John Gerard Hanafin (Fianna Fail)

I welcome the Minister of State to the House. In framing the budget, the Minister sought balance, equity and fairness. At an unprecedented time in financial markets, the Minister gave a resounding "Yes" to a balanced budget in terms of tax, borrowing and savings. The 1% levy is necessary given the reality of our taxation code, which meant that those on the lowest incomes were not in a position to offset any tax increases at the lower band. However, there were people who, through exemptions, pension rights, section 48 and section 23 provisions, film rights and other positive measures, paid nothing. This was unjust. The 1% levy means that the very wealthy will pay, an example set by Ministers when they took 10% pay cuts. They should be commended on doing so on top of the other taxation that everyone must bear.

The strategy to reduce spending was important in the context of a different financial situation, a matter that relates to borrowing. Our borrowing is nothing more than a modulation of the past 11 years. It is sound business practice that in the good years one puts away money and in the bad years, rather than causing deflation, one does not take too much money from the economy. This is what the Minister has done. He was prudent in managing the funds available.

We have promoted industry in this budget by way of increased exemptions for research and development investment, new start-up businesses and no capital gains tax or corporation tax below a certain income level. We have also ensured the income of enterprise boards has increased, meaning that small business will again benefit. In the most difficult times, the Minister has managed to promote industry and balance taxation. In doing so he increased the litre of petrol by 8 cent but that will hardly be noticed at the pumps because the increase will equal the decrease in the price of oil in the past few weeks, which is down to $72 a barrel today. The Arabs tell us that the real price of oil is $60 to $70 a barrel. Other positive developments in the past few weeks include the reduction in interest rates, so repayments on our national debt will be lower. Markets appear to have stabilised and we should take credit in this country because the first in Europe to underpin its banks was Ireland, followed by Greece, Portugal, Denmark and Austria until every country made sure the banks were underpinned or nationalised, as in the UK.

This is a balanced budget in terms of looking after people. Of the €55.8 billion of budget moneys, 78% will be spent on social welfare, education and health. The increases in social welfare, at 3% and 3.1%, are over what is expected to be the inflation rate. Inflation may be lower because commodity prices fall in recessionary times. It is a balanced budget in terms of taxation, borrowing, savings, looking to the future and ensuring the less well-off are looked after. It was with particular pride that I heard of the €2.6 billion increase to €19.6 billion allocation to the Department of Social and Family Affairs. There is €7 extra per week for old people, an extra €2 in the fuel allowance and an extension in the number of weeks. People of working age get an extra €6.50 in all working age payments, which includes jobseeker's benefit, illness benefit, disability allowance and one parent family payments. Families with children have seen an increase, with €56 million of improvements in support of families and children. The qualified children's increase goes from €2 to €26 per week. All family income supplement thresholds are increased by €10 per week per child.

This is a budget geared to the times. It looks to the future, will not be deflationary and is committed to ensuring a viable building sector, which has had a battering in the past few weeks. The Government is committed to ensuring the national development programme continues to proceed, with all major cities linked to the capital by motorways, the upgraded M50 and the Atlantic corridor.

Tax relief was provided to first-time buyers of new properties. The budget suited the times that were in it and will lead us out of the perfect storm in the financial markets and will see Ireland as a safe and good place to invest. People will say that sound management was balanced with the needs of the people.