Brian Cowen's speech - part 2

Text of Minister for Finance Brian Cowen's speech (Part 2)

A NEW FIVE-YEAR CHILDCARE STRATEGY

The Government is very conscious of the difficulties faced by many parents and families in securing affordable childcare. Our task is to assist all parents in the early years of child-rearing by widening the options they have. Some parents like to use family care or informal arrangements while others prefer the formal childcare setting. In addressing this issue, I have tried to take account of the following considerations:

Having carefully considered all the complex issues involved, the Government has developed a five-year strategy to tackle the problem.

We can only do so much in one Budget. A complete solution will take time but the structured medium-term approach I am announcing will, I believe, increase the options for parents in a balanced way. I hope it will be recognised as a constructive step forward in this area.

In devising the strategy the Government was particularly anxious to develop further supply side measures to increase the number of childcare places. The Government is also very conscious of the importance of the first year in the life of a child and the strategy provides for a significant extension of maternity leave. The strategy also seeks to address the immediate cost pressures facing parents of young children by providing a new childcare supplement for all children under the age of six years.

I am making a significant start in implementing the programme today by providing €317 million in the 2006 Budget for this purpose. The cost will increase to over €600 million a year by 2008.

Supply Measures

I am providing for a number of measures which will increase the supply of childcare places.

As part of the overall Childcare Strategy I am today announcing a major new five-year National Childcare Investment Program- me, which will run from 2006- 2010 and will support the creation of an extra 50,000 childcare places.

This will be achieved through enhanced capital grant aid to private providers, the limit for which will double to €100,000, and continued support to community providers of up to €1 million per facility subject to a maximum grant per place of €20,000.

This new Investment Programme will build on the success of the €500 million Equal Opportunities Childcare Programme which has already been provided under the National Development Plan 2000 to 2006. I would like to thank the Minister for Justice, Equality and Law Reform and the officials in the relevant areas for the roll out of these programmes. So far this funding has generated over 26,000 new places with a further 15,000 places due to come on stream before it ends in 2007. This means that, between now and 2010, some 65,000 additional places will be funded, including early childhood, pre-school and school-age places. Furthermore, we will continue to support the Department of Education and Science in targeting early childhood education in disadvantaged areas.

For the new Programme, I am now providing a total allocation of €575 million over the next five years. This comprises additional capital spending of €357 million as well as increased funding for the continuation of staffing grants to community settings with a social inclusion focus. Added to the funding already committed to the final two years of the existing Equal Opportunities Childcare Programme, this will bring total direct expenditure on supply creation to some €790 million for the period 2006 to 2010.

This planned roll-out of new places will be complemented by an intensification of training arrangements to support quality childcare delivery. It is expected that 17,000 childcare workers will be trained in the period.

In order to help further to improve the supply side, I propose to exempt from income tax, PRSI and levies all income up to €10,000 per year from childminding where an individual minds up to three children, who are not their own, in the minder's own home. This will recognise the contribution of this sector to supporting supply. Such individuals will be required to notify their local County Childcare Committee so that information on availability of childcare places can be more readily co-ordinated. The County Childcare Committees provide support, information and small grants to the sector.

Maternity Leave

The Government is particularly conscious of the importance of the first year of life to a child's development. This is also the time during which pressure on parents can be at its greatest, not least because the cost of caring for infants is higher than for older children. I have given careful consideration to the various calls for improved parental leave and I am now announcing significant extensions to the periods of paid and unpaid maternity leave over the next two years.

From March next, mothers of new-born children will have an additional four weeks paid maternity leave, extending the duration of such leave to 22 weeks. This will cost a total of €35 million in 2006. I will be following this up with a further four weeks of paid maternity leave in 2007. Thus, by 2007, mothers of new-born children will be entitled to a full six months of paid maternity leave.

Furthermore, unpaid maternity leave will be increased by four weeks in 2006 and a further four weeks in 2007, bringing total unpaid maternity leave to 16 weeks by 2007. This is in addition to the existing 14 weeks unpaid parental leave. In total, parents will be entitled to 56 weeks between paid and unpaid leave by 2007.

Early Childcare Supplement

The increase in maternity leave and the additional measures I have just announced to improve supply will take time to have their full impact. In the meantime working parents continue to need additional support to meet the cost of childcare.

It is only fair, at this point, to recall the huge investment which this Government has made over recent years in terms of direct financial support for families. This year, we will spend almost €2 billion on Child Benefit alone. This compares to just €500 million as little as five years ago.

During that time child benefit rates have increased substantially to the point where, as I mentioned earlier, over one million children in more than half a million families will next year receive monthly payments of €150 or €185.

There has also been a radical change in the personal tax system which has seen the tax burden on families significantly reduced across the board. To take just one example, a married two-earner couple with a combined income of €60,000 per annum will pay, on average, just 11 per cent of their gross income in tax in 2005, down from 28 per cent in 1999. This is an annualsaving of over €10,000.

However, notwithstanding these very significant improvements in income, this Government acknowledges the continuing cost pressures on parents, particularly those with young children, for whom I am today providing some additional financial support. I have had the benefit of examining a wide range of different views and proposals but it is clear that a broad consensus is hard to find.

Having looked in depth at all of the issues I have decided that the most effective response lies in introducing a new Early Childcare Supplement. This will be a direct payment of €1,000 per year available equally to all parents regardless of their labour force status, for each child up to his or her sixth birthday.

These payments, which will be exempt from income tax and levies, will be made on a quarterly basis in respect of more than 350,000 children who are less than six years of age. The first payment will be made in mid-2006 and will cover the second quarter of 2006. This scheme will cost €265 million in 2006 and €353 million in a full year.

This will be an additional new payment separate from the exist- ing Child Benefit scheme. This new Early Childcare Supplement and the existing Child Benefit will bring the amount a family will receive next year, for each of the first two children under six years, to €2,800 per year, equivalent to over €50 per week in direct financial support. This will be even higher where a family has more than two children under six. By any standards, this is a significant contribution from the taxpayer towards the cost of childcare in such circumstances.

New Childcare Arrangements

Funding for the National Childcare Strategy will be allocated in the Revised Estimates Volume. In that context, the Government will be introducing new administrative arrangements to streamline the functions relating to childcare.

HELPING THOSE ON THE MINIMUM WAGE AND ON AVERAGE PAY - TAXATION

Tax revenue provides us with the resources to develop a fairer and more productive society. Additional revenue affords us the opportunity to return some of this to those who earn it. This Government has radically restructured the tax system in the past eight years to ensure that much more income tax relief goes to the lower paid. As a result, over one third of the work force is now outside the tax net completely in 2005. That represents 720,000 earners compared to 380,000 in 1997.

Basic Tax Package

I intend to take more earners out of the tax net today. I am increasing the Employee Tax Credit by €220 per year and the basic personal tax credit by €50 per year single and €100 per year for married couples. This will ensure that all those on the current minimum wage will remain outside the tax net completely in 2006. This will remove from the tax net, nearly 52,000 low-income taxpayers who would otherwise be in the tax net next year.

I am also increasing the annual income tax exemption limit for persons aged 65 and over by €500 single and €1,000 married. This will remove a further 1,700 taxpayers from the tax net. These age exemption limits have been nearly trebled since this Government came into office.

I am increasing the standard rate income tax band by €2,600 per year, that is, by just under 9 per cent, removing over 90,000 taxpayers from the higher tax rate. This increase is aimed at ensuring that all those taxpayers earning around the projected average industrial wage in 2006 will pay tax at the lower rate of income tax. This is worth €11 per week in increased take-home pay for those on average incomes.

Finally, I am increasing the threshold for the payment of the 2 per cent Health Levy from €400 per week to €440 per week. This will benefit 72,300 lower paid workers by an extra €8 per week on top of the other reliefs I have mentioned.

All these increases mean that a single person on €22,000 per year will benefit by €13.65 per week in net income in 2006 and a married one earner couple on €40,000 per year will see their net income rise by €12.92 per week.

Other Personal Tax Reliefs

I am happy to tell the House that the tax credits for widowed persons, blind persons, incapacitated children, dependent relatives and those aged 65 or over are being further increased this year, by amounts ranging from over 20 per cent to 50 per cent.

The tax relief for persons living in private rented accommodation is being increased by 10 per cent to assist those faced with increased rental costs.

The tax allowance for those paying Trade Union subscriptions, which was introduced by this Government, is being increased from €200 per year to €300 per year. This allowance is available at the standard rate of income tax.

The total cost of all these increases in income tax credits, bands and reliefs is around €900 million in a full year.

A FAIRER TAX SYSTEM

Last year I announced a major review of tax reliefs in order to achieve a greater degree of equity in our tax system.

This involved both internal reviews and the employment of outside consultants. It also included an extensive public consultation in which nearly 90 submissions were received from a wide range of persons. These submissions were reviewed by the Joint Oireachtas Committee on Finance and the Public Service and I have had the benefit of that committee's discussions. At the end of the day, the decision on what to do rests with the Government, for which we can be held accountable by this House.

What we are Seeking to Achieve

My basic aim is to see that everybody pays an appropriate amount of income tax relative to their ability to do so. This is a cornerstone of tax equity. We must balance this with the need for effective tax reliefs to incentivise work, effort and enterprise so as to stimulate economic and social development. To achieve this balance I am announcing a range of specific measures. These reflect the recommendations of the reviews, a synopsis of which is set out in the Summary of Budget Measures. I propose to publish all the relevant reports reviewing these various tax reliefs in time for the Finance Bill.

Firstly, the following reliefs either have achieved the objectives set for them or are no longer considered to be cost effective in terms of the objectives set for them and are therefore being terminated subject to certain transitional provisions: the urban renewal, town renewal and rural renewal schemes, and the special reliefs for hotels, holiday cottages, student accommodation, multi-storey car parks, third-level educational buildings, sports injuries clinics, developments associated with park and ride facilities and the general rental refurbishment scheme.

The transitional measures take cognisance of the fact that there are currently over 250,000 jobs in the construction sector and the building industry accounts for around 20 per cent of the economy. We should not do anything that disrupts unnecessarily an industry that is such an important driver of jobs.

For this reason, for projects that are already in the pipeline, I am extending the date for which 100 per cent relief for expenditure will apply by five months from end July 2006 to 31 December 2006. Thereafter, where 15 per cent of the relevant expenditure on the project has been incurred by that date, the relief will apply to only 75 per cent of the expenditure incurred in 2007 and to 50 per cent for expenditure incurred up to end-July 2008. The relief will then reduce to zero, and thus end, after 31 July 2008. Full details of these transitional arrangements are set out in the Summary of Budget Measures.

Both sets of external consultants dealt with the transitional issue and both recommended an extension of relief for such pipeline cases. One recommended a simple extension of 100 per cent relief for 17 months beyond 31 July 2006. The other recommended an extension of five years but at only 50 per cent relief. I have chosen a middle course.

This winding down of property based tax reliefs is consistent with the greater capacity of particular economic sectors nowadays to fund such investment from their own resources, and the sizeable capital investment which the Government itself is making through the major new investments I referred to earlier.

In line withthe recommendations of the consultants, I propose to continue the tax reliefs for nursing homes, childcare facilities and private hospitals. Special arrangements will apply for park and ride facilities and the living-over-the-shop scheme as indicated in the Summary of Budget Measures.

The reviews also proposed that any new reliefs should be time-limited and should, where relevant, be subject to an assessment of costs and benefits prior to their introduction. They also proposed that recipients of these kinds of tax reliefs be required to supply full data to Revenue to assist in the costing and assessment of reliefs. I will be following this advice as far as appropriate.

A Minimum and Fair Tax

It is necessary not only to eliminate some incentive reliefs but also to regulate the use that can be made of those that remain. We cannot stand over a situation in which some high-earning tax residents, through the use of incentive reliefs, can reduce their taxable income to nil. This is simply not a fair situation, although I should point out that high-earning non-payers are in a very small minority. Accordingly, I propose now to place an annual overall cap on the extent to which specific incentive reliefs can be availed of.

The cap will apply to those with income over €250,000 per year. It will operate by reducing by half the amount of income that can be relieved from tax by certain specified tax reliefs. This measure will help eliminate the phenomenon of tax-free millionaires and increase the effective rate of tax on those with high income towards a minimum of 20 per cent. Further details of how this will work are set out in the Summary of Budget Measures. This will require some complex new legislative provisions and I propose accordingly that the new system will apply for all tax years from 1 January 2007.

This annual cap system will also apply to Artist's relief from the same date. There is no change in the tax treatment of income now exempt under the Artist's relief scheme, where that income is less than €250,000 per year.

Pensions

Tax equity applies not only to taxpayers' current income but also to how taxpayers provide for their income needs in retirement. Recent Budgets and Finance Acts have made significant and innovative improvements in the nature and scope of tax reliefs for pension provision. This was done so as to encourage earlier and more substantive saving by the generality of individuals to meet the cost of providing themselves with a reasonable and affordable pension.

The Government itself is putting aside 1 per cent of GNP each year to help fund future pensions. The National Pensions Re- serve Fund is expected to amount to some €15 billion or 11 per cent of national output at end 2005. In addition, substantial tax costs of the order of €3 billion or more are incurred to incentivise pension saving through tax reliefs each year.

The cost of providing such reliefs is that high because the funds which a pension scheme must build up have to be a multiple of the annual pension to be provided. Thus, a fund of about €1 million is required to generate even a relatively moderate annual pension.

We must continue to incentivise pension contributions if we are to meet the challenge of supporting an ageing population. To achieve this objective, I will be considering measures in the Finance Bill to assist those to- wards the lower end of the income scale, and those who are not using their current full entitlements, to provide themselves with reasonable retirement arrangements. The policy objective is to provide reasonable tax relief subject to limiting the amount the general taxpayer is required to finance. People will, of course, continue to be free to provide higher amounts for their retirement but without a subsidy from the general taxpayer.

To help contain this subsidy, the current maximum amount of an individual's pension contributions that can be tax-relieved each year is already limited to a specified percentage of income, subject to an earnings limit of €254,000. This earnings limit affects less than 1 per cent of income earners. It broadly translates into an accumulated pension fund of the order of €5 million, depending on a number of factors. There is currently no overall maximum limit, however, on the amount of the pension fund that can be tax-relieved. I believe that it is reasonable to set such a cap at €5 million, or the existing value of a person's pension fund as of today, if that is greater.

Under current rules the maximum tax-free lump sum that can be taken by a person is one-quarter of the fund. Therefore, a fund cap at €5 million means a €1¼ million cap on all tax-free lump sums. This cap will apply on and from today.

I am also proposing that for those with funds in an approved retirement fund, these funds will be subject to income tax as if not less than 3 per cent of the fund were distributed each year. This should ensure that such funds are used to provide a retirement income and not as a device for tax deferral. As a transitional arrangement one-third of this rate will apply in 2007, two-thirds in 2008 and the full 3 percent in 2009 and following years.

Further details are set out in the Summary of Budget Measures.

Other Reliefs

I have examined a number of other tax reliefs such as the reliefs for expenditure on significant heritage houses and gardens, woodlands and donations and the tonnage tax and I have decided to make no significant changes in their operations for the present. In the case of horse and greyhound stud fee income this exemption will end on 31 July 2008. A new regime appropriate to the industry will be discussed with the European Commission.

I also propose to disallow interest on personal loans taken out to acquire shares in, or provide loans to, rental income companies.

KEEPING CONSUMER PRICES DOWN

Turning now to indirect taxation, I am proposing, like last year, to leave the main excises and VAT rates as they are. This is a significant Government contribution to keeping inflation down and securing further value for money for the consumer. On top of this the consumer can look forward to lower retail prices for basic grocery items due to the forthcoming removal of the grocery prices order already announced by the Government. Our efforts to increase competition generally also help keep price increases to a minimum.

Home Heating Fuel

There is a sizeable gap in the cost of certain heating oils between here and Northern Ireland. I plan to eliminate the excise difference between the two jurisdictions in the next two years, starting today. I am beginning by halving the excise rate on Kerosene and LPG used for home heating from midnight tonight. This measure will cost €46 million in a full year.

Betting Tax

Earlier this year I initiated a review of betting duty. One of my prime concerns is how to protect the revenue base on a fair basis in view of the prevalence of effective tax-free betting on the internet.

With this in view, I am announcing today a reduction of betting duty from 2 per cent to 1 per cent from 1 July next with the intention that this duty will be borne by the industry and not the customer. This should ensure that tax-free betting is available in all betting offices and prevent betting offices competing on the basis of tax, sometimes to the detriment of small, locally-owned concerns. This reduction will cost up to €25 million in a full year but it is my intention to examine the potential for widening the tax base on which this 1 per cent applies in the future.

In making this reduction, I am seeking to protect the betting tax base in the State and to secure at least some revenue by levying the duty on the bookmaker and not on the customer.

SECURING OUR ENVIRONMENT AND OUR HERITAGE

Farming Tax

Farming is an integral part of this country's heritage. However it faces a significant challenge over the next few years for a variety of reasons. On the world scene, in the context of the ongoing WTO talks, there are pressures to reduce certain supports for agriculture and to throw open markets for agricultural produce to a greater extent, particularly those of the EU and the US.

On the other hand, there are opportunities too, particularly where land can be used in a sustainable and environmentally-friendly way.

I will be giving details in a moment of new incentives for the promotion of Biofuels which offer not only a new opportunity for farmers, but environmental and economic benefits for the whole community.

Farming will continue to be one of the lynch-pins of the economic, social and cultural life of this country, and I will ensure that policies that support farmer enterprise and good business practice will be maintained. The five-year investment framework I am announcing today includes over €1 billion to support on-farm investment, including forestry.

The Minister for Agriculture and Food and I are agreed that there is a clear need for us to provide additional assistance to farmers, and particularly younger farmers, to help them adjust to the major changes which will take place. With this in view, I am proposing a package of significant tax reliefs for the farming community. These include the continuation of the stamp duty exemption for young trained farmers for a further three years, a significant increase in the tax exemption limits for income from farm leasing for over five years, an improvement in the farm pollution control relief and an extension of certain existing Capital Acquisitions Tax, Capital Gains Tax and stamp duty reliefs to cover the EU Single Farm Payment Entitlement in appropriate circumstances. Full details are set out in the Summary of Budget Measures.

Alternative Energy Sources

Government concerns about the environment, our obligations under the Kyoto Protocol, the present level of oil prices and concerns about security of energy supplies over the medium to long term all suggest that Ireland should take further measures to support the provision of environmentally friendly energy alternatives and put in place structures to support this policy.

My Budget today builds on the measures already in place to support the provision of alternative sources of energy, through the establishment of a Carbon Fund, further support for biofuels, flexible-fuel cars and renewable energy.

Carbon Emissions

I want to make it clear that the Government is conscious that Climate Change is one of the most challenging environmental issues facing this and future generations.

To meet this challenge further, I am announcing today the establishment of a Carbon Fund to enable the State to purchase Carbon Credits. This fund will be financed on a multi-annual basis and I am providing €20 million in respect of 2006. The National Treasury Management Agency will be the Carbon Credit Purchasing Agency for the State.

More details on this initiative will be provided by the Minister for the Environment, Heritage and Local Government.

Biofuels

I have agreed with my colleague, the Minister for Communications, Marine and Natural Resources, that Ireland should set an initial target of 2 per cent of the fuel market to be taken up by biofuels by 2008 and that we should achieve this through targeted excise relief measures. The level of excise relief will start at €20 million in 2006 and will be increased to €35 million in 2007 and to €50 million in each of the following three years. This relief, when fully operational, is expected to support the use and production in Ireland of some 163 million litres of biofuels per year. This is 20 times the current level of biofuels that is excise-relieved.

There are clear benefits to all from this initiative. The environment will benefit in terms of a reduction in CO2 emissions. It will enhance security of supply of fuels, and create jobs and outlets for agriculture production. It is estimated that the programme I am announcing could ultimately give rise to hundreds of extra full-time jobs in the State.

This new relief will require EU approval as a State Aid.

I am also extending the VRT relief for hybrid fuel cars to flexible fuel vehicles for a trial period of two years.

Renewable Energy Grants

To help develop a better focus on renewable energy my colleague, the Minister for Communications, Marine and Natural Resources intends to launch several innovative grant schemes relating to biofuels, combined heat and power, biomass commercial heaters and domestic renewable heat grants. I am allocating up to €65 million to provide support for the implementation of these initiatives in the Capital Envelope for his Department for the period 2006 to 2010.

Heritage Reliefs

I will be providing in the Finance Bill for a new scheme of tax relief for heritage property donated to the proposed Heritage Trust subject to a cap of €6 million per year on the level of overall relief. This will be modelled on the scheme already applying to gifts of heritage items to certain museums and galleries.

HELPING BUSINESS TO DEVELOP

I am personally conscious of the enormous contribution made to our economy by the many small businesses in the State. To help develop business generally, and small business in particular, I am proposing the following measures:

VAT Registration Thresholds

The VAT registration thresholds for small businesses will be raised in the forthcoming Finance Bill from €25,500 to €27,500 in the case of services and from €51,000 to €55,000 in the case of goods. This will cost €12 million in a full year and remove almost 2,200 businesses from the VAT net.

PAYE/PRSI Payment Arrangements

The annual tax payment limit below which PAYE and PRSI can be paid on a quarterly, instead of the normal monthly basis, is being raised to €30,000 per year. This will assist 74,000 small firms at a cash flow cost of €102 million to the Exchequer in 2006.

Companies Capital Duty

I propose to abolish the half per cent companies capital duty from today at a cost of €16 million in a full year to help firms operating in particular in the financial services sector. I will also be making changes in the Finance Bill to assist the leasing sector.

Closure of Various Tax Loopholes

I am closing off two particular loopholes in the tax system relating to Capital Gains Tax and interest relief in groups of companies. Details of these anti-avoidance measures are set out in the Summary of Budget Measures.

Remittance Basis of Taxation

I propose to end the current arrangements whereby certain non-domiciled employees of non-resident firms can escape a large element of income tax by arranging their affairs so that much of their income from working here is paid outside the State. The ending of this scheme should save the State up to €100 million per year in lost income tax revenue. More importantly, it will place all employees and firms, irrespective of nationality or employer, on the same tax footing when working in the State. Further details are set out in the Summary of Budgetary Measures.

SOCIAL FINANCE INITIATIVE

Deputies will be aware of this Government's commitment to ensuring that our economic success continues to be mirrored in social and community development. I am encouraged by the initial reaction of the banking community to my invitation to participate in a social finance initiative to enhance the availability of loan finance for social and developmental projects in local communities. I am looking to the banks to contribute both seed funding and their expertise to support the practical delivery of this initiative. I intend to keep the door open also for other sectors, and indeed private individuals to participate. The banks have indicated that they are willing to discuss with me how this initiative can be successfully advanced. I will be asking other interested parties to also assist in developing an effective model.

REFORMING THE BUDGETARY PROCESS

Last year I indicated that the Government was open to reviewing the budgetary process to encourage a more constructive and relevant examination of how the nation's finances are run.

I also made it plain that any changes would have to allow for the clear right and duty of the Government to direct and manage the budgetary process itself. This Government has no problem in giving an account of its stewardship to this House and to the electorate in due course.

Such accountability can only reasonably take place on the basis of action that has been taken, and not on the basis of proposals involving spending yet to happen. It is for the Government to decide and to act and for the Dáil to hold us to account, as provided for in the Constitution.

Having reviewed the matter, and studied various relevant contributions from inside the House, the Government has decided that certain proposals should be made to the House.

These proposals would mean that from January 2006, I would meet the Finance and Public Services Committee to discuss the economic and fiscal background to this and the next two Budgets. In the following autumn, my department would update these three-year economic and fiscal projections and publish them in place of the existing Economic Review and Outlook which deals only with the current year.

From 2007, individual Ministers would publish an annual statement on the outputs and objectives of their departments and from 2008, the actual outturns. These statements would be presented to the relevant Oireachtas committee along with the department's annual estimates. After these individual examinations, the Finance and Public Service Committee would co-ordinate the preparation of a report to the Dáil on the deliberations.

I believe that these proposals go a long way to meet the desire on all sides of the House for better debate, better scrutiny and better results from the raising of tax and spending of public money in the State. I intend to write to the Opposition spokespersons on finance and the party whips inviting them to a more detailed briefing on the principles and issues involved in implementing these reform proposals. These proposals, once bedded down, can lay the ground work for a more unified Budget approach in the future.

CONCLUSION

The Budget I have outlined today will sustain our economic growth and generate the resources we need to drive on with our key infrastructural programmes and look after the more vulnerable groups in our society. It is a progressive Budget. It will help Ireland build a fairer, more enterprising and more innovative society.

We are reducing the tax burden, expanding services broadly, and following a prudent budgetary policy all at the same time. Many countries would be happy to achieve just one of those goals in any one year.

I believe this Budget embodies the active determination of this Government not to rest on Ireland's success, but to push ahead - so that prosperity too can be a great gift that this generation gives to the next. We are continuing to push ahead in the strategically important area of infrastructure, so that Ireland can compete in the new economy of a globalised world.

We are pushing ahead with investment in education which has been the oxygen of our economic success. We have taken stock of where we stand within the education environment today. Fourth level Ireland is a robust response on the part of the Government to protect our reputation for graduates of the highest calibre. We intend pursuing excellence, not preserving privilege.

We are pushing ahead with innovative proposals to finance high priorities like healthcare and social welfare - because prosperity is not a collection of statistics, or just a level of GDP; it must be a condition of life, a better life, for all Irish people. We are building a new environment for the care of our children in a modern and changing society.

We are driving forward in all the major policy areas because innovation is a test we must meet if we are to be faithful to the mandate we have been given - and the future we envision.

And we are pushing ahead because we believe in Ireland, today and tomorrow. This Budget advances our belief that the Irish people can continue to achieve extraordinary things if Government works with them and for them.

I commend the Budget to the House.