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

I thank the Deputy. I think the fact that people pay the highest marginal tax rate at such modest incomes is very unfair. That improves next year when people will be able to earn up to €40,000 without paying that highest rate of income tax and will only pay the highest rate on income earned above €40,000. If we look across the OECD and across Europe, Irish workers pay much the same amount of income tax as other workers do but the distribution is different. People on relatively modest incomes pay the highest rate and that is very unfair. One would have to earn £120,000 in Britain before paying the highest rate of 45% there. Somebody on €40,000 would pay that here. I know it is not an exact comparison but I think the House will get the point. We want to increase that threshold. Like the Deputy, I would be reluctant to increase employer's PRSI but there are circumstances under which we would consider it, particularly if it meant the introduction of new benefits.

One of the things the Minister, Deputy Humphreys, is working on at the moment is the possibility of pay-related benefits, which may include things like subsidised childcare and healthcare. I would not like to see it happen unless it was linked to real benefits for workers and even benefits for employers as well.

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