Eamon Scanlon (Fianna Fail)

I welcome the Minister and his staff to the House. I welcome the Bill. I congratulate the Minister and his staff on his firm control of the public finances. The Government's fiscal policy was endorsed by the European Commission a short time ago. The suitability of the Minister's budgetary policy has been endorsed by the Central Bank and the ESRI in recent reports.

I am glad that the Bill's impact on inflation will be minimal, the budget deficit is prudent and discipline in current expenditure looks set to continue. We have been experiencing an international downturn, but so far we have survived it better than most other countries. Nobody can dispute that the downturn has been disappointing and painful for some and that tough choices have had to be made, but we can be grateful we have a Government that acts decisively.

The public recognises the need to have fiscal restraint and to avoid excessive borrowing, which is the real stealth tax. We need to limit our spending to what we can afford. When I first entered the House, the national debt was over 100% of GNP and the IMF was at the door because of irresponsible borrowing policies pursued by Governments of all stripes between 1972 and 1987. There are encouraging signs, such as strong domestic and US growth and Ireland's GNP growth figures for the first few months of 2004.

The fall in inflation is welcome. A great deal of nonsense is talked about inflation. The rise in inflation in recent times was caused by the euro's weakness and the fact that much of our trade is with countries outside the eurozone. In any case, inflation is now falling, which is especially welcome in terms of our competitiveness. I hope this decrease will encourage moderation in pay rises when the discussions take place.

The Bill before the House yet again reaffirms Fianna Fáil's commitment to the less well-off in our society. No Minister for Finance has provided more for the lower-paid than the present incumbent. The budget protected the weaker sections of the community through substantial real increases in welfare payments. Social welfare expenditure is twice what it was in 1997, even though employment has been halved.

It is not just through social welfare increases ahead of the rate of inflation that the Government has done its duty. It has also improved the tax position of the lower-paid. The Bill delivers an increased employee credit, which ensures that tax is not payable on up to 90% of the minimum wage. When the minimum wage was increased in April 2000, less than 64% of those earning it were exempt from paying tax. The minimum wage was increased to €7 on 1 February last and it is now the third highest such wage in the EU. On a monthly basis, it is almost three times that of Portugal.

Some 700,000 people will be exempt from income tax in 2004, representing an increase of 40,000 from 2003 and of almost 300,000 since 1997. A single earner's entry point to the tax system has increased to €246 per week from €223 in 2003. As the Minister stated after the introduction of the budget, the average tax rate for a person on the average industrial wage will be ten percentage points lower than it was in 1997. An increasing proportion of those on the tax record — over 35% of all earners — will pay no tax this year.

The Finance Bill will legally enact the Government's provisions to foster enterprise and to protect our jobs base for the future by putting in place measures to support our ability to sustain and expand employment. I am pleased that the rural renewal scheme is in place, particularly in the west. It has made a difference and brought benefits to parts of counties Leitrim, Roscommon and Sligo. A young couple can buy a three-bedroom semi-detached house in a nice housing scheme for €150,000. I have spoken to a number of friends in the Civil Service who were fortunate enough to have mortgages to help them to buy their homes ten years ago. I am aware that such people, who have equity of almost €300,000 in respect of their Dublin homes, are only too delighted to move. People from Sligo are only too delighted to move from Dublin to Sligo, where they can buy a home for approximately €150,000.

It is important that we acknowledge the Minister's extension of the timeframe for the rural renewal scheme from the end of 2004 to June 2006, in order to complete construction. I congratulate the Minister on that necessary change. Planning permission has been secured for a number of developments and a number of developments are in planning at present, despite the best efforts of some councillors and the changes made to county development plans. I know people who applied for planning permission a month ago for small schemes of between 18 and 20 houses in the rural renewal areas. The first problem is having the application validated. Then there is a request for further information and even though we do not have our development plans, further information can only be requested once. Now there is a new problem: a request for clarification, which takes another five or six weeks. While the timeframe to build is sufficient, I ask the Minister not to close the door on schemes for which permission has not been granted by the end of 2004 because there are serious hold-ups in the planning process.