John Minihan (Progressive Democrats)

I welcome the Minister of State to the House and I am glad of the opportunity to speak on this year's Budget Statement. I welcome wholeheartedly the measures announced this afternoon. Over the past 20 years, the Progressive Democrats have determinedly pursued the following objectives — economic and social policy aimed at maintaining full employment; strengthening the competitive position of the Irish economy; keeping taxes on labour low; and focusing on the low-paid, the elderly and the vulnerable. Today's budget reflects that approach very clearly.

On income tax, social welfare, pensions, child care and care of the elderly, the Government is delivering both the right policies and on the commitments outlined in the programme for Government. First, regarding taxation, the Government is committed to a tax policy that will expand our economy, reward work and alleviate the burden on taxpayers, especially those on lower pay. From today, we will see a €270 increase in tax credits for PAYE workers. That means that a single person on the minimum wage of €15,818 will pay no tax. The standard-rate band has been increased by €2,600 to €32,000 for a single person and to €41,000 to a married one-income family and €64,000 for a married two-income family. Thus, no one on the minimum wage will pay any tax in 2006, and no one on the average industrial wage will pay tax at the higher rate.

In 2006, a person on the average industrial wage will have seen his or her take-home pay rise by €12,600 since 1997, but that person's tax will have been cut by over €400. After today's budget, for a person on the average industrial wage, the average tax rate will be 12% lower than in 1997, at approximately 15%, compared with over 27%. For 2006, the average industrial wage will be taken out of the higher rate of tax altogether.

Those measures are further evidence of our strong commitment. The Progressive Democrats have long espoused the view that the best defender against social injustice and poverty is a job. It is the responsibility of the Government to provide a climate where the economy prospers and people are given the opportunity to create their own wealth and shape their own futures. Hard work and endeavour must be rewarded. The more jobs we create, the more revenue is generated for the vulnerable of society and to develop public services. That is the Progressive Democrats' idea of social justice.

Certain parties, particularly those of the so-called left, claim exclusive ownership of the social justice agenda. Their response to meeting social challenges often involves increasing the tax burden on Irish families, however covertly. In criticising the approach of the Progressive Democrats, and the approach taken in today's budget, they are criticising Irish working people for not wanting to pay more in tax.

The people of this country work hard. They must get maximum reward for their efforts and sacrifices. The Opposition decries that as the pursuit of a liberal agenda. For once, ironically, it is right. Liberal economic policy means having faith in people. The Progressive Democrats believe that people themselves are best qualified to decide how to run their own lives and spend their own money.