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

I want to add to what the Minister, Deputy McGrath said regarding the recognition of those who do not qualify for social welfare payments, but are in work and clearly face new difficulties because of the higher price of energy and food. That is why there is complete agreement in government regarding the role of indexation in our personal code.

The Minister, Deputy McGrath, and I recognise that people who receive a wage increase from their employer to help with the cost of living receive it because of how hard they have worked and the ability of employers to pay an increase in recognition of their efforts. We believe, therefore, it is appropriate that we try to avoid someone paying a higher level of tax on a wage increase he or she has earned. This is why, since day one, we have focused the programme for Government on the role of indexation in our tax code at a time at which wages are growing to try to deal with the consequences of inflation.

If wages grow at a sustainable rate, which is why the work the Minister, Deputy McGrath, is leading on public sector wage negotiations is so important, we want to do our best to help workers keep their fair share of the wages they earn. That will form an important part of the package we announced on budget day. It is why the Government agreed to a change in the resources available for the taxation element of the budget.