Budget to ensure fair division of wealth - Taoiseach

The budget will provide incentives for economic growth and will ensure a fair distribution of the benefits of prosperity, the…

The budget will provide incentives for economic growth and will ensure a fair distribution of the benefits of prosperity, the Taoiseach has told the opening session of the Fianna Fáil ardfheis.

In his address to delegates in Killarney last night, Bertie Ahern also lined up his party behind farmer demands for the retention of the Common Agricultural Policy, which is under extreme pressure in the run-up to the world trade talks.

He stressed the importance of what Fianna Fáil saw as its competitive advantage over the Fine Gael/Labour alternative government - handling of the economy.

"At the heart of the strong case that Fianna Fáil has to make is our capacity to strengthen and sustain our economy," he said.

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"It is in Fianna Fáil's capacity to manage and to lead the economy that people can really see and feel the political difference between rhetoric and results."

He listed the economic improvements since 1997: "Unemployment has halved; the economy has almost doubled in size; public spending on health has more than trebled; last year 77,000 houses were completed, the highest level per capita in Europe; and taxes on incomes, taxes on jobs and taxes on investment have all been cut with huge and positive effect."

On taxation, voters knew where he and Fianna Fáil stood. "They are now entitled to be told truthfully where others stand too."

It was Ireland's resilient and dynamic domestic sector that was driving economic growth. "Consumer and investor confidence is driving our economy. That confidence can be expected to be strengthened when the Government's SSIA scheme comes to maturity next year and the year after."

Nevertheless, there were risks to the economy. Ireland had to ensure it retained competitiveness to allow it to deal with any negative developments over oil prices and "financial imbalances in the major economies" - a reference, in particular, to the US trade and budget deficits.

"We have lost more competitiveness than we can afford in the last few years," Mr Ahern said.

"Moderating our own income demands and expectations is one way to tackle this. Action on the part of the Government to spur competition and to manage the public finances in a sound manner is another way to achieve our aim."

Increasing competitiveness was not done only by lowering unit costs, which include wages.

"Some other higher-wage countries, like those in Scandinavia, lead on competitiveness because of their large-scale investment in human skills and knowledge.

"All this boils down to a better focus on education, targeted measures to foster research and development and attracting and rewarding firms who use these skills."

The Cap, which provides large subsidies for Irish farmers "has been the subject of misplaced and misinformed criticism", he said.

"The objectives of the Common Agricultural Policy are to guarantee the availability of food supplies to the consumer at reasonable prices and of ensuring a fair standard of living for the agricultural community. I believe these objectives are valid today."

He said that although Ireland was committed to a successful outcome to the World Trade Organisation negotiations, "we are not prepared to sacrifice agriculture for the sake of an agreement at any price".