Green Party leader and Minister for the Environment John Gormley has put the best complexion on his party's contribution to the Budget and spoken of "a very good start" in curbing carbon emissions. Unfortunately, the reality does not bear out that assertion. The Coalition Government, in its very first year, will fail conspicuously to meet its target of cutting carbon emissions by three per cent. There is, as yet, no sign of a carbon tax.
The programme for government was presented to party members some months ago as "a work in progress" and the best that could be achieved at the time. And while there are positive developments in this Budget in terms of additional resources for environmental protection bodies, new technologies and energy-saving projects under the aegis of Green Ministers, the overall thrust is disappointing in view of the urgency of the climate change agenda.
A vehicle registration tax based on carbon emissions only, rather than the dual system proposed by Dick Roche 12 months ago, is hardly revolutionary. Especially when the new system will be delayed by an additional six months. A decision to ban the sale of incandescent light bulbs by 2009 is merely responsible housekeeping. Difficult and unpopular decisions that would have affected industry and the broader community are being deferred while investment in public transport remains inadequate.
In spite of such limitations, there are thin political pickings for the Opposition in this Budget. The great majority of taxpayers and social welfare recipients will be slightly better off. And economic growth is predicted to continue at an above-EU average level next year. That forecast could be overturned by recession in the US, rising oil prices and a strengthening exchange rate, developments over which Minister for Finance Brian Cowen has no control. With that in mind, the Minister took action to soothe the domestic financial and property markets by reforming stamp duty. It was a measure that came too late for the Progressive Democrats and for Michael McDowell. And its relatively modest nature, compared to cuts advocated by Fine Gael during the general election campaign, has insulated him from accusations of extravagance. Whether the measure will serve to underpin the housing market or merely provide a "dead cat bounce" remains unclear.
On the basis of this Budget, there is no doubt about who is running the show. As on three previous occasions, Mr Cowen has provided generously for welfare recipients. In addition, he prioritised capital spending in the National Development Plan; provided extra funding for social and affordable housing and continued to invest in health and education. But there was little imagination or innovation on display. In the end, it amounted to little more than a holding exercise. The most formidable challenge now facing the Government involves containing its spending increase to 8.2 per cent while dealing with wage demands and the benchmarking process. It was manifestly a Fianna Fáil Budget with a Green tinge.