Noonan describes Budget as being socially divisive

The Budget was described by the Fine Gael spokesman on finance as the "most socially divisive" ever presented to the House.

Mr Michael Noonan said Fine Gael had proposed in its taxation policy to extend the standard rate band to £17,500, just above the average wage, and to double that to £35,000 for married persons.

The Minister, however, had brought forward a more radical proposal, extending the range of the standard rate band to £17,000 but individualising it, he said.

The current Attorney General, said Mr Noonan, had once said that the choice facing his party was to be radical or redundant.

"This is radical, but it is also possibly redundant because I cannot see how it is constitutional.

"I cannot see how this squares with the findings in the Murphy case. It is socially divisive, blindingly unfair and discriminates against one-income families where a mother stays at home to look after her children."

Mr Noonan said that the tax system should reflect the real cost of a second spouse going to work.

"That option was open to the Minister by increasing the PAYE allowance.

"However, the provision that one family will pay the higher rate of tax when it exceeds an income of £28,000, but another family will only pay the higher rate of tax when it exceeds an income of £34,000, is socially divisive, blindingly unfair and probably unconstitutional."

This, he added, was a departure from what he understood to be the principles on which Fianna Fail was founded.

"I thought it was the party of the family and the party which supported the woman who stayed at home to mind her children. I did not think it would involve itself in a socially divisive policy, designed to fuel the labour force by forcing women to work." The Budget, said Mr Noonan, represented a basic change of philosophy. "This feeds into one of the undesirable features of the Celtic Tiger, which is the increasing individualism in society.

"The sense of community and parish spirit is going. The Minister is now intruding between married couples. This will lead to conflict in many families with spouses saying: `Our neighbour is out working - why are you not?' "

Mr Noonan said that the Minister's proposals on childcare were so meagre that the £46 million he was allocated included £20 million already in the Book of Estimates.

"His tax measures will force more women out to work, so we will have more children in need of proper, affordable childcare.

"However, at the same time, he is giving £2 per week in child benefit for the first two children and £2.50 per week for subsequent children, but doing very little on the supply side."

He was glad, he added, that the Minister had accepted Fine Gael's proposals on inheritance tax almost in their entirety. He would comment on it during the debate on the Finance Bill, because he did not think it was tenable to place a time limit on the person who benefited and the period of their residence in the family home. "This will lead to chaos."

Criticising the social welfare provisions, Mr Noonan said that they should be measured against the average increase in wages and not against the consumer price index.