Budget 'should help the vulnerable in society'

Today’s Budget must use record public finances to address social inequality, it was claimed today.

Finance Minister Brian Cowen’s €2.5bn spending fund should boost vulnerable sections of society such as the unemployed, the elderly and low-income families, social policy watchdog Cori said.

Cori chief Fr Sean Healy said: “This Budget must cater for the most vulnerable, increase social provision and resource infrastructure.”

Cori, which represents 135 religious congregations in 1,110 communities, also called for a minimum €17 rise in unemployment benefit.

Among Mr Cowen’s welfare increases will be a rise in the old age pension, to edge it towards the Government’s stated 2007 target of €200.

Mr Cowen said today: “It will be a balanced Budget. I’m conscious that many people in this country depend on the state to survive and they have to be looked after.”

Average earners should benefit also from adjustments which will allow them to earn up to €2,500 more before being subject to the top 42% tax rate.

It is understood that Mr Cowen will also sanction substantial increases in child benefit to help parents with young children to meet the cost of childcare.

A multi-annual package including tax relief measures is also likely to entice childminders out of the black economy and build more creche facilities.

Labour’s finance spokeswoman Joan Burton said: “Our children are our greatest resource and if we are to have a good society as well as a good economy, we should be putting the interests of children and families first.

“We want everybody to share in the fruits of the Celtic Tiger, not just a select few.”

Opposition finance spokesman Richard Bruton demanded measures in the Budget to eliminate public spending waste.

The deputy Fine Gael leader said he wanted to see decisive initiatives to ensure taxpayers’ money is properly spent.

“Waste has been the scourge that has pushed up tax burdens on every ordinary household and business,” he said.

Mr Bruton said he wanted a generous Budget, given that the Government is proposing to collect an additional 4,000 euro in tax from every household in the country in 2006.

Mr Cowen is also expected to aim in his Budget for greater equity within the tax system by capping property investment schemes and capital allowances to ensure the well-off pay their fair share of income tax.

The tax-free status of the bloodstock industry in Ireland may also be phased out.

Green Party finance spokesman Dan Boyle said: “We have too many tax reliefs with no social, economic or environmental benefit that enable people on high incomes to avoid paying tax.”

Similar to his tax breaks for the micro-breweries last year, Mr Cowen may also introduce excise relief to encourage the biofuel industry.

In addition, the minister is expected to include more long-term measures in his second Budget to ensure the continued prosperity of the Irish economy.

With Taoiseach Bertie Ahern ruling out any General Election until May 2007, today’s Budget will be the last chance for the Government to exert year-long budgetary influence over the state’s finances.