The Government's belated acknowledgement that the biggest give-away budget in the history of the State was socially divisive and politically unacceptable is to be welcomed, though the measures announced by the Minister for Finance yesterday must still carry a political health warning. After a virtual mutiny by members of the Fianna Fail parliamentary party and pressure from the Independent TDs on which the minority Coalition relies for support, Mr McCreevy proposed the introduction of a £3,000 a year tax allowance for the spouses of one-income families who care for children, the aged or handicapped persons in the home.
This climbdown on the main plank underpinning Mr McCreevy's Budget last night seemed to effect the immediate aim for which it was designed. It was a sop in the direction of Fianna Fail TDs and Independents which has served to temper the political climate in the short term. The controversial "individualisation" strategy still stands. And the social partners are being invited to consider the future development of the policy because, it seems, the unions are aggrieved that the Government was unilaterally deciding the direction of tax strategy rather than making it a component of the partnership negotiations.
But away from the hothouse of the Cabinet room, the Opposition parties offered a more astute assessment of the biggest volte face in the history of budget-making. Both Mr Michael Noonan of Fine Gael and the Labour leader, Mr Ruairi Quinn, suggested that the £125 million package could compound the original mistake and exacerbate the controversy. The new £3,000 tax allowance at the standard rate to spouses of one-income families who care for children, the aged or the handicapped in the home, does not restore official parity of esteem nor, more importantly, monetary appreciation of the roles of women in the workforce and women in the home. From April 6th next, the married woman caring for a child, the elderly or the handicapped will get £660 a year. She will not get it, however, if she has no children or if her children are reared. Her counterpart who works outside the home, sharing a joint income under £28,000, will not benefit from "individualisation" nor the new tax measure. She might be better off staying at home and allowing her husband to claim the £3,000 tax allowance.
The woman working outside the home who shares a joint income above £28,000 will gain, whether she has children or not. The maximum gain of £1,320 from the increased band will go to all dual-income couples earning over £34,000. And if the "individualisation" policy is continued over three budgets, as originally intended by Mr McCreevy last week, the married spouse caring for children, the aged or the handicapped in the home will still get £660 while her counterpart in the workplace, sharing a joint income of £56,000, will receive £6,160.
The introduction of "individualisation" in the formal Budget last week opened a deeply divisive debate about the position of women in society. There is no reason to believe that the amendment to that policy, hastily-conceived over three emergency meetings of Government Ministers in the last two days, has resolved the controversy. At most, it has put a stay on the public criticism until the proposals are studied. It is difficult indeed to discern any coherent social, political or economic philosophy behind Budget 2000.