DAIL REPORT: Budget 2004 is a "Budget of hope" and one for a strongly growing Irish economy, the Taoiseach has told the Dáil.
Mr Ahern said it was a socially progressive budget and "exposes once again the hollow ideological myth that this is a right-wing Government that cares only for the better off".
Hitting out at the Opposition, he said that Fine Gael claimed the Government had spent too much money, while Labour and most of the Independent TDs argued that the State had spent too little. The reality was that "after three years of downturn and as we approach a likely upturn, we are in a surprisingly strong economic and fiscal position".
In a 40-minute address, the Taoiseach described the Budget as one of hope, but it was also based on economic reality, and "our public finances are the envy of Europe".
He said that inflation should be no more than 2.5 per cent on average next year and would fall below 2 per cent for part of that, and the indirect taxes in the Budget would add 0.4 per cent to inflation.
In a staunch defence of the Minister for Finance, Mr Ahern said the truest line in Mr McCreevy's speech was that "borrowing is the real stealth tax".
"Those who propose a much higher level of borrowing can have no real long-term commitment to maintaining the low tax rates that we have achieved in this country." Benchmarking would cost €305 million this year and it had already delivered in 2002, the "best year of industrial peace for many decades".
He criticised Fine Gael's opposition to it and said, "I cannot take seriously the notion that Fine Gael would actually repudiate its obligations if it were in Government or that it would ever be allowed by the Labour Party to do so." But the Fine Gael leader, Mr Enda Kenny, said benchmarking should be renegotiated, and he was "disappointed that there has not been openness and accountability on the value of the public money".
Mr Kenny said the Budget should have addressed three fundamental issues - competitiveness, targeting resources where they were needed most and the delivery of reforms to drive value for money. In each of these areas, he said, "the Government has failed seriously".
He also said only 2,183 of the proposed 10,000 decentralised jobs would go to spatially recognised towns, so the National Spatial Strategy "has been seriously disregarded and cast aside".
The Labour leader, Mr Pat Rabbitte, told the Dáil that 52 per cent of all tax payers would now pay at the top rate, and that "in effect the Minister is moving towards the creation of a standard rate of tax of 42 per cent".
There were 1.8 million income earners in the State and nearly 700,000 earned such a small income that they were tax exempt.
Of the remainder, 579,000 would now be on the standard rate and 633,000 on the higher rate.
"In other words, a majority, or 52 per cent of taxpayers, will now pay at the higher rate. That rate of 42 per cent will apply to the average industrial wage next year," he said.
"The result is that thousands on moderate family incomes will be substantially worse off next year and will pay a much higher marginal rate of tax."
He described the decentralisation announcement as a "classic old-style Fianna Fáil stroke".
Government backbenchers heard "no mention of community employment in yesterday's Budget, or any other meaningful aspect of community development. They were soon distracted by the coloured pictures accompanying the decentralisation announcement," Mr Rabbitte said.
