DAIL REPORT:Fine Gael spokesman Richard Bruton accused the Minister for Finance of having "bottled" the challenge facing him. It was "all bark and no bite", he said.
"He cannot see that the reason why our public finances are in the diabolical state they are in today is because of the sloppy, self-indulgent and wasteful way this Government has spent money.
"This Minister is a back-seat passenger in the Department of Finance, just as he was a back-seat passenger in other departments before this." The Budget, he said, had represented a very stern test of Mr Cowen's leadership. "It was a test to see if he would have the courage to break down the incompetence and indifference that surrounds this complacent Government.
"Would he have the vision to embrace real reform and see real change in the way we spend money in this country? This is what the country has been crying out for, and the bleak answer today is that he is not willing to face those challenges."
He claimed that the Minister had failed to honour core commitments. More ordinary taxpayers on modest incomes would be plunged into the top tax rate as a result of not indexing.
"At the end of next year, we will have 750,000 people on the top rate of 41 per cent. That is the reality.
"Even people on the average industrial wage will find themselves in the top rate. Now is that not an extraordinary situation?
"Here was a Minister who promised in the last programme for government that there would be only 20 per cent of taxpayers on the top rate." It was unacceptable, he said, that ordinary people were being asked to pay at the same tax rate as multi-millionaires.
Mr Bruton said that families would have looked to the Budget for some support. "And what do they find? On child benefit, the sum total of €1.38 a week is offered at a time when all the basics, bread, butter, milk, eggs, are growing in cost by 15 or 16 per cent.
"What Minister could say that a child could be supported for €1.38 extra a week in a climate of rising costs like that?"
Mr Bruton accused the Minister for waiting for the housing market to collapse before he addressed the needed reform in stamp duty. "It was his obstinate refusal to reform that tax that has seen the housing sales diminish month-by-month to half what they were at the beginning of January this year." The same was true of the environment, said Mr Bruton. The Government had promised VRT in 2002. "Here we are six years later, six years during which 600,000 extra cars went on the road."
It was an "extraordinary admission of failure" that the Minister for Finance "should see it necessary to change the stamp duty regime twice in six months," Labour spokeswoman Joan Burton told the Dáil.
Ms Burton described the Budget as an "admission of economic incompetence" and said the "mismanagement of the housing market" was written all over it. "The increased borrowing and limited tax and social welfare packages reflect the hit that the economy and exchequer have taken from the property slump," she said, adding that the total increase in the health service allocation "amounts to the equivalent of six days' spending on health".
Brian Cowen in June "brought in stamp duty reforms which he told us would restore stability and certainty to the housing market", and it was a "humiliation" for the Minister that he had to return to it again. The exchequer borrowing he announced was a "direct result" of the misjudgment of the housing market.
The first stamp duty reform was "badly constructed and inadequate". The latest reforms again demonstrated that "the more you have, the better you do". Buying a second-hand house in the Dublin area for €500,000 will save €11,200 and that was welcome. "Somebody buying a house for €2 million will save €28,750 and that's the way all these reforms go. Just as with the reforms in June, many of the people who benefited were very wealthy families able to spend a million plus."
The Minister's growth forecast was for 3 per cent but "I don't think, Minister, that you'll be lucky enough to hit 3 per cent, the way the housing market is at the moment. Every forecast is a little less than the one before. No one can rely on what Minister Cowen says today."
Ms Burton said inflation "is set to remain stubbornly high and that is as much the fault of the Government's domestic policies as the fault of international conditions". There was practically no change for disability services, no change in medical card coverage, while pensioners who were promised €100 over five years, €20 a year, would only receive €14 extra a week.
She said: "Working families won't be getting the kind of pay rises that Ministers will get. In fact over one million of them will earn less in a whole year than the Taoiseach's proposed rise in salary of €38,000."
Sinn Féin's Arthur Morgan claimed that the Budget had revealed the deceit on which the general election was won.
"Tax-cutting proposals, which were never viable, had to be abandoned in the face of a €1.7 billion shortfall in tax revenue."
In many ways, he added, it was too early to judge the Budget. "We have not seen the fine print. We will have to examine its contents and the measures announced by individual departments in the hours ahead."
Cork East TD Ned O'Keeffe voted with the Government last night in the first division on the Budget. Mr O'Keeffe resigned the party whip last week in advance of abstaining in a Labour motion of no confidence in Minister for Health Mary Harney. The Budget increase in the duty on cheques, from 15 cent to 30 cent, was challenged by the Opposition. The Government had a comfortable majority of 84 votes to 71.