Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

On the question of tax, we have a programme for Government commitment that I strongly support. If we were to have a static tax system in which no changes were made at a time of rising incomes, it would be the equivalent of an increase in income tax. I do not believe it is fair that workers who earn that little bit more would then be paying more than half that in tax through USC, income tax and PRSI. Therefore, I anticipate there will be changes in respect of income tax but it will be about keeping pace with the reality that we have rising incomes for many workers across the country and we do not want more and more of their income to be taxed by stealth at the marginal rate of tax.

There is, therefore, a programme for Government commitment, which I believe is important that we continue to honour. The forthcoming budget will have a cost of living focus, however, and it will not be all about tax. It will predominantly be on the expenditure side, as it has been in recent budgets. That is where we can make the greatest difference and target the limited resources that are available to the people who most need it.

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