Minister for Finance Brian Cowen has delivered his Budget speech to the Dáil, targeting the lower-paid and parents.
Brian Cowen
Central to his second Budget is a wide-ranging reform of childcare support from the State.
Mr Cowen announced a "significant extension" of maternity leave, a new childcare supplement for children under the age of six and a modest increase in child benefit payments.
From next March women with newborn children will be entitled to an extra four weeks' paid maternity leave, bringing the total to 22 weeks paid leave in 2006. An additional four weeks of paid leave will be available in 2007, by which time mothers will be entitled to 26 weeks, or six months, of paid maternity leave.
An additional four weeks in 2006 and another four weeks in 2007 will be available in unpaid leave. The reform will mean that by 2007 women will be able to take a total of 56 weeks' paid and unpaid leave.
An annual supplement of €1,000 will be paid to parents of children under the age of six. This payment, costing €265 million next year, will begin in the middle of 2006. It will be payable to all qualifying parents regardless of income.
Child benefit will rise to €150 per month for the first and second child and to €185 for third and subsequent children.
Mr Cowen said the aims of the Budget were to improve equality and opportunity and support lower income earners.
The old age pension is to rise by €14 to €193 per week, an increase of 8 per cent. The weekly fuel scheme is to rise from €9 to €14 per week. Tax on home heating oil will be reduced.
The employee tax credit will rise by €220 and the personal tax credit will rise by €50. That measure will lift 52,000 low income earners out of the tax net altogether.
Mr Cowen said GDP growth was projected at 4.5-5 per cent in 2006 with inflation of 2.7 per cent. Minimum wage earners will be lifted out of tax net, there will be a freeze on indirect taxes, social welfare payments will be well ahead of inflation and infrastructure and education will be a priority.
Some €900 million in capital spending has been set aside for third level institutions by 2010 and €300 million for higher education.
"I want to improve equality and opportunity for all in society. I want to help those on lower incomes," Mr Cowen said.