It was what Charlie McCreevy might call a "liberal pinko" package, writes Cliff Taylor, Economics Editor. The Minister for Finance, Mr Cowen, had money to spend and he directed it firmly at the welfare sector and lower earners.
Just about everyone will gain from Budget 2005, though many middle to higher earners may hardly notice the difference.
The most expensive part of the Budget package was an €870 million welfare package, giving €14 extra a week on basic payments and an additional €12 a week to pensioners. This will give significant percentage income increases to those in receipt of these payments, even if the gains in cash terms are still greater for taxpayers.
On taxes, Mr Cowen made a clear choice. He directed the bulk of his resources to increasing tax credits, taking those people on the minimum wage of €7 an hour - €273 a week - out of the tax net completely. With the bulk of the increase going to the PAYE credit, all employees on the minimum wage are exempted from paying tax , but the self-employed and farmers still enter the tax net at lower income levels.
The price of increasing tax credits was that relatively little cash was left to expand the standard rate band, which determines when taxpayers become liable to the higher 42 per cent rate. This means that the percentage of taxpayers who pay tax at 42 per cent will rise from 32.6 per cent this year to 33.2 per cent next year.
The combined impact of the changes in income tax credits and bands - as well as changes in the health levy and the PRSI ceiling - lead to a complicated picture in terms of who gains most from the tax package. Lower earners gain across the board, while some middle earners benefit significantly from the widening of the standard rate band, or the increase in the floor for the 2 per cent health levy. For others, the rise in the PRSI ceiling claws back some gains.
A separate analysis presented with the Budget shows that the combined impact of all the tax and welfare changes is to give the greatest percentage benefits to the less well off sections of society.
However, the Government realises that equity remains an issue in the tax system. And following the affair of the 11 millionaires who pay no tax, Mr Cowen has promised a review of tax reliefs. Many of the property allowances are due to end in mid-2006 anyway. However, it may be a nervous year for stallions and greyhounds - or more precisely their owners - and artists as their tax breaks come up for review.