Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank Deputy Bacik for raising those two matters. On the negotiations that are under way on public pay, it is precisely because the Government recognises and values so much the contribution that nurses, doctors, teachers and civil servants make to society and the economy that these public pay discussions are under way. We believe an agreement on the future of public pay for the country is a just and needed recognition of the efforts of those who play such an important role, particularly during the pandemic.

On the Deputy's point on taxation, the views of the Government, including in the programme for Government, are very clear. The Deputy made the point that if an increase in real pay happens, she wants that pay to feed through into take-home pay improving at the same rate. That is the view of the Government in relation to indexation. The point the Government is making is that if there is an increase in overall wages to respond to the great cost-of-living challenge we face, we simply want to ensure that as much as possible of that increase in overall wages feeds back into people's purses and wallets as opposed to being absorbed into unintentionally higher levels of taxation. That is what we are looking to do.

I would have thought there could be some common ground on this issue between the Deputy and me. If she is making the point that she wants to see real pay increase, what the Government is doing is putting forward, as recognised in the programme for Government, a personal taxation strategy that is looking to do the same - no more and no less. It is something that will be valued and needed at a time in which the cost of living is such a challenge and so many are under such pressure.

In stating that there are limits to what a Government can do, I am simply making the point that the cost of borrowing is changing. It is increasing. It is quite remarkable how little this ever features in Opposition critiques and statements regarding what the Government will do. At the start of this year, the interest rate on Irish Government debt was just above 0%. Today, it is nearly 2.5%. It is a change that is taking place around us, the consequences of which Ireland, the economy and the Government are well able to manage. However, to indicate to the Oireachtas and the people of Ireland that there are no constraints on action the Government can take would plainly be dishonest and even dangerous. Even within the constraints that are there, the Government's response in housing and the need to deliver more homes is an investment of €4 billion and the thousands of homes being directly built by the Government via local authorities all over the country. This is leading to higher numbers of planning approvals, commencements and homes being built.

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