John Paul Phelan (Fine Gael)

I move recommendation No. 7:

In page 10, line 6, column (1), to delete "€32,000" and substitute "€34,000".

The Government's key priority in its programme for Government was to reduce the proportion of the workforce paying tax at the top rate to 20%. The Minister referred to this yesterday on Second Stage. Roughly 33% of the workforce currently pays tax at the top rate. Recommendations Nos. 7 to 9, inclusive, seek to reduce that number to the 20% commitment given by the Government. The current figure is €32,000, which is little more than the average industrial wage. That wage has increased significantly and the Minister outlined this yesterday in his opening speech, but it is inappropriate that such a high proportion of the workforce would continue to pay at the top rate. It certainly flies in the face of the commitment given in the programme for Government that the figure paying the top rate of tax would be reduced to one in five of the workforce. Will the Minister introduce measures in the next six months to allow that proportion to fall dramatically?

I have no doubt that Senator Mansergh will state that average wages have increased and that the Government could not have foreseen that economic circumstances would be as they are now. However, I feel that the Government could have foreseen that. Every indication was there in 2002 that economic growth would continue at a reasonable level in the future and that as a result, incomes would increase steadily. How could the Government have been so far off the mark in its commitment to ensure that only 20% of the workforce paid tax at the top rate?