireland will earn the money to look after the ageing population of this country. We must look after those mothers and the families who nurture our young children, who are this country's greatest asset. It was true in the 1970s, it will be true in the 2000s and also in 30 and 50 years hence.

I applaud the budget and all the measures it contains. I look forward to having more to say when the Finance Bill is introduced to the House.

(Wexford): The budget is a tremendous success. The hiccup involving double income households was addressed today by the Minister. I listened with interest to Deputy John Bruton and Deputy Quinn. They jumped up and down like jack-in-the-boxes, demanding extra time to debate the budget and because of this we are here at 11.25 p.m. while members of the public are out socialising, having a pint. The world goes on and they could not care less what we are saying to each other. They are glad the budget will give them something extra, be it in their pay packets, their social welfare payments or whatever.

The Minister has been very unfairly treated over the past week. I accept the decision to exclude the stay at home mother or father with a family from the double income family provision was a mistake. The Minister recognised it and rectified it. In addition, he has done more in the past three years to ensure that the PAYE worker received some of the benefits of the Celtic tiger.

Like Deputy Seán Ryan, I was here in the 1980s when belts were tightened and tough decisions were taken. People were paying tax at the rates of 55% and 35%. When the economy started to boom Governments did not respond adequately to the needs of PAYE workers. I am glad that over the next two budgets, as in the last three, the Minister will give recognition to the role of working people and will ensure they will have decent take home pay each week to look after their families. For far too long they have been left behind.

In the discussions on a new partnership arrangement I hope more concessions will be granted to PAYE workers and especially the low paid. I am glad Mr. Geraghty and other union leader suddenly woke up. For the past two to ten years they have operated in a cosy arrangement with different Governments while the well off became richer and the less well off were at a standstill. It took Mr. Geraghty three or four days to realise there may have been a problem with the budget and to threaten to walk out of the new talks. I understand he may have rejoined them following various interventions.

When the Government enters into discussions with the unions and all the other partners I hope those on low incomes and low pay will be looked after because under the last series of agreements the better off gained while poor people were left behind. I hope a new set of arrangements will be established when the current talks are concluded in the near future.

I welcome the increases in social welfare payments outlined in the budget. I listened to the hypocritical criticisms form the other side of the House regarding the increase of £7 in pensions and £4 in social welfare payments. When the great socialist, Deputy De Rossa, was Minister the biggest increase he gave to social welfare recipients was between £1.80 and £2. I have not seen him in the House for a long time. He must squirm when he sees the major advances made in the social welfare area. He neglected people on social welfare.

Debate adjourned.
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