Taoiseach defends Budget as 'entirely responsible'

This year's Budget is "entirely responsible", designed not to overheat the economy and to give a substantial safety margin if the existing economic environment should deteriorate, Taoiseach Bertie Ahern has told the Dáil.

He said that "if there is arrogance in the Irish political system, it rests with those who think that democratic government has to be some sort of merry-go-round where parties have an automatic entitlement to take their turn at the levers of government at regular intervals.

"Democracy does not involve any such entitlement that is not earned. I believe that the people deserve the best in terms of reliable and experienced leadership, capacity and hard work. In this Budget, the Government has shown again why we merit the people's continuing confidence in our commitment and in our capacity to serve them."

Fine Gael leader Enda Kenny described the Budget as the "defining moment of the Government's attempts to win the next general election".

He claimed the Government had not honoured "its most specific promise in the Programme for Government, which was to ensure that no more than 20 per cent of income earners pay tax at the higher rate. The Minister has changed the basis of his calculations to disguise the fact that 31 per cent of taxpayers will pay at the higher 41 per cent tax rate next year.

"This means that 235,000 people have been let down by a Government that has failed to honour a clear commitment."

Labour leader Pat Rabbitte believed "the end product lacks sparkle. There is no innovation, nothing novel and nothing risky. There is no imagination, just a safe targeting of interest groups that might show an electoral dividend."

He claimed that the individualisation agenda was progressing and that a married couple now pay tax at the high rate on €25,000 of their income, up from €23,000 last year. Before individualisation "a married couple could fully transfer their tax allowances or bands to reduce their tax bill.

"It meant a couple could pay tax at the 20 per cent rate, up to €68,000." He said that "if a parent makes the choice to reduce their income in order to spend time with their family, the State should respect that decision".

The Budget was a "half-hearted, short-sighted and profoundly conservative exercise", according to Green Party leader Trevor Sargent.

The €270 million in carbon emission fines being sent out of the State "can be juxtaposed with the budget from 1987 when then minister for finance Ray MacSharry was declaring how scandalous, regressive and objectionable it was for money to leave the country".

He claimed there would be an attempt to push through the Carbon Fund Bill next week without any serious debate.

He said that "Ministers are so embarrassed by this policy failure that they would not have any substantial debate on the floor of the House".

Arthur Morgan (SF, Louth) described the private hospital location plan as "silly and illogical" and said it was "starting to unravel with the news that the proposed hospitals at Letterkenny and Galway will not go ahead.

"The Government and the HSE cannot agree how many additional hospital beds we need. Public money should be spent in the public system only, with equal access for all based on need alone."