THE Coalition has presented a preview of its election manifesto, but little hint of its timing, with the biggest giveaway Budget in the State's history.
The Minister for Finance, Mr Quinn, produced a package which will cost £650 million in a full year - a record £490 million of it in tax reductions across a broad range of political interest groups.
He also announced that it was the first time a Minister for Finance had planned for a significant current budget surplus of £193 million.
Mr Quinn based his third, and possibly last Budget before the election, on three principles yesterday - to reward work, promote enterprise and strengthen social solidarity.
He reduced the standard rate of income tax from 27 per cent to 26 per cent, widened the standard rate tax band and increased personal allowances.
He cut the employee's PRSI rate from 5.5 per cent to 4.5 per cent and increased the threshold for employers' PRSI.
Mr Quinn increased all social welfare payments by £3 per week from mid June, increased child benefit payments, adjusted the carer's allowance and increased and extended, the maternity and adoptive benefits to the self employed.
He introduced tax improvements for business and farming sectors, among them changes in the rate of corporation tax, capital gains tax and capital acquisitions tax.
He also moved to head off any political fall out from the recently announced increase in stamp duty. Introducing a sliding scale, he said that the full 9 per cent rate would now apply only to properties valued at over £170,000. He confined tax increases to the areas of least political impact, cigarettes and petrol.
Fianna Fail and the Progressive Democrats were left in the unenviable position of having to oppose what was seen as a good news Budget last night. Their finance spokesmen, Mr Charlie McCreevy and Mr Michael McDowell, both saw it as a blatant attempt to buy votes.
But Mr Quinn dismissed their criticisms with the claim that it was the first of two budgets which he hoped to introduce this year. "This is not an election Budget," he said. "It is a Budget in an election year. I don't think this Budget will win an election but this Government will."
Government sources displayed ample evidence of the election backdrop to the Budget, however, with the three parties claiming credit for different components of the package.
The Tanaiste, Mr Spring, told Dail members that the Opposition were only half wrong in their accusations that they were spending the fruits of economic growth. "Yes, we are distributing the fruits of growth among the people who contributed to it," he said.
Fine Gael sources laid claim to the tax reductions generally, particularly the level of the employers PRSI threshold, corporation tax reductions and the planned current budget surplus.
It was clear from Mr Quinn's speech that the Minister for Social Welfare, Mr De Rossa, traded the PRSI concessions for a commitment that a process of regular reductions in the social insurance fund was not envisaged.
The timing of taxation and welfare improvements gives no hint of when this year's general election might be called.
The income tax and PRSI reductions will come into effect in April; the main social welfare increases will come into effect in mid June; the child benefit increases will come into effect in September; and the new sickness allowances, pensions improvements and widower's pension will come into effect in October.
