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

As I said previously, the priority in the budget will be to increase spending on public services and infrastructure. These are areas in which everyone can benefit. Everyone in society, no matter who he or she is, will benefit from greater investment in infrastructure, whether it be housing, healthcare, schools, broadband or actions against climate change. They will also benefit from improvements in public services such as education. The priority will be to increase resources and spending on public services and infrastructure. However, in the budget package we will and should - the Deputy is right - find space to ensure we do something to improve the living standards of hard-working people, the people the Deputy mentioned who get up early in the morning, work late, work shifts and work weekends, the people who are just about managing and very much in middle Ireland.

On the types of thing we anticipate doing, we will be following on what was done in previous budgets. For example, in the last budget we were able to reduce the cost of prescription charges for everyone, not only those with medical cards but also those who received a refund under the drugs payment scheme. We will be examining ways to do so again to reduce the cost of prescriptions.

In the last two budgets we improved access to childcare and early childhood education. Everyone is now guaranteed free preschool for two years for their children. That benefits everyone. In addition, there is subsidised childcare for the same length of time. We will also examine ways to improve it. We can help people in many ways and reducing the cost of accessing services can be as important as a pay increase or a tax cut.

As always, the self-employed will be prioritised. The Deputy will be aware that we have increased the earned income tax credit for those who are self-employed. We will be examining if the resources are available to do the same again. In recent years we have extended benefits in return for PRSI contributions to persons who are self-employed. They include, for example, access to invalidity pension and treatment benefits for the first time. One thing struck me during the recession when I was knocking on doors and meeting people who were self-employed. Often they had worked in construction as fitters, for example, or architects and had lost their jobs when they were entitled to virtually no social protection because somebody else in the household had an income which very often had been the second income. As a result, they were entitled to nothing. That is why we extended invalidity pension to persons who were self-employed. We are looking at ways to also extend jobseeker's benefit in some form to the self-employed.

The Deputy is right that there is real unfairness and a real anomaly in the tax system under which people on very modest incomes pay income tax at the highest rate. That is not the norm in other western European countries. It means that somebody on an average income who receives a pay increase, a bonus, an increment or works extra hours will lose more than half in tax and USC.. The first thing we had to do - it was the right thing to do - was reduce USC to take nearly 1 million people out of that net entirely. We have done that in the past few years, but the priority now, having taken so many low paid workers out of the income tax net altogether, is to provide relief for those on middle incomes by increasing the point at which people pay at the higher rate.

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