Joe O'Toole (Independent)

I welcome the Minister of State. It is good to have the opportunity, at this early stage, to comment on the Budget Statement, which is a curate's egg. There are things in it which can be looked at positively, but there are others which will give rise to huge problems in the long term.

On the down side is the reduction in public service staff numbers which will mean war in primary and secondary schools that fail to secure the additional teachers they require. That is unsustainable. I have been there, done that and seen it happen before. It will just not work. On the positive side, any day we stuff €500,000 into the back of the ATM machine cannot be bad. I look forward to restocking it in the course of negotiations over the next couple of weeks to ensure that the flow is maintained.

What concerns me most about the budget is the failure to index link gains in personal income taxation over the last three to four years. The vast majority of people will have their gains eroded by inflation over the course of 2003. I choose the word "eroded" carefully and I do not employ the word "eliminated". If there is going to be a standstill budget, there should be a 4.5% improvement in income tax thresholds and bands. I acknowledge that this is only relevant to people earning in excess of €20,000 or €25,000 a year and that for those on lower incomes, inflation will effectively be neutralised. At least their position will be maintained.

The commitment to the lower paid, which is reflected in the removal from the tax net of certain persons, is welcome. At pre-budget and pre-Estimate meetings with the Minister for Finance I appealed to him to take those on the minimum wage out of the tax net. I regret that has not been done but I recognise there has been movement in that direction. I look forward to bringing that to the final stage as soon as possible.