Minister for Finance Brian Cowen was adamant yesterday that his Budget was not designed to buy the forthcoming general election and that he had held back much of the surplus money available for fear of triggering inflation.
He told the Today with Pat Kennyprogramme on RTÉ radio that he had deliberately put a lot of resources into increasing welfare payments and taking people on low incomes out of the tax net.
"I wouldn't accept if the insinuation is that we're buying our way to an election. I'd say to people how high a surplus am I to have before that charge is not levelled against me? Thankfully the public finances are in a good shape and we had a surplus to deal with.
"If you like, one-third of the windfall gain is being spent on immediate priorities and two-thirds retained because we can't put all that money back into the economy without having inflationary effects and affecting the cost of living."
He maintained that he had hit a landmark point in terms of social welfare payments. "In the last few budgets I've had unprecedented increases in order to get it to where the social partnership commitment required us to do, something around 30 per cent of gross average industrial earnings, and those who have advocated that we get to that point are not suggesting we should continue with increases of that magnitude in the future."
He added that people would now have to earn over €17,600 a year before they come into the tax net.
During the programme the Minister received a tearful call from a woman identified as "Catherine" from Sligo who said she was a carer for her 19-year-old son, had other children and was due to have a baby in five weeks.
"I had a commitment to provide a 20-hour home package for him. For 17 weeks out of the last 15 months I have received that cover . . . Where we live in rural Sligo and the reason that's been given to me is they can't find suitable staff . . ." She added: "We've had meetings with the HSE since September of 05 and I'm in a position now that I can't meet with them because I'm expecting a baby in five weeks' time and I'm in full-time care of my son 24/7." She said she had now received a letter stating that funding had been approved for four hours a day twice a week for a three-month period. However, the HSE was now advising her it could not be responsible for the person she was employing.
The Minister promised that the issues would be investigated by the Department of Health.
Meanwhile, the Fine Gael finance spokesman, Richard Bruton, said that yesterday's interest rate increase by the European Central Bank had wiped out the benefit of the tax concessions given by Mr Cowen to first-time house buyers.
"The measure was designed to curry favour, and was not a genuine attempt to reform a housing system which is not working for young families. Failing to introduce targeted reform of the Stamp Duty system has been a serious missed opportunity by this Government. They had the money, and the market stability made this the right time to do so."
He said the Government's pose as champions of the first-time buyer was like the wolf dressing in sheepskin to mind the flock. "It is the needs of developers, not young families, that has dominated this Government's thinking about housing development."
