The Budget is a small change in direction from many years of transferring growing income and wealth upwards.

Congress sought a "bold Budget on taxation" and while it was not radical, it did meet a number of demands. Those on the minimum wage will be out of the tax net, until its next rise and some low to middle incomes will not be paying higher income taxes. While the improvements in social welfare are welcome, more could have been done.

A major disappointment is that there is little progress on the promise, under Sustaining Progress, to have only 20 per cent of all taxpayers paying at the top rate. Fiscal drag continues with little indexing of the credits and bands over the past three years.

The review of the tax shelters is welcome, but may only reflect the embarrassment of government with the revelations of some high earners using these shelters. There is no case for such "incentives" in a booming modern economy. They only serve to overheat, divert resources from productive activities and reward the wealthy beneficiaries.

Mr Cowen promised a "coherent and equitable approach to public services and the economy, through social partnership" but with "a low tax burden" on business and on labour. While Ireland has exceptionally low taxes on business and taxes on most incomes are not high, we also have exceptionally high taxes on spending, which are largely regressive. Increased public spending at 9 per cent, less growth and inflation, is really about 2 per cent. It will hardly bring us European standards of public services. This will take time - a long time!