Thomas Pringle (Donegal South West, Independent)
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7. To ask the Minister for Finance his plans to widen income tax bands; the number of persons it will affect; and if he will make a statement on the matter. [8371/14]

Thomas Pringle (Donegal South West, Independent)
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This question was prompted by media reports during the past week of indications by the Minister and the Taoiseach that their priority or choice was to increase tax bands in the upcoming budget. What are the Minister's opinions on the matter?

Michael Noonan (Limerick City, Fine Gael)
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As I indicated in my earlier reply to Deputy Pearse Doherty, the income tax burden is too high and needs to be reduced. However, I have also stated that, although it is my intention to alleviate the burden, I can only do so when the public finances allow it. The general government debt at the end of 2013 is estimated to be just over €200 billion and each year we incur an annual deficit that figure grows.

The Government remains committed to returning the public finances to sustainability, upon which the prosperity of the economy depends. Under the terms of the Stability and Growth Pact, until Ireland has reached its objective of a balanced budget in structural terms, we may not introduce discretionary revenue reductions unless they are matched by other revenue increases or expenditure reductions. This means that the Government must consider carefully any tax change, as any reduction will need to be offset elsewhere. However, it should be noted that extending the standard rate income tax band would benefit all of those whose income exceeds €32,800. The extent of the benefit would depend on the amount by which the band was extended and the incomes of the relevant individuals.

Ireland has a progressive taxation system that ensures that the burden of taxation falls most heavily on those with a higher ability to pay. The latest OECD data indicates that Ireland has the most progressive tax system of the 21 EU countries that are members of that organisation.

As is the normal practice for the Minister for Finance, I have no intention of setting out planned changes to the tax system in advance of the budget, which is almost eight months away. My officials constantly model and examine potential options for changes to the tax system. Such options will be proposed for my consideration as part of the overall budget package for 2015.

Thomas Pringle (Donegal South West, Independent)
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In public comment, the Minister has stated that the tax bands are a barrier to job creation. Given the fact that most of the jobs being created in the economy are part-time, which is a different model of working, surely the changes in the bands should benefit those people with part-time jobs? The majority of taxpayers, some 60%, earn under €30,000 and would not benefit from any change to the top band. A consideration of changing the bands seems to be a consideration of continuing the inequity that the Government has fostered in recent budgets. Would it not be more sensible to target the benefit at those who would dispose of that income in the economy? Those on low incomes would benefit most.

Michael Noonan (Limerick City, Fine Gael)
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It is reasonable to adopt different positions based on one's perspective. I am sure that we will hold many discussions on tax over the next two years or so. Many part-time workers are not in the tax net. Some 850,000 workers do not pay income tax because they are not liable for it. Many of those are part-time rather than low-paid workers. This is one starting position.

The benefit of this reform would be for persons earning incomes in excess of €32,800. However, it is becoming an issue. As the economy grows and people are needed to work in its emerging vacancies, we must attract back some of the young emigrants and those who commute to the UK. If someone can fly out of Dublin on a Monday morning to a job in London, stay for five days and enjoy a much higher salary in a more benign tax system, it will be difficult to bring skilled workers back. This is the connection with job creation. In the UK, one does not go on the higher income tax rate until one is earning somewhere north of £180,000. We are at €32,800.

Thomas Pringle (Donegal South West, Independent)
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I would love to see the Department's research on the bands posing a barrier to job creation. I know a number of people who travel to England every week to work. When one factors in the cost of flights and accommodation, I am damn sure that most of them would be happy to get a job at home on €32,000 or €33,000 per year. The fact is that people cannot get those jobs because they do not exist. Will the Minister publish the Department's research that shows tax bands are a barrier to job creation?

Michael Noonan (Limerick City, Fine Gael)
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We publish a great deal of data every year and put much of them up on our website. There is also the tax reform group, the papers of which are published.