Mr. Joe Cullen:

Regarding the question as to whether the indexation of the tax system would apply to pensioners and younger earners, the starting position is that the tax system applies to all income earners, from zero and right up the income spectrum. The starting position if there were to be indexing of bands and credits is that it would apply to everyone. On the issue of what has been achieved in the absence of having a system of automatic indexation in place, I will give a concrete example. We have taken figures for average earnings from the Central Statistics Office, CSO, publications and looked at the years from 2014 right up to the impact of budget 2022, which was a period when the economy began to stabilise after the financial crisis. In that time, a person on the average wage back in 2014 would have been earning around €36,000. The current equivalent average earnings figure is €44,191. The effective rate of tax on those two figures has varied slightly over that time, but not much. It was 21.8% in 2014 and, after budget 2022, it is now 22.5%. Therefore, it is broadly similar. This would suggest that the tax changes we have introduced have broadly kept pace with increases in earnings over that fairly decent period of eight years. If we look at married couples with one earner, people in that situation have done even better. In 2014, their effective tax rate was 13.1%. That has reduced after budget 2022 to 11.7%, and this has been largely due to the impact of the increase in the home carer tax credit over that time. Those are just some brief examples of how the system has matched the growth in wages over that time.