2005 at a photocall this morning
The Minister for Finance, Mr Cowen, has targeted spending on social welfare and disability services in his first Budget.
A reduction in stamp in duty for first-time buyers of second-hand homes was also a major feature of the Budget but Mr Cowen left the "old reliables" unchanged.
He told the Dáil that first-time buyers of second-hand properties would have to pay no duty on houses up to the value of €317,500. A reduced rate will apply to houses worth up to €635,000.
His Budget contained no increase in the price of alcohol, cigarettes or fuel, and Mr Cowen said he planned to reduce excise duty rates on alcohol produced by micro-breweries to encourage employment and investment in the brewing sector.
He also introduced tax relief for young farmers in relation to livestock and land.
Personal tax credits are increasing by €60 for a single person and €120 for married couples to bring those to €1,580 and €3,160 per year respectively. "This will benefit all workers and will ensure that all those on the minimum wage are fully outside the tax net," Mr Cowen said.
"As a result of these increases, over 650,000 of the 1.9 million income-earners will be exempt from paying tax on their earnings," he added.
The old-aged pension will increase by €12-a-week while child benefit will rise by €10 a month for first and second children and €12 for subsequent children. Social welfare payments are to rise by €14 a week.
Mr Cowen said: "Improvements in social welfare payments will amount to a total of €874 million. Even within such a large sum, priorities have to be made. I think it is just, then, to concentrate on the lowest earners in society."
In a major part of Mr Cowen's Budget, he said spending on the disabled is to rise 11 per cent to €2.8 billion. Mr Cowen announced a special multi-annual funding package of €900 million for those with intellectual and physical disabilities up to 2010.
A €3.25 billion four-year investment programme for health services infrastructure was also announced by Mr Cowen. The mutli-annual investment will run from 2005 to 2009 and includes funding directly from the Exchequer as well funding from Public Private Partnerships and monies directed from the National Development Finance Agency - which has yet to invest in a project within the State.
At the outset of his first Budget speech, Mr Cowen paid tribute to his predecessor, Mr Charlie McCreevy. The tribute was greeted by applause by some members of the House and jeering from Opposition benches.
Decentralisation, announced controversially by Mr McCreevy last year is making "considerable progress", Mr Cowen reported and is "well on track". Earlier this month the Government announced a scaled back implementation phase of the project.
Mr Cowen said "ensuring a fair and equitable tax system" was a "priority for this Government."
"The primary aim of the our tax policy is to use the tax system to stimulate economic growth, reward work and reduce the tax burden on the low paid," he said. Personal tax credits would rise by €60 for a single person and by €120 for a married couple, and the standard rate band would increase by €1,400.
He said €45 billion would be allocated for gross spending on public services in 2005, a 9.1 per cent increase on last year.
"We must continue to compete to attract foreign direct investment. Economic development is crucial to our future well being", Mr Cowen said. "We have the potential to grow at 5 per cent in real terms and keep inflation at 2-3 per cent in real terms."
Concluding his speech, Mr Cowen said the Budget "radically improves the funding for and delivery of services for the disabled, increases social welfare rates by well above the rate of inflation, frees those on the minimum wage from income tax, seeks to reinforce the equity of the tax system...[and] keeps inflation low to help those on lower incomes."
"There is more to come in the next two Budgets to be presented to this House. This Budget is my first instalment."