Michael McDowell (Dublin South East, Progressive Democrats)

Ba mhaith liom mo chuid ama a roinnt leis an Aire Iompair.

The announcement of the new and expanded provision for child care services, including the new child care programme, in budget 2006 is a major and welcome landmark in the Government's policy on child services and the important issue of child care. As Minister with responsibility in recent years for the development of Ireland's child care infrastructure, I am particularly pleased with the new and expanded policy strategy and what I believe is a ringing endorsement for the work done under the Equal Opportunities Childcare Programme 2000-2006 to develop a child care infrastructure in Ireland.

While it has been argued in some quarters since the beginning of the EOCP that there was no logical connection between child care and the Department of Justice, Equality and Law Reform, I have been delighted with and proud of the way I was able to oversee and support the development of this programme at every step of the way. I pay tribute, in particular, to the staff of my Department who have done such an excellent job.

The EOCP and its successor are a reflection of the commitment to child care which the Government has shown since coming into office in 1997 and its identification at that time of the need to take an active and urgent role in developing a child care infrastructure to assist parents with child care needs. I merely contrast it with what happened before.

When the EOCP was initiated under the national development plan in 2000 as a major infrastructural investment programme, with funding amounting to €500,000 million over seven years, Ireland was effectively a greenfield site left to us by the rainbow coalition in terms of child care provision and child-centred policy. With this in mind, a clear decision was taken from the outset of the programme that we would need to plan for the future and, at the same time, address the immediate needs for child care services faced by parents. This latter need has been addressed to the extent that over 49,200 child care places and 2,300 staff are receiving grants and supports under the programme, as are child minders who continue to play an important role in child care.

This longer-term view of child care will pay dividends under the new policies for child services announced today by the Taoiseach as we are in a position to build on the holistic approach we have taken in the past. By this I mean that in addition to the provision of capital and staffing grant schemes to fund and develop child care services, the EOCP has from the start been much focused on the broader issues such as development of quality and training and of national and, in particular, key local structures at city and county child care committee level. The child care committees now provide the essential local infrastructure to enable co-ordinated children's services and child care policy to be developed to meet local needs.

As a programme in receipt of EU funding, I am happy to say the EOCP has passed all its mid-term and other reviews with flying colours. It is, therefore, a success story in terms of delivering value for money while meeting its objectives and exceeding its original targets. The programme is highly regarded within the child care sector and has been commended by the social partners. I am glad to hand to the Minister of State, Deputy Brian Lenihan, charge of this programme in such excellent condition and the new expanded policy area into which it will sit. As Minister of State at the Departments of Health and Children, Education and Science and Justice, Equality and Law Reform, he will be in a key position to bring key expertise and a demonstrated level of commitment to this new policy area.

In recent months and weeks my officials have been working closely with those in the Department of Finance to bring about a policy framework for the next stage of the child care programme and its broader policy context. This has enabled work to be done to build on the achievements of the EOCP and to bring all the strands of child care policy together in a coherent and strategic manner and enable each of the relevant agencies and services to work together in a planned way. The outcome is an excellent one for progressive Government policy and will result in a more child-centred approach to and effective delivery of children's services as well as meeting its target of an additional 50,000 new child care places over the next five years.

I understand the programme from 2006 to 2010 will invest a further €575 million into the capital and current funding available. This is in addition to the EOCP funding which will be rolled out over the next two years. As an entirely Exchequer-funded programme, the level of funding is clearly a hugely significant response by the Government as an endorsement of the EOCP and as a commitment to the concerns of parents in relation to child care.

I take the opportunity to reassure child care providers engaged in the equal opportunities childcare programme that it will continue to operate to its end date and that there will be a smooth transition between the two programmes. I expect my staff to have available shortly full details of the new programme arrangements.

While the EOCP has been under my remit, I have been fully committed to supporting it as a key area of Government policy serving the social and economic good of the State. I wish the Minister of State, Deputy Brian Lenihan, well in his very important new policy remit.

People, particularly the last speaker, have asked what is in this budget for ordinary families. Let us take a family with three children under the age of six and look at one small aspect of the budget, that is, child benefit and the new supplement. For the first child, it gets €150 per month, for the second child, €150 per month and for the third child, €185 per month, making a total of €485 per month. If one multiplies that by 12, one gets a figure of €5,820 per year. If one adds a €3,000 supplement to that, one is talking about a payment to that family of €8,820 per annum. Let nobody say there is nothing in this budget for ordinary families struggling to bring up children in the economic circumstances of this State. That is the figure before tax relief.

A sum of €8,820 is the extent of the State's commitment to a family in those circumstances. It is a huge benefit to a family with young children. People have talked about the €1,000 per annum payment as small beer. At the ordinary rate of income tax — the 20% rate — it is equivalent to an old-fashioned tax allowance of €5,000. Let nobody say it is small beer, it is serious money. I am talking about a family with two parents and three children under the age of six which will get over €8,000, at least €3,500 of which is increased payments to it in support.

I turn to the broader aspects of the budget. We have looked at the details of the Budget Statement to work out the implications of it for ourselves and our families. I wish to look at the economics behind the budget, but my contribution will not be technical or complicated. The key points of my contribution are capable of being delivered in six words — lower rates, higher yields, more resources. My essential point is that the lower tax rates provide higher revenue yields for the State which, in turn, lead to more generous levels of State resources. That has been my political philosophy and that of my party from its inception. When the Government was elected in 1997 the top rate of income tax was 48% and unemployment was 10.5%, the kind of level that causes scandal in Europe. The top rate of income tax is now 42%. The basic rate of income tax has dropped over the same period from 26% to20%, yet despite falling tax rates, income tax receipts to the State will have doubled from £6 billion in 1997 to a targeted €12 billion in 2006.

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