Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I make two points on that. I should have responded to the Deputy's earlier question. I entirely take his point and it might surprise him that I agree with him that the income interests of people on very low income are of course entirely different from those on very high incomes. This is why I have tried to prioritise resources that are available to me on the standard-rate cut-off point as opposed to what we would do with the percentage reduction in the higher rate of income tax. It gives me the opportunity to be able to concentrate resources on particular income cohorts and bands.

On the Deputy's second question, I accept the income tax or personal tax gain is quite low for people on low income. As he will know, when people are paying very little personal taxation in the first place, it is very difficult for me to reduce it further without taking them out of the tax net entirely. Because of the changes that have been made to the entry point for liability for USC and income tax, the aggregate amount of personal taxation that people on low income are paying is now at a relatively low level. The only way I can reduce it further is by taking those people entirely out of the tax net and I do not believe that is a path we should take. We are getting to a point - it is a policy background to the point I just made - that personal income tax and USC changes will be tools of increasingly less significance for income distribution for people who are on low income because the total amount of USC or personal tax they are paying in the first place is quite low in comparison with what it was in the past.