Martin Mansergh (Tipperary South, Fianna Fail)

I thank all Senators for their contributions to the debate on the budget and I will respond to some points. First, for the information of the House, while we have been speaking, the Minister for Finance, Deputy Brian Lenihan, has published the scheme which is subject to the approval of the Houses of the Oireachtas, the Credit Institutions (Financial Support) Scheme 2008.

Senators Ross and Quinn raised the issue of capital gains tax and were of the opinion that there would be no such tax worth talking about levied on shares and property next year and so therefore the rise to 22% was academic. The gain is, of course, computed on the difference between sale proceeds and cost price. Many assets will have been held for longer periods and the appreciation of those assets will by no means have been cancelled out by recent falls. It will have been in some cases but not in others. The capital gains tax increase is directly related to the reduction in stamp duty on commercial property and to the combination of income tax and income levies.

Senator Alan Kelly did not give adequate account of the tax credit for research and development, which is being raised from 20% to 25% and will be a positive development from the point of view of attracting companies that will engage in research and development. The measure will also reduce the effective rate of corporation tax, which stands at 12.5%.

Senator Ross, not for the first time, attacked FÁS. Community employment programmes are extremely important around the country and many worthwhile local organisations, sports clubs and cultural organisations would find it difficult to continue without them. They also provide valuable employment for older people who might find it difficult to secure alternative useful employment.

I will now dwell a little on history. An income levy was first introduced by Alan Dukes in 1983 and cancelled in 1986. The second time an income levy was introduced was at the beginning of the previous Fianna Fáil-Labour Party coalition when Deputy Bertie Ahern was Minister for Finance. The levy was the pièce de résistance of the Labour Party's contribution to the budget. One must take this into account when considering comments from the Labour Party.

In the case of a person on a low income earning €60 per week in part-time employment, the levy will be only 60 cent per week. If a person is earning €98,000, the example cited by Senator O'Malley, the levy will amount to €980 per annum. The criticism of the levy is, therefore, over the top.

Senator McFadden raised the issue of rural dwellers and cars. If people were to switch to vehicles with diesel engines, they would not pay extra. On the assets sold or privatised under various Fianna Fáil Administrations, which was also raised, the rainbow coalition sold very cheaply the second mobile telephone licence and even more cheaply the Irish Steel company, the closure of which caused such environmental problems.

I was amazed that Senator Kelly, in his supplied script, referred to PRSI. Given that the PRSI ceiling was only index linked for 2.5%, as has happened in practically every budget under every Government over the past 20 years, I do not understand to what it is he takes exception in the measure. The changes in child care payments must be taken in the context of the substantial improvements there have been in the past ten years.

On another point of history raised by Senator Quinn, Mr. Haughey, as Minister for Health, had substantial increases in budgets in 1978 and 1979. It was not the case that he could only produce a toothbrush.

I was amused when Senator Leyden effectively proposed an absentee tax, which used to be proposed every year in the old Irish Parliament. He also wanted to introduce a star chamber or what the French would call a chambre de justice for tribunal lawyers.

As Senators will be aware, the demand for third level fees is coming from the university heads. The question of whether third level education should be free, particularly at higher income levels, is a matter for debate.

Approximately 2,000 teachers have been recruited since July 2007. When considering the pupil-teacher ratio one also needs to take into account the many additional special needs assistants and resource teachers who have removed some of the burden on teachers.

A question was raised about assumptions on growth. By 2010 it is calculated that the housing contraction will have worked its way out of the system. This has had an effect of reducing expected growth by 4% of GDP.

Decentralisation was cancelled by Fine Gael and the Labour Party in 1981 and 1983. Since this was a matter of dispute, I want to give the facts. The construction contracts — public-private partnerships — for decentralisation will be carried out on a fixed term basis.

Senator Buttimer appeared to make two contradictory statements.