Despite the "economic tsunami" that has hit Ireland, all the social gains of the past decade “didn’t go out with the sea”, Taoiseach Brian Cowen said today.
Opening the Dáil debate on yesterday’s Budget, he rejected calls that he should be “ashamed”.
Mr Cowen told a half-filled Dáil he was “proud of all those progressive policies”. In an emphatic speech in which he highlighted the social benefits of earlier in the decade, Mr Cowen claimed up to 90 per cent of gains “can be maintained if we take the decisions now”.
Under the measures announced yesterday by Minister for Finance Brian Lenihan, most workers face substantial tax increases, while social welfare recipients will have their benefits cut as part of the €6 billion adjustment.
The Taoiseach said today: "The levels of income support provided by the Irish State to those on welfare are still among the highest in Europe and we’re all proud of that.
“And people who live in Border counties know what the social welfare budgets and payments are across the Border.”
He added: “Many people used to look in the past down to the Republic and suggest patronisingly that we weren’t capable of looking after our own people.
“Despite the economic tsunami that hit this country a couple of years ago from which we’re still trying to recover, all those social gains didn’t go out with the sea. Many of them can be retained. If not all, many and many can be regained and improved upon when things pick up again in the years ahead.”
Mr Cowen said the social policies the Government had introduced during the past number of years had been the right thing to do. "When else were we going to be able to do it? And now we can maintain much of it, perhaps as much as 90 per cent of those gains can be maintained if we take the decisions now.”
Mr Cowen repeatedly attacked Opposition policies. “Your analysis of last night’s Budget - on the one hand the Fine Gael party saying [there is] no need for any income tax increases and on the Labour Party [there is] no need for any welfare cuts is simply an incredible position to take," the Taoiseach said.
But Fine Gael leader Enda Kenny described Mr Cowen’s Budget contribution as a “speech of desperation”. He said anyone listening to the debate would think there was a balance of trade surplus and full employment.
Mr Kenny accused the Taoiseach of not being straight with the people on the state of the banks and when our economic sovereignty was about to be taken away.
Nor, he added, was the Taoiseach straight with the people on emigration, calling it "employment stabilisation’’. He said there was no strategy for growth or reform.
Labour leader Eamon Gilmore said: "The arrogance of Fianna Fáil knows no bounds. It is an arrogance of being in Government too long." He said that arrogance was "most eloquently expressed by the Taoiseach - an arrogance that says never apologies, never admit a mistake".
In his speech on the Budget he said it was a Government that destroyed the economy, made a calamitous mistake with the banks and "that goes off in the final months of its life, negotiates a bad deal with the international institutions". Mr Gilmore said was fortunate for the Government "that there was snow for the last 10 days that it did not get the scrutiny it might have got".
He said the Taoiseach wanted to fight the election on his "distorted" interpretation of the Opposition's policies. He told Mr Cowen: "You're going to fight this election on your miserable record."
Speaking later on RTÉ radio, Mr Cowen was critical of opposition parties, suggesting they has no real alternative to the National Recovery Plan.
The wide-ranging tax changes in the Budget will bring some lower-paid workers into the tax net for the first time and will hit every income group up to the top earners.
The Budget passed its first test in the Dáil last night, with the Government having a comfortable majority of 82 votes to 77 on the first vote on the measure. Former Fianna Fáil TD Joe Behan joined Michael Lowry and Jackie Healy-Rae in voting with the Coalition.
The Budget hit taxpayers hard through a reduction of 10 per cent in the tax credits and bands, a new consolidated social charge of 7 per cent and the abolition of the PRSI ceiling. The combination of measures will lead to significant tax increases for almost all workers, with more people paying at both the standard and the higher rate.