It was Mr McCreevy's second Budget and it has to be said that he made a much better fist of it than he did last year. Even his delivery has improved but then he is far more assured when delivering Budgets rather than responding to them. Mr Michael Noonan for Fine Gael and Mr Derek McDowell for the Labour Party performed commendably in their necessarily seat-of-the-pants responses but the non-partisan observer might have concluded that Mr McCreevy may have got it just about right when Mr Noonan complained that the Minister gave away too much and Mr McDowell criticised him for giving away too little.
The debased adjectives which Mr McCreevy alluded to in his speech actually do describe accurately the main thrust of his Budget; it is radical and it is reforming. The switch from allowances to tax credits is justified, equitable and overdue. Sitting on the opposition benches yesterday were former Ministers for Finance such as Mr John Bruton, Mr Alan Dukes and Mr Ruairi Quinn - all of them reform-minded and radical in their way - who would have cherished the opportunity to switch income tax to a credit system but were deprived of today's revenue buoyancy which makes the switch not just affordable but positively attractive.
The tax give-aways amount to a staggering £581 million but, unlike last year, the concessions are directed principally at those who most deserve them. The Budget will render tax free the first £100 earnings per week for a single person. And about time too. The Budget will remove 80,000 low-paid workers from the tax net altogether. Persons will now earn in the region of £14,000 per annum before they start to pay income tax at 46 per cent. This Budget will not eliminate all disincentives to work but it will go a long way.
No Minister for Finance, no matter how much is available, can please everybody and Mr McCreevy can often take some convincing that he should set out to please anyone. Consequently, there are fault-lines in his package of measures where he seems to have rejected sectional requests of merit. The poor did not do well. It seems incongruous that a Minister for Finance holding a surplus of £1.4 billion would not declare war on poverty, of which there is much. The increase of £3 in social welfare assistance is parsimonious to a fault. The lower-paid did well through the tax cuts but, leaving aside the (generous) pension increase, Mr McCreevy would seem to have difficulty in giving to the unpaid what he gives to the paid. So much for social inclusion. Perhaps, he reckoned that a higher welfare increase would diminish the work incentive.
He could offer no similar argument to the farming community yet the Farm Assist Scheme is of derisory proportions. There are nearly 40,000 farmers who have an income of under £150 per week but the scheme will reach out to fewer than 14,000 of them. There isn't a penny extra for fodder. Has Mr Joe Walsh no clout at the Cabinet table or has the mostly-urban Cabinet decided that smallholders have no economic value and should be driven out of existence? Does the Government not realise that there is more to fighting rural depopulation than building water and sewage systems?
The thrust of the Budget however must be commended. Moderate wage increases are one of the rocks on which this State's economic performance stands. If the tax reductions promised in Partnership 2000 had not been delivered - and handsomely - the industrial situation next year would have been fraught and the prospects for a further programme almost non-existent. The endorsement of save-as-you-earn profit-sharing schemes, while increasing the employee's stake in the company, will also discourage unrealistic wage demands. This is the fifth successive year of strong economic growth. There are many external factors which could bring it to an abrupt halt, so it is imperative that economic and fiscal planning give it all possible support.