Taxpayers in general have benefited from the tax improvements introduced in the recent budget and Finance Act, 2000, that is, the 2 percentage point reductions in both the standard and top income tax rates, the increase in the personal allowances of £500 single or £1,000 married to £4,700 single or £9,400 married and the widening of the standard rate band.
Under the new standard rate band arrangements the single standard rate band is increased to £17,000. Two income married couples will have a combined standard rate tax band of up to £34,000 per annum, with a maximum transferability of £28,000, which is equal to two single bands of £17,000 each. This means that the second spouse will now have his or her own standard rate band worth up to £6,000, which reduces their tax bill by £1,320 per annum.
This will provide an incentive to enter employment and particularly for married women to re-enter the workforce, as they will now have the benefit of their own standard rate band. Previously their spouse would have used up all of the couples married allowances and standard rate band, meaning that, generally speaking, the second spouse would start paying tax at the higher rate from the first pound.
Child care has become an important issue in Ireland and it raises very important and complex issues. The Expert Working Group on Childcare reported to the Government in February 1999. Its recommendations covered a wide area including financial supports for parents availing of child care services and a particular complaint was the lack of supply of high quality, affordable child care.
Following consideration of the report by an interdepartmental committee, the Government agreed that the most urgent task was to increase the number of child care places. As a result, in Budget 2000, I decided to implement a major package of measures to that end. These measures will cost £46 million in a full year and include a £10 million grant scheme towards the cost of upgrading crèches.