Low-paid, elderly to get priority in Budget

The Minister for Finance, Mr McCreevy, has signalled that priority will be given to the elderly and the lower-paid in next month's Budget.

He has dismissed speculation that he is considering increasing Capital Gains Tax (CGT) from 20 per cent to 30 per cent on the disposal of second houses. He has also stated that he would be "a bit slow" to take any initiative to impose DIRT (deposit interest retention tax) on credit unions.

The broad parameters of the Budget will be considered by the Government at a special one-day meeting today, in advance of the publication of the Estimates on Wednesday. The recommendations of the interim expert working group on child care will be considered. Traffic and housing are also on the agenda. No final decisions are expected to be taken at the special meeting.

As the Government prepares to tackle the taxation side of the Budget, the Minister for Finance said last night that there was "a lot of hype" from farmers at present, suggesting that a very short-term problem was bringing farming to its knees. "It is not", he said in an interview on RTE's Moneybox programme.

Mr McCreevy said that the Government of the day was not going to become the mechanism for certain types of people - including farmers - to fall back on. No Minister for Agriculture had done so much for farmers, yet all he had got in return was "loads of abuse from the farming organisations".

The Minister also said that £1,000 million will have been paid out by the Exchequer to Irish farmers this year. "It is not a small amount", he added.

Turning to budgetary matters, Mr McCreevy indicated that there would be movement on the Government's commitment to increase the old-age pension to £100 a week by the end of its five-year term. Most people would readily agree that the elderly deserved recognition in a special way. "Certainly, the old will be to the forefront of my mind when I come to the social welfare package", he said.

The Minister said he had "no idea" where the speculation that he was considering increasing CGT on investment houses had originated. "It certainly didn't come from here", he added.

He was more circumspect about the prospect of imposing DIRT on credit unions. Confirming that he had received a report from the working group on credit unions, Mr McCreevy said that he intended to proceed very cautiously in dealing with the credit unions in the future. "I am a bit slow, having learned the pain on the last occasion, to take any initiative in this regard", he said.

The Irish Farmers' Association responded angrily to the Minister's criticisms late last night. The blunt message from Mr McCreevy to 30,000 low-income farming families was to "pack up and get out of farming", it said.

A spokesman said that the Minister's dismissive attitude was a severe blow to IFA participation in Partnership 2000. The first casualty of this could be the proposed Government task force on beef, "which the IFA would find impossible to support while the Government continues to deny equity in the Family Income Supplement scheme to low-income farm families".

Meanwhile, Government sources claimed to have no knowledge last night of a threat by the Independent TD, Ms Mildred Fox, to support a Labour Private Member's motion in the Dail this week.

Ms Fox indicated that she supported the principle of the motion, which calls for the allocation of an additional £60 million to deal with mental handicap. She said that she would consider voting against the Government if it did not come up with an amendment to the motion.

Government sources indicated that they would be in touch with Ms Fox, through the usual channels in the Taoiseach's Department, to discuss the issue today.