Brian Cowen (Laois-Offaly, Fianna Fail)

I refer the Deputy to tabular data provided in reply to Parliamentary Question No. 531 on 28 September 2005. This remains the most up-to-date information available. The data indicates that for 2005 only one third of earners will be on the higher rate of tax, while almost 31% are on the standard rate and almost 36% are exempt.

The 80% target in An Agreed Programme for Government was set in the context of a broader economic and budgetary strategy which provides, among other things, that the public finances will be kept in a healthy condition and that personal and business taxes will be kept down in order to strengthen and maintain the competitive position of the economy. Further progress in this area will be a matter for consideration in the context of the annual budgets over the coming years consistent with the Government's overall economic and budgetary strategy.

The Government's tax policies since 1997 have ensured that Ireland now has the lowest tax wedge in the EU, and one of the very lowest in the entire OECD as measured by that organisation using comparative data relating to those earning an average production wage. After tax income for a person on the average industrial wage, adjusted for consumer price index inflation, is now 40% higher than it was in 1997. Approximately half of this increase is due to lower taxes.

Moreover, one reason many income earners pay at the higher rate is that incomes have increased significantly. This is not an indication of a problem but of a major economic success.

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