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

If it has not been, it will be. The Department of Finance analysis is based on cash. It is done in pure cash terms. On the Department's analysis, it is progressive because there are no cash increases for people who do not receive welfare because there were no tax cuts, with the exception of the self-employed and home carers. The vast majority of taxpayers did not get a tax cut. However, there were increases for lone parents and those living alone, in the fuel allowance, and for families on welfare with children. In cash terms, on the Department of Finance analysis, it was progressive.

The ESRI does it differently. It compares the actual budget with a notional budget in which taxes are indexed to earnings and welfare and pensions are indexed to earnings as well. For example, on the ESRI analysis, a 3% pay increase with no tax cut means the budget makes a person worse off because he or she is paying more tax, and a welfare or pension increase less than the rate of earnings growth means a person is worse off. It is done as a comparison against a notional budget in which tax credits, tax bands, welfare and pensions are indexed to earnings. Deputies may be interested to know that if the ESRI applied the same methodology to the Labour Party, Green Party and Sinn Féin alternative budgets, it would also conclude that those alternative budgets made everyone worse off-----

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