Opposition dismissive of tax changes

THE low-key and unradical approach of the Budget to tax reform provoked the most negative response from opposition parties in…

THE low-key and unradical approach of the Budget to tax reform provoked the most negative response from opposition parties in Leinster House.

Shortly after the Minister ford Finance, Mr Quinn, delivered his second Budget speech, both Fianna Fail and the Progressive Democrats united in dismissing the tax and PRSI changes as miserable and suggested that the Budget had pandered to Democratic Left demands.

As the Opposition rose to deliver their criticisms, the Tanaiste, Mr Spring, declared that Mr Quinn's management of the economy had been exemplary. Ireland did not need a Budget of "flashy gimmicks", as some commentators had been demanding, he said.

"That is not what Ireland needs. When growth is as high as it is, we have to maintain it and harness it. We must not endanger the combination of growth and low inflation that we have with measures that would do no more than undermine the strength of the economy," said Mr Spring.

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But the Progressive Democrats' leader, Ms Mary Harney, said there was "no crock of gold for anyone at the end of this rainbow's second Budget". By the Minister's own figures, the lower paid would only be better off by little more than the price of a pint - £2.49 - every week, while the average worker would not benefit.

"In fact, many will be worse off when further reductions in mortgage interest relief and VHI relief are taken into account. These reductions, which the Minister cutely omitted from his statement, are due to take effect from the new tax year in April," she added.

The Fianna Fail spokesman on finance, Mr Charlie McCreevy, said the Budget "fails on all counts", but this was not surprising as the Minister was "pulled in all directions by his partners".

"If the Minister had adhered to his own self-imposed figures of increases in public spending, he would have been in a position today to allocate another couple of hundred million pounds which would have had a real impact on tax reform," he added.

Mr Michael McDowell, the Progressive Democrats finance spokesman, said that public spending had increased in terms of supply service expenditure by more than 6 per cent, a far cry from the figure of 2 per cent that the electorate had been told about.

He warned that, like expenditure, taxation was set to increase by a significant amount next year.