SNP MSP Willie Coffey says tuition fees are effectively a tax as are prescription charges, therefore "the idea that Scotland is the highest taxed part of the UK is nonsense".

Mr Mackay says he would dispute the assertion that Scotland is the highest taxed part of the UK.

The finance secretary says the Scottish government believe in getting certain social benefits at a time of need.

Brian Taylor
BBC Scotland Political Editor

And so to the budget. It depends, as ever, upon definitions. Should we talk about money for local government? Or money for local services?

If we consider cash for councils, then opposition parties can point to figures which indicate that the budget is down.

However, if we consider funding for services in the round, then ministers can point to figures which suggest that the level of financial support is up.

To offer a little more detail. Please turn to Table 9.02 in the Draft Budget document, external. It is on Page 91 in the book version. I know, I know, I sound like that maths teacher you disliked but bear with me.

This table cites Level 2 expenditure upon local government. Combining local government cash with central government grant support produces a cut of £327m from 2016/17 to 2017/18. That is the figure cited by Labour.

Image source, bbc

But, says the Scottish government, those are stripped-down stats. More info is available at Level 3 (Table 9.12, Page 101). That includes other funding streams and generates a cut of £182m across the relevant years.

But, says the SG a second time, that neglects other methods of providing funding for local services, albeit not necessarily through local authorities.

Finance Secretary Derek Mackay cited: £120m for the schools attainment gap, no longer to be top sliced from high band council tax; £150m for extra capital spending; £107m diverted from the NHS to social care partnerships; plus the prospect of an extra £70m from increasing council tax, should councils choose to do so.

According to Mr Mackay, the entire package added up to "an increase in spending power on local government services" of £240.6m. Note his precise use of language.

All of this, of course, with an eye to next May's local council elections - in addition to the immediate impact. Will voters heed the cry of "council cuts"? Or will they listen to "service delivery"? And which one will they believe?

Read more here.

Labour MSP James Kelly says councils now have less money which will affect public services because the Scottish government has not made best use of its tax powers.

Mr Mackay says the local government settlement is a fair one. 

"If it was such a bad deal for local government then i'm sure COSLA would have rejected it," he says. 

Image source, bbc

Mr Bibby asks what would have to change for Mr Makcay to increase income tax to 50p for those earning more than £150,000.

The finance secreary says any reasonable person would say that it would have to be certain to attract more income.

Mr Mackay reiterates that the "tax policy is set year on year". 

Questions have been raised over the Scottish government's use of health funds to boost local services spending on its budget balance sheets.

The Scottish Parliament Information Centre and the Fraser of Allander Institute noted that social care funds were being used to show an increase in both the council and health budgets.

Image source, Getty Images

The Tories said this was a "double counting con" by the finance secretary.

The government said the budget would give councils extra spending power.

Meanwhile Scottish Labour claimed the budget had become a "total shambles" after revised funding allocations had to be sent out to councils.

Labour MSP Neil Bibby asks if the Scottish government require the chancellor to support a 50p tax rate before it can.

Mr Mackay says parliament must understand the Block Grant Adjustment.

The finance secretary says a 50p tax rate "does not seem like a decision Philip Hammond will be making anytime soon."

"Of course we would have to look at it if the UK government introduced it," he says.

Image source, bbc

SNP MSP Ash Denhom also asks about the additional rate of income tax not being raised.

Mr Mackay says the key issue is if the additional rate is  raised would there actually be a tax increase

Mr Harvie asks why increase the higher rate threshold by inflation but not change the additional rate.

The finance secretary says the change on the threshold on the higher rate would raise more, in terms of the block grant adjustment.

Mr Mackay says the the government feels that freezing the current income tax rate gives taxpayers more certainty.

"What we are putting forward gives more stability and certainty," he says.

The finance secretary says we are not "passing on" higher rate threshold tax cut of the Tory government.

Greens Co-convener Patrick Harvie says Mr Mackay keeps referring to "passing on" but there is no passing on. 

"This is something that is set here in Scotland now, it is not about passing on," he says. 

Image source, bbc

Scottish Green Party co-convener Patrick Harvie asks about progressive taxation and closing the inequality gap.

Mr Harvie asks if the zero change in income tax rates and bands is sufficiently progressive.

Mr Mackay says the income tax policy is taken year to year and he says the SNP were elected on these tax proposals.

The finance secretary says the income tax policy remains under review.

Mr Fraser says in 2010/11 the total budget was £34.2bn which rises in this draft budget £37.9bn.

The finance secretary says over the total period the Tories have been in power there has been a real terms reduction in terms of discretionary spend.

Image source, bbc

Mr Fraser says the Scottish budget document is saying something completely different.

The Tory MSP asks: "How is there a cut or have you got your sums wrong?"

Derek Mackay says there has been a 9.2% cut over 10 years in real terms spending.

Tory MSP Murdo Fraser says the finance secretary has taken the decision to have different business tax rates than the rUK.

Mr Fraser says the budget for next year has a £501m increase in real terms.

Mr Mackay says there is, in this one year, a real terms increase.

The finance secretary says that is taking into the context that there is a 9.2% reduction in the next ten years. 

Mr Mackay's budget plans would see a distinction drawn between the higher rates of income tax in Scotland and the rest of the UK.

While the UK Treasury aims to up the threshold for the 40p tax rate to £45,000 and eventually £50,000, the SNP has pledged to raise it by no more than the rate of inflation - to £43,430 in 2017/18.

Image source, bbc

This would leave some Scots paying more tax than those earning the same amount south of the border, which the Conservatives say would make Scotland "the highest taxed part of the UK".

The budget calculations also include the end of the council tax freeze, with councils able to raise rates by up to 3%, and extra increases to bands E, F, G and H, which were agreed earlier in the parliamentary term.

Labour MSP James Kelly says everyone agrees promoting economic growth is important.

Mr Kelly asks why some of the Scottish government growth figures are different to the OBR figures.

Mr Mackay says that it is to do with the different forecasting models and methodology.

Mr Mackay says the Scottish government and local authorities work together to establish a deal and this can be different for each area.

The finance secretary says city deals have largely been around infrastructure but also employment too. 

He says strong working partnerships are important. 

Revenue from oil and gas tax is expected to rise over the next four years, according to the Office for Budget Responsibility.

Documents published with the Autumn Statement, external forecast a rise in the price of both oil and gas of 10-15%, generating bigger taxable profits for offshore operators.

Image source, OBR

The independent body predicts nearly £6bn revenue over the next four years.

In March, it forecast a tax allowance giveaway by the Treasury of £4bn.

The main factor in its revised forecast has been a faster than expected rise in dollar oil prices.

Image source, Reuters

The number of jobs relying on the UK's offshore oil and gas sector has fallen by more than quarter in the past two years, according to an industry report published in September.

In a second year of severe cuts in cost, the industry is thought to be supporting 120,000 fewer jobs than in 2014.

The annual economic report from Oil and Gas UK shows the impact this year is increasingly on the supply chain.

Spending is down by 30% in two years as a result of the oil price fall.

Mr Mackay says oil and gas has had a profound impact on tax receipts and on productivity growth.