Martin Mansergh (Fianna Fail)

The Minister for Finance would not be doing his duty if he did not maintain the maximum flexibility for the future, including any unforeseen circumstances that might arise. I applaud him for not making commitments that would tie him down unduly. There is the old chestnut of indexing bands. It is far better that the Minister for Finance increase bands by more than the rate of inflation some years, as on this occasion, and less at other times when circumstances demand it. I do not believe that a Minister for Finance from any of the parties opposite would act or react any differently were they in Government.

The 20% target that Senator Phelan has emphasised dates from 1997 rather than 2002, but it too is a question of priorities. Great improvements have been made in the tax system and the level of take-home pay. We have moved from the situation where people sometimes went onto the higher rate when earning slightly less than the average industrial wage. This may be implicit in Senator McDowell's remarks. If one focused on bringing down the tax rate to 20%, one would skew the budget from an equity perspective. It depends on whether one's priority is to keep low-income people outside the tax net, ensuring that budgetary gains are enjoyed mainly by those on low or lower-middle incomes, or further up the scale.

The Senators opposite would be the first to criticise the Government if, when examining budgetary tables, they saw that percentage increases in income were larger further up the income scale. Election commitments and programme aims are important, but they should not necessarily override everything else. The Minister for Finance should act in the interests of the country and its people and not necessarily fetishise commitments made in good faith. Rigorous pragmatism is required. I entirely applaud the Minister. The 20% target is a long-term aspiration. I doubt how easily or quickly it will be reached, and to a degree I even share Senator McDowell's position, in that I am not certain that it is vitally important.