Tom Parlon (Laois-Offaly, Progressive Democrats)

I hope the Senator has not fallen into an air of doom and gloom following last Sunday's hurling defeat.

Senator John Paul Phelan suggested that we are exaggerating the degree to which the Government has decreased the tax burden on the economy, which I reject. As I said already, sections 2 to 5 of the Bill give effect to the various increases in the personal tax reliefs announced in the budget. The effect of these measures is that more than 66,000 taxpayers, including 4,700 elderly people, are removed from the tax net. After budget 2005, the total number of income earners outside the tax net stands at an estimated 656,500, which is 34.4% of all income earners. This compares with 380,400, or just 25.5% of income earners in 1997.

In addition, average tax rates have fallen for all categories of taxpayers. After the budget, the average tax rate per person on the average industrial wage will be more than 10% lower than it was in 1997. That is less than 17% as compared with more than 27% in 1997. In 2005, a person on the average industrial wage will see his or her pay increase by more than €11,000, while the tax bill has decreased by €200 per annum compared with 1997. Given a €11,000 increase in pay, and a €200 decrease in tax, I do not know how Senator Phelan can suggest that tax rates have increased.