Budget distributes economic gains

 

Budget 2001 is compassionate, radical and progressive. It is a Budget which signals a determination on the part of the Fianna Fail/Progressive Democrat Partnership Government to target the benefits of wealth at the marginalised, the elderly, the low-paid and those with either physical or intellectual disability.

In transforming this radical determination into sound budgetary policy we have dismissed those charges that Fianna Fail is anything but a party of socially progressive republicanism. Plainly, this levelling progressive tradition moulded last Wednesday's Budget.

In the run-up to the Budget, the Fianna Fail Parliamentary Party held three meetings specifically concerned with budgetary policy. The concern that our republicanism should form the basis for a radical and caring Budget was advanced vociferously by all. Budget 2001, in providing massively increased spending on social inclusion and social provision, in removing 133,000 low-paid people out of the tax net and at the same time maintaining the basis of our economic success, competitiveness and social partnership, addressed those concerns.

On the taxation front, the reduction of the lower rate of tax to 20 per cent and the raising of the upper tax rate to £20,000 will aid some of those on and below the average industrial wage most. By international standards the tax burden on the low to average pay in Ireland is now extremely low. A married couple with an income of £15,000 per annum who paid just over 20 per cent tax in 1997, under the provisions outlined in Budget 2001 will pay just 4.6 per cent.

Just as Fianna Fail's brand of levelling republicanism has exasperated those lazy students of political science who would coral the Irish political landscape into the regular left-right divide of our continental neighbours, our fiscal policies have exasperated those lazy economists who would seek to place Ireland, and indeed Budget 2001, firmly in either the Boston or Berlin camp of social and economic policies.

Because we favour radically disburdening the low and average earner of high taxation some have erroneously placed us in the low-tax, low level of social provision policies which characterise the US or 1980s Britain. This notion is plainly unsound. We have increased spending on social provision massively.

As we have reduced the tax burden and increased competitiveness, employment, investment and spending have increased and the tax intake has been raised. We have used this increased tax intake to maximise social inclusion and increase social provision.

A phenomenal £2,110 million is provided in Budget 2001 for social inclusion measures. This figure is four times greater than that provided by the rainbow government throughout its lifetime. Indeed the 133,000 people removed from the tax net under Budget 2001's provisions, when added to the 176,00 already removed in our three previous budgets, make the 38,000 the rainbow government managed to remove seem derisory. Budget 2001 is not an election budget. The clear intention behind this Budget is to distribute our economic gains to the benefit of the marginalised and disadvantaged while maintaining economic competitiveness and social partnership.

Fianna Fail and the Progressive Democrats with the support of Independents are justly proud of this Budget. The increase in Children's Allowance by £25 per month for the first child and by £30 per month for the second and subsequent child is about giving parents choice in the area of childcare and attaining our goal of eliminating child poverty in Ireland.

The disability allowance has been increased by £8 per week and by £10 per week for those over 65. An additional £83 million, including £40 million in capital spending, has been allocated to the Department of Health and Children specifically to provide measures for people with intellectual disability and autism. These include new residential places, new respite places and new day places.

Despite this increased spend, inflation is expected to fall back to 4.5 per cent next year. In addition, there is a specific anti-inflation element to the Budget including direct tax measures to increase participation in the economy, cuts in indirect taxation to bring down the Consumer Price Index and measures to encourage increased saving as opposed to over-spending. We have balanced the need to spend with the overriding necessity to remain fiscally prudent. This is a sensible Budget which will not endanger economic success.

Opposition critiques of Budget 2001 to date have been tame and predictable. This is understandable. In the face of the most socially inclusive budget in the history of the State, there is little to criticise without appearing uncaring and unconcerned with the plight of our low-paid underprivileged.

The Labour Party has never produced a more caring budget than this. Fine Gael has never produced a budget more compatible with continued economic competition. Fianna Fail and the Progressive Democrats, with the support of Independents, have produced a progressive, radical, caring Budget, which will maintain prosperity, competition and social partnership.

Seamus Brennan is also Minister of State at the Department of the Taoiseach