This budget is as fair as it could be, given the current circumstances

THIS Fine Gael-Labour Government came into office nine months ago.

The failure of our predecessors to govern responsibly over the past decade has caused great difficulty to people throughout this country. This colossal failure of governance has also left the new Government, elected with a record mandate, with very limited resources to implement our Programme for Government.

Nevertheless, in our first nine months in office, we have implemented key elements of our Programme for Government: the Jobs Initiative, the restoration of the minimum wage, we have renegotiated the conditions of the bailout, and reduced the interest cost by €10 billion.

This week’s budget continued the implementation of the Programme for Government and placed economic growth, job creation and fairness at its centre. We have protected basic rates of social welfare for those out of work and protected the incomes of people who are working throughout the economy.

Economic growth is absolutely essential to generating jobs in this country. The budget uses innovative measures targeted at the sectors of the economy that are well positioned for growth: exporting small and medium sized enterprises, the multinational sector, the agri-food sector, manufacturing industries, financial services, and tourism.

In the agriculture sector alone, we have encouraged the transfer of farms to the next generation of farmers through reductions in the rate of stamp duty. We have continued the present relief for transfers to close relatives. We have stock relief for young farmers forming partnerships, and farmers may claim a refund on wind turbines purchased from January 1.

The budget includes measures to allow the growth in the export sector to extend into the domestic economy. The Government knows that a broad-based recovery is necessary to create the job creation required. It is the companies based in our communities that will solve this unemployment crisis. The Government is providing assistance to these companies through Enterprise Ireland and the County Enterprise Boards. In addition to the measures in the budget, the Government will be introducing an action plan for jobs in January.

The budget is also working to remove the constraints on growth, most notably the continuing deterioration in the construction and property sectors. A sector which once employed 270,000 people has fallen to just over 100,000.

The measures are not an attempt to re-inflate the property market, they are to bring stability. We must also remember that when the value of family homes is falling it has a very negative effect on consumer sentiment. We need a stable market to allow confidence to grow and jobs to grow.

The taxation policy of the budget was a clear implementation of the Programme for Government. It was guided by the twin principles of fairness and protecting employment, through minimising the effect of the tax changes on jobs. Taxes on income have a greater effect on jobs than indirect taxes, such as VAT and capital taxes.

The Government recognises that a key element to generating greater confidence is the protection of people’s income. A key measure of the tax package was removing 330,000 people from the Universal Social Charge. The other tax changes will give a better balance to our tax system. The majority of the additional revenue to pay for our education, health and social welfare systems will be raised from indirect taxes. These tax changes will also bring about greater fairness as people with wealth will pay a greater share with the increases in capital gains tax, capital acquisitions tax and DIRT.

The Budget has provided assistance to those most exposed to the height of the property market. We are fulfilling our commitment to increase mortgage interest relief to 30% for first-time buyers. This measure will assist those who purchased homes between 2004 and 2008.

The Government fully understands that, for many people, this budget has been very difficult and has meant changes to their standard of living. We have attempted to make reductions in public spending as fairly as possible. We have acknowledged mistakes where we have made them, such as the removal of the disability allowance for young people. We listened to the views of the people on this issue, expressed through TDs and Senators.