Labour MSP Iain Gray accuses Derek Mackay of bringing the budget to parliament containing a mistake.

"He is not on the strongest ground when it comes to fiscal competency, is he?"

Derek Mackay says the local government settlement is up in real terms before council tax rises are considered.

He notes Cosla has welcomed this.

Tory MSP Brian Whittle says South Ayrshire Council is having to make a number of service reductions, asking how the finance secretary reconciles this with the first minister's assertion that education is her priority.

Derek Mackay says the council will get £9.4m extra.

"And he's going to vote against it," we here John Swinney shout... repeatedly.

Mr Mackay points to "popular support" for the proposals and concludes by saying he is proud to present the budget today.

Philip Sim
BBC Scotland political reporter

The changes to the income tax system in the Scottish budget mean almost everyone in the country will notice some difference in their lives. But what other big measures were in there, and exactly what will it mean for you?

Overall, 70% of Scottish taxpayers will pay less, while 55% will pay less than they would if they lived elsewhere in the UK.

That does, of course, mean 30% will pay more than they did last year - and 45% will pay more than they would if they lived south of the border.

There was originally an "anomaly" in the plans which saw some higher earners get a tax cut as a result of changes to the higher rate threshold.

However this was ironed out as a result of the negotiations between the SNP and the Greens, raising an extra £55m.

Read more here.

Finance Secretary Derek Mackay says: "Patrick Harvie made a number of very positive contributions throughout the budget process and it is in that context that in the national interest we have secured a deal for Scotland."

Image source, bbc

The Tories have £556m of secret cuts, says Mr Mackay.

Moving to Labour's "Billion pound budget plan", the finance secretary asks what was Labour's assessment of the behavioural change.

Mr Mackay say millions of pounds would be lost and that is why the SNP listens to the Scottish Fiscal Commission.

Image source, Pa/Getty images

The deal between the Derek Mackay and the Greens will see:

• an additional £170m going to local councils.
• raise public sector pay for 75% of workers rather than 51%.
• all public sector employees earning up to £36,500 will now receive a minimum 3% pay increase
• increase he new higher rate threshold by 1% to £43,340, to address
• an additional £10.5m to help fund inter-island ferries in Orkney and Shetland

Mr Tomkins says you can't have the world leading services everyond

He says: "This is a budget of betrayal."

Mr Tomkins says the SNP was elected on the pledge to freeze the basic rate of income tax - "a promise abandoned".

The Tory MSP says Nicola Sturgeon said she would not put up income tax.

Tory MSP Adam Tomkins labels the budget "high-tax", suggesting it taxes success and aspiration.

Nurses, teachers, social workers, police officers and GPs will pay more tax, he says.

"It's bad for them, it's bad for their families, it's bad for the economy and it's bad for Scotland."

Derek Mackay "listened only to the Greens who urges him to thrust his hands deeper into the pockets of hard-working people", Mr Tomkins states.

The second theme of the budget, he says, is "chronic low growth".

Ms Lennon says: "Our plans are ambitious and we make no apologies for that."

"The important narrative here is about ending the misery of austerity."

Image source, bbc

Scottish Labour's budget proposals to raise and spend an extra £960m would come via radical changes to taxation.

Read more here.

"The SNP's tax plans are timid and simply tinkering around the edges is not good enough."

To tackle child poverty, Labour is backing the Give Me Five campaign to top up child tax credits by £5, says Ms Lennon.

Closing for Labour, Monica Lennon says the budget fails to protect the most vulnerable in society.

She states it does not meet Labour's five tests of:

1. Halting austerity
2. Stopping poverty growth
3. Redistributing power
4. Redistributing wealth
5. Growing the economy in the interest of the many

She criticises the SNP for labelling Labour's proposals a "wish list".

There is "nothing amateur" about challenging austerity, she says directly to SNP MSP Ben Macpherson.

Image source, bbc

SNP MSP Ash Denham says the majoirty of people will recieve a tax cut and are at the lower end of the income scale and will spend more.

Ms Denham says: "This budget makes Scotland the fairest taxed part of the UK with the best deal for tax payers."

Tory MSP Liz Smith says she will focus on non-domestic rates, beginning by welcoming a number of the Scottish goverment's proposals.

However, she criticises decisions around the large business supplement, warning a number of medium-sized businesses will have to pay more.

Concerns are expressed about "anomalies" around private day nurseries and independent schools.

Slightly separately to the rest of her speech, she also thanks Public Health Minister Aileen Campbell for listening to concerns about the Scottish Sports Association, which will now receive the £70,000 funding it requires.

Strong public services and a vibrant economy go hand-in-hand, SNP MSP Ben Macpherson says.

He labels Labour's tax proposals "amateurish".

Labour MSP Iain Gray says the Scottish government could choose to end austerity and boost growth, thanks to the new powers over taxation.

Instead, he argues, "they brought forward a budget for passing on cuts yet again".

SNP MSP Ivan McKee says Labour's tax plans are holed below the water line.

Mr McKee says Labour lack credibility on its budgeting process.

He accuses the rival party of "tax proposals more worthy of Screaming Lord Sutch" than a credible party.

Image source, bbc

He then turns his fire on the Tories' economic policy.

"Clown's to the left of us, jokers to the right of us," says Mr McKee nearly quoting Stealer's Wheel accurately, but not quite.

Image source, bbc

The correct line is "Clown's to the left of you, jokers to the right", which scans better.

Tory MSP Miles Briggs criticises the Scottish government for not assessing how tax increases may affect NHS recruitment and retention.

He suggests it will make it more difficult to attract highly skilled individuals.

Mr Briggs argues the economic growth is needed to improve public services.

"I never thought I would say bring back Alex Salmond to this parliament, but he at least had an idea of growing our economy."

Here's a wee guide to the expected next steps in this year's budget process:

• Stage 1 today, decision time vote on general principles at 5.15pm - don't go away!

• Stage 2 on 7 Feb

• Stage 3 on 21 Feb

Image source, Scottish Parliament

As with last year, a motion for a Scottish rate resolution on income tax rates is expected to be lodged at some point during the Budget Bill process.

Stage 3 of the Bill cannot be taken until the Parliament has agreed to the motion.

As ever, while the Parliament will be able to make recommendations in relation to the rates and bands for income tax, only Scottish ministers may move a motion for a Scottish rate resolution.

Such a motion may not be amended.

Image source, bbc

SNP MSP Emma Harper says equality has been at the forefront of the finance secretary's mind, by aligning pay and tax policy.

Ms Harper says accuses Labour of calling a debate of no confidence in the budget when they did not even have a tax plan, "incompetence" she says.

She calls on the Tories to explain where the cuts, required to give £500m to high earners, should fall.