Quinn ignores demands for tax cuts with a Budget of social solidarity

RUAIRI Quinn adopted an attitude of "Hit me now with the deprived child in my arms" when, ignoring opposition demands for major…

RUAIRI Quinn adopted an attitude of "Hit me now with the deprived child in my arms" when, ignoring opposition demands for major tax cuts, he produced a modest Budget of social solidarity.

It was the closest thing to an ideological divide we have seen on Budget day. With Fianna Fail and the Progressive Democrats demanding the introduction of income tax rates of 20 and 40 per cent to benefit the "haves" of society, the Government chose to deal with the disease of large scale unemployment and social exclusion.

Charlie McCreevy and Michael McDowell were scathing. The Minister had missed a marvellous opportunity to cut income tax, to generate enterprise and to reward the real wealth creators of the country. Instead of that, he had frittered away scarce resources had engaged in "economic nonsense" and had added considerably to the national debt.

There was a great deal of sound and fury in the contributions, but the empty seats on both sides of the House said it all. The boredom threshold of deputies was low and inspired leaks in the press had provided many of them with all the financial information they required. The annual budgetary circus had lost its appeal.

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Mr McCreevy tried valiant to make the exercise amusing. Starting with the analogy of a Teddybears' Picnic, with left wing Labour Party and Democratic Left bears taking advantage of right thinking Fine Gael bears, he drifted to identify a new political disease of "pre Budget tension" in Cabinet and ended up with John Bruton leading a "Government of the bewildered" which required professional help from Anthony Clare.

The Fianna Fail spokesman was, to use his own words, "all over the place", but he got his retaliation for Fine Gael's "coping class".

Identifying "fancy accounting footwork" in the Budget, Mr McCreevy condemned the Government's failure to tackle public spending or to introduce "real tax reform". The had spent too much and not on the right things.

A specific "wrong" thing, he suggested, was the encouragement of people in their early 20s to stay out of the workforce, through social welfare payments.

Mr McDowell sang off the same hymn sheet. Tax reform had come to "a juddering halt" in this Budget, he declared, and the rainbow coalition was "completely divided on basic economic strategy".

Public spending was far took high. People at work were being taxed at an exorbitant rate and insufficient incentives were being provided for the business sector.

There was little or nothing in the Budget for the middle income PAYE sector when account was taken of changes in mortgage and VHI tax reliefs. Even the PRSI changes were largely cosmetic and the Government had completely given up on tax reform, Mr McDowell said.

The Government's efforts to do something about the growing levels of crime extended beyond a targeting of the long term unemployed and the provision of better social service An extra £3.7 million was quietly devoted to a prison building in an effort to take some of the heat off Nora Owen and a further was provided for ad Fine Gael provided for farmers through an increase in VAT refunds and agricultural reliefs and there was benefit for business by way of, a 30 per cent tax rate for the first £50,000 of company income.

Away from the over heated political atmosphere of Leinster House, the Budget got a more generous welcome.

The Irish Congress of Trade Unions found "a lot good in it", the Irish Business and Employers Confederation felt it was "a move in the right direction" and, Government borrowing 1996 £100 million lower than was expected, the markets relaxed.

The most innovative idea in the Budget was the decision to establish a task force for lands area. This area, on both sides of the Liffey, had great potential for the continued redevelopment and rejuvenation of the city, Mr Quinn, said, and a master plan be produced under State direction.

But perhaps the best news was the Minister's announcement that the circus will come to an end in 1998, when the November estimates and the January taxation elements will finally be unified in a rolling programme.