Taoiseach outlines 'social justice' role

There is no credible alternative economic model to the hybrid version developed in the Republic in recent years, the Taoiseach has told the Dáil.

Opening the formal debate on the Budget, Mr Ahern said this hybrid model has been tailored "to the needs of our particular situation".

He said: "Wealth cannot be taken as a given. It has to be continuously generated and renewed. When it is, the State can play its role in redistribution, in order to foster the stability and social cohesion that are so necessary to underpin growing prosperity."

The social partners had recognised that "only strong and sustainable growth, facilitated by a consistent policy framework, will generate the resources required to address our social and development needs".

"There is no credible alternative foreign model to the hybrid one that we have developed here in recent years tailored to the needs of our particular situation," he said.

A competitive economy can enable greater social justice, and a just and caring society can be a powerful source of competitiveness, he added. "That broad philosophy, as distinct from any narrow ideology, forms the heart of our social partnership model." Solid sustained progress "will deliver infinitely better results for everyone than stop-go policies caused by impatience and trying to do too much too quickly. Even where there are undoubted needs to be met, improvements in capacity and facilities have to be phased in."

Praising the "inspiring" first Budget of the Minister for Finance, Mr Cowen, the Taoiseach said this year's Budget is one for "hardworking citizens, men and women" and it continued a trend since 1997 of falling average tax rates.

The taxation tables focused on equity. "They show the benefits of tax relief concentrated on low and middle-income earners and on the largest segments of the workforce."

The Budget was "guided towards greater social justice, higher household prosperity and enhanced national competitiveness, but still rooted in sound public finance. This is social justice in practice, making a real difference to all our lives."

Paying tribute to the "outstanding contribution" of former minister Mr Charlie McCreevy, Mr Ahern said that "rarely if ever has an outgoing minister for finance been able to leave his successor a more positive legacy".

The public finances "are in excellent order. Revenue has exceeded target by an estimated €2.3 billion, thanks to higher growth and effective tax collection." The Government's tax strategy had been an "important ingredient" in the Republic's success story but it was not the only one. He pointed out that the value of the social inclusion measures announced in the Budget "exceeds the cost of the income tax measures by €200 million".

"The increase of €14 a week, four times the expected rate of inflation and a rise of 10 per cent, is a very significant step to enable recipients to live life with dignity, in line with our commitments."