Paschal Donohoe (Dublin Central, Fine Gael)

I thank Deputy Doherty and wish everybody a good morning. I accept that, in the absence of indexation of tax bands and credits, it does have an effect on workers within our economy and society. At the same time, we will continue to see wage growth take place in our economy, meaning that across next year with wages going up, once workers have paid their taxes, I expect to see a net increase in after-tax income.

Overall, in the construction of the budget, we have to ensure the budget is of a certain size. The reason for that is my view that if the budget was any larger than €9.4 billion - it is already a very big budget - and I were to add on top of that a personal package of indexation with regard to bands and credits, it would have taken the overall size of the budget up to anywhere between €10.5 billion and nearly €11 billion. My assessment is that a budget of that scale could pose real challenges to our ability to afford some of the changes we have made.

This is a budget that is largely defined by investment and how we try to support jobs within our economy. The Deputy is correct; there are some areas within that on which we have disagreed over a number of years. I look forward to continuing that debate in this Finance Bill. The way I am trying to support workers and growth in their income is by investing in jobs and in their future. My concern is that if I had added on top of that a personal taxation package of €1 billion to €1.5 billion, it would have posed real, long-term risks to our ability to afford the changes in this budget.

My aim, on completion of this budget, is to be able to do what I have done in other budgets in other years, which is to accompany it, on an annual basis, with changes in spending and changes in regard to indexation of bands and credits.