John Gerard Hanafin (Fianna Fail)

The budget was a question of priorities and it matches our expectations. We wanted the Minister for Finance to look after the less well-off. It is a time of economic change in the world in which we have little say. It is a time of uncertainties in the finance and equity markets. The Minister for Finance took the right course. It was a prudent budget but one which looked after the most vulnerable.

Last year, Senator Quinn gave the budget a pass at a time with a high Exchequer surplus which led to high expectations. This year there was no surplus but prudent borrowing of 0.9% of gross national product for which the Minister got honours. It proves that what is done with the available moneys is how people will assess a budget.

It is an excellent budget because it has dealt with smaller items in a positive way. It has cleared the way for corporate tax to be paid at different times to suit businesses. It has reduced the duty on bank and credit cards and made positive contributions to the green challenge, including vehicle registration tax, VRT, on which the Minister is to be commended.

People worried that house prices were far higher than people realistically could be prepared to pay and the collapse of sub-prime lending in the American market raised further questions about the stability of the housing market. The Minister has taken the opportunity to deal with this on two levels, by significantly increasing mortgage interest relief, which is welcome, and by making allowance for first-time purchasers to avoid the clawback on stamp duty relief after the first two years of purchase rather than the first five. This reflects the mobile nature of society as people move to work in different parts of the country and is a small but significant item for those whom it affects. In addition to the timely changes in stamp duty, it will give the added impetus necessary to the market.. There was a significant and continuing bounce in the world equity markets at 3.30 p.m. today which indicates that confidence is returning. By this time next year the situation will be very different, with possibly a significant increase in the moneys going to the Revenue Commissioners from the housing sector, as often happens.

The Government has increased spending on public services by €8.6 million to €62 million which is entirely appropriate at a time of uncertainty. While the market has slowed down in this country, the infrastructure is being rolled out with expenditure in many areas, including transport, education and health. We were in the unique situation that certain areas needed extra funding quite quickly as the population grew. Uniquely in Europe, by the time a new school had been built in the western and northern suburbs of Dublin, another was needed. It is difficult for anyone to anticipate growth of that level. None of our European neighbours had but we are meeting that challenge directly.