Pearse Doherty (Donegal, Sinn Fein)
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Mr. Barnes mentioned that the summer economic statement has revised up the Government's taxation package from €500 million to slightly over €1 billion. He said that the upward revision of the tax package would help to prevent the tax burden from rising substantially. I wish to tease that out. Last month, Dr. Barra Roantree from the ESRI noted that the benefits from changes to the standard rate band is concentrated towards the top of the income distribution. Therefore, changing the upper band gives no benefit to 80% of tax units. The IFAC income assessment report in May noted that high-income households which would benefit from a tax change such as this would simply increase their savings, increasing their spending power. We know that 80% of tax units do not pay tax at the top rate and only 20% would benefit from a change to the standard rate. To have secondary effects and so forth, tax cuts can be provided to people who will increase their spending power and possibly fuel inflation. Is that the best measure in terms of tax cuts?

I take two things from Mr. Barnes's opening statement. I see a change in his position to the effect that tax cuts to the standard rate are required - so a tax rate for 20% of income earners. An inference could be drawn that the increase in the tax package from €500 million to €1 billion is actually for this purpose. Without second-guessing the Minister, I would suggest it is not. I suggest that the Minister will and should extend the 9% VAT rate on petrol, diesel, kerosene for three months into 2023, which would be the bear minimum and would cost a few million euro shy of €250 million on its own. Has IFAC changed its position on those changes which it claimed in its May report would simply increase people's savings and the ESRI said is concentrated towards the top of the income distribution with no benefit to 80% of income earners?