Bertie Ahern (Dublin Central, Fianna Fail)
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This is the budget of a successful economy which continues to outperform practically all the other economies in the developed world. The budget is designed to enhance social solidarity and improve the quality of life for young families and older people. It is constructed in the spirit of social partnership that has served this country well for almost 20 years. It continues the ambitious programme of improvements across the board in the public services. The budget provides further compelling evidence of the consistently high quality of stewardship in the Government's management of the country's affairs. We will be glad to submit our record to the people for their judgment in 18 months when we seek a renewal of our mandate.

Governments in other countries, like previous Governments in this country, must grapple with lower growth than forecast, high unemployment and persistent overshoots in targeted borrowing. The current situation in this country is the opposite of that as we are looking forward to satisfactory growth of close to 5% for the third year in a row. A dynamic level of employment growth of almost 5% has involved the creation of an additional 96,000 jobs over the past 12 months. Some 2 million people will be employed by early in 2006, which will represent an increase of more than 500,000 people in employment since 1997. It is likely that by 2007, the number of people employed will have increased by 1 million since 1987.

Buoyant revenue growth, which can never be taken for granted, has meant that we have significantly undershot the modest level of borrowing that was projected in the 2005 budget. We will end up with a small general Government surplus, as we have done in all but one year since 1997. As a result, substantial resources are available to the Government to relieve the tax burden on the low paid and hard-pressed working families; to increase the volume of spending on social services, focusing on greatest need; and to invest in infrastructural improvements which we could not afford in the past and which many other jurisdictions cannot afford today. It is forecast that inflation will remain in historically low single figures next year. We now obtain much better value from capital spending. The overall level of expenditure remains at a constant 33% of gross domestic product. Gross current spending has been increasing at roughly the same level — approximately 10% — each year since 2002. We must guard against overheating an economy at full throttle or causing sudden jolts when things are going so well.

Ireland has the most impressive and sustained growth record of all of the countries surveyed by the National Competitiveness Council in its recent report. Our rate of unemployment is half the European average, pro rata. Our labour force is growing at record rates as a result of inward migration and a higher rate of participation by our own people. The level of infrastructural development through investment is more than twice the European average. The Government has provided for continuing developments in the quality and extent of our social services. For example, there have been substantial increases in the real incomes of those who depend on social welfare. Such statistics represent an exceptionally positive balance sheet for the Government. The aim of the 2006 budget is to underpin the strong confidence that has been a marked feature of the economy in recent years so that we can continue to make dynamic progress of a kind that has never been sustained before in our history.

In keeping with the Government's progressive social philosophy of democratic republicanism, another of its priorities is to ensure that there is justice and fairness in the tax system. The Exchequer should not continue to offer unlimited incentives to the wealthiest tax residents in society at the expense of the general taxpayer. It is not right that a few of them would contribute nothing by way of income tax directly to the State or that we would publicly assist further accumulation of very substantial pension funds without any limit. People in that fortunate situation are well able beyond a certain point to look after themselves. To be fair, most of them are contributing heavily in more ways than one to the running costs of this society. Those few affected by these changes will still enjoy a very favourable tax environment compared to most other countries. It should also be stressed that the top 4% of income earners pay 40% of the total take from income tax.

A whole array of construction incentives, which were always meant to be finite, have served their purpose. With some exceptions, such as park and ride, which is obviously relevant to the roll-out of Transport 21, and private health care provision, they should no longer be needed to stimulate activity. The provision of student accommodation, thanks to an incentive introduced in 1998, for instance, has been very successful, but has now served its purpose.

Writers and artists will still have exemption on annual income up to €250,000. The vast majority of artists fall well below this threshold. Before the stallion fee exemption runs out at a time when all the other relevant reliefs end, we will consult closely with the industry and the European Commission to come up with an effective alternative that takes account of the importance of the success of this industry not only to Ireland but also to Europe.

Our reforming approach to the tax system has been designed to underpin a more enterprising and fairer society, through a pragmatic approach to the various components of the tax system. Fundamentally, our objective has to be to generate the maximum resources available for redistribution consistent with fostering a dynamic and sustainable enterprise sector. Our commitment is to a clear and transparent corporate tax regime, which, with many other highly attractive features of Ireland as a business location, has brought about substantial investment, and increased activity, employment and, crucially, tax revenue.

This budget, like last year's, is once again characterised by no increases in direct or indirect taxes, thus helping to keep down inflation, and ensuring that the budget does not put pressure on prices in the family shopping basket. We have reduced excise on certain heating oils, which will be of benefit particularly to older people and which over the years will eliminate a North-South difference that provides an incentive for irregular trade. The phased-in removal or capping of incentives will broaden the tax base and have positive revenue flow implications in the years ahead.

We have developed a structure of taxation, which provides incentives for those who wish to work and employ others, and which distributes the burden of income tax fairly among those best able to meet it. The exemption of those on the current minimum wage from the tax net — despite our minimum wage rate being one of the most attractive in Europe — combined with our low rate of taxation on those on approximately average earnings, have produced a highly equitable and progressive income tax system. It will be a constant task in every budget to make sure that those working full-time on the minimum wage, which is likely to rise each year, stay out of the tax net.

The total full-year cost of income tax relief goes up from €682 million in 2005 to €900 million in next year's budget. Once again, it is concentrated on low to middle-income groups. Some 36% of all income taxpayers will pay no tax. The rest will be equally distributed between the standard and higher tax bands. The standard tax band is being increased by €2,600, or nearly 9%, compared with €1,400, or 5%, last year. The standard income tax band has now been effectively protected in real terms since 2002.

The primary objective must be to ensure that we keep those on the average industrial wage out of the tax net, which we have done, unlike our predecessors. Wise governments avoid automatic and unthinking index linking by sometimes doing more and sometimes less to retain necessary flexibility to manage the economy and the public finances, and inject resources into what may have become new priority areas. I doubt if many people would wish us to index-link excise duties by reference to an automatic scale. They had to abandon such linkages in other EU member states when economic priorities changed.

As has been the case in all budgets since 2002, a study of the tables showing who benefits presents a picture of progressive tax changes, with the proportional benefit concentrated on the middle to lower end. Tax equity has been our priority. By preserving incentives, especially at lower income levels, and by keeping the tax wedge at a generally low level, we have produced an environment in which almost 2 million of our people are at work and unemployment, especially long-term unemployment that was once chronic, is at historically low levels.

Another feature of the budget is the support it gives to small business by relieving their tax and administrative burden. Targeted special reliefs will enhance protection of our environment and heritage, helping to implement our Kyoto commitments and establishing the heritage trust which I proposed in the early autumn.

I turn to the purposes for which the revenue raised through our equitable and balanced taxation system will be applied. The major initiative of this budget is to make inroads into the problem of the cost and supply of child care. There has been much public debate about whether the European model of society can continue and whether the welfare state has had its day. Trading labels of that kind is not always particularly helpful. However, if we must have a label, I believe our policies are designed to build up what the NESC in a recent report called the "Developmental Welfare State". This involves combining income supports, well targeted services and appropriately innovative measures to help individuals, families and communities not only to access quality services, but also to achieve their full potential and, in particular, to maximise their independence, autonomy and contribution to society.

These are the principles which were already expressed in our national anti-poverty strategy, our national children's strategy and the national disability strategy, which was published earlier this year. What these different approaches have in common is that they set out the standard of services which we aim to provide as a recognition of the rights of our citizens, improved arrangements to develop a joined-up approach on the part of Government to developing policy and a greater degree of integration at a local level in delivering services and supports which reflect the needs of people. In doing this, we have recognised the particular milestones in people's lives, where particular types of support and encouragement are required, be it in respect of children, young adults at the stage of establishing a family, independent adults in the workforce, older people or those with disabilities or other restrictions on their autonomy.

This is the context within which the Government's policy on child care has been developed, through a careful combination of measures to stimulate the availability and supply of child care and measures to support those in need of child care services. We have taken this balanced approach, and set out how we propose to develop it over a number of years, in response to the obvious facts about child care. In particular, we know that if we relied only on putting more money into the purchasing of child care services without increasing its supply, the likelihood is that prices would soon rise. We also recognise that parents have, legitimately, differing views about the best type of child care for their children. Some people will wish to provide care in the home themselves, either for a period after the birth of a child or for the pre-school years. Others will wish to use part-time nurseries and crèches, while working in the home. Many will wish to place children in a family home setting, using the services of family members or neighbours. Others will wish to have the benefits of structured child care programmes in well-run and regulated centres.

The package of measures announced by the Minister for Finance provides recognition and support for that full range of choice. They also provide a particular focus on the needs of families and communities with the greatest needs and under the greatest pressures. The package also recognises the importance of the development of the child as a specific objective in its own right, within the broader child care needs of the family. The extension of paid and unpaid maternity leave will be widely welcomed.

Supply is vitally important. I have had pleasure in opening publicly funded as well as voluntarily organised family resource centres in different parts of the country. The €10,000 income tax and PRSI disregard for those who look after up to three children, who are not their own, in the minder's home will also have a measurable impact on increased supply and help to keep down costs. This is certainly one instance where we are better off regularising the informal economy. Child benefit has been transformed and is now four to five times its value in 1997. The new child care payment of €1,000 per year extra in cash for children under six is the equivalent of a €5,000 tax allowance at the standard rate per child.

The multi-annual strategy for child care announced by the Minister for Finance requires an equally ambitious strategy to improve the arrangements for developing and implementing our policies on child care. Excellent work has been carried out by the Minister for Justice, Equality and Law Reform and his Department in developing the equal opportunities child care programme. However, at present, that responsibility is separated from policy in respect of standards, registration and inspection of child care facilities in the Department of Health and Children, while education in early years is the responsibility of the Department of Education and Science. To bring greater coherence to the sector, the Government has decided that responsibility for the child care programme will transfer from the Department of Justice, Equality and Law Reform to the Department of Health and Children and, as is normal in these situations, the relevant staff will also transfer. Therefore, the expertise and network of contacts which have developed will continue to be available to the child care area.

Responsibility for child care, together with other aspects of policy for children generally, is delegated to the Minister of State, with responsibility for children, Deputy Brian Lenihan. The Government has decided to take this opportunity to bring greater coherence to this important area of public policy. Accordingly, the office of the Minister of State with responsibility for children will have responsibility not only for child care, but for child protection and welfare, for juvenile justice and for early years education, reflecting the Minister's responsibilities in the Departments of Health and Children, Justice, Equality and Law Reform and Education and Science, respectively. To the greatest extent possible, all of the staff involved will be brought together in this office. There will be an overall head of office in the Department of Health and Children, reporting to the Minister of State, Deputy Brian Lenihan. The Minister of State will attend Cabinet regularly in furtherance of his responsibilities for children. Further details of these arrangements will be announced by Deputy Lenihan, following consultation with the relevant staff interests.

This budget represents a major step forward for children and families not only in terms of the resources provided, but in terms of a more effective and joined-up approach to this critical area of public policy. An equally important aspect of our budget strategy is the strong commitment to share the current prosperity of our society with those who are retired as well as the less fortunate. We are honouring our commitments to our older citizens who have served this country in their families, communities and workplaces over the years.

We are meeting our commitments to provide more realistic incomes for those dependent on the old age pension, which is within easy striking distance of €200 per week. We are also honouring our commitments in respect of the most vulnerable, those in receipt of the lowest rates of social welfare payment, including those in receipt of unemployment assistance and supplementary welfare, who receive an increase of €17 per week or 11%. This is far in excess of the 2.5%, 3% or 4% budgetary increases that were for a long time the norm under previous regimes.

Deputies:

Hear, hear.

Bertie Ahern (Dublin Central, Fianna Fail)
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Enabling all our citizens to live life with dignity is a commitment we have made in the national anti-poverty strategy and in our agreements with the social partners. We are taking practical and effective steps to recognise and support the invaluable role of carers. We are also taking the opportunity to make more flexible some of the conditions which apply to the receipt of social welfare payments, to encourage people to maximise their independence and to contribute to the common good if they wish, through undertaking some paid work. It would not be right that they alone would be prevented from supplementing their income within reasonable limits.

It is right that at a time of buoyant incomes and record employment levels we should create the opportunity for the less well-off to share in the success of our society. We are doing this in a way that reflects the mutual obligation on all of us to support the less well off, but also the obligation on every citizen to provide for his or her needs and to contribute to the greatest extent possible to the common good through their active participation in the workforce and in society. This is a record €1,120 million social welfare package. It is an enormous welfare package at a time when unemployment is at historically low levels and the economy is in such a good state with the vast majority of our people working.

The very substantial resources we are committing through this budget to the development of public services and the building up of our physical infrastructure make it essential that we use these resources to best effect. Waste and inefficiency are no more acceptable in the context of the very large resources made available in this year's budget and Book of Estimates than when resources were much more constrained. That is why the modernisation of the public service is of crucial importance to the Government. We need to maintain progress in the streamlining of our administrative and regulatory systems, and the updating of our work practices and use of technology. In fairness, much has been achieved in these areas, as evidenced by the independent performance verification groups for the different sectors of the public service.

However, we need to ensure that best practice standards are operated in our public departments and agencies. In particular, we need the flexibility of staff at all levels, and their willingness to embrace change including new technology if the goals for a successful society and economy are to be achieved.

The budget also demonstrates the continuing commitment of this Government to creating a modem, world-class physical infrastructure to serve our people for the 21st century. The extent of that commitment is evident, both from the specific additional capital investment announced by the Minister in the budget yesterday, but also from the detailed provisions set out in the Book of Estimates published last month. In total, capital expenditure in the coming year will amount to more than €9 billion, equivalent in terms of the net Exchequer contribution to 5% of GNP. This is double the European average.

Transport 21 is a bold and ambitious programme to address not only the inherited transport deficit, but to anticipate the growth in population and commerce for the decades ahead. What is important is not just the scale of that financial commitment, dramatic though that is — but the focused and effective manner in which it will be managed. The enhanced project management system within the transport sector has been steadily delivering infrastructure projects within budget and ahead of time. It is no secret that the substantial ramping up of capital expenditure in transport put strains on our administrative, planning and management systems. What is clear is that these challenges have been met and we have developed both our capacities and our policies. Managing large projects of this nature requires consistency and continuity, as well as a process and contracting changes to deliver value for money. That is why the Government decided to introduce a ten year capital envelope for transport investment, thus providing both the timeframe and the confidence to ensure value for money in the planning and execution of our ambitious transport plans.

Our productive capacity is also dependent on the quality of our people, their qualifications and skills. That is why providing high quality educational facilities at all levels is of such a high priority to the Government. The provision for the development of new schools for a growing population, and the upgrading and refurbishment of literally hundreds of primary and post-primary schools, are evidence of that commitment. It is also critical that we continue to develop our talent base of graduates and researchers. That is why the Government has made a further commitment not only to the ongoing development of our third level sector, but also to its transformation, and to the development of a fourth level system meeting the highest international standards in important areas of research and development.

Developing our physical infrastructure extends beyond the economy's productive capacity to underpinning the quality of life of our people. In particular, our capital investment in health care, both hospitals and community-based facilities, provides a clear expression of our commitment to the modernisation and greater effectiveness of the health services. The challenge is not only to provide substantial additional resources, but to manage them in a way that reduces unnecessary strains on the system.

In addition to flexibility and modernisation, value for money in public services also requires that our wage bill remains reasonable. Pay costs in the public service represent a high percentage of total expenditure, to a greater extent than in the enterprise sector of the economy. We must ensure that wage costs are managed and that any pay increases are realistic, having regard to our low inflation environment and to trends in productivity compared to international norms.

As a small society, we have an innate capacity to move quickly and to anticipate change. We also have the capacity to engage in dialogue with one another and to work together for the benefit of a real, national common interest. The social partnership framework which we have operated since 1987 provides a tried and tested mechanism to realise that potential. It has delivered in the past. It can deliver again, not only for trade unions and their members, but also for employers and the enterprise sector, including farmers, through its contribution to the successful management of change, and for the wider community, through the stability and confidence which industrial harmony and a shared understanding can provide. I strongly believe that early engagement between the social partners and the Government, and early agreement on a new social partnership framework, would be in the best interests of the entire community. The measures announced in the budget should significantly help to underpin progress towards such an agreement.

This budget provides the means by which we can consolidate our strong growth and development, based on high employment and rising productivity into the future. It provides a generous and sustainable response to the needs of those who are most at risk in our society. It provides realistic and effective support for families and children facing the pressures of life in a modem and dynamic economy. Above all, it provides evidence that this Government continues to honour its commitments to manage our economic and social affairs with care and imagination and to balance securing long-term growth with more immediate improvements in the quality of life of our people.

I commend the second budget of the Minister for Finance, Deputy Cowen, to the House and congratulate him on his considerable achievement.

Enda Kenny (Mayo, Fine Gael)
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I regret the House had to wait so long this morning to hear the Taoiseach's speech. It is a cause of concern that the House did not agree to set aside some time to discuss the resignation of the former Minister of State, Deputy Callely, and the implications that will undoubtedly follow.

As a society we now face a new set of problems. The cost of child care has risen dramatically. This places an enormous burden on people trying to raise a family and work outside the home. Despite increased prosperity and greater opportunities, there is a growing sense that improvements in the quality of life are not keeping pace. In our towns and cities congestion is increasing, undermining the quality of life for many of our citizens. We must provide a first-class infrastructure, better transport, roads and housing in order to improve the quality of life for our citizens.

How true. The problem is though, those are not my words, they are the Government's. That was its verdict on the state of the nation at the time of budget 2000. Six years and six budgets later we see no change. Since 1997, €266 billion was spent to achieve remarkably little. We have the same tired old promises, team and problems with Fianna Fáil and the PDs, and the same yesterday, today and tomorrow.

I am glad today is a good day for many people throughout Ireland. They listened to the news, read the papers and find they will be a little bit better off, and it is about time. However, let me disavow the Government of its vision and propaganda that this budget is some miraculous ATM stocked up for the people out of its own largesse. Altruistic Fianna Fáil and the PDs, even in the season of make-believe, is a fiction too far. The money the Government is spending in this budget is the people's own money. Let us be clear it is not a give-away budget. This is a budget about giving back.

It has taken this Government, not one, two, three, four or five budgets, but nine budgets to recognise and to give something back to the first-class people of this country who work hard, pay their taxes, rear their families and do their bit for their community. It has taken eight years and nine budgets to start giving some fair play to the people who have made our economy what it is today. I am glad that finally, the Irish people are getting some return on the huge, personal investment they make in the country because they deserve every cent they get and more. In fact, my biggest regret about this budget is that it does not give people enough. Their hard work, sacrifice, risk and ingenuity put billions into the public purse and they should get more.

They could get millions more if the Government ditched its small-change mentality towards millions of euro going down the tubes, and instead examined carefully every euro and how it is spent. Never in the history of our country has a Government had so much money with which to work. Never has a Minister for Finance addressed this House in as strong a position as the Minister for Finance, Deputy Cowen, was yesterday. Never in the history of our country has a Government spent so much to achieve so little and wasted so much money without even batting an eyelid.

People could be so much better off today if the country had a Government that knew the difference between spending money and investing money, that would make sure that investment follows reform, delivery, targets and results, and that would haul itself into the 21st century, keep its promises and its word. This budget is about more than putting the people's money back in their pockets. The budget must also be about keeping that money there in the future. In that sense, the budget must be a blueprint for the future of our country, jobs, children, security and economy.

In the 21st century, international economic stakes have never been higher. In these volatile circumstances where when one country sneezes the rest of the world catches a cold, Ireland's quality of life, public services and future wealth and wellbeing cannot and should not be a matter of political chance. They should and must become a matter of political choice. I regret that this budget contains nothing, not the barest hint of a plan or decision, never mind a choice, to solve our country's problems in the health service, crime, the cost of living, to secure our future in the longer term or meet the challenges we face ahead.

What happened yesterday was the injection of an unusually large amount of money in the economy. This, coupled with the money that will come from the SSIAs, will fuel a massive consumer spend, which will inevitably lead to increases in costs and prices and consequently to a further increase in the cost of living.

This budget is the first half of a political blueprint for one purpose only, the attempt by the Government parties, Fianna Fáil and the PDs, to survive at the next election. Some Governments change when they see the light. Fianna Fáil and the PDs only change when they feel the heat. They feel the heat at the elections and in the polls. This is their especially designed budget to take the heat off. It is a fire-escape budget.

Their consistent neglect, waste, arrogance, complacency and detachment from the lives people live today have given us hospital waiting lists that were supposed to disappear, 2,000 extra gardaí who actually did disappear, trolley watch figures that stand at 325 today and gangland executions on our streets. Children in disadvantaged areas leave school unable to read or write anything much beyond their own name. The cost of electricity and gas is going through the roof, so in the recent cold weather thousands of old people had to choose between heating and eating.

The budget might take the heat off in the short term, as a diversionary tactic, but it will not meet Ireland's future challenges because spending alone does not work and does not constitute a governing philosophy for any country, never mind one of the leading economies in the world. This budget will not work to solve our problems because spending alone is the sole governing philosophy of Fianna Fáil and the PDs. It is proved every time I ask the Government a question through the Taoiseach. Two weeks ago in this House I read a letter from a woman whose mother was critically ill and crying with pain, but was unable to get the care she needed. His stock answer is not to tell me what he is doing to actually solve the problem, it is to tell me how much he is spending on it, as if spending money was the end in itself.

Bernard Durkan (Kildare North, Fine Gael)
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A history lesson.

Enda Kenny (Mayo, Fine Gael)
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Every time one asks the Taoiseach a question in the morning, he reels off figures like a judge at an ice-skating contest, 9.1, 8.6, 7.5 and 6.4. The Government's spending follows political and election cycles but not economic cycles. Its furthest horizon is the next general election and its priority is hanging onto power together. There are always unfulfilled plans but no reforms and no acceptance of ministerial responsibility, even yesterday and today.

No one is ever to blame. In this Government, nothing is ever anyone's fault. Therefore, there are no results because the spend philosophy in this budget does not deal with the fundamental issue of reform in the public service. Reference was made to it in the Taoiseach's address, and there were some references in the address of the Minister for Finance. However, it does not deal with the issue.

Earlier this year, the Travers report on the examination of health levies on long-stay institutions cited long-term overall systematic corporate failure of corporate public administration. That is what it stated and this applies not only to the Department of Health and Children but to other Departments of State also. This was echoed by the Ombudsman when she addressed an Oireachtas committee in June, stating:

[I]n the aftermath of the Travers report, the nature of the relationship between the Executive, between Ministers and civil servants, requires urgent attention ... [T]he wider issue is that the model of government meant to underpin and support the working of Government is no longer fully relevant.

That is why we have a crisis in the Health Service Executive and other areas of the public service. Addressing the Fine Gael parliamentary party in Portlaoise, Professor Drumm stated that in the changeover from the health board system to the HSE, at least 3,000 administrative staff did not know where they fitted into the system. This is the reason for the inability to deliver effective services and the inability of one area to talk to another. The lack of monitoring resulted in the overrun in the PPARS project.

Given the Government's alacrity on child care, one would imagine it was dealing with a state of emergency and that the angel Gabriel appeared in the skies and made a mass visitation to every child in the country. As far back as the budget for 2000, Fianna Fáil and the Progressive Democrats were lamenting the dramatic rise in costs and the major burden on families. It took the Government until the budget for 2006 to do something about it.

It was not the nation's children or the nation's families that roused the Government on child care, rather it was votes. The Government's change of heart on child care did not take place on the road to Damascus but on the N2, the N7 and the by-roads to Nobber and the estates of Navan at the time of the Kildare and Meath by-elections. The Government felt the heat, the issue was brought home to it at this time, it saw results and decided it was time to address the matter.

This budget will not work as a fire escape or an electioneering tool because the people know they are being taken for a ride. Frankly, they are tired of the scenery. Political promises are made, public trust is invited, elections are won, Government promises are broken, public trust is abused and public confidence is shattered.

From public meetings held throughout the country we know that people look at the reality of their day-to-day lives. They consider the difficulties of balancing home life and work life, killer commuting, mortgages that mean they do not have enough money left at the end of the month to put into a pension, and looking after a parent. People live through this every day and see they are not getting the services they need, value for money, or value from their vote and trust. They will never allow this to happen again. Albert Einstein, whose commemorative year this is, described insanity as doing the same thing over and over and expecting different results. At the next general election, people will take that advice to heart.

We should not get carried away by the spin that takes place on budget day. The torpedo fired in this budget is of a serious nature. We should never lose sight of the amount of money spent in the budget compared with overall figures and we must examine the detail of these measures.

In spite of buoyant tax revenues in 2005 and very promising projections for 2006 and 2007, 32% of earners, or half of all taxpayers, will pay tax at the top rate. The Government is still a long way from meeting its target of 20% of earners paying tax at the top rate. Average earners across all sectors will continue paying tax at the same rate as high earners. So much for tax reform.

In 2005, the Government received €1.8 billion more than expected in taxation. In this budget, a net of €1.4 billion was given back. The net value of income tax reductions was only €275 million out of a total tax take of €42.2 billion. So much for a low tax Government.

The much-heralded package to assist older people has hardly materialised. The total package of €150 million is less than the amount wasted by the Government on the PPARS debacle. This reflects poorly on the Government's commitment to the elderly as it still owes €1 billion to elderly patients of nursing homes and has failed to introduce an effective inspection regime.

The budget programme might read well in paragraphs but when one speaks to nurses in the community, considers the number of retirements taking place this year and considers that no nurses are coming on stream this year, this package is going to be difficult to implement. Trained staff, such as public health nurses, will not be available.

The package for carers, €27 million, got the same priority as the reduction in betting tax. The Government is still running €2.5 billion behind in its capital spending programme.

Given the Government's appalling record in implementing previous multi-annual plans, such as the health strategy, decentralisation and road safety, there is little confidence that the aspirations for increased child care places will be met. While the new early child care supplement is welcome, it will have little impact on working parents who will have to earn at least €300 per week to pay for current child care costs. I am not downgrading the package which is welcome and has been promoted by this party for a long time.

The €1,000 payment per child is welcome but it comes with a reduced increase in child benefit of €1.94 per week and no increase in child dependant allowance. The €10,000 limit in respect of taxation for child care means there is no link to quality in this area. Fine Gael had a detailed proposal on this matter to make it easier for parents and better for children. Everyone understands the importance of vetting, standards and child care but those providing child care who earn more than that limit have no incentive to join in this proposal.

An opportunity to announce an innovative scheme to encourage SSIA savers to continue the savings habit by investing in pensions has been lost. This will be a crucial issue in the future. This would have helped the lower paid, in particular, to invest in their pensions and is a serious missed opportunity. We see shops advertising credit terms that will allow payment for goods when SSIAs mature. This means that much of this money will be frittered away on loose credit and the Government has lost an opportunity for pensions savings.

One of the biggest problems with this budget is not just in the fine print but the missing print. Energy is an example, as the budget treatment of alternative energy is risible, proving the Government has not just lost touch with life in Ireland but in the wider world. The Minister for the Environment, Heritage and Local Government, Deputy Roche, is in Canada today. Climate change has the capacity not just to affect day-to-day life but is quickly reaching the level where it can radically alter human existence. Judging by this budget, the Government does not appreciate what is happening.

In monetary terms alone, disregarding the higher matters of our international responsibilities, we face fines of more than €400 million if we fail to meet our obligations on emissions. Credits are only a partial solution. We need a change of heart if we are to step up to the 21st century and examine our energy equation.

With the days of easy oil over, energy security is exercising every responsible government in every developed economy in the world, except Ireland. The Government is hanging the country out to dry by its stubborn refusal to recognise two issues. First, that alternative energy is critical, not just to our economic success, but to our economic survival in the future and second, that it has the potential to create thousands of new jobs and become a dynamic, sustainable sector of our economy.

It would have been preferable if the Minister's initiative regarding biofuels had dealt with blended fuels in the first instance, which do not carry a range of high conversion costs and which would have allowed for immediate participation by the public transport network. At a time when the Minister for Agriculture and Food has single-handedly wiped out the beet industry, the Government has missed an opportunity to develop alternative growth and jobs for farmers. Furthermore, I did not see anything in the budget about the capacity that wind energy could contribute to this country over the next 20 years. Legislation currently in place deprives people of the capacity to enter that market, which is scandalous.

There are, of course, a number of aspects of this budget that are welcome. If the Government is going to spend €3 billion, it is bound to please some people. We have been accused on this side of the House of not producing policy programmes but in this budget I can see six policies, at least, that have been lifted from the Fine Gael website or party documents. The Taoiseach does not have to steal Deputy Joe Higgins's clothes all of the time. There is the issue of the €1,000 payment, which was promoted by Deputy Stanton; the increased birth-related leave; the capping of tax reliefs, which Deputy Bruton has been advocating for the last three years; the reform of the Estimates process, on which we put forward a detailed document; the reduction of excise duty on biofuels, promoted by Deputy Durkan; and the increase in the VAT threshold for small businesses, which is welcome but not enough, promoted by Deputy Hogan.

This budget does not address the issue of competitiveness in the way it should. Manufacturing jobs number 300,000, which is the same level as seven years ago. Approximately 100,000 of those jobs are relatively new, which means the manufacturing sector is running hard to stand still. The construction industry has been boosted to almost 250,000 employees and is a critical element of what is now driving our economy. Ten or 15 years ago, our economy was based on exports, productivity and sales. We are now in a situation where we are running hard to stand still in terms of manufacturing competitiveness and are being sustained by very strong growth in the construction industry.

I welcome Deputy Cowen's initiative on the fourth tier of education but while it represents a start, it is a very small one. I accept that Universities will have to compete for funding but perhaps we should take a more radical approach. Why, for example, are there seven chemistry faculties in Dublin alone? If we are serious about research and innovation, we must ascertain if there is a better way of dealing with the future in terms of the specialist area of PhD education. I am also not sure if this issue should be left with the Department of Education and Science. That Department is the oldest and most retrospective of all Departments.

Olivia Mitchell (Dublin South, Fine Gael)
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It is the most rigid Department.

Enda Kenny (Mayo, Fine Gael)
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It would be better if this issue was placed with the Department of Enterprise, Trade and Employment or some other Department.

The budget makes a start in the area of food and health but given what has happened with the nitrates directive, which will have a serious impact on the pig and poultry sectors, the difficulties in the beef industry, the wipe-out of the beet sector and the implications of the current WTO trade negotiations, it is noteworthy that agriculture and farmers were mentioned only once in the Taoiseach's contribution today. The participation of farmers in social partnership programmes in the future, given what has happened recently, will be very much diminished as time goes on.

We are lucky to live in times of unprecedented good fortune but the challenges we face now are not Fine Gael, Fianna Fáil or Progressive Democrats challenges; they are Ireland's challenges. We have seen that spending alone does not work in terms of dealing with those challenges. Spending must follow fundamental reform. In the next election, people will be seeking a Government that is willing not just to spend, but to act and I give them my word that we will act.

In the programme set out by the Government, its great plan, the problem of sewage disposal in towns and cities was to be eliminated by the end of 2003. That has not happened to any great extent and the Government is very much off the mark. A free travel pass for pensioners throughout Ireland was to be put in place. The programme referred to an all-Ireland free travel scheme for pensioners. That has not happened, nor will it happen now. The programme stated that the Government's intent was to reduce consistent poverty to below 2%. However, the Society of St. Vincent de Paul has recently stated that there has been a 300% increase in people contacting them for help, many of them working people. That speaks for itself. In respect of taxation, the Government's commitment to have only 20% of taxpayers paying at the higher rate is very far off the mark and is unlikely to be achieved. Those on the minimum wage who have been removed from the tax net this year will be back in the net next year. We have had debates here about the failure to deliver the promised 2,000 extra gardaí at a time of unprecedented levels of break-ins, burglaries and vandalism on our streets. Due to the differences between the Minister for Finance and the Minister for Justice, Equality and Law Reform, this is an issue that is not being addressed successfully by this Government. The voluntary housing sector was supposed to deliver 4,000 units per annum. In 2002 it produced 1,360, in 2003, 1,617 and in 2004 a little over 1,000.

One of the most scandalous failures of all by this Government relates to class sizes. The programme for Government said the coalition partners would "ensure that the average size of classes for children under nine will be below the international best practice guideline of 20:1". Currently, the average class size is 24, which is one of the highest in the European Union. Approximately 80% of children under nine years of age are in classes of more than 20. A total of 5,000 children are in classes of more than 35, while 73,000 children are in classes of more than 30. The issue is not the pupil-teacher ratio but class sizes. When the Minister for Education and Science, Deputy Hanafin, who appears to be tied down to the unions completely, makes an announcement of the appointment of several hundred extra teachers, it is not related to the increase in population or the impact it will make on class sizes. That is where the problem lies. Teachers, no matter how good they may be, cannot do their job with the resources they have, if they have 30, 35 or more pupils in their classrooms. It is a physical, mental and educational impossibility. That is a fundamental failure of this Government which has not been addressed in this budget.

The budget contains nothing on pre-school learning, which is so important for developing an environment for learning, teaching and acceptance of new ideas. That is not addressed in the budget. While Deputy Cowen referred, at length, to the value of education, the pre-school area is where we have to make our play. His play only relates to a segment of third and fourth level education, which while being fundamentally important, does not deal with the issue of the beginning of the educational journey, in the pre-school and primary school sectors. It is in those two latter sectors that the fundamentals of learning are imparted.

The roads programme was to be implemented by 2006. The toll road from Mullingar to Dublin will be opened next Monday, nine months ahead of schedule. All of the tolls will be paid to the public private partnership company. The road west, which is one of the last roads to be developed is one of the first to be tolled. There is no toll on the road to Wexford, Waterford, Cork or Limerick. However, for those commuting from Mullingar everyday, for example, a husband and wife with different jobs, the new road will cost €1,200 per year.

Bernard Durkan (Kildare North, Fine Gael)
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The Government is hitting the motorist again.

Bertie Ahern (Dublin Central, Fianna Fail)
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There would be no road at all under Deputy Kenny.

Enda Kenny (Mayo, Fine Gael)
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People will obviously pay for convenience but it is a very serious charge that is being levied against them. It is an issue that will arise repeatedly.

The public-private partnership sector has been allocated several billion euro. It is very complex and costly to tender for the major road projects planned for the next 20 years under public-private partnership. If a contractor applies but is unsuccessful, he is unlikely to want to tender again because of the cost. This means a small cartel of companies with the capacity and money to tender for PPP projects will inevitably develop and prices will rise as a consequence. I suggest reviewing the PPP system to find some mechanism whereby those who tender unsuccessfully are not eliminated from future schemes so that competition remains in the system. Otherwise an inbuilt cartel will operate whereby the price of infrastructure, especially road infrastructure, will escalate.

The metro to Dublin Airport was to be built by 2007. I understand the rockbreaker sank below the design level in the tunnel several times because the geological reports were inaccurate. Instead of going through rock it went through something much softer. I understand a substantial claim arises as a consequence. The financial position of Aer Lingus has not been addressed, although a report is due shortly.

We have not seen the end of the accident and emergency debacle. The trolley watch shows today there are 375 beds in hospital corridors. Hospital beds were to be increased by 650 at the end of 2002.

A number of tax incentives have been closed off, which was due to happen anyway, meaning that investors will now be encouraged to get into the private medical area, meaning that health becomes a commercial commodity instead of a public service. There should be an analysis of the cost of a bed in a public hospital delivered through the normal system compared with one in the 20% of beds to be delivered in the private sector.

The decentralisation programme has become a complete and utter shambles. I have supported the decentralisation programme for many years. Many towns in provincial Ireland are to be beneficiaries of the programme but not in the way it is being carried out. How does the Government account for the situation where the Equality Authority, which addressed the Fine Gael parliamentary party recently, states that of its 53 members, none had applied for transfer to Roscrea? This is replicated in a number of areas throughout the country. If it continues, it will destroy the public service by forcing people into new positions for which they are not trained and will break the long memory connection of the public service. People will end up doing nothing in other Departments where they did not want to move in the first place.

The headage section in Michael Davitt House in Castlebar ran out of work because the scheme ended. The employees were offered jobs in the PULSE section of the Garda Síochána on three eight-hour shifts, which is unsuitable for young married women with children among others, or a relocation to Portlaoise. Those who still do not want to go will be moved out of their offices in the next few days into empty accommodation to persuade them to accept the offer.

The Minister of State at the Department of Finance, Deputy Parlon, appears to have doctored, at public expense and in his own interests, the results of a radio poll in the midlands which resulted in findings that 94% of listeners said decentralisation as it was progressing was a great thing. It is a shambles and I am not sure how the Government proposes to address it. The Minister for Finance does not use the same terms in the Budget Statement as the former Minister for Finance, Mr. McCreevy, who said he would move 10,000 civil servants in a voluntary capacity within three years. That wording has disappeared into the ether. When people knock on houses in Dublin, they find that many civil servants have no intention of moving and the Minister responsible must provide an explanation. Many Departments where people do not want to move will not move. It will either destroy the public service or Departments will have to train people for jobs they have no experience of, thus damaging the quality of the public service.

The Travers report pointed out that reform of the public service is inadequate and that spending money will not bring results without fundamental change. The next election will be very important and will have great consequences for this country. How a nation manages good fortune and success and the problems associated with it is as important as how it manages in adversity. Can we work with our wealth in such times?

The Fine Gael and Labour parties will see to it that our prosperity is maintained and, with a new vision for Government, a new sense of responsibility and a strong spirit of community, we will build an Ireland that fulfils its promise. The vital Irish centre is alive and well. We will use a strong economy to make our streets safer and our hospitals better. Our strategy will meet Ireland's challenges and protect Irish values. There has been a big splash and much spin and propaganda about yesterday's budget, delivered from the biggest war chest there has ever been. This war chest exists not because of Ministers such as Deputy O'Dea, Deputy Martin or Deputy Cullen, but because of the work of the people.

Everything that is wrong with this Government is epitomised by today's unfortunate demise of the former Minister of State at the Department of Transport, Deputy Callely. There has been a litany of such episodes in the past nine years to illustrate what is wrong at the heart of this Government. When people get their chance, they will cast their verdict and throw it out of power.

Pat Rabbitte (Dublin South West, Labour)
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I join Deputy Kenny in regretting that the debate on the budget was delayed by the efforts of the House to have the issues surrounding the resignation of the former Minister of State, Deputy Callely, debated.

Bertie Ahern (Dublin Central, Fianna Fail)
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To block a budget debate.

Pat Rabbitte (Dublin South West, Labour)
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I do not see it that way. We did not block the debate but the Taoiseach blocked Deputy Callely from speaking. He was blocked and silenced and that is an important issue. Adversarial politics aside, nobody on this side of the House takes any pleasure from the resignation of an office holder. In this case it is clear the Minister of State resisted resignation because he felt he took the rap on the nursing home charges issue and covered it up for the then Minister for Health and Children, Deputy Martin.

Bertie Ahern (Dublin Central, Fianna Fail)
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That is more rubbish. I hope the Deputy has something more constructive to say on the budget than this nonsense.

Pat Rabbitte (Dublin South West, Labour)
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The Minister was fully aware of the nursing homes issue and was quite prepared to clock up another hundred million euro of taxpayers' money without acting. When Mr. Pat McLoughlin's legal advice was brought to his attention, he had no argument after that. He should have known about the issue from the extension of the medical card to the over-70s but could not have failed to realise it from Mr. McLoughlin's advice, and no amount of retired civil servants' control of the English language could cover up the fact that responsibility lay with the Minister, but the Minister of State took the rap. The Taoiseach is sensitive about it because the Minister of State said he told the Taoiseach at a division in the House.

We are discussing the budget of a Government that has lost any sense of purpose other than hoping that it can buy people's votes at the next election with their own money. It lacks vision for the future and seeks to see how available money can be scattered around to avoid heavy defeat at the polls in the next general election.

For most of its eight years in power, the Fianna Fáil-Progressive Democrats Government unapologetically transferred income to the better-off in society but now we are asked to believe it has discovered society and community and that Professor Putnam and Fr. Seán Healy have become the favoured reading of the Cabinet. During the McCreevy years, it saw tax reduction as the only form of economic policy. Then, when its luck ran out and when its false promises were found out, it sent Mr. McCreevy to Brussels and promised that all was changed, changed utterly.

This budget shows that the supposed Pauline conversion on the road to Inchydoney was not so much a firm purpose of amendment as a firm aversion to purpose. This is not the budget of a Minister who wants to steer this country in the direction of future prosperity or a fair society, but of a Minister running around from one issue to the next, like a demented fireman in a burning forest, putting out electoral fires and dampening down hotspots of voter discontent.

This budget is little more than a series of attempts to address issues which have been preoccupying and aggravating voters: child care, transport, the standard rate tax band and tax avoidance by the super-wealthy. On each of these the Minister has sought to address, or to be seen to address, public concerns. In each case, he has done the bare minimum required, in his mind, to mute public anger. Many of his solutions are purely illusory. When in doubt, devise a five-year plan and forget to mention that the election is but 18 months away.

The Labour Party should be flattered by our ability to provoke a Government response when we raise an issue. We raised the issue of child care, millionaires who pay no tax, the heating allowance and the stealth tax imposed by not indexing the standard rate band. In these and other cases, we got a response — inadequate, but a response.

In several cases, there are now elaborate plans and strategies. There is to be a five-year plan for child care, just like in 2001 when there was to be a three-year plan for child care. The first two phases of that plan were implemented and then came the election, and the third phase was simply forgotten.

We have a ten-year plan for transport, just like in 2001 when we were offered a ten-year health strategy, with hundreds of hospital beds right away and thousands more to follow. The transport plan comes with money attached — just look at the capital envelopes. The Fianna Fáil manifesto, however, had a multi-annual plan to provide billions in additional funding for the health strategy. The Minister for Finance said health would be the first priority, come what may, but as soon as the election was over, the strategy was scrapped, the funding was not provided and a plan to privatise the health service has been introduced instead, or more correctly, a plan to create a parallel private health service has been introduced.

Pouring ointment on electoral sore points may seem like good politics but it is not a recipe for good government. That is not the way to chart a course to future prosperity or fairness, towards a society that has a place for every child, that offers a better life to those who get up at 6.30 a.m. to go to work and that offers a warm and secure retirement to the elderly. It does not add up to a vision for how we can lay the foundations of future prosperity and ensure more and better jobs in the future. It will certainly not arrest the race to the bottom in employment standards that the Taoiseach is so concerned about but is so unwilling to address. There is, frankly, no prospect of the Government ever adopting such a sense of purpose and vision. It is tired, jaded, bereft of ideas and reduced to responding to public anger in a piecemeal fashion.

We can say what we like about Mr. McCreevy — most of us in this House have — but Charlie McCreevy had an agenda. That agenda was changing the tax code and change it he did. It cannot be doubted that he left a very different tax code from the one he inherited. The millionaires who pay no tax are in no doubt as to what he achieved.

The agenda now is different, it is the one McCreevy neglected — reforming public spending and public services. While it is important to reverse some of the most regressive of Mr. McCreevy's tax breaks, the clear focus of the next Minister for Finance must be on public expenditure management and reform. We need to focus on the development and delivery of high quality public services with value for money for the taxpayer in the interests of society and the economy.

Tackling that agenda means a major shift in the approach of the Minister for Finance and his Department. The Department of Finance must return to the kind of reforming, innovative and developmental role that it once adopted, most notably in the 1960s. The Department has not functioned in that way for some time. Rather, its role has been reduced to being the keeper of the purse, constantly seeking to minimise expenditure in the short term, rather than taking a longer-term view. It certainly does not act as an engine of economic and social development. This is not a new problem. In his autobiography, for example, Garret FitzGerald wrote: "I had been concerned to observe how far the Department of Finance had moved from the innovative and developmental role it had played under T. K. Whitaker's leadership in the late 1950s and 1960s".

Every organisation needs a treasurer, a keeper of the purse who contains the urge to spend. No organisation, whether it be a local sports club or the Government of a country, can be without such control. We must maintain strict discipline over our public finances. For the Department of Finance and its Minister, however, that is not enough. It also needs to use its role in the monitoring and control of public expenditure in a proactive manner. This developmental function is a central element in the role of a modern treasury. It is also one which was legally assigned to the Minister for Finance in 1980, when the Department of Economic Planning and Development was abolished.

The functions transferred to the Minister for Finance at this time are worth reciting: to promote and co-ordinate economic and social planning for the development of the economy both generally and as respects different sectors and different regions of the country, to identify the policies it considers necessary for general economic and social development and to report to the Government, to identify in consultation with Departments of State and to review and appraise the plans and activities of Departments giving effect to the policies for general economic and social development adopted by the Government, to make proposals to the Government for the co-ordination of those plans and activities and for their integration with national economic and social plans and to review the implementation of such national economic and social plans as may be approved of by the Government from time to time and to report to the Government.

The Minister for Finance is simply not fulfilling this role. Instead we have a patchwork of different initiatives, regular failures of imagination and sheer unmitigated, unprecedented waste of taxpayers' money. The Minister came in here yesterday and sought to portray the impression that he had a great plan for our economic future and our society. In the end, he simply addressed the usual budget concerns and provided money for what he calls fourth level education. What it amounts to is a fund for universities and it is not clear in what we have heard so far whether the institutes of technology are included. The Minister for Education and Science, always on hand to educate people inside this House and outside it, is nodding her head. If that means "yes", I welcome and accept her assurance, but the Minister for Finance did not say that yesterday. His statement was endorsed by an exhortation to efficiency. He said:

This is a small country. It is not sensible to have our third level institutions pitched against each other across key disciplines. Instead what we need is the promotion of system-wide collaboration that can draw on the collective strengths of all of our third level institutions.

He wants universities to co-operate in using this money. How is this to be achieved? If fourth level education is so important, and it is, does it not deserve an institutional innovation? Is there not a case for a new university structure at national level, which would act towards the existing third level institutions in the way that, for example, the universities of Oxford and Cambridge act towards their constituent colleges? Might not such a new fourth level institution be able to co-ordinate the combined talents of our universities to attract the highest calibre of researchers from abroad, ensuring that they had the best possible facilities, while also arranging links to the individual colleges?

For all the high-minded talk, there is no joined-up or coherent strategy on how we are to address the challenges and fragilities facing the Irish economy or to build a stronger society. What is the plan for how we are to move up the value chain and create more and better jobs? How will we preserve living standards in the economy rather than indulge in a race to the bottom? How can we deal with an over-bloated construction sector which accounts for one in eight jobs and where a correction, which will inevitably happen, will have significant consequences for our economy? What is the Minister's view of the performance of the export sector? Does he have any thoughts on how SSIAs will affect inflation, let alone any strategy for dealing with it? Is he even aware of the disaster that is the Government's broadband policy and its implications for our economy?

It is incumbent on the Minister for Finance to develop a strategic vision for the future of our economy and our society and to structure public spending to these ends. However, the Government does not have that vision. The national development plan is a central case in point, launched with fanfare and spin and then allowed to run rapidly into the sand. From the beginning, the NDP had no departmental or ministerial champion. Each Department was responsible for its own bailiwick, no joined-up thinking, no Minister anxious to leave an imprint behind him or her and no single Minister responsible for implementing the national development plan. The next national development plan, about which the Minister, Deputy Cowen, spoke yesterday, will follow exactly the same pattern unless the next Minister for Finance drives its implementation.

As the litany of wasteful and foolish expenditures of the Government is well known, there is no need for me to repeat it. It comes with a very real cost attached. Every euro wasted by the Government is a euro not spent on health, new teachers, supporting families and tackling crime or anti-social behaviour. Not only is waste socially injurious, but it represents a drain on our economy and a threat to our current and future competitiveness. Where public services and productive infrastructure are provided at a cost, which is greatly in excess of the cost of similar provision in other countries, Ireland is at a corresponding competitive disadvantage.

The absence of a visionary approach to development is evident elsewhere as well. Last year, the enterprise strategy group, established by the Tánaiste, Deputy Harney, published a report, Ahead of the Curve, which attempted to chart out a future for Irish enterprise policy. It was an attempt to put flesh on the idea of moving up the value chain. One of its conclusions was that a precondition for economic success is what it described as effective and agile government. What was so striking was the statement in the report which reads as follows: "The Irish public system proved itself capable of such responsiveness in the past, but many believe that Ireland has lost its former ability to respond quickly and flexibly to identified needs and there is no longer a clear focus on enterprise as a key economic driver". That is not the Labour Party speaking but the enterprise strategy group, established by the Minister, Deputy Harney.

There can be no more damning indictment of this, the so-called pro-enterprise Government. As I meet people throughout the country, I am increasingly struck by the shared sense of a Government that is anything but effective and agile. This must change. If we are to bridge the gap between economic success and social failings, and if we are to lay the foundations for future economic prosperity, we must reinvent the way the Government does its business, starting with the way it spends our money.

I see little in the Minister's speech yesterday on parliamentary oversight of public spending and public expenditure decision-making. There is a paragraph about it in the report. However, it appears to pay lip service to a report I prepared at the request of the Committee of Public Accounts, which it endorsed subsequently and sent to the Secretary General of the Department of Finance for comment before publishing it. In the report, we addressed the entire question of public expenditure decision-making and the parliamentary oversight that is currently absent. The Committee of Public Accounts does not address that issue. It gets regular requests for intervention in current public projects, but that is not the role of the Committee of Public Accounts. The role of the committee is to examine the spending post hoc.

The weakness in the system is in the preparation of the Estimates, the manner in which it is done, the manner in which it is inaccessible and impenetrable and the manner in which it is approved after a half year's spending or more is over. We made specific recommendations in terms of the Estimates process, the bilateral meetings that go on between Ministers, the timing of it and collapsing the Estimates publication and the budget into a single event. When questioned in the House on the matter, the Minister appeared to effect his usual dismissive approach that if a proposal did not come from him or the Department, it apparently has no merit. While he paid lip service to it yesterday, it is far from clear that it means a significant change in the way we do things. I mean no disrespect to the Department of Finance officials, for whom I have great respect, but by any international comparison, parliamentary oversight of the Estimates process is inadequate.

There is a table at the back of the report I drew up relating to the Estimates debates for the 15 Departments this year. It shows that, for example, €11 billion spent on health attracted an hour and a half's discussion in committee. The select committee system is not working in that sense. I put forward the proposition that the finance committee should have this responsibility and should be resourced to do the job properly. I am aware it would mean more accountability for the Government and the senior officials in the Department of Finance, but that is a price we must pay in modern governance. Merely because all wisdom was reposited with Government, the Executive and the permanent government in the past does not mean that is good enough for the future.

There was no shortage yesterday of money to be spent, but there was a shortage of ideas, imagination and vision. Let us look at the child care package as an example. For months families have been promised that the Government would address the child care problem. As my colleague Deputy Burton stated yesterday, our children are not the problem, and nurturing children is one of the central functions of any human society. The Government seems to have forgotten that and for years it has done little to address the child care issue. When it got a bloody nose at the by-elections, as Deputy Kenny said, it decided child care would be addressed and we were all assured it would be the main priority. A sum of €19.23 per week is the full measure of that priority. After all the hype, the amount to be delivered will be less than €20 per week, in a country where the average cost of full-time crèche care is nearly €170 per week. It is commonplace to pay €200 per week for the care of a young child, all from post-tax income.

The provisions will do nothing for school-going children. Do they not merit consideration? The Minister has opened a new division, not between mothers or spouses who opt out of the workforce for a short period to care for their children and those with children who remain in employment, but between families with children under six and families with children over six. Apparently parents in the latter category do not deserve help with child care costs.

The other significant item of news is that there is to be an extension of maternity leave. I welcome such a proposal. The Labour Party published its proposals in this regard. However, in spite of the extension, half of the additional maternity leave will be unpaid. According to the Irish Examiner child care poll, 57% of mothers do not avail of unpaid leave and only 22% avail of more than four of the eight weeks to which they are entitled at present. In stark and simple terms, unpaid leave does not pay the mortgage.

We are not prepared to make employers contribute in respect of child care. Employers demand European-level participation rates of women in the workforce, yet we seem to be afraid to statutorily underpin career breaks, maternity leave and part-time work. The Government has been very generous to employers over almost nine years. There are a number of examples even in this budget. We had a very interesting discussion last night on the financial resolutions pertaining to tax remittances. The closing off of the loophole in this regard by financial resolution is calculated to save the State €100 million in lost income tax. We have been very generous in allowing people who earn more income than the rest of us to invest it in tax-efficient schemes to generate more wealth for themselves, yet we seem to be fearful of requiring employers to make their contribution to the critical issue of child care.

It is particularly disappointing that the budget does not address the issue of universal pre-school education. Universal pre-school education is a central plank in the Labour Party's child care policy, and for good reason. The social, economic and developmental advantages of pre-school education are enormous and it is now regarded internationally as a vital element in any serious attack on poverty and disadvantage. In a world where people will increasingly trade not on who they know but on what they know, the combined nurturing of children by family and society is the key to the future well-being of individuals and countries. The Government does not seem to believe our children are worthy of that investment.

I wish to say a few words about taxation. For some time, the Labour Party has been arguing that the main issue regarding taxation is one of fairness. Given the prosperity of our economy, there is no pressing requirement for increases in taxation. There are, however, deep structural inequalities in our tax code. The Government has presided over the accumulation of tax reliefs and incentives that have allowed the very wealthy in our society to pay little or no tax. Such was the anger provoked among the public that the Minister felt obliged to be seen to change the circumstances that obtained. However, it is by no means clear that he has done so. He stated:

I propose now to place an annual overall cap on the extent to which specific incentive reliefs can be availed of. The cap will apply to those with income over €250,000 per year. It will operate by reducing by half the amount of income that can be relieved from tax by certain specified tax reliefs. This measure will help eliminate the phenomenon of tax free millionaires and increase the effective rate of tax on those with high income towards a minimum of 20%.

Will the cap really eliminate the phenomenon of tax free millionaires and, if so, how? Unless one introduces a minimum effective tax rate whereby high earners, irrespective of the extent to which they avail of tax reliefs, are subject to a minimum tax liability, it surely remains the case that a person can continue to accumulate reliefs until he or she pays no tax. My party proposes that the minimum liability be 20%.

I do not know what "towards a minimum of 20%" means, nor do I know what is implied by "certain specified tax reliefs". Does it mean, for example, that one can no longer avail of the relief applicable to investment in car parks but that one can avail of it if investing in the private medical facilities on public campuses proposed by the Minister for Health and Children, Deputy Harney? None of this is spelled out and I envisage many accountants generating income that they might invest in car parks at the end of the process. The Department has again excelled itself in constructing a form of English than is entirely inaccessible and impenetrable in respect of matters about which it does not want us to know.

I do not understand how the system will work. Each individual relief may be capped but there will be no limit on the adding up of reliefs. I do not understand how this can be claimed to be a minimum effective rate of tax. If it were, the Minister would say so, rather than use carefully judged language about increasing the effective rate of tax "towards" a minimum of 20%. The people who get up at 6.30 a.m. do not have tax rates "towards" 42%, they just pay 42%. They also pay PRSI and levies and, as Deputy Kenny stated, they are now expected to pay tolls to come to work. They make these payments from modest incomes, which are substantially more modest as a result of the non-indexation of bands since the general election. They do not pay rates of tax "towards" any given percentage, they just pay, and so should the millionaires. It is clear from the Minister's budget that the millionaires will not do so. A whole new class of no-tax millionaires will be created through investment in private hospitals. They will be provided with land on the sites of public hospitals and with generous tax breaks. They will cherry-pick what is profitable to provide in the health service and leave the expensive and the difficult to the public sector. In the process they will drive up costs, drive up insurance bills and cause a migration of skilled labour from the public health service to these private institutions.

All this, we are told, arose from an accidental meeting between Mr. McCreevy and a constituent in Naas. This person just happened to suggest including a special section in the Finance Bill for those who wanted to build private hospitals. That was done and the Tánaiste and Minister for Health and Children, Deputy Harney, is building on that, thus aggravating further the existing two-tier system.

Liz McManus (Wicklow, Labour)
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Hear, hear.

Pat Rabbitte (Dublin South West, Labour)
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The Minister for Finance had a great deal of money to give away yesterday and he did that. He scattered it around every segment of the electorate from whom the harvest of votes might be improved. There is no innovation, no new ideas and no joined-up thinking. The budget is cautious, predictable and safe. It is not intended to address structural inequality, rather it is designed for one purpose only: to schmooze sections of the electorate that have grown disaffected with the Government. Taxpayers get some of their own money back but they will forget the swindle wrought on them by the Government's calculated failure to index tax bands since the previous general election, which is the greatest stealth tax of all.

I regret that the newspaper of record has got it wrong this morning. I acknowledge this is a major offence and I know the people on the Government benches are very happy with the newspaper of record these days, but nonetheless I wish to correct the record. It states that 23% of taxpayers will now pay at the top or marginal rate. I correct that by stating that 32% will pay at the top rate, not 23%. This is against the Government's pledge of 20%, which commitment was reiterated in Sustaining Progress when it said that 80% of taxpayers would pay at not more than the standard rate. The Government pledge was that 20% would pay tax at the top rate. However, following, rather than before, yesterday's budget, 32% of taxpayers pay at the top rate.

This is the progress made on tax reform by the Ministers, Deputy McDowell and Deputy Harney, who never failed to blow their trumpets. It must irritate the daylights out of Fianna Fáil backbenchers but on and on the Ministers go about how they are responsible for the tax cutting strategy of this Government, with 20-42, 20-20 cashback and everybody is happy. As this House knows and as people outside this House know when they look at their disposable income, tax is a function of how quickly one comes into the initial tax band of 20% and thereafter how quickly one becomes liable to pay tax at 42%. Under this Government, people on the average industrial earnings become liable to pay tax at 42%, which is the point that the Minister, Deputy McDowell, should take on board.

The child care lobby could not be ignored again, but is €19.23 per child per week worth the candle? Do working parents of children over six years of age not deserve help with child care? When it comes to rolling out five-year strategies, has this Government any credibility left? The former Minister for Health and Children, Deputy Martin, should be asked where the health strategy is now. I remind the House of Ballymascanlon. Where is the health strategy today? Where is the Minister, Deputy Martin, today? Where will he be next week after Ivor talks to the Sunday newspapers?

Following years of lip-service to the closing of loopholes and shutting down of tax shelters, some tentative steps are evident, but on the Saint Augustine principle of "not just yet". In the meantime, I suggest anyone thwarted from minimising their tax liabilities in car parks should consider switching to private hospitals as the Tánaiste and Minister for Health and Children, Deputy Harney, sets out to create a parallel private health service against the advice of even the chief executive of the Health Service Executive.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Saint Augustine was talking about purity, not profligacy.

Pat Rabbitte (Dublin South West, Labour)
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Then Saint Augustine would have no place in this Cabinet.

Emmet Stagg (Kildare North, Labour)
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Muck again.

Bertie Ahern (Dublin Central, Fianna Fail)
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We will tell them that.

Pat Rabbitte (Dublin South West, Labour)
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The basic social welfare increases are welcome and will help people in a high price economy to keep body and soul together. However, as the Society of St. Vincent de Paul pointed out, the social welfare package will do no more than that. There is no structural assault on poverty.

The meanest cut of all is that there is no reinstatement of the RAPID programme. I really regret that our friends and hard-working colleagues in the media do not address the RAPID experience. In 2001, a year before the general election, the then Minister of State, Deputy Eoin Ryan, a man whose words one would never question, launched the RAPID programme to fast-track moneys of €1.9 billion to 25 areas of disadvantage. The sum of €5 million was expended in recruiting consultants to devise the RAPID plans but when the general election was over, the rug was pulled from under it. The plans exist but they were never funded. Multiple disadvantage is concentrated in 25 areas of the country and the only contribution the Cabinet made was to add 25 more on the basis that if anything is going, we want one in our area too. The RAPID programme disappeared off the face of the earth.

The dormant accounts money came out of the DIRT inquiry and was to be distributed for this kind of social and community purpose by ADM, but the Minister, Deputy Ó Cuív, introduced legislation to take it over when he discovered the sum of money was a great deal more than the House thought it would be. He is since going around the west dishing it out like lollipops. One cannot go into a pub in the west for a quiet drink without being informed that the Minister is upstairs at a meeting with some community group and giving them a few bob.

Emmet Stagg (Kildare North, Labour)
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God help them.

Pat Rabbitte (Dublin South West, Labour)
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Deputy Burton made the point yesterday that the people in the new poverty trap are those who are forced into private rented accommodation. Our social housing problem is now forced into private rented accommodation, which is accommodation driven by tax reliefs and tax incentives. Those people are on housing rental supplement but if they try to go back into the workforce, either they lose that supplement or else it is greatly abated. This creates the new modern poverty trap. People who want to get out of that accommodation, into work and back to education are not being facilitated by this Government. This is one major defect in yesterday's budget which ought to be addressed in the Finance Bill.

Séamus Kirk (Louth, Fianna Fail)
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We now move to the speaking slot for the Technical Group. I have a list of names, Deputies Crowe, Joe Higgins and Sargent. Should I divide the time?

Trevor Sargent (Dublin North, Green Party)
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No. It was set down clearly on the Order of Business. I will speak first followed by Deputies Crowe and Joe Higgins.

Tááthas orm deis a fháil labhairt tar éis na cáinfhaisnéise mar tá go leor ann ar cheart dúinn a phlé. Tosóidh mé le ráiteas an Aire é féin. The Minister spoke yesterday about economic sustainability and the quality of spending. If we are to develop an economy and a society on a sustainable basis, the Government must invest in alleviating poverty and in the development of indigenous renewable energy. Instead, the Government has decided to kick off its election campaign and has paved the way to send money out of our economy using a carbon fund. Let us imagine that the Minister for Finance stood up yesterday, telling us that he had a great scheme to advance the cause of road safety. Instead of providing resources for more road checks, random breath testing, more ambulances and so on, he would instead pay for the funerals of those that were going to die on the roads. That is the analogy which parallels the carbon fund. It is not a response to the growing problem of greenhouse gas emissions.

It seems the Government is finally beginning to accept that the economy is facing a serious energy crisis in the medium term. Evidence of this has been available for years. The Government has reacted because of the impending election and the increase in oil prices we have experienced this year. It is also reacting to the worldwide evidence that climate change is kicking in. We do not have to go to New Orleans to see the effects of climate change. We only have to look at the frequency and intensity of rainfall. In the 1960s, 7% of rainfall was classed as heavy, but in the 1990s, 15% of rainfall was classed as heavy. It is no wonder that we have flooding problems and it is no wonder that the Taoiseach was famously pictured in his wellingtons in Drumcondra. It will not be the last time that such a scenario will occur.

However, the excise relief on biofuels and capital grants announced yesterday still fail to acknowledge the massive potential in the renewables sector for creating employment, developing indigenous enterprise, creating markets for Irish agricultural produce and providing security of energy supply to this economy. The Government's measures are conservative, long overdue, and leave us lagging behind other countries. The potential of the renewables sector represents an enormous opportunity. The Government's biofuels target of 2% by 2008 is extremely conservative and even brazen, as it effectively states that we will break the EU requirement that the target be reached by 2005. Moreover, it seems to be an admission that we will not meet our EU target of 5.75% of biofuels for transport by 2010, just as we have missed the 2% target in 2005.

The Minister's announcement of €65 million for a renewable energy grant scheme for the period 2006-10 is very small beer given the potential for saving energy in this way. With 75,000 new homes being built every year, an allocation of €13 million per year only amounts to €175 per house. That does not allow for any allocation to existing housing stock. This is not a serious commitment. In the UK, significant grants have been available to householders for such works for many years. We have to go further and I repeat my call for grants of between 30% and 50% for solar, geothermal and woodchip heating systems. There are grants available north of the Border for photovoltaic installation in public and private buildings. I was in a church that was able to derive an income from the energy being created by the photovoltaic cells on its roof. The Government's measures betray the consistent and regrettable lack of vision and ambition that seems to have prevailed in this policy area.

The energy performance of buildings directive is legislation that has been questioned by many of us on this side of the House over several months. It will take effect across the EU on 4 January 2006. It is an elementary step in increasing energy efficiency and, amongst other things, will provide house buyers and tenants with information on their potential home. However, it will not come into force in Ireland, because this Government has arranged a three-year derogation. This derogation is ostensibly a result of the Government's lack of technical ability to implement the directive. However, that is an attempt to protect friends who will fund the respective election campaigns of the Government parties. If that is the case, then I compliment the Government on its consistency. This "friends first" approach to policy is consistent with the effective extension of many of the property and area-based tax reliefs, as well as the stallion relief which is being retained until after the next election. The Government's corporate backers will smile this Christmas.

However, I warn the Minster for the Environment, Heritage and Local Government that he has no right to complain about the EU's assessment of Ireland's environmental record if this represents the approach he is taking. The carbon fund is essentially a mechanism put in place so that the Government can avoid its international obligations under the Kyoto protocol and send hundreds of millions of euro out of our economy between 2008 and 2012. A carbon levy, laid out in our national climate change strategy and supported by the Combat Poverty Agency, the EPA and senior advisers in the ESRI, would keep the money in the Irish economy. In turn, the money should be used to reduce PRSI for employees and employers, reduce VAT and increase social welfare payments. The carbon fund is consistent with the Government's approach to this issue. It is happy to have the taxpayer pay for the effects of its failures rather than addressing the causes. As I mentioned earlier, this is like paying for the patient's funeral rather than paying for the treatment.

Yesterday, the Minister for Finance waxed lyrical about the quality of spending. I will not try to point out the contradictions between this philosophy and between the Government's practice in transport, health and energy, as they are too obvious to require comment. However, I will ask a question. Has the Minister applied this philosophy of quality spending to tax expenditure? Although he has undertaken some piecemeal reform of the system of tax relief in this budget, he has not put in place a transparent and rational system whereby he will be in a position to answer the following questions this time next year on tax expenditure. What is the social, economic or environmental purpose of the tax relief? How many people and which incomes are benefitting from the relief? What benefits are accruing to Irish society from the relief? How much tax is being foregone? Are these costs justified? These are the questions that come about from a cost benefit analysis, which we are entitled to have. Lobbying for tax reliefs will continue in the infamous tent at the Galway races. The Government's decision on tax reliefs will continue to be led by its "friends first" philosophy. The quality of expenditure comes a distant second.

In 2003, we were given a decentralisation budget. Decentralisation is now a mess. In 2004, we were given a disability budget. In the meantime, the Government has forced through a deeply flawed disability Act. Now that the Act is in force, there was no mention of disability in this year's budget speech. That is somewhat surprising, given that the Irish Wheelchair Association and others have been lobbying hard for core funding to mainstream many of the services provided by community employment schemes. It would have cost about €11.5 million to provide that core funding. It would have been well within the tax take of €100 million from VAT on increased fuel charges and would also have paid for a doubling of the fuel allowance. While a great deal of money was spent, it was nothing like as much as was taken in. It was a mean gesture by the Government.

We have been disappointed again by the provisions for children and carers, which is something which will rebound on the Government when election time comes. While I acknowledge that the Government has at least modified its narrow, child benefit based approach to children, it is failing to target those in need. It has failed on a number of fronts. Barnardos and other groups have rightly pointed out that in the context of current child care costs, the under-sixes payment is a drop in the ocean. Budget measures do little for stay at home parents and fail utterly to deal with the need for a free year of pre-school places. Most significant, perhaps, is that they fail to deliver on a policy of ending child poverty.

The Government must be reminded of some basic facts. It has failed once again to target poverty despite the recommendations of the Society of St. Vincent de Paul, Barnardos and, it seems, the Minister for Social and Family Affairs. Since taking office at the Department of Social and Family Affairs, Deputy Brennan has paid constant lip service to the concept of ending child poverty, but the budget makes his talk seem hollow. It must be embarrassing for the Minister who must ask how he will face those to whom he has promised targeted, anti-poverty payments. Wealthy parents will receive the same payments as those living in poverty which is money which could have been targeted more effectively if the Government was serious. In this respect, I am obliged to mention the three words "child dependant allowance" which the Government has tried to ignore for the past eight years. The allowance has fallen by one third in real terms in three years despite the fact that it is supposed to be the mechanism to target child poverty. Why has the Government failed on this front?

Deputy Rabbitte mentioned the formative period during which Dr. Ken Whitaker strongly advised in the Department of Finance a radical shift in the economic paradigm of the late 1950s. In 2005 we face a very significant crossroads which is signalled internationally by the rising cost of energy. Unless Ireland embraces the zero-emissions unit of wealth, we will find that our country will slip further and further behind in its competitiveness. In the North I see small scale grid connections and hear from Denmark of targets of 50% wind energy generation by 2030 while we continue to be so oil dependent in the Republic that we make the United States of America look good. Ireland is the seventh most oil dependent nation in the world while the United States of America is ninth. Talk of economic competitiveness and wealth creation is hollow as long as the Government promotes a gluttonous, energy hungry country. We must make the paradigm shift necessary to build a lean, green and fair society.

Arthur Morgan (Louth, Sinn Fein)
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The budget was not an especially bad one as budgets go and I welcomed it to the extent that it went. To a great extent it involved putting a brave face on things after years of neglect and there are glaring omissions from it, especially in the areas of housing and health. The Government is not driven by a vision of a better Ireland. While it tells us we enjoy an enhanced quality of life, it neglects to tell us that the State is more unequal than ever before. Some Ministers, especially Deputy McDowell who is present in the Chamber, believe inequality in society is a useful and good thing, but the sentiment is not shared on this side of the House, certainly not by any Member who is here. While the Government tells us that more of our citizens are in work than at any time in our history, it fails to say we are working longer hours. The eight-hour day is an illusion to those on average incomes who are trying to meet excessive mortgage payments. The Government says we are welcoming and providing for more and more people who are coming to our shores, but it does not tell us that we allow migrant workers to be exploited and bar them from accessing social protections during their first two years in the State despite the fact that they pay taxes and contribute to the economy. The Government tells us more people enjoy a decent quality of life than ever before, but its members should try telling that to the families languishing on social housing waiting lists, elderly patients spending days on trolleys and chairs in hospital corridors and commuting parents, many of whom spend more than four hours a day in traffic, who drop their toddlers in crèches at daybreak and do not see them again until nightfall.

According to the Minister, the budget is largely about two key objectives which are the facilitation of sustained economic growth and improved equality and opportunity for all in society. In truth, the budget is about economic growth and the winning of an election. The 48,413 families on social housing waiting lists will be dumbfounded by the fact that the Government has failed to make provision for their urgent needs in a budget which amounts to a slap in their faces. Expenditure on local authority and social housing programmes will increase by a mere5%, which figure fails even to keep pace with the annual increase in the cost of building houses and purchasing land. Development cost increases run currently at 10%. What hope can people waiting on social housing lists have for the future in that context? Sinn Féin has asked the Minister for the Environment, Heritage and Local Government for 12 months whether the Government will accept the NESC recommendation of an increase of 73,000 permanent social housing units between 2005 and 2012. There is no target for the elimination of housing waiting lists nor is there a commitment to deliver the number of social housing units needed.

Given that housing is a basic human requirement, it is difficult to comprehend how the Government can so blatantly ignore the plight of so many in desperate need of it. I have asked myself why there is so little on housing in the budget and how the Government can ignore the plight of some of the most vulnerable in society. I can only conclude that Fianna Fáil, whose policies are decided by focus groups and aimed solely at winning votes, does not include people with social housing needs in its calculations. The crux of the problem is that where Government policies are calculated merely to win votes, the most vulnerable lose out. The Government has written off that section of society which has serious housing needs and has probably made the calculation that those in hostels for the homeless and other emergency accommodation do not vote. Their needs, therefore, will not affect an election outcome. I congratulate the homeless community which has organised itself in the group Street Scene and done a great deal to bring media attention to the ongoing issue of homelessness. This agitation must continue in light of the Government turning a blind eye to their plight.

Groups working with the homeless have expressed their disappointment at the failure of the budget to deliver on housing. The Simon communities have expressed their disappointment that there has been no progress on three actions which would have made a serious impact on homelessness. There could have been an increase in social housing expenditure, an increase in the caps on capital assistance scheme housing and the introduction of a revenue stream to supply formerly homeless people in their own homes.

Parental care for children must be a key element of the child care strategy. We must work to enable parents where it is their preference to care for their children in the early years of their lives. Measures in this area would be of long-term benefit to society. I was deeply disappointed that the Minister for Finance chose not to bring forward proposals on paternity leave. The position of this State on paternity leave is shameful. It is incredible that in this day and age there is no legal entitlement to paternity leave, paid or unpaid — not one day for a new father. It is archaic. This State ranks bottom of the list in terms of paternity leave. Most countries in the EU offer paid paternity leave, from two days in Spain to two weeks in France, while in Norway new fathers are entitled to a full four weeks. Fathers north of the Border are entitled to two weeks' paternity leave, yet in this State there is no entitlement. We need an explanation why nothing was included in the budget in respect of paternity leave.

The other shocking omission was the introduction of pay in respect of parental leave. This Government has not, evidently, grasped the extent to which paid parental leave may be used to alleviate the child care crisis. According to the MORI-MOC survey carried out as part of the review by the maternity leave working group established in 2001, almost 7% of the labour force was eligible for parental leave in that year. Only 20% of those eligible were estimated to have taken up the leave. This is very low and should be of concern to the Government. If it were genuinely committed to parental leave and believed in its benefits for children and parents, it would promote it and seek to encourage maximum take-up.

Payment in respect of parental leave would have made a real difference and progressed significantly the goal of enabling children to be cared for by their parents during the early years of their lives. It would have alleviated pressure for child care places and would have been of enormous help to parents who otherwise would have to put small infants into child care. This is most expensive in the case of children under 12 months who need a higher level of attention. The take-up rate of parental leave in this State is very low. We need to move progressively towards a situation where it is possible for a child to be cared for by one of its parents at home up to the age of three.

I want to touch on a number of other issues such as why the Government did not get rid of tax breaks for private hospitals. In effect, taxpayers will continue to subsidise private health care. A perfect example is an application for a private hospital near Dundalk in my constituency which was dealt with by the local authority. Effectively, the taxpayer would have funded the capital cost of the provision of a private hospital, equivalent to 15% in each of the six years, with 10% in the final year. We are told the taxpayer is offered services by the private hospital sector in return for such generosity on the part of the Government. That is so, but at what price?

To take one example, the cost of public renal dialysis for patients attending at the Beacon Clinic is €68,000 per year per patient. That is the private sector. Just across the Border, at Daisy Hill Hospital in Newry, public sector patients, who are there because of the lack of capacity in this State, can be catered for at a cost of €49,000 per patient per year, 41% less expensive than the private sector. How is this good value for taxpayers' money? How is the Government being responsible or caring of the health of the people of this State? Surely this is a perfect example of how the Government, as with the housing situation, should develop our public services and provide the necessary level of service for people while preventing the rip-off in the private sector. The Minister should address this issue in his reply.

Another example is the fact that the employee PRSI ceiling is regressive and my party seeks its abolition. This view has been supported by the Department of Social and Family Affairs, which stated in 2002:

Abolition of the ceiling would make the employee PRSI system more progressive. The current system is regressive in that those over the ceiling pay a smaller proportion of gross income in PRSI than those earning under the ceiling. Both receive the same benefits. Abolition of the ceiling would, therefore, strengthen the social solidarity element of the system in that a proportion of all income would be pooled for the benefit of all contributors.

In a submission to the tax strategy group on 28 September 2004 in respect of PRSI issues, the Department of Social and Family Affairs stated that the abolition of the employee ceiling would, "address the criticism that the employee contribution system is regressive because those over the ceiling pay a smaller proportion of gross income in PRSI than those under the ceiling". My party calls for revenue raised for the social insurance fund from this proposed abolition to be used for the introduction of pay in respect of parental leave. There are many other issues which I would like to deal with but, unfortunately, time is against us.

Joe Higgins (Dublin West, Socialist Party)
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The hype, rí-rá agus ruaille buaille that traditionally accompanies the Budget Statement and budget day badly needs to be decommissioned. It is a smokescreen which diverts attention very effectively from the following reality. As far as the economy and the lives of working people and working class families are concerned, when it comes to economic reality, the budget and its measures are a sideshow. The economic structures that dominate our society and the economic policies pursued by this Government, based on the fundamentals of neo-liberalist capitalism, dictate how people live, their living standards, their struggle to survive and how difficult it is to make ends meet. Around budget time the millionare-owned media — even the billionaire-owned media in a few cases — and the political parties in Government all collude to obfuscate this reality, namely, the mortgages people must pay, the cost of living and the stealth taxes that continue in one form or other. These are the issues that determine how people can live economically. In this regard the budget truly reflects some relatively minor adjustments.

To illustrate, in the budget a single worker on €30,000 or about the average industrial wage will gain in changes in the PAYE income tax, according to the Budget Statement, €402 in a full year. Take the example of a single worker who lives in Tyrellstown, a major new suburb of 2,000 homes or so in west Dublin. The single worker moved and purchased a home there, say, two years ago. However, the privatisation of public services such as the maintenance of open spaces, public liability insurance and lighting through the mechanism of the management companies foisted upon people such as this by the local authority, acting in place of the Government, means he or she must pay a management fee of, say, €400 a year. The money arising from the PAYE tax break envisaged yesterday will be spent before it appears in their pay packets. However, the Minister for Finance does not have to mention that in the House. It is one of the many dishonest stealth taxes placed on the shoulders of ordinary working people.

Up to three years ago in parts of north and west Dublin under the remit of Fingal County Council, refuse collection from households was met from the general taxation of working people. Every time a bin is emptied in Fingal, it costs €7.50, which amounts to €390 a year should a family have to put out a bin on a weekly basis. This is the same amount allegedly gained by a single worker earning €30,000 per annum in the budget. A second stealth tax, therefore, has been placed on the shoulders of working people, which the Minister does not have to mention and which he ignores conveniently.

The changes to child care and child benefit were announced with a great fanfare. The Budget Statement referred to an example of a married couple with a gross income of €40,000 per annum and two children under the age of six. The increases in the personal tax credit, child benefit and the child supplement are worth €2,323 in 2006, as it only covers nine months. However, this couple purchased a semi-detached three-bedroom house three years ago for €260,000. Ten years ago the home would have cost €60,000. The mortgage payments hanging around their necks reflect that grotesque increase in house prices. During that time, speculators and developers were allowed by the Government to run riot with the price of building land and homes, one of the most fundamental human needs. The increase in the price of a home, which that typical family is forced to pay, means the €2,323 gained in tax breaks and child benefit pales into insignificance by contrast with the outright robbery of mortgage payments resulting from the increase in house prices.

The records of the Central Statistics Office indicate that three years ago an average family home cost €262,000 in Dublin. Incredibly, within three years, the average price had jumped €100,000 with mortgage payments increasing accordingly. The average mortgage payment for a regular family home costing €300,000 is €1,437 per month whereas three years ago, the house would have cost €80,000 less and the family would have paid €400 less per month on its mortgage. A family purchasing a home this year will pay €4,800 per annum more on its mortgage than three years ago, yet the Minister and the Government expects us to be grateful for the provision of €2,300 in child care allowances.

The increases granted in the budget, which are generated by the hard earned taxes of the PAYE and self-employed workers, are absorbed by the profiteering and speculation the Government parties have allowed land owners, developers and big business to run rampant with since they first came to power. These factors influence the lives of working people 1,000 times more than the adjustments made on budget day, yet the print media provide acres of detailed coverage about the winners and losers today while these fundamental realities are not mentioned. The lives of working people are much more intense and difficulty nowadays as they try to make ends meet, than they were ten years ago as a result of the Government's policy of allowing speculators and private capitalists to run riot while workers pick up the tab. One can only expect this from the millionaires and billionaires who own the newspapers and who are part of the establishment.

The banks are another bastion of society, which have gained massively from the significant increases in house prices that are such a burden on working people. They have made profits hand over fist at the expense of young single workers and couples who will pay 30 and 40 year mortgages for virtually the rest of their days, yet the Government decided to abolish levies that would have taken a modest €100 million from these super profitable institutions. The Government decided to do nothing about the speculators and to leave them at it. This time last year, I exposed in the House the purchase of 11 acres of building land in south Dublin five years ago for €32 million and its resale in 2004 for €85 million, a speculative profit of €53 million in only four years. The speculators were not from outer space; they were the so-called cream of the establishment. Wealthy legal, business and medical personnel organised this entirely legal speculative scam. However, the apartments on that land will cost on average €200,000 in site costs alone before a brick is laid. In other words, the Government's policies are bleeding ordinary workers, particularly young people, and the adjustments in the budget are minor by contrast.

Similarly, yesterday, tax adjustments in recent years were not mentioned, which resulted in massive reductions in corporation tax. Since they were first introduced four years ago, big business has saved between €500 million and €600 million in tax. Capital gains tax changes have massively enriched speculators and tax breaks for private hospitals have been maintained. Everything reflects the fact that the Government is utterly wedded to a right wing economic policy and neoliberal capitalism and working people are suffering. All the rí-rá and nonsense that accompanies the budget is a diversion from that basic fact.

Is frithbhuaic amach agus amach an buiséad seo, mar is gnáth gach bliain. Rí-rá a thagann leis an mbuiséad sna nuachtáin agus na meáin cumarsáide i measc páirtithe polaitiúla. I ndáiríre is fothaispeántas ar thaobh an aonaigh an buiséad. Tógann seo aird ó pholasaithe an éite dheis agus bun struchtúir eacnamaíochta a bhfuil tionchar acu ar shaol an gnáth lucht oibre 1,000 uair níos mó ná an buiséad agus na mion-rudaí a rinneadh inné. Fothaispeántas ar thaobh an aonaigh 'sea an buiséad ach i lár an aonaigh chomh fada agus a bhaineann sé le gnáth lucht oibre — praghas tithíochta, cánacha faoi cheilt agus costais eile atá i gcónaí ag méadú. Sin is mó a chuireann isteach ar ghnáth lucht oibre agus a dhéanann an saol chomh deacair sin i láthair na huaire.

Tá an Rialtas ag déanamh mór dó féin ag teacht isteach anseo agus ag tabhairt cúpla céad euro in aghaidh na bliana do daoine aonaracha i gcáin ioncaim agus míle nó dhó le cúnamh leanaí. Ní faic sin i ndáiríre i gcomparáid leis an chostas uafásach atá curtha ar ghnáth-lucht oibre le blianta beaga anuas i gcostais millteanacha ó thaobh tithíochta agus cánach faoi-cheilt. Is sin an saol réadúil atá ag cur buairimh ar ghnáth-daoine anois.

Tá súil agam go mbeidh díospóireacht i bhfad níos leithne agus réadúla ar na ceisteanna seo chomh fada agus a bhainfidh siad le buiséid sna blianta os ár gcomhair.

Michael McDowell (Dublin South East, Progressive Democrats)
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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.

Denis Naughten (Longford-Roscommon, Fine Gael)
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That is because more people are paying tax at the higher rate.

Michael McDowell (Dublin South East, Progressive Democrats)
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Yes, more people are working. That is a very good point. The reason so many people were unemployed when Fine Gael and Labour were in office on the last occasion is because there was a high tax on work.

Liam Twomey (Wexford, Fine Gael)
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You have been around since 1985.

Michael McDowell (Dublin South East, Progressive Democrats)
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When the Government was elected in 1997, the rate of tax on capital gains was 40%.

Denis Naughten (Longford-Roscommon, Fine Gael)
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We were creating jobs at the same rate but we were not losing them.

Michael McDowell (Dublin South East, Progressive Democrats)
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Capital gains tax is now 20% and yet the State's yield from capital taxation has exploded from £168 million in the glorious days of the rainbow coalition to a budgeted €2.025 billion next year. Lower rates have again produced higher yields. I remember a Labour Party spokesman describing the plan of the former Minister, Mr. McCreevy, to reduce the rate of capital gains tax from 40% to 20% as a fiscal obscenity. Let him look at the figures now.

The same picture emerges when we look at corporation tax. Since 1995, the standard rate of corporation tax has been reduced to 12.5%. Let us see what has happened since 1995. Proceeds from corporation tax have jumped from £2 billion to a budgeted €6 billion in 2006. Lower tax in this case yet again produced higher yields.

It is interesting to look at what has happened in the Irish taxation system. Since the mid-1990s the balance of the Irish taxation system has changed with the State collecting more of its total tax take from corporation and capital taxes. Curiously, once we got the left out of power, corporation and capital taxes went up as a proportion of tax receipts. Therefore, we need to collect less from income tax and value added tax. The share of the total tax take from corporation and capital gains tax together has risen from 14% of the total tax rate under the rainbow coalition to 26% now. There has been a corresponding reduction in the share contributed by income tax and value added tax from 86% under the left dominated rainbow coalition to 74% now.

The benefits of our policies for ordinary working people can be illustrated looking at the income tax burden as it falls on a single person earning the average industrial wage. In 1997, a year when the economy was in great nick we are told, a person on the average industrial wage paid 28% income tax, more than a quarter of his or her income. By 2006, that will have fallen to just 16%. The reduction in the amount of tax taken from their wages has contributed to growing numbers of people wishing to work, as the Deputies opposite point out, and being able to find work, which is more important. Between 1997 and 2005, the total number of people working in the economy has grown from 1.5 million to 2 million.

The message from my party and our partners in Government is simple — lower rates produce higher yields and more jobs. Higher yields also provide for more spending. The Government has reduced tax rates and enjoyed rising tax yields. These increased tax revenues have allowed significant and generous increases in State spending. In 1997, net resources available to the Department of Health and Children under the rainbow coalition were £3.3 billion. Next year, that Department will have resources of €9.6 billion. Spending in that Department is up over 200% since 1997. The story is similar in other Departments. Resources for education are up 135% since 1997 and resources in the Department of Social and Family Affairs have more than doubled.

Bernard Durkan (Kildare North, Fine Gael)
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Why is the Minister focusing on 1997? He should pick another year.

Michael McDowell (Dublin South East, Progressive Democrats)
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Because it was the last time when we were in a position to see the colour of the Opposition's money and how it can ruin an economy. Some will say that yesterday's budget was more of a Fianna Fáil budget than a Progressive Democrats one. They will point to all the increased State spending as being a Fianna Fáil goal rather than a Progressive Democrats one. I could not disagree more. It never was and is not Progressive Democrats doctrine to amass vast wealth just to sit on it and admire ourselves.

Bernard Durkan (Kildare North, Fine Gael)
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Perching on telegraph poles is the Minister's approach.

Michael McDowell (Dublin South East, Progressive Democrats)
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It is our goal to strengthen our economy so as to increase the opportunities people have to develop themselves to their full potential. Yesterday's spending increases are ones the Progressive Democrats fully stand over. They represent the fruits of a low tax, high yield economic strategy.

Bernard Durkan (Kildare North, Fine Gael)
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And no police. That is another promise that was not kept.

Michael McDowell (Dublin South East, Progressive Democrats)
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From the late 1970s to the mid-1980s this country tried the opposite approach to that which the Government is following. That mistaken policy produced the disastrous combination of high spending, high tax rates, high unemployment, low tax yields and a budget deficit spiralling out of control.

Bernard Durkan (Kildare North, Fine Gael)
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Who started that?

Michael McDowell (Dublin South East, Progressive Democrats)
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It was only the political arrival of the Progressive Democrats and the national threat of bankruptcy that led Ireland to abandon that failed policy. The result since then has been an endorsement of our economic logic and our political philosophy. However, not everyone sees it that way. The Labour Party, for instance, cannot get rid of its reflexive instinct to meddle, muddle and increase taxes. Deputy Rabbitte stated in September 2005 that he wants to rebalance the income tax system. In essence, that means there is going to be more tax. Yet, the Labour Party ignores the fact we have already a highly progressive tax system.

I wish to put on record some figures certain people like to forget. The top 1% of income tax earners contribute 20% of total income tax receipts in our economy. Another 40% of total income tax receipts are paid by the top 4% of income tax earners. We have a broader, fairer and more progressive system of income tax and it will be made even fairer by yesterday's announcements limiting the size of private pensions and capping the availability of tax reliefs. That has always been a personal goal of mine; that nobody should be able to escape tax liability to the extent of being completely relieved of the tax burden because of clever tax planning and so avoid paying his or her share.

Denis Naughten (Longford-Roscommon, Fine Gael)
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The Minister might try to deal with the shootings around Dublin.

Bernard Durkan (Kildare North, Fine Gael)
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And the stabbings.

Michael McDowell (Dublin South East, Progressive Democrats)
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The Labour Party wants to go beyond what we have done. It wants a wealth tax. Deputy Rabbitte stated in The Irish Times on 24 February 2003: "You can't simply say we will impose what are still pretty hefty taxes on work and no taxes on wealth".

A single person on the average industrial wage will pay just 16% of his or her income in income tax next year compared to 28% when the parties opposite were last in Government. If Deputy Rabbitte thinks taxes on work are pretty hefty now, what agonies must he have suffered around the Cabinet table when they were nearly twice as high? The second point to note about his desire for a wealth tax is that it would rapidly become a property tax. A wealth tax would operate only as a property tax because paper wealth can be transferred offshore but property cannot. The burden of a wealth tax would end up falling on to property. The sad fact is that the Labour Party ignores the lower rates, higher yields, more spending formula of the past decade. The party's absence from this debate speaks volumes. Beset by the impulses of a failed ideology, it would put our prosperity at risk.

It is interesting that Deputy Rabbitte said recently he was there to comfort the afflicted and to afflict the comfortable. This shows the narrow, envy-driven ideology which lies at the back of his proposals. It is interesting that in these failed policies of the past, the Labour Party is joined by Sinn Féin, which wants to increase our rates of corporation tax and income tax. We just heard now for the first time that it also wants to increase PRSI, to take away the ceiling on employees' contribution. Now we know what is happening.

Séamus Pattison (Carlow-Kilkenny, Labour)
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The Minister should conclude.

Bernard Durkan (Kildare North, Fine Gael)
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The Leas-Cheann Comhairle is right.

Michael McDowell (Dublin South East, Progressive Democrats)
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I am finishing. The Green Party mentioned today that it wants to introduce taxes on fuel, a site value tax, new pollution levies and increase capital gains tax.

Liam Twomey (Wexford, Fine Gael)
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They want to introduce a carbon tax.

Séamus Pattison (Carlow-Kilkenny, Labour)
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Order.

Michael McDowell (Dublin South East, Progressive Democrats)
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The choice is very simple. We can go forward and build a new Ireland on the policies that have made this country successful or go back down the cul-de-sac of social and economic failure which is well populated by the Members on the benches opposite.

Bernard Durkan (Kildare North, Fine Gael)
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Speaking of cul-de-sacs, a lot of bodies have been dragged out of them in recent times.

Séamus Pattison (Carlow-Kilkenny, Labour)
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Order.

Bernard Durkan (Kildare North, Fine Gael)
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I am sorry. I just get upset sometimes.

Martin Cullen (Waterford, Fianna Fail)
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It is easy to upset him. I am not surprised he is upset. He must be frothing with upset.

Bernard Durkan (Kildare North, Fine Gael)
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It will be time enough when the Minister starts because he is the man who introduced electronic ballot boxes.

Martin Cullen (Waterford, Fianna Fail)
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That is an old chestnut.

Bernard Durkan (Kildare North, Fine Gael)
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Before he starts, he should apologise to the Irish people——

Martin Cullen (Waterford, Fianna Fail)
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It is a bit worn down. The Deputy should be a bit more updated and original.

Bernard Durkan (Kildare North, Fine Gael)
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——for perpetrating that on them. They did nothing to deserve that. Step to the ballot boxes.

Michael McDowell (Dublin South East, Progressive Democrats)
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Would somebody throw the Deputy some meat?

Martin Cullen (Waterford, Fianna Fail)
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Throw him a few sprats. I welcome the opportunity to speak on budget 2006, which is targeted at improving the lives of people across the country and to sustain the economic gains we have made in recent years. The people have worked hard to generate the resources. Our job is to focus these resources to ensure maximum return for the taxes paid and budget 2006 does that.

Denis Naughten (Longford-Roscommon, Fine Gael)
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It must be an election year.

Martin Cullen (Waterford, Fianna Fail)
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The Deputies opposite fail to understand that what will re-elect this Government is the sustained development of this country by Fianna Fáil and the Progressive Democrats. It is not about one budget but about building an inclusive society, which we have done consistently in every budget and in every positive way.

Denis Naughten (Longford-Roscommon, Fine Gael)
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Inclusive in that everyone is sitting on the roads instead.

Martin Cullen (Waterford, Fianna Fail)
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As my colleague, the Minister for Justice, Equality and Law Reform, said, nobody in Ireland wants to return to the days ofhigh unemployment, spending, taxes and borrowing——

Bernard Durkan (Kildare North, Fine Gael)
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Long traffic jams.

Martin Cullen (Waterford, Fianna Fail)
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——which was the consistent hallmark of Fine Gael and Labour in government.

Bernard Durkan (Kildare North, Fine Gael)
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Rip-off republic.

Martin Cullen (Waterford, Fianna Fail)
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If one goes back to the speeches of pre-1973 and pre-1983 and the last Fine Gael and Labour Governments, to the last time they were in government——

Bernard Durkan (Kildare North, Fine Gael)
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The Red Cow roundabout, does the Minister remember that? Technology put to the test.

Martin Cullen (Waterford, Fianna Fail)
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——and compares them to what they say today, absolutely nothing has changed. It is remarkable.

Bernard Durkan (Kildare North, Fine Gael)
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What about the tunnel that no one can enter?

Martin Cullen (Waterford, Fianna Fail)
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The earlier speeches could be transposed to today. The language and philosophy are the same.

Liam Twomey (Wexford, Fine Gael)
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The Minister is not very busy.

Bernard Durkan (Kildare North, Fine Gael)
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The swimming pools that cannot keep the water in.

Martin Cullen (Waterford, Fianna Fail)
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Their problem is a consistent one. They promise everything and can deliver absolutely nothing because their promises are, as usual, utterly unrealistic.

Bernard Durkan (Kildare North, Fine Gael)
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Is the Leas-Cheann Comhairle surprised that electronic voting was not inflicted on the Irish people?

Martin Cullen (Waterford, Fianna Fail)
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That characterises Fine Gael and Labour in government.

Denis Naughten (Longford-Roscommon, Fine Gael)
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Fianna Fáil is characterised by promising everything and delivering nothing.

Martin Cullen (Waterford, Fianna Fail)
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The difference on the next occasion — if they ever get there, which I doubt — will be that they will have to throw the Greens into the mix and maybe Sinn Féin and the Independents who have utterly contradictory policies in all areas.

Bernard Durkan (Kildare North, Fine Gael)
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Fianna Fáil has already given in to Sinn Féin.

Martin Cullen (Waterford, Fianna Fail)
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Not alone would we have two parties looking in different directions but the possibility of at least three or even a combination of four.

Liam Twomey (Wexford, Fine Gael)
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The Government does that.

Martin Cullen (Waterford, Fianna Fail)
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It is easy to predict what would happen to Ireland if these people were successful in returning to power.

Bernard Durkan (Kildare North, Fine Gael)
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We have had it from over there for long enough.

Martin Cullen (Waterford, Fianna Fail)
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The consequence of decades of under-investment in our transport infrastructure is indisputable. It is clear that the Government has put in place the largest and most sustained programme of infrastructural investment in our history.

Liam Twomey (Wexford, Fine Gael)
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Here we go.

Martin Cullen (Waterford, Fianna Fail)
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It is almost impossible to travel a significant distance——

Liam Twomey (Wexford, Fine Gael)
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That is for sure.

Martin Cullen (Waterford, Fianna Fail)
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——without coming across a major project that is under way. Increasingly, it is also impossible to travel a significant distance without benefiting from a major project which has been completed on budget and ahead of schedule.

Liam Twomey (Wexford, Fine Gael)
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Or roadworks.

Martin Cullen (Waterford, Fianna Fail)
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If the Deputies feel that way about it, they might tell Fine Gael mayors, cathaoirligh and councillors throughout the country not to knock me down when they want to get into photographs. Every week, I travel the country to show pride in the developments.

Bernard Durkan (Kildare North, Fine Gael)
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The Minister should reassemble the ballot boxes and bring them with him, then nobody will try to knock him down.

Denis Naughten (Longford-Roscommon, Fine Gael)
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It is hard to listen to the people.

Martin Cullen (Waterford, Fianna Fail)
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While the Deputies' local colleagues understand what is going on and are capable of seeing the benefits, obviously the colleagues in Dáil Éireann have a different view.

Liam Twomey (Wexford, Fine Gael)
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Is that in between reading speeches which are 30 years old?

Martin Cullen (Waterford, Fianna Fail)
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It is typical of the two-faced look of Fine Gael every time it tries to put a policy forward.

While the progress to date is real, it reinforces rather than questions the need for further sustained action to be underpinned by a clear vision of our objectives. The importance of transport to the economy cannot be underestimated. The National Competitiveness Council has consistently highlighted the need for investment in transport infrastructure in its annual competitiveness reports.

Excellent progress has been made since Fianna Fáil and the Progressive Democrats came into office in 1997. The road network has been and is being transformed, DART capacity has doubled, the Luas was built, there has been real rail improvements for the first time in decades and a renewed and expanded bus service is in place. These are real and tangible benefits, which we can too easily take for granted, and they have changed the transport experience for thousands of people.

Bernard Durkan (Kildare North, Fine Gael)
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The Minister is right about that.

Martin Cullen (Waterford, Fianna Fail)
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If it was down to Fine Gael, there would be no public transport. If one looks at that party's record of investment, there would be nothing, the country would be at a standstill.

Bernard Durkan (Kildare North, Fine Gael)
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At least we will be able to get into the tunnel.

Martin Cullen (Waterford, Fianna Fail)
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However, the figures indicate that their plan was to keep high levels of unemployment so that fewer people would try to go to work in those days. They yearn for the days when they could pretend to represent people in this country and promise to do things for them.

Liam Twomey (Wexford, Fine Gael)
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He has tunnel vision on that.

Martin Cullen (Waterford, Fianna Fail)
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The consistent experience of Irish people over three decades of Fine Gael in office with the Labour Party has been of abysmal results.

Bernard Durkan (Kildare North, Fine Gael)
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If we had as many consultants, it would have reduced unemployment levels no end.

Martin Cullen (Waterford, Fianna Fail)
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Challenges remain and our population is growing. As we become more prosperous, the number of two car households is increasing. Lifestyles are also changing. Decisions on changing jobs or houses are major ones which affect family life. House prices and not wishing to interrupt children's education impact on the way we live. This in turn impacts on transport infrastructure. These are the challenges presented by a successful economy and the Government has set about meeting these challenges.

In last year's budget, my Department was given the extraordinary opportunity by the Government to prepare a plan to transform this country's transport network with a ten-year financial framework. The opportunity was great but the challenge immense.

Liam Twomey (Wexford, Fine Gael)
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Nobody believed him.

Martin Cullen (Waterford, Fianna Fail)
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Transport 21 is our integrated and focused costed response to that opportunity.

Denis Naughten (Longford-Roscommon, Fine Gael)
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Is it costed?

Martin Cullen (Waterford, Fianna Fail)
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It is an unprecedented commitment on the part of Government and it recognises the importance of a world class public——

Bernard Durkan (Kildare North, Fine Gael)
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Is it safe to allow him on the N7?

Martin Cullen (Waterford, Fianna Fail)
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The fact that there will be a metro and Luas in this city must be galling, but I am afraid that the Deputies will have to live with it for many decades to come.

Denis Naughten (Longford-Roscommon, Fine Gael)
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A bit like electronic voting.

Martin Cullen (Waterford, Fianna Fail)
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The leader of Fine Gael described current investment in Luas as a waste of time and a project that would never be realised. Dublin Fine Gael Deputies are singing a different tune today and are repeating the old nonsense they spoke prior to the Luas coming into operation for people in this gay capital city of ours.

Budget 2006 represents the commencement of the €34.4 billion investment in Transport 21. That programme will dramatically increase the choices available to transport users, enhance the ability of businesses to efficiently transport their goods and contribute to balanced regional development, as envisioned in the national spatial strategy and the regional planning guidelines. Most importantly, Transport 21 is about connectivity. It provides the basis for an integrated transport network, particularly for the greater Dublin area.

The availability of a ten-year funding framework has given us a unique opportunity to set out in Transport 21 a long-term investment programme for an integrated transport system. That investment will not come cheaply because the bill for Transport 21 will amount to a staggering €34.4 billion. However, the pay-off will be a complete and welcome transformation of our transport system, not only for this generation but for those to come.

Transport 21 will also provide for major investment in our regional airports, which have an important complementary role to play in promoting regional integration. Traffic to regional airports amounted to 1 million passengers in 2004. Regional airports can have a role to play in encouraging inward investment and tourism. Budget 2006 outlines an injection of additional investment in our regional airports. In 2006, €15 million is being allocated for capital grants to these airports, an €11 million increase in one year.

Budget 2006 ensures that Transport 21 gets off to an excellent start. The year ahead will see the continued roll-out of the motorway programme, construction of more bypasses across the country, the building of the new docklands railway station, the start of a process which will see the reopening of the western rail corridor, the Kildare rail routes, DART upgrading and the delivery of new rolling stock.

Bernard Durkan (Kildare North, Fine Gael)
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That is for the short trains.

Martin Cullen (Waterford, Fianna Fail)
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Work will commence on the Cherrywood Luas extension, while planning of other major infrastructure projects will be advanced.

Liam Twomey (Wexford, Fine Gael)
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The Government is going to drain the Shannon.

Martin Cullen (Waterford, Fianna Fail)
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The Government, through Transport 21 and backed by budget 2006, is working to deliver a transport infrastructure that supports economic activity across the nation and enhances the quality of life of every citizen. We will continue to work to build a 21st century infrastructure for a 21st century country, an infrastructure network that will connect communities and promote prosperity for generations to come.

The challenge is for other political parties to state what they would not do in the context of all the actions being taken by the Government and to spell out where they would spend money if they ever got into power.

Denis Naughten (Longford-Roscommon, Fine Gael)
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On infrastructure, not consultants.

Martin Cullen (Waterford, Fianna Fail)
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Irish people will see that the Opposition has promised, in every single area of government in recent years, an incredible roll-out of projects which, if achieved, would lead to a financial burden on the people . If it achieves even one tenth of what it has promised, it will mean a massive increase in taxation for ordinary people and a return to the borrowing levels that almost bankrupt Ireland in the 1980s.

Bernard Durkan (Kildare North, Fine Gael)
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I will tell the Minister about bankruptcy. Motorists are charged €4.5 billion to sit on the M50 all day. That is what will bankrupt the country.

Martin Cullen (Waterford, Fianna Fail)
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That is the sort of financial rectitude and management that Fine Gael, Labour, the Green Party and others are bringing to this debate. It is well past a reasonable time for certain people to spell out how they are going to spend the people's money and explain why they are unhappy with how we are spending the resources of the people. This is the most dynamic economy in the world. It is one of the most socially cohesive and successful countries in the world. It is a country of challenges, the great challenges of a very successful economy. We no longer have to deal with the challenges of failure, the legacy of failure through which Fine Gael and Labour led this country for three decades. On each occasion, Fianna Fáil had to come back into Government not alone to sort out the mess they left but also to develop this country.

Bernard Durkan (Kildare North, Fine Gael)
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The Minister was not even in Fianna Fáil then. He was only there a short time.

Martin Cullen (Waterford, Fianna Fail)
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The proof is there. The number of people at work has grown from 1.2 million to almost 2 million. We reduced unemployment to levels of 4%. We are the most dynamic and successful economy in Europe. We have social cohesion, investment in education, health and services, along with the development of the local government structure, the national spatial strategy, Transport 21, and now a major roll-out, in the charge of my colleague, Deputy Brian Lenihan, of the child care provision programme going forward.

Bernard Durkan (Kildare North, Fine Gael)
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"Going forward" is an awful expression.

Martin Cullen (Waterford, Fianna Fail)
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As the Minister for Justice, Equality and Law Reform, Deputy McDowell, said a few moments ago, who would have believed a few years ago that a family with three children under six years of age would be getting a payment from the State of nearly €8,500? That is an incredible commitment by Fianna Fáil in Government to the people. This Government, with the policies and philosophies which have underpinned it for more than ten years, and in reality back to 1997, has created balance and fairness, redistributing wealth and ensuring that everyone had an opportunity to fulfil their dreams, to work, to get their children into second and third level education and to access right across the spectrum.

Once and for all we ended the curse of lost generations. We were at a stage where some 40,000 young people were emigrating in years past. Now we have reached the stage of immigration into Ireland. People of the world want to be in Ireland. People in Europe want to be here, to work here, to live here and participate in Irish society. We are becoming a much more dynamic, cosmopolitan society but one founded on what true democratic republicanism is about. That is what underpins and characterises this country today.

Bernard Durkan (Kildare North, Fine Gael)
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A lot of damage done, more to do.

Martin Cullen (Waterford, Fianna Fail)
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This is a country of success. I understand the difficulties the Opposition faces in having to look over at this side of the House and see what real success and proper management of the economy can deliver. They can look at their own opportunities and the failures they had in the past.

Denis Naughten (Longford-Roscommon, Fine Gael)
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I wish to share time with Deputies Twomey and Enright.

I welcome the opportunity to speak on the budget. It is an important opportunity to highlight significant weaknesses from the point of view of agriculture. We are now in an environment structured by the CAP reform, the WTO negotiations, the impending nitrates action plan and the impending closure of our sugar industry. I had hoped that in that context we would have seen some positive developments from the Minister for Finance in his presentation yesterday, but he ignored the entire area.

I will give an example of where I thought some progress might have been made. We are currently spending 4% of our total research and development budget on the food industry. The food industry in this country is worth more than €11 billion annually. It accounts for 24% of our exports, yet just 4% of the total R&D budget is spent in that area, with nothing done to address the deficit.

Agricultural incomes have collapsed. Last week, the Minister for Agriculture and Food, Deputy Coughlan, was pictured all over the place with numerous lovely cheques from the single farm payment scheme, but in reality the average farmer in Ireland will have an income this year of €15,557. That includes the single farm payment. Out of that, input costs come to €15,478, and the Government's stealth charges put in place over the past few years come to an another €3,978. Based on those figures, what the single farm payment amounts to for the average Irish farmer is a nett loss of €75 per week.

Farmers are not benefitting from the single farm payment. Yesterday, the Minister for Agriculture and Food paid lip service to the issue of agriculture. One key objective raised by all the farming organisations was that of farm consolidation. Some 30% of farms are in four or more parcels of land and for the past few years farming organisations have been pleading for the introduction of roll-over relief in relation to stamp duty for farmers who want to improve their efficiency and consolidate their farms. No recognition was given to that yesterday.

We have the crazy situation where Deputy Parlon, when leader of the IFA, negotiated a deal with the Government with regard to the compulsory purchase of land whereby farmers would get roll-over relief in regard to capital gains tax. The moment Deputy Parlon joined the Government benches, after the election, he and the Minister for Finance rescinded the deal made. Farmers are now being taxed on the compulsory purchase of land by the State with regard to our motorways around the country. A gun is being put to their heads and the Government then takes 20% in tax off the compulsory purchase price given. That is an immoral, disgraceful situation, and a spineless Minister is not prepared to even discuss the matter in the House. That is the reality farmers must deal with on a daily basis. The issue of farm consolidation was completely ignored in the budget even though the Minister paid lip service to agriculture.

I will give an example of what the budget means to farmers. A progressive farmer with an income of €30,000 per annum and two children over the age of six has benefitted from the budget by €5 weekly. Admittedly, if he had two children under the age of six, he would benefit by €33 weekly. However, the Minister also made an announcement yesterday with regard to the PAYE tax credit. This has increased by €220 to €1,490, which means farmers are losing that additional tax credit because they happen to be self-employed. They are losing out compared to other taxpayers within the economy and no recognition has been given to their income loss and the dramatic fall-off in income which has taken place over the past number of years.

Farm families and home carers did not get one extra cent from this Government. The tax credit of €770 was not touched in the budget. Incentives were given with regard to betting tax but there was nothing for the housewife who decides to stay at home and care for her children. No recognition was afforded her, nor was there any recognition for those caring for the elderly with regard to the tax system. They were completely ignored.

It is a great misfortune that we do not recognise women who work on farms and in homes in rural Ireland. Many of them work in partnership with their husbands. In some cases they own the land, but because tax and PRSI are paid by the husband, no recognition is given to these women with regard to social welfare. That is wrong and needs to be examined. No recognition was given to them in this budget with regard to the home carer's credit. Anyone with children and unfortunate enough to be on social welfare, whether it be farm assist or any other form of welfare, gets no recognition in terms of the child dependant allowance. It did not increase by one cent in this budget, even though this Government is supposed to be prioritising children in the budget. Those in the most marginal elements of society were completely ignored compared to other earners in society.

There was a silver lining with regard to biofuels. The Minister for Agriculture and Food was rushing out of the Chamber yesterday, tripping over herself to welcome that. However, in order to avail of the new biofuels package, one has to convert vehicles, and many people will not go to the cost of converting their vehicles to take biofuels. We should have introduced a measure whereby one could blend biofuels into existing fuels. In Austria, for example, 5% of the biofuel produced is mixed with petrol and 2% with diesel. Such products could be used in all vehicles and would ensure a major take-up of biofuels. It would also provide the incentive to farmers to grow biofuels. Such a measure was not introduced in this budget, however. Instead, more money was taken from farmers in terms of the VAT refund for non-VAT registered farmers. Last year, the Taoiseach gave a commitment that this provision would be reviewed this year. However, he has turned his back on farmers in this regard. Input costs have risen, returns have fallen and farmers are losing at least 1% in this area. Based on their current tight margins, this will have a significant impact.

The measures regarding stamp duty for young trained farmers are a positive development. There are many more anomalies, however, in inheritance tax and stamp duty which have not been addressed. The issue of land leases was examined but inter-family land leases are ignored. Many farming families lease their land to a son or daughter but no recognition was given to this issue by the Minister for Finance. He clapped himself on the back about the €1 billion multi-annual budget for farm investment. The reality, however, is that this €1 billion budget will be taken up in implementing the prescriptive rules laid down under the nitrates directive. It will not lead to any additional efficiency but rather to additional costs and regulations for farmers and the possibility of being prosecuted for using one bag of fertiliser more than set out in the rules. That is what has been proposed by the Government and what it plans to implement. There is very little in this for farmers and farming families.

The Minister for Finance yesterday announced €110 million for services for the elderly. This is a far cry from the €160 million that has been lost on the PPARS system. Three weeks ago, the Tánaiste and Minister for Health and Children came to County Roscommon and paid lip-service to the issue of services for the elderly there. We cannot recruit the specialist staff to provide these services no matter how much money is allocated. An allocation of €110 million or even €1 billion is no good unless we address the issue of recruitment.

When the Tánaiste visited Roscommon she also made the announcement that she would appoint a third consultant physician at the county hospital in Roscommon. However, she did not inform us that it would be a temporary appointment for a six-month period. The Government adopts a deceptive attitude on these and other issues. It speaks with a forked tongue about every commitment it has given and then goes behind our backs and undermines what has already been delivered. This is a spineless Government that is prepared to make announcements but not to implement and deliver its promises. A prime example of this is the guillotine hanging over the accident and emergency unit at the county hospital in Roscommon. The Tánaiste will not be back there for some time.

Liam Twomey (Wexford, Fine Gael)
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The main focus in yesterday's budget was child care. To listen to the earlier contribution of the Minister for Transport, Deputy Cullen, one would believe there are no transport problems or only a minor one that will be solved by him through Transport 21. The issue of child care exploded onto the political scene, as far as the Government was concerned, during the by-elections in Meath and Kildare North. For residents there and elsewhere, the problem of child care is as much a matter of paying for it as of getting to see their children. Some parents leave home at 7 a.m. and do not return until 7 p.m.

No Government Members ever ask: "What about the children?" If they made some minor inquiries, they would realise there is now a much greater prevalence of behavioural problems among children. Many are put on medication, the need for which is doubtful. Many of these problems arise in a context where children see very little of their parents. The Government can produce figures of €150 per month and €1,000 per year but the problem is the commuting times that keep parents apart from their young children. In some cases, children believe their minder is a parent because they spend more waking hours with the minder than with their parents. The focus on child care does not take account of the child and the Government is failing completely in this regard. Ministers get a quick glimpse of an idea on the front page of the newspapers and go with that. The focus is unbelievably narrow.

It was first announced in the 2003 budget that excise relief would be given to farmers who grow biofuels, such as oilseed rape, and convert them into oil for vehicles. It was a year and half later, however, before any concessions were made in this regard. This is similar to the decentralisation experience. Developments take place so slowly under this Government that a five-year plan is needed for any initiative. The first year is to announce a scheme and the next four years are taken up with some form of implementation before the next general election takes place.

This time last year, the Tánaiste and Minister for Health and Children announced the ten-point plan for accident and emergency services. There was much fanfare about how she would solve the problems in this area. Some 200,000 doctor-only medical cards were to be introduced along with 30,000 regular cards. This Government has a major credibility problem because it does not deliver on its announcements. It is as if Ministers believe that all that must be done each year is to come out with a new set of announcements and they will be doing a good job.

The Minister for Transport, Deputy Cullen, is particularly affected by this affliction. If he were to announce in the morning that he plans to drain the River Shannon, many people would find this more credible than his Transport 21 announcement. People no longer believe what the Government says because they are aware of how it wastes money. We have had the PPARS and FISP systems. We have a health strategy that has not been delivered in the most minor way after five years. One could trip over Ministers making daily announcements about broadband. However, the Government has failed to deliver in this regard.

In regard to the health service, only €110 million was announced for the care of older people. We must ask whether this is enough and whether the Government will deliver. I suspect more will be delivered in 2006 for the simple reason that not since 2001 have we seen the Government making an effort on any of these issues. That this is a pre-election year is the only reason we might see something delivered. Nothing has been delivered in the past four years. The €110 million could be divided to cater for the needs of older people living in their own homes and those needing nursing home care.

The Tánaiste's announcement today gives the impression that subvention rates have increased in the nursing home sector but this is not the case. The same rates that have applied since 2001 — between €130 and €190 — will apply next year. The only aspect that has changed is that the means testing is altered slightly. What is important, however, is that average costs of nursing homes, especially in the greater Dublin region, vary between €1,000 and €1,500. The change desired by those who require nursing home care was an increase in rates so that families could more easily avail of private nursing home care. There are very few public nursing home beds and there has been an overall reduction in numbers since 2001.

In her speech the Tánaiste laid great emphasis on the fact that one in three people in nursing homes, both public and private, could stay in their own homes if there were appropriate nursing or home help. It must be a long time since the Tánaiste visited a public nursing home if she believes that one in three patients could return home. The reasons patients are in nursing homes in the first place is that their immobility or illness does not allow them to live at home. The actual cost of private nursing home care is not in line with the pathetically low level of grant assistance.