Mr McCreevy has honoured the letter, if not the spirit, of Partnership 2000, as far as the unions are concerned. His decision to press ahead with cuts in the top rate of tax at the expense of higher tax allowances for the lower paid, has particularly angered the country's largest union SIPTU, which represent most low paid workers.
While £517 million is being offered in tax cuts, very little of it will go to people in low paid, part-time or seasonal work, who will have to rely on the £250 a year increase in tax allowances for most of next year's pay rise.
The Budget will, in other words, increase the significant opposition to national agreements that already exists within SIPTU, but the union won't be calling for any special conferences of the Irish Congress of Trade Unions to consider withdrawal from this agreement.
The fact is that the Minister has produced a package which more than meets the headline figures provided for in Partnership 2000, to reduce the income tax burden on the PAYE sector and fight social exclusion. As Mr McCreevy said in his Budget speech, these targets are being met within the first two years of the 39 month long agreement. The Government is providing £517 million in tax relief, compared with £393 million last year, and many of the middle to upper income earners who will benefit most are trade unionists.
Cuts in the top rate of PAYE may also help curb pay militancy among higher income groups of workers, especially in the private sector. About 1.4 million PAYE workers will benefit from tax cuts, although the amounts may vary from £2 a week at the bottom of the pay scale to over £20 a week at the top.
The Minister is also promoting a "job friendly" tax and social welfare environment. Community Employment schemes are to recruit an extra 2,000 long term unemployed for their most successful programmes, there will be 5,000 more places on the Back to Work schemes and Family Income Supplement for the low paid will increase significantly.
Special tax breaks for employers taking on long-term unemployed and the reductions in tax rates for Small and Medium Enterprises should also boost job creation.