Martin Mansergh (Fianna Fail)

Social cohesion and harmony are required and Members do not want Rossport five situations nationwide.

I will come to the budget itself. All Members will welcome the announcement that contributory old age pensioners will be in receipt of €209.30, while non-contributory pensioners will receive €200. There is also a very substantial increase in the income tax exemption, which has been a policy of successive Ministers for Finance for the past ten years at least. Child benefit will increase by €10, along with a special boost to child dependants. This allowance was held down for a long time following a survey conducted under the rainbow coalition, in order not to aggravate a tax wedge. However, it is right that it is being done now and that more money is being put into child care. The issues of disability and mental health were raised a moment ago and an additional €100 million was announced in the budget in this respect. Not only has the fuel allowance for pensions been increased, but the eligible income over and above one's pension has doubled to €100.

We all, and many young people, will welcome the improvement in family mortgage interest relief worth €133 per month. No doubt that is the right approach at this point in time. We had the debate on stamp duty last week. It is a question of making a real difference to people. I am not denying that stamp duty may need some reform but there are appropriate times in which to do that. The danger — this came out at our debate last week — is that any changes in stamp duty at this point would most likely go straight into the hands of developers.

We all welcome the income tax changes, which mean that not only are those on the minimum wage kept out of the tax net but that also those on the industrial wage will not pay tax on any of their income at the higher tax rate. Of course there is a substantial increase in the tax band as well as in the personal credits and notwithstanding the cut in the top rate of tax, one will see in the tables that the progressiveness that has been the hallmark, particularly of this Minister for Finance, has been maintained. In broad terms, the proportional benefit is greater at the lower and middle income part of the cohort than at the higher level.

There is a commitment that if we continue to make progress there will be a further 1% reduction in the top rate. I see merit in that in terms of competitiveness. There is merit in having the same top rate of tax in this country as across the water, although in many respects our tax system is becoming more favourable than theirs. The tax credits have somewhat altered the parameters, but we have achieved a position where 80% of income earners are on the standard rate of tax and one third of the population or more does not pay income tax at all.

I also welcome the business provisions, the increase in the BES investment as well as how much individuals contribute, the raising of the VAT threshold, and the improvements in tax administration. I welcome the measures to encourage conferencing in tourism — I raised tourism on the Order of Business this morning.

I welcome the support for farming and of course the fact that the Government is increasingly supporting farming. Not all, or at this stage even most, of it is coming from the EU.

I am glad that the Minister of State, Deputy Parlon, mentioned decentralisation. Of course he, not the Minister for Finance, except in an overall sense, is the Minister of State responsible for decentralisation and it is therefore appropriate that he should mention it.