Michael McGrath (Cork South Central, Fianna Fail)

-----and the family now relies on mortgage interest supplement to heat the family home. They will lose €228 on child benefit. They will lose €120 on fuel allowance. For the youngest child they will lose €200 on the back to school allowance and for the two older children they will lose €105 between them. With much less disposable income the VAT increase will cost them approximately €250 - I am sure the Department of Finance officials will not disagree with that. Motor taxation, carbon tax and excise duty increases will cost them a minimum of €100, which is a very conservative figure. Critically in their case, as a family relying on mortgage interest supplement, the Government imposed a savage cut yesterday, reducing the budget for mortgage interest supplement by approximately a third and increasing the minimum contribution from €24 per week to €35 per week. That will cost that family €572 in a year. That is €1,575 for a family entirely dependent on welfare. That is the net effect of the budget introduced yesterday and today. These are just two examples of families already hard hit by the recession.

It would be unrealistic for me or anyone else on this side of the House to think that those people and other families would be unaffected by the budget - we are not that naïve. The major flaw in this budget is that its impact is not progressive - in fact it is a highly regressive budget. It is also socially regressive because of the choices the Minister has made. The token 5% surcharge on income that is sheltered by the reliefs is a pretty poor compromise for the Labour Party to make given the way it made hay when sitting on the Opposition benches and calling for the immediate abolition of all the property-related tax reliefs. If that is all it managed to negotiate in government, it does not say much for its clout in government.

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