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

The Taoiseach is in New York chairing the UN Security Council. I, as Tánaiste, am just the first substitute, in case anyone was not aware of that, but I am happy to be first sub here today.

First, on the carbon budget, the plan is to stabilise the herd, not reduce it. However, that does mean we have to do a lot in other areas to reduce emissions from agriculture. We do not want to have to reduce the size of the herd or the amount of food produced because all that will then happen is that it will be displaced to other parts of the world where they will produce it less sustainably than we do, and that is not good for the environment. The aim is stabilisation and continuing to produce as much meat and milk as we do now but we will have to do a lot more in sustainability in agriculture to enable us to do that.

The point the Deputy makes about middle Ireland is absolutely right. In the budget we are looking at things like an increase in the fuel allowance and increases in pensions and social welfare so that people can keep up with the rise in the cost of living. It is not an increase; it is really just indexation, and the same thing applies to our working people too. That is why we need pay increases and there will be pay increases in most parts of the economy in the coming year, including the public service, as well as an increase in the minimum wage. That is also why we need tax indexation. These are not tax cuts, as Sinn Féin likes to describe them - it is tax indexation. It is just making sure that if people get that pay increase or increment, they are able to keep it. If they are earning €40,000, which is roughly the average income, and they get a pay increase of 2%, that is €800. At the moment, someone would lose half of that in tax and would only get €400. That is not enough to keep up with the rise in the cost of living. With indexation, they will keep most of that €800. They will get €650 or €700. That is the whole point of indexation. It is not a tax cut. It is just making sure that middle Ireland holds on to whatever small pay increase or increment they get. In the same way as we increase pensions or welfare to take account of the rise in the cost of living, we should do the same when it comes to income tax and that is what indexation is. It is not a tax cut.

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