Jim Higgins (Fine Gael)

The purpose of a taxation regime is to raise revenue in order to run the State. The purpose of tax bands, allowances and credits is to achieve a balance between the amount taken from one's income or resources, on the one hand, and the amount somebody needs to maintain his or her living standards and keep body and soul together, on the other.

From the point of view of the merits or otherwise of indexation, the principle of indexation is irrefutable. While this might be a difficult year, the whole principle of adjusting or relating income tax allowances and increases to the consumer price index which, as I said previously, is the manual for determining the cost of living, is irrefutable. The Minister is right when he says it would limit the scope of the Minister for Finance. Of course, it would, it would take much of the gloss off the Budget Statement – everybody waits with bated breath to see what the Minister gives by way of various tax concessions, reductions, etc. but the linking of the two together is irrefutable and uncontradictable from the point of view of its merits. One would adjust it on an ongoing, regular basis with the consumer price index, the price of living, in order to ensure a fair balance, between what is taken, on the one hand, and given, on the other, is maintained.