Budget is designed to enhance quality of life
Childcare will benefit from centralisation of services
An Taoiseach, Mr. Bertie Ahern, T.D. said today that the Government’s Budget is that of a successful economy that continues to outperform practically all others in the developed world. He said the Budget is designed to enhance social solidarity and improve the quality of life for young families and for older people alike and is constructed in the spirit of social partnership.
“As a result of our high quality stewardship in managing our affairs we have substantial resources available for several purposes: to relieve the tax burden on the low paid and on hard-pressed working families; to increase the volume of spending on our social services, focusing on greatest need; and to invest in infrastructure improvements that were not affordable to us in the past, and that are not affordable in many other jurisdictions today.”
The Taoiseach said that the whole aim of the Budget is to underpin the strong confidence which has been such a marked feature of the Irish economy in recent years in order that we can continue making dynamic progress of a kind that has never been sustained before in our history.
He added, “Our reforming approach to the tax system has been designed to underpin a more enterprising and fairer society, through a pragmatic approach to the various components of the tax system. We have developed a structure of taxation, which provides incentives for those who wish to work and employ others, and which distributes the burden of income tax fairly among those best able to meet it. The exemption of those on the current minimum wage from the tax net combined with our low rate of taxation on those around the level of average earnings, have produced a highly equitable and progressive income tax system.”
The total full-year cost of income tax relief goes up from €682m in the 2005 Budget to €900m in next year’s Budget. Some 36% of all income taxpayers will pay no tax at all.
The Taoiseach said that the major initiative of this Budget is to make inroads into the problem of the cost and supply of childcare.
The Taoiseach said this could be achieved by combining income supports, well targeted services and appropriately innovative measures to help individuals, families and communities not only to access quality services, but to achieve their full potential and, in particular, to maximise their independence, autonomy and contribution to society.
The Taoiseach said, “What these different approaches have in common is that they set out the standard of services which we aim to provide as a recognition of the rights of our citizens, improved arrangements to develop a joined-up approach on the part of Government to developing policy, and a better degree of integration at a local level in delivering services and supports which reflect the needs of people.”
“This is the context within which the Government’s policy on childcare has been developed, through a careful combination of measures to stimulate the availability and supply of childcare and measures to support those in need of childcare services. We have taken this balanced approach, and set out how we propose to develop it over a number of years, in response to the obvious facts about childcare. In particular, we know that, if we relied only on putting more money into the purchasing of childcare services without increasing its supply, the likelihood is that prices would soon rise.”
Supply is vitally important and the €10,000 income tax and PRSI disregard for those who look after up to three children not their own, in the minders home will also have a measurable impact on increased supply and help to keep down costs.
The Taoiseach pointed out that Child benefit is now four to five times its value back in 1997. The new child care payment of €1,000 per year extra in cash for children under six is the equivalent of a €5,000 tax allowance at the standard rate per child.
In order to bring greater coherence to the Childcare sector, the Government have decided that responsibility for the Childcare Programme will transfer from Justice to the Department of Health and Children.
The Taoiseach also stressed that the Government is meeting its commitments to provide more realistic incomes for those dependent on the old age pension, which is now within easy striking distance of €200 a week. He also said that the Government are also honouring its commitments in respect of the most vulnerable, those in receipt of the lowest rates of social welfare payment, including those in receipt of unemployment assistance and supplementary welfare, who receive an increase of €17 a week or 11%.
In conclusion the Taoiseach said, “This Budget provides the means by which we can consolidate our strong growth and development, based on high employment and rising productivity into the future. It provides a generous and sustainable response to the needs of those who are most at risk in our society. It provides realistic and effective support for families and children facing the pressures of life in a modern and dynamic economy. Above all, it provides evidence that this Government continues to honour its commitments, to manage our economic and social affairs with care and imagination, to balance securing long-term growth with more immediate improvements in the quality of life of our citizens."
8th December 2005
Ends.