Mr. John King:

The first point I would make about purchasing power is that workers in Ireland deserve a pay increase. The vast majority of them, as we know from the figures that have been released, are low paid. A far bigger percentage of workers are on rates of pay below the medium pay level and certainly below the average level than are on rates of pay above it. They have not received a pay increase. It is only right that workers, and low paid workers in particular, should benefit from the recovery that is taking place.

The taxation issue or the issue of the development of public services is a much bigger question. We want there to be a progressive taxation system that would be capable of funding the delivery of proper, decent public services for all our citizens. I believe it was the Taoiseach who said last week that work should pay. We believe there should be a clear distinction between the two and that those who are required to rely on public services should have the standard of public services we all deserve in the 21st century. Our view is that people who go out to work deserve to be treated with dignity and respect and paid properly for the work that they do.

As I understand it, the low pay commission at this stage will be used as a means to guide Government policy on what the minimum wage rate should be. In that context, reference is also made to "and related matters". It will be interesting to see the scope it will have in interpreting what related matters might be. In conjunction with that, a review is being carried out by, I believe, the University of Limerick on the zero-hour contracts. Facilities are now provided, both in the minimum wage legislation and in the reform agenda for the reintroduction of the joint labour committee system, for employers to be able to plead inability to pay in certain circumstances. Workers in this economy have carried the brunt of the adjustment necessary by way of income reduction or a reduction in spending power and so on. That has led to some of the stagnation that has taken place within the domestic economy. All of our European partners, bar one, saw the sense in maintaining consumer demand in their domestic economies and all of them, bar one, increased their minimum wage. A strategy of not increasing wages, or reducing wages or take-home pay, is not only detrimental to the interests of the workers, but it is also counter-productive to the maintenance and creation of demand in the economy, which will be essential if we are to sustain a recovery from this crisis.