Trojan horse Budget
In an unanticipated move, Mr McCreevy used his Budget speech to announce the most ambitious Government decentralisation programme in the history of the State.
In all, eight Government departments and the Office of Public Works will be based outside Dublin. It will mean the relocation of 10,300 civil servants from Dublin to 53 centres around the country.
The ministers and top civil servants of the departments affected will also be based outside Dublin.
The departmental moves are: Agriculture (Portlaoise), Arts (Killarney), Communications (Cavan), Community and Rural Affairs (Knock, Co Mayo), Defence (Newbridge), Education (Mullingar), Environment (Wexford), OPW (Trim) and Social and Family Affairs (Drogheda).
Mr McCreevy, who succeeded in keeping the announcement under wraps until yesterday, described the decentralisation decision as a radical programme that would benefit all.
"I believe that over time decentralisation will lead to a radical change of culture in terms of policy formation in this country. No longer will policy be made entirely in Dublin on the basis of a Dublin mindset," he said.
The opposition, taken by surprise by the development, rallied quickly to condemn the decentralisation move as a smokescreen designed to bolster Fianna Fáil and PD candidates in next year's local elections.
Fine Gael and Labour said decentralisation hid stealth taxes in a Budget that was otherwise unremarkable and minimalist.
They said that, for the second year running, Mr McCreevy did not adjust tax bands to keep in line with inflation. That, they claimed, would mean an additional 62,000 taxpayers will pay at the highest rate and, for the first time, would include those paid the average industrial wage of 27,500.
Fine Gael deputy leader Richard Bruton accused the minister of imposing more stealth taxes on middle-income earners. He claimed the Budget would cost the average household approximately 600 per year.
"Some 33.4% of all taxpayers will be paying at the higher rate in 2004," said Mr Bruton. "In the Programme for Government the commitment was that only 20% would pay at the highest level. It is another broken promise."
Labour's finance spokesperson Joan Burton also took a similar tack.
"There is one item of big news that the minister never mentioned," she said in her Dáil speech. "This year he has implemented the biggest stealth tax of all. By freezing the standard tax rate band, he has ensured that tens of thousands of workers will be moved to the higher tax rate."
Ms Burton was also scathing of the 6 monthly increase in child benefit. "6 would not even buy a packet of Pampers," she said.
Besides decentralisation, there were few other major surprises. As expected, rises in the old reliables were not swingeing 25c on a packet of cigarettes and 5c per litre on petrol.
Social welfare increases were typically 10, running at 6% to 7%.
Mr McCreevy also bowed to intensive lobbying, not only retaining the tax break for the film industry for another four years, but also doubling the amount that can be claimed per film to 15 million.
The Green Party's Dan Boyle attacked the extension of tax relief for property-based schemes like holiday homes and carpark schemes.
"Charlie McCreevy has looked after Fianna Fáil paymasters. The continuation of these tax reliefs is scandalous," he said. - do not delete bc
One other significant change was the decision to increase the employee contributory PRSI ceiling by 1,700 from 40,420 to 42,160. But much-rumoured wholesale reform of the PRSI system did not materialise.
The minister was in characteristically implacable mood in defending the Budget last night and said decentralisation would be complete within three years. He would not be drawn on its costs, but accepted it would be high. He said it would be partly financed by swapping departmental buildings in Dublin for property in rural towns.
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