John Minihan (Progressive Democrats)

I welcome the Minister of State at the Department of Finance, Deputy Parlon, and his officials.

In my statement to the House on budget day, I referred not just to how it was a demonstration of the right Government choices in action, but also an unambiguous illustration of the approach of the Progressive Democrats. Some Members lazily conclude that the approach of the Progressive Democrats is one focussed, with a tunnel vision, on the economy. It is argued our mantras are "economy first, society second" and "get the economy right; the rest will take care of itself".

The reality is more nuanced than that. To uncover the reality takes a little more inquiry and effort, practices that would serve our opponents better. The Progressive Democrats and the Government see economic policy as an instrument of social justice. Unlike our opponents, we do not deal separately with the economy and society. Unlike our opponents, we do not devise policy on the basis of simplistic choices. It is not a question of policy A being targeted at economic progress, policy B at a specific societal group or challenge, policy C at the environment, and so on.

In shaping our eighth budget with our Government partners, we have again shown our commitment to the Progressive Democrats' central tenet. We believe in a strong, dynamic economy that can deliver for all in society, most particularly the vulnerable. The Finance Bill reflects this approach. If the legislation were drafted by Fine Gael and the Labour Party, with some so-called help from the newly repackaged Green Party, the correct and successful approach would be absent. Lack of experience, clarity, agreement, maturity and freedom to follow the right course would create a finance Bill that would turn the economy back.

The path we chose has delivered a strong, growing and dynamic economy, allowing the hard work of people to deliver the higher living standards they deserve. It is a path that allows improved social provision and the most favourable income tax system in the EU for people on low to medium incomes. As a small island, geographically on the edge of Europe, our prosperity depends on that forward-looking approach. We have succeeded by embracing change and openness, not shutting it out.

The Bill is another solid step forward away from the failed policies of our opponents. Their policies not only failed them but also the country. Their policies delivered 17% unemployment, mass unemployment and mass emigration. In 1991, we passed the 1.1 million employment milestone, and the 1.9 million milestone last year. The sign ahead reads 2 million people employed in 2006, but only if we keep on this progressive path. We cannot afford three or four years of finance Bills drafted by those who want Ireland to rest and re-think.

The extraordinary growth and increased tax revenue that resulted from the Progressive Democrats' approach has increased the resources available for social provision. It has allowed real and substantial increases in social welfare payments, health and education. For example, the old age pension has risen by 67% since 1997. The Finance Bill 2006 not only ensures a fair tax system, but a more successful one. Fairness breeds compliance. Compliance means greater revenue for expenditure on social provision.

Sections 2, 3 and Schedule 1 set out taxation rates and personal reliefs. These demonstrate the fair approach by allowing for increases in personal and PAYE credits. They will see the removal of those on the minimum wage from the tax net. They also provide that those on the average industrial wage will be excluded from the higher tax rate. Both these commendable developments are clear evidence of the Government's determination to keeping tax down on low and modest incomes.

The Bill will restrict the use of tax reliefs by high income earners and introduce greater equity to the tax system. Members opposite should take note of this and refrain from erroneous future pronouncements about the focus of the Progressive Democrats' policy and action. I will not, however, hold my breath. I apologise to Senator McDowell who is taking the brunt of this as the Opposition benches are empty.