A BADLY-SHAKEN Government yesterday amended two key elements of the Budget in the face of a backbench revolt, serious tension between the coalition parties and widespread public anger at the decision to abolish the over-70s medical card scheme.
The Budget measure abolishing the medical card for the over-70s was changed significantly to allow 95 per cent of those with cards to retain them, while the 1 per cent income levy was amended to exempt those earning the minimum wage of €17,542 a year.
Fine Gael's deputy leader and finance spokesman Richard Bruton maintained last night that Brian Lenihan's Budget was in tatters, with the Government being forced "into yet another humiliating U-turn" on the 1 per cent income levy.
In an effort to put even more pressure on the Government, the Labour Party leader Eamon Gilmore announced last night that his party would table a Dáil motion next week condemning the Budget education cuts and calling on the Government to reverse its decision to increase class sizes.
The climbdown on the issue of the over-70s medical cards was announced at a joint press conference involving Taoiseach Brian Cowen, Minister for Health Mary Harney, and the Green Party leader John Gormley. Mr Cowen apologised for the distress caused by the controversy, and said he was confident the new scheme would be acceptable to TDs supporting the Government.
Some 105,000 pensioners who would have lost their medical cards under the initial provisions will not now do so. Mr Cowen said he wished to express how sorry he and his colleagues were for the distress caused to people who feared they would lose their medical card, when in fact they would never have lost it.
"We regret the anxiety that was caused by the failure to properly communicate the fact that over 70 per cent of pensioners over-70 would have been completely unaffected by the original proposal." He said that people not affected believed they were going to lose the medical card. "That was never the Government's intention, so I very much regret that and apologise for it," he added.
The new threshold for qualification for a medical card for over-70s is €700 a week for a single person, equivalent to €36,500 a year and €1,400 a week for a couple, or €73,000 a year.
Existing cardholders will not have to do a means test. Instead, they will be asked to notify the Health Service Executive if they are over the income threshold.
Ms Harney said 20,000 medical cards would be handed back by those over the new income limits. The original thresholds would have resulted in the withdrawal of 125,000 medical cards.
After the press conference to announce the changes, Mr Cowen addressed the Fianna Fáil parliamentary party and briefed TDs on the decision. The Government Chief Whip Pat Carey said later that party TDs were happy that "a better and more equitable system had been arrived at".
Mr Carey said there had been a very good discussion at the meeting and he expected all TDs to support the Government in the Dáil vote tonight on the Fine Gael motion calling for a reversal of the decision.
The most open opponents of the measure - including Noel O'Flynn, Pat "The Cope" Gallagher, Mattie McGrath and Noel Treacy - all spoke strongly in favour of the new scheme.
Independent TDs Michael Lowry and Jackie Healy Rae are also expected to vote for the Government tonight, although Mr Lowry said he required further assurances.
Mr Cowen announced the Government decision to exempt the low paid from the scope of the 1 per cent income levy.
Government sources emphasised that the decisions on the medical card and the income levy had been taken within the parameters of the budget and that other savings would be made to compensate.
Mr Bruton said the Government had shown a lack of understanding of the issues affecting ordinary people.
"As the Budget crumbles, the lack of competence among those who framed it is being exposed. The Government is demonstrating its lack of grasp on the challenges facing the economy, and its lack of any coherent strategy to address them," he said.