Finance Minister Michael Noonan robustly defended his latest Budget following its unveiling, rejecting accusations it was a return to ‘McCreevy-economics’ – the overly generous Budgets of the Celtic Tiger years – and “we can well afford the extra expenditure.”

Speaking to George Hook on The Right Hook following his Budget speech in the Dáil, Mr Noonan rejected George's assertion that the Budget was an irresponsible one, more aimed at winning votes than ensuring a stable financial footing for the nation. Mr Noonan said growth in the economy – “from the end of 2014 to 2016 growth in the economy is 18%” – and increased taxation takes of 14.7% in two years have given the Government breathing room for a budget that saw €750m in tax cuts and €750m in additional public spending.

The Finance Minister spoke to Newstalk Breakfast, and said he expects a lot of young couples will “take the plunge” and buy a new home, thanks to measures introduced in Budget 2016.

Mr Noonan says people “were waiting for the Budget” and have been waiting to see what moves would be made. He said he “very confident” the budget will help “drive supply” in the housing market.

Mr Noonan announced a broad range of tax cuts in his Budget speech, with just one increase - a 50c bump up on the price of 20 cigarettes. Overall the Finance Minister promised the measures would result in "an additional week's wages for all workers."

“We can well afford the extra expenditure and still have a lot of money left over ... to reduce the deficit further, to balance the budget and to get the debt down further,” Noonan said.

Measures included in the Budget include cuts to USC, cuts to capital gains tax, cuts to commercial motor tax rates and a raft of further measures.

Rejecting the accusation from George Hook that these measures were akin to the vote buying Budgets of the Celtic Tiger years, Mr Noonan said it is prudent to pump money into a growing economy as “If you have an economy where there’s a lot of spare capacity – like 9.4% of people still unemployed – you have an economy (that can still grow) until you use up the spare capacity,” he said.

The approach was approved by the Irish Fiscal Council approve the Budget and influenced by approaches taken by German governments to their Budgets in the past.

“It’s very, very prudent and our approach was approved by the Irish Fiscal Council,” he said.

“We are prudent like the Germans. The playbook is very much like what the Germans did in the 90s.”

Listen to the full interview on The Right Hook below 

More: The key points from Minister Brendan Howlin's Budget speech

Opening his speech by describing the banking crisis and recession of the last few years as "one of the great" challenges faced by Ireland in its maiden century, Mr Noonan said "the last few Budgets have been very hard but they made it possible to exit the bailouts, to remove our debts," and said that Budget 2016 primarily aimed "to keep the recovery going."

From the start Noonan cuts in USC, more nurses and doctors, more affordable childcare, and "end to the unfair treatment of the self-employed" and "sensible affordable steps that will keep the recovery going and bring its benefits to every family."

The USC threshold changes were one of the biggest early announcements, with the threshold at which people pay rising to €13,000, that means an additional €1,000 per year for most middle income earners, he said, while also removing 42,500 people from paying USC completely.

Mr Noonan has also announced PRSI changes for the lower paid, meaning more net cash for those on the minimum wage - and there's an increase to the home carer tax credit of €190 bringing it to €1000.

The Finance Minister has signaled an extensive childcare package will be announced later by Brendan Howlin - This is expected to include two weeks paid paternal leave, a second free pre-school year, and a €5 increase in the children allowance

The local property tax will be frozen until at least 2019 and a new capital gains tax rate of 20% is being introduced who dispose of all or part of a business up to limit of €1m.

Mr Noonan promised it was a Budget "designed to grow the economy" ensuring there would be "no more booms and busts".

Measures announced in Budget 2016

• New capital gains tax rate of 20% for people who dispose of all or part of a business up to limit of €1m
• New Earned Income Tax Credit to the value of €550 for self-employed with no access to PAYE credit, to be increased further in future budgets if resources permit
• Bank levy to be extended to 2021 to bring an extra €750m to exchequer
• Remaining 0.15% pension fund levy will end in 2015 and will not be applied in 2016
• Postponing the local property tax revaluation date from 2016 to 2019
• Increasing threshold for Group A (transfers between parents and children) from €225,000 to €280,000
• Increasing entry point to the top rate of 10.75 by €20 per week to €376 a week
• Tapered PRSI tax credit for low paid workers to counter any change to tax on earning more
• Increase to the home carer tax credit of €190 bringing it to 1000
• Cuts in charges to businesses who accept debit card payments, saving these businesses €36m a year, warns must be passed onto consumers in lower prices
• Commercial motor tax rates to be cut with 20 rates being replaced by five - ranging from €92 to €900 (current max is €5,195)
• Increasing the film tax credit cap on eligible expenditure to 70 million
• Plans to introduce first OECD compliant KDB (knowledge Development Box) in the world and income that qualifies it will be subject to reduced corporation tax rate of 6.25% 
• NAMA to deliver 20,000 residential homes by 2020 - 90% of these in Dublin at cost of €4.5bn

USC

• USC changes bring marginal tax rate to 49.5% for all earners under €70,044
• USC Rates to be cut from 1.5% to 1%, from 3.5% to 3%, from 7% to 5.5%
• Around 42,500 workers will be removed from paying USC completely
• From January 1, USC entry threshold increases from 12,012 euro to 13,000

Increases

Pack of 20 cigarettes increased by 50 cent