John Minihan (Progressive Democrats)

I commend the Government on framing a budget that seeks to expand our economy further, promotes enterprise, rewards workers and alleviates the burden on taxpayers, particularly those on lower pay.

With regard to the review of tax schemes and measures, the Minister has today announced appropriate changes to how those will operate. A variety schemes that have served their purpose will cease or be phased out. Furthermore, a cap will be placed on the amount of relief that any individual can claim in respect of various schemes, including the artists' exemption scheme. That applies to people with incomes in excess of €250,000. The effective tax on high-income earners will increase towards a minimum of 20%. In 2006, 40% of all tax will be paid by those earning more than €100,000.

As I said at the outset, the Progressive Democrats support fair tax and low tax, not what has been termed "no tax for higher earners". I welcome the changes announced by the Minister in that regard.

The approach correctly chosen by the last two Governments has been to promote and support economic development and prosperity, but not for its own sake. As I said, the people of this country work hard. The more that they are encouraged to work hard and prosper, the more the economy prospers and the more revenue is generated for the vulnerable of society.

The contributory old-age pension has been increased by €14 per week to €193.30. The non-contributory old-age pension has been increased to €182 per week. Furthermore, for people in receipt of the non-contributory old-age pension, earnings from employment up to €100 will be disregarded for means tests. Basic social welfare payments will be increased by €17 per week, from €148.80 to €165.80. That represents an increase that is more than four times the rate of inflation.

I hope every Member will join me in welcoming these steps and congratulating the Government on taking them. There are two key areas on which I wish to focus before I conclude, child care provision and services for older people. On child care, the Government is acting wisely and fairly by reducing the burden borne by families in respect of costs. The Progressive Democrats and I have long sought taxation measures to help increase the supply of child care places. More places mean lower costs for families. Thus, I particularly welcome the €10,000 income disregard for child care providers announced by the Minister today.

The rate of child benefit is to rise to €150 per month for the first child, and €185 per month for subsequent children. A €787 million child care investment programme will create an extra 50,000 child care places. Members across party lines — Senator White, Senator O'Meara and I — have promoted and contributed to the child care debate. The Government is to introduce a phased increase in paid maternity leave from 18 to 26 weeks. There will also be a new child care payment of €250 per quarter in respect of all children under the age of six.

Unlike the approaches proposed by certain people, in so far as a coherent policy can be discerned, the Minister has considered all family configurations and choices. The Progressive Democrats and I have long made clear in our policy documents that we support increasing child care supply and choice for families, in conjunction with steps to alleviate the financial burdens on them. In that context, I welcome the steps outlined in the Minister's speech and congratulate him on them.

Perhaps of most significance are the measures announced for home-delivered services and care for the elderly. Our older citizens deserve the best possible care. The Progressive Democrats have set out in its manifestoes that care for older people is a basic social duty. We first campaigned for and delivered a €100 per week pension. The old-age pension is up, from €99 in 1997 to €193.30, announced today, meaning that it is well on the road to the €200 target set out in the programme for Government.

International research suggests that the life of a person can be extended by up to two years if care is delivered in the home, and I welcome the new measures outlined for the elderly in today's budget. The new €150 million per annum package to support care for the elderly in their own homes represents a sea change in approach. It is the single largest increase in such funding ever. I pay tribute to the Tánaiste and Minister for Health and Children for her dedication in this policy area. Among all politicians and policy-makers involved in ensuring the best care for older people, she has proven herself the most determined and effective, and I congratulate her on her work in promoting the measures included in today's budget.