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

As Deputy Nash acknowledged, this is a process whereby the Government receives a recommendation from the Low Pay Commission and acts on it. A process with an independent group acting on behalf of the State, evaluating information independently of the Government or its view on the matter, is the right process. It has been a reason this is just one of a series of increases to the minimum wage in recent years. When we are debating this minimum wage, the context in which it should be seen is not just looking at this as a single move, but as a series of moves that have taken place over recent years, as a response from the State to support those who are earning the least as our economy is growing. The challenge from a tax policy point of view relates to those who are on a low level of income in the first place. They tend to pay a lower level of tax. This is a consequence of having a starting position of a highly progressive tax code. Any changes that we make at the lower level of income sometimes lead to a change in take-home pay that can be a subject of debate. Some would say that we are making a change that is only worth a small amount of money to somebody on a low level of income. That is a consequence of the fact that they are not paying a high level of tax in the first place. It is a reason why the work of the Low Pay Commission is important. I have no doubt that, as it continues its independent process into next year and beyond, the kind of trends that are developing in the cost of living will be considered seriously by the Low Pay Commission.

With regard to Deputy Mairéad Farrell's views, it is important that the committee be aware that changes such as the one I am making to reduce the level of universal social charge that somebody would pay on the minimum wage were not included in Sinn Féin's proposed budget. Sinn Féin has taken the overall view that there should be no changes in personal taxation at a time when the cost of living is increasing for many. I take a different view. I believe that targeted changes in our tax code that are inside the parameters agreed by the Government as part of our summer economic statement are appropriate to help those who are under pressure and facing challenges because of an increase in the cost of living. Some on the Opposition benches take a different view. While I listen to Deputy Farrell's view on the adequacy of this proposal, it is much more adequate than doing nothing at all, which is what Sinn Féin proposes. This is a sensible change. I accept that one could ask the question as to whether it is enough but it has to be seen in the context of changes made in budgets each year.