Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

However, I believe excessive tax cuts, wage rises and increases in public spending would drive inflation and would be counterproductive. I am determined that this Government should not repeat the mistakes that were made by previous Governments, which operated the inflationary and pro-cyclical economic policies that caused so much damage in years gone by.

I said that the Government is committed to improving living standards. By any objective measure living standards have been improving for the past two years. The most recent Central Statistics Office, CSO, numbers from the survey on income and living conditions, SILC, show unemployment is substantially down, pay is increasing, poverty and deprivation are falling and inequality is narrowing. I said that we could improve living standards in a number of ways, but particularly in three significant ways. One is wage increases, which are well deserved. That is why we increased the minimum wage and negotiated pay restoration with public servants. The second area is tax reductions. That is why we reduced the USC and income tax in the budget and improved tax credits for the self-employed and home carers. It should be borne in mind that while the Government can increase the salaries of public servants it cannot increase the salaries of people who are self-employed or in the private sector. One of the best ways of putting money directly back in the pockets of the vast majority of people, that is, people who are self-employed or work in the private sector, is through tax reductions. That is the reason I disagree with the view of other parties that we should not have any tax reductions and that only public servants should see an increase in their wages.

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