John Dardis (Progressive Democrats)

I was explaining to Senator Norris that if he came to this side of the House he would get his full ten minutes. He has not accepted that invitation, obviously.

I welcome the budget and will seek to put it in an overall context before discussing its detail. It is within the overall context that I find most to celebrate. What is being done in the area of disability, social welfare and the more needy in society in terms of the old age pension and so on is very much to be welcomed, particularly the fact that those increases are well in excess of the predicted level of inflation. The main achievement, however, is that the economic ship that has been so well steered by Deputy McCreevy when he was Minister for Finance, continues in the same direction under the Minister, Deputy Cowen. As the Minister explained in his concluding remarks, it required balanced, consistent policy, fairness in the distribution of resources and efficiency in the delivery of public services. That summarises well what the budget is doing and what the Minister, Deputy Cowen, has done.

If we were to increase public spending by an enormous amount, and not to control it, allowing inflation to run rampant, all the achievements that have been gained over several years would have been lost. There is a significant figure here, namely, the relationship between gross domestic product, GDP, and gross national product, GNP. The figures for this year are for GDP to increase by 5.3% and GNP by 4.9% compared to 2001 where GDP increased by 6% and GNP by 3.8%. The significance of that is that the Irish domestic economy is contributing to the engine of growth, whereas previously external investment was the main growth contributor. Those figures are singularly gratifying and something I believe both the previous and current Ministers for Finance can take a great deal of satisfaction from, as indeed can the entire Government.

That overall economic governance has allowed resources to be allocated to the areas most in need. I reject the proposition that this is a repositioning. If one looks at the figures in terms of increases in social welfare, the old age pension and children's allowances over the lifetime of this and the previous Government, one sees that this trend has been consistent right from the start. One figure demonstrates that point while there are many others in the budget which support it. In 1997, a family with two children got €672 per year in children's allowances and now it gets €3,400. The same is true of old age pensions. It means the targets that were set under An Agreed Programme for Government can be met. We are well on the way to achieving those targets. I accept some of the caveats Senator Mansergh outlined with regard to the levels, particularly regarding the old age pension. I accept that point, but we are well on the way to achieving the targets provided overall governance maintains its steady course.

The Minister in his concluding remarks summarised well what the budget was about. It radically improves the funding for the delivery of services for the disabled and increases social welfare rates by well above the rate of inflation. It frees those on the minimum wage from income tax. It seeks to reinforce the equity of the tax system, through the plan to reform, which he outlined. It keeps inflation low to help those on lower incomes and that is a key point. Everything can be lost if inflation increases and the Government contributes to inflation.

The Minister also said the budget enhanced capital spending to improve the public services. He made a point earlier in his speech, which I regard as important, when he said we should not be shy about our achievements. Those of us who are on the Joint Committee on European Affairs were in Turkey the week before last. Countries much larger and much more powerful than Ireland are still fascinated as to how this economic miracle was achieved. That is something to celebrate, irrespective of what party one belongs to, that Ireland plc is being held up as a model to the world.

We saw what the economists had to say about us when previously they were talking about the "sick man of Europe" and the fact that the International Monetary Fund would have to intervene and take over. There has been a radical change which has transformed our self-esteem, the vision of our place in the world and which has taken us out from under the shadow of the power across the water. At least now we have a global view. We look to Europe and beyond, and have a self-confidence which my generation thought we would never see. We argued for it back in the 1960s and had particular difficulty in convincing people that we would ever achieve that transformation.

The economy will grow by 4.7% in GNP terms and by 5.1% — although the table says 5.3% — in terms of GDP. Employment will grow by 35,000, so there is still the requirement for people to come in and help this economy. Unemployment will remain low at 4.4% and price inflation will come in at 2.5%, which is close to the EU average. There is much to be grateful for and much to celebrate. The Minister said our economic growth rate was more than twice the average in the European Economic Area. The rate of spending increase in 2005 is three times the European average. The rate of public investment, at nearly 5% of GNP, is almost twice the EU average, our unemployment rate is half the average and our debt burden is among the lowest in the European Union. These are among the positive indicators in the budget.

I welcome what the Minister had to say about the review of the sheltered tax areas. While there are wealthy people who avoid tax, many of them are doing it by being non-resident. I do not approve of that. I believe if one is a patriot, one should pay tax to the country in which one is born.