Feargal Quinn (Independent)

There are many good aspects to the budget but I will concentrate on the widening of the standard band of income tax. A recent election manifesto claimed that the aim was to have 80% of taxpayers pay at the standard rate. To the best of my knowledge 37% are still paying at the top rate. The pressure on the wage rates in Ireland comes about because people jump from 20% to 50% at the top rate when PRSI is included. That is also a huge disincentive for people to work overtime.

The answer is to introduce an intermediary tax band at 30% but we have lost the opportunity to do that. If that was in place, people would not jump from 20% to 50% in one go. Two major stresses on the economy are that this is an expensive State because of our wage rates and the cost of living. The jump in the tax rates from a low to a very high rate is one reason for the increase in wage rates. We could do something about that and it would take the pressure off inflation, a challenge the Minister mentioned.

Capital expenditure on infrastructure deserves the money that has been put into it. The Minister spoke about value for money. Last week I said in this House that we should not measure the amount of money we spend, we should look for value for money.

I heard the Minister speaking today but I did not see any action. There must be action on the tax bands to avoid people jumping from 20% to 50% tax rates; we must reduce costs and wage rates and secure value for money. If we can take those actions and add them to the good aspects of the budget, it will be a success.