Tom Parlon (Laois-Offaly, Progressive Democrats)

With regard to social welfare provisions, the Minister emphasised his belief that a primary function of Government is to protect and support the weaker sections of society. He backed up his words by announcing a social welfare package with a full-year cost of some €1,120 million. The Minister reaffirmed the Government's commitment to supporting older people. He announced an increase of €14 per week in the old age contributory pension, bringing it to €193.30 per week. We are now well on our way to meeting the commitment in the programme for Government to increase the State pension to €200 per week by 2007.

A particularly imaginative feature of the Minister's statement was the announcement of a package of measures to provide care and support services for older people in their homes and communities. For those in need of nursing home care, the nursing home subvention scheme will also be improved. At a full year cost of €150 million, these measures should go a long way towards improving the quality of life for older people.

As regards other social welfare recipients, the Minister announced an increase of €17 in weekly rates. This works out at an increase of 11%, some four times the projected rate of inflation. On child benefit, the Minister increased rates to €150 for the first and second child and to €185 for third and subsequent children. This fulfils the commitment given by the Minister in last year's budget.

The needs of carers have also been acknowledged in this budget. The carer's allowance has been increased as have the income disregards associated with the allowance. Carer's benefit has been extended and will be payable for up to two years and there is a 20% increase in the respite care grant to €1,200.

This generous and innovative package of improvements will go a long way towards relieving the pressures faced by families, older people and those on low incomes. I recall that in the debate in this House on the budget last year, Senators expressed a degree of disappointment with the Government's approach to the child care issue. It is appropriate therefore to devote some remarks to this area, one of the highlights of this year's budget.

The Minister outlined the wide range of considerations to be borne in mind in addressing this complex and multifaceted issue. He announced an integrated strategy comprising measures to increase the supply of child care places and to assist parents in meeting the substantial costs involved. On the supply side, the five year national child care investment programme will build on, and expand, the successful equal opportunities child care programme leading to the creation of an additional 50,000 child care places by 2010.

The Government plans to spend almost €800 million on this programme in a mixture of capital and current funding over the period 2006-10. The obvious need this will generate for further qualified and expert child care personnel will be supported by increased funding for training, which will facilitate the training of more than 17,000 workers over the period.

Mindful of the importance of the first year of life to a child's development, the Minister also announced a phased extension of paid maternity leave to six months by 2007. In addition, unpaid maternity leave is also to be increased by eight weeks over 2006 and 2007. Of course, these measures, particularly those dealing with supply, will take some time to come to fruition.

The Government was also concerned to provide assistance to the parents of younger children, who can find themselves under particular financial pressure. Having examined all of the issues carefully, the Minister announced a new early child care supplement of €1,000 per annum in respect of all children under six years of age. By any standards, this is a generous response to the child care needs of parents.

The effect of both this measure and the increased rates of child benefit is that, for example, a family with two children under the age of six will receive a total amount of €5,600 per annum. I look forward to hearing the reaction of Members to a comprehensive and integrated approach to this complex issue.

Expenditure measures are not the only means to assist people on low incomes. This budget continues the Government's approach of using the tax system to target those on the minimum wage and on average incomes. Through a combination of increases in both the employee and basic personal tax credits, the Minister has ensured that those on the current minimum wage will stay outside the tax net in 2006. He also increased the income tax exemption limit for persons aged over 65, again illustrating the depth of the Government's commitment to supporting older people.

For those on average earnings, the Minister has raised the standard rate income tax band by some €2,600, well ahead of inflation. This should ensure that those on the projected average industrial wage in 2006 will pay income tax at the lower rate. The increases in tax credits for widowed persons, blind persons, incapacitated children, dependent relatives and those aged 65 or over are further evidence of the Governments commitment to supporting the most vulnerable in Irish society.

The tax allowance available for the employment of a person to care for a family member has also been increased significantly to €50,000 per annum, an increase of over 60%. The total cost of these measures, plus others announced by the Minister, is €900 million on a full year basis.

In his statement, the Minister also announced the results of the major reviews of tax undertaken over the past year. The review process involved detailed examination of the various reliefs as well as extensive public consultation. In reaching decisions, the Government had to balance the imperative that all tax residents should pay tax appropriate to their ability against the need to use the tax system to promote development.

The result of the review process is the termination of several reliefs that have either served their purpose or are no longer cost effective in meeting their objectives. The decisions taken reflect the consideration that much has been achieved in the areas and sectors supported by these tax reliefs, and their greater capacity to support investment without such incentives in the future.

The reliefs in question are largely property based. In view of the importance of the construction sector for economic activity and employment, the Minister has wisely put in place transitional measures. The gradual phasing out of reliefs over the period to 2008 will ensure that we do not do anything unhelpful to employment in this important sector of our economy. As well as terminating some tax reliefs, the Minister also took action aimed at avoiding circumstances where high-earners reduce their taxable income to nil through the use of certain reliefs.

There has been much talk recently at home and abroad about the role of agriculture in developed economies such as Ireland's. The Minister in his speech highlighted the vital contribution of the agriculture sector to our economy and to enriching Irish life in general. I wholeheartedly echo the Minister's views. The Estimates and the budget continue to recognise this vital contribution and offer significant support to farmers to safeguard the future of the sector at a time when there are significant external pressures to reduce certain supports and open markets fully to competition.

At €1,280 million, the multi-annual capital framework 2006-10 for the Department of Agriculture and Food represents an increase of €175 million on the corresponding framework for 2005-09 published in last year's budget. Within the envelope significant provision has been made for improvements to the farm waste management scheme to support farmers in meeting the cost of on-farm investment required to achieve the targets set in Ireland's nitrates action plan.

The package of tax reliefs for farmers that the Minister announced today are wide-ranging and will offer support to farmers, in particular young farmers. The package comprises the following measures — the extension of the young trained farmer stamp duty relief for a further three years; separate reliefs on capital acquisitions tax, capital gains tax retirement and stamp duty in respect of the EU single farm payment entitlement scheme; an increase in the farm pollution control relief to a maximum of €50,000; and an increase in the exemption for income from certain farm leases to €12,000 per annum for leases of between five and seven years and €15,000 for leases of seven years or more. This package will cost over €22 million next year and is further evidence of the Government's continued strong commitment to the agricultural sector in Ireland.

Farmers are key guardians of our countryside. I am pleased that the Government's package of measures to support the safeguarding of the environment also presents opportunities for them, in particular the measures announced by the Minister to encourage the use of biofuels.

Members will have been interested to hear the Minister's intentions for the reform of the budgetary process. His proposals include the discussion of a three-year economic and fiscal outlook with the Oireachtas Joint Committee on Finance and the Public Service in January, and the publication of an update of these projections in the autumn by the Department of Finance. From 2007, the proposals also envisage the publication of annual statements by Ministers on their Departments' outputs and objectives and of the out-turns from 2008. The relevant Oireachtas committees will examine these statements. These proposals will increase the opportunity for the Houses to debate the important issues around the generation and use of taxpayers' money. I hope these proposals will be welcomed all round.

The budget presented by the Minister is one that provides the basis for continuing improvements in our economy and society. As the Minister said in his address, today's budget is progressive. We are not resting on the laurels of Ireland's recent economic success. This budget is balanced, not only in the fiscal or financial sense but also in advancing the aspirations of our people. Through substantial investment in infrastructure, the budget will secure our future and provide the basis for sustained economic growth and improvements in quality of life. Through generous improvements in social welfare and changes to taxation, it will help build a fairer and more inclusive society.

In short, the budget embodies a vision of continuing to improve the quality of life for all Irish citizens. This is the most obvious and important measure of our success.