Ahern says Budget 'strong on equity'

Taoiseach Bertie Ahern has told the Dáil that the 2008 Budget is "strong on equity" and that it has honoured the Government's commitment to the Irish people and to social partnership.

Mr Ahern commended the first Fianna Fáil-Green Party Budget to the Dáil today.

"The confidence of the Irish people in the capacity of this Government to manage our way through difficult conditions has been been fully vindicated by the terms of the Budget introduced by Brian Cowen, Tánaiste and Minister for Finance," he said.

"This is a Budget that will sustain progress in the Irish economy through more difficult international conditions. Our ability to produce an innovative, progressive and socially caring budget at this time reflects well on the strength and resilience of our economy which we have built up over many years," Mr Ahern added.

"Today, we have the resources and the flexibility to respond constructively to less favourable conditions, in a way that would be the envy of our predecessors in the 1980s and of many of our European partners now.

"The Budget is prudent, and stays well within the margins of safety, but expresses the Government's determination, not just to hold what we have, but to maintain forward momentum," he added.

Mr Ahern also said the Government would examine next year how best a carbon tax can be set up on a "revenue-neutral" basis.

Some commentators noted today that the Green Party's key demand for a carbon tax on entering Government was not included in the Budget.

"We are also undertaking a review of administrative efficiency in all areas of the Public Service. This will complement the comprehensive review of the Irish public service by the OECD which I announced earlier this year, and which will be finalised early in the New Year," the Taoiseach said.

The Government would also examine the revenue system with a view to encouraging lower alcohol consumption, Mr Ahern told the Dáil.

Responding to the Taoiseach, Fine Gael leader Enda Kenny accused the Government of "inability to face the difficult decisions" and of "reckless management of the economy". It was a "dull and uninspiring Budget", he said.

On the reforms of the car tax regime, the Fine Gael leader said this was a "direct stealth tax" to the tune of €83 million that would affect "every household and every family".

"It's a direct hit on the pockets of people, hard pressed but required to have motor transport to get to and from work," Mr Kenny said.

It suited the Government to use Minister for the Environment John Gormley as a cover for introducing such changes to car tax, he added.

The measures were a "straightforward piece of theft carried out by a government wearing a green balaclava".

Mr Kenny said it was a "highly conservative Budget when it comes to tax reform" and that it had failed to address inefficiencies in the public service.

The Fine Gael leader said the economy faced a prolonged slowdown, possibly to 2013, "as the property bubble inflates".

Over the last seven years, he said, Government spending had averaged 40 per cent more in growth terms than the growth of the economy, and that the Taoiseach had presided over such spending growth.

Mr Kenny added the Government had spurned the opportunity for public sector reform.

"There is no mention of this [efficiency in the public sector] other than waffle and cotton wool in yesterday's Budget speech."

Labour Party leader Eamon Gilmore said the Budget was a "monumental breach of the promises which were made by Fianna Fáil to the Irish people last May".

Mr Gilmore said the Budget had not delivered on 4,000 promised extra teachers, on 2,000 extra gardaí or on the promise for double capitation funding for schools. Mr Ahern had not delivered on free fees for part-time students, nor on the promise to deliver 2,000 more hospital consultants, the Labour leader added.

"The big picture in this Budget is that capital spending has been increased, the rate of growth in current spending has been curtailed, a minimal tax package has been introduced which will effectively increase the taxes that families are paying, and the State is willing to borrow about 1 per cent of GDP," Mr Gilmore said.

"This budget contains no concerted or thought-through effort to address the very real poverty that afflicts our society. One in nine children in Ireland lives in poverty, but there is no concerted effort here to address this monumental waste of human potential."