Noonan focuses on economic risks

Fine Gael's finance spokesman accused the Minister of taking serious risks with the economy.

"It is not so much by what you did today, but what you did with the Book of Estimates," Mr Michael Noonan told Mr McCreevy. "The increase in current expenditure is well over 8 per cent, but this Minister always seeks to hide what he is actually doing. He is a master of creative accounting."

Mr Noonan said that in the Estimates the Minister planned to spend an additional £1 billion next year. "He has added a £581 million income tax package to this today, and also increased current expenditure by £230 million. This is an extremely expansionary Budget. It will add very significantly to consumer demand at a time when the economy is booming and when consumer demand has been significantly stimulated already by the recent reductions in interest rates."

The European Central Bank had advised the Minister to be prudent, while the Irish Central Bank had advised that tax cuts should be offset by tax increases elsewhere, said Mr Noonan.

"The Minister has ignored all advice and is now steering a very dangerous course; he is fuelling an economy which is already moving like a bush fire and has taken no counter-steps to reduce consumer spending."

Mr Noonan said the Minister was stimulating the economy, while at the same time not taking sufficient measures to increase its capacity to grow.

"The State is running out of workers, but a radical income tax policy would increase the labour force. If the gap between welfare and wages were sufficient, many of the long-term unemployed would return to work; if the tax regime were more benign and if child-minding were more affordable, many married women would return to work."

Fine Gael believed a radical reform of the income tax code was necessary, and it supported the moves towards tax credits, Mr Noonan said.

He added that making the State more tax-friendly so that additional people joined the labour force was not enough. "Emigrants will not return if they can neither buy nor rent suitable accommodation. Dublin women will not rejoin the labour force if the only affordable houses are in far-flung midland towns."

On the Minister's announcement of an additional £8 million to deal with hospital waiting lists, Mr Noonan said that last year £12 million had been allocated for this purpose but the waiting lists had increased by 15 per cent to 35,405.