Martin Mansergh (Fianna Fail)

That was a complete exaggeration and misreading of the situation. The public finances were far stronger than anticipated and benchmarking is not causing a major problem.

Revenue is needed for improved public services. It is a source of immense satisfaction that since 1996, the last year of the rainbow Government, revenue has been doubled from €16 billion to approximately €33 billion. That has been achieved at the same time as tax rates have been substantially reduced. Economic policy is all about maximising tax revenue, not maximising tax rates. Maximising tax revenue may even, in certain situations, involve cutting tax rates. We have had experience of that.

I do not agree with suggestions that the headline rate of income tax should be raised by 1% or 2% for health services or anything else. We need to maximise revenue for public services and the Government is going the right way about it. On a year to year basis there is flexibility in the tax system for adjustments. In some years it is possible to index the tax rate or over-index it while in other years it is necessary to under-index it. In the last budget, the concentration of the resources available was on the low income groups, the people at the bottom of the pile. This resulted in up to 90% of people on the minimum wage being taken out of the tax net. Everybody benefited. I am sure adjustment of the bands to take account of inflation over the past couple of years will more than likely be a topic of conversation among the social partners. However, I have no worries on that score.

There are concerns about corporation tax in the new member states but our headline rate of corporation tax, at 12.5%, is lower than that of any of the accession countries. Obviously, we must keep a sharp eye on our competitiveness. The Opposition in its amendment lists 27 stealth taxes. The term "stealth taxes" has been misused. It includes the increase of bus fares in line with inflation. That is not a tax, still less a stealth tax. What is stealthy about it? The Opposition has tried to throw every conceivable item into this category but the public perfectly understands——