The Dublin government presented a generous budget on Wednesday in a transparent effort to boost its rating in the polls.
The Minister for Finance, Brian Cowen, reversed the trend of recent years under his predecessor, Charlie McCreevy, by introducing a number of measures to boost social welfare and reduce tax on the working poor.
Cowen’s first budget took all minimum wage earners out of the tax net, while also increasing tax credits and the standard-rate tax band. He also used a big budget surplus to modify nine of the so-called “savage 16” cutbacks introduced last year.
There were also increases in social welfare payments and a large package for the disability sector over the next three years, as well as measures to help first-time house buyers.
Observers had been predicting such measures as part of Fianna Fail’s efforts to reposition itself following its poor showing in the local and European elections earlier this year.
Controversially, there were no tax relief measures for childcare in the budget. Meanwhile, tax loopholes available to the ultra-rich were allowed to remain in place.
The main opposition party accused the Minister of presenting a “crafty, cunning Budget” which it said was designed to press all the right buttons.
Richard Bruton said that the Budget was designed to try to rehabilitate the Government’s image, but added that little had changed beneath the surface.
Labour’s finance spokesperson Joan Burton described the Budget as populist, but not visionary or reforming.
Deputy Burton said it was trying to make up for the mistakes of the past, but had failed. She said the Budget did not bring justice to the tax system, because there were still too many people on low incomes paying the top rate of tax.
Sinn Féin TD Arthur Morgan said it was fear of the voters which forced the government to abandon its previous policies.
Deputy Morgan said “well done... to those voters who scared the living daylights out of this Government last summer and sending the message that they, the people, will no longer accept the wanton, right-wing gallop that is widening the gap between rich and the 20% of people living in poverty.
“Keep voting Sinn Féin; it’s working.”