John Paul Phelan (Fine Gael)

The Minister has missed the point. I complimented him in the House on the evening of the budget and his efforts to remove those on the minimum wage from the tax net should be applauded. When he made a similar change in this regard in the previous budget, my colleagues and I pointed out it would only take effect for a number of months until the national minimum wage was increased but he rectified that in this year's budget, for which he deserves credit.

His argument make no sense. The Government entered into a commitment that it would remove those on the minimum wage from the tax net and it also made a commitment that only 20% of earners would pay tax at the top rate. At a time of unparalleled revenue buoyancy with billions of euro generated in tax surpluses every year, a choice did not have to be made to meet both commitments as the money was available. I appreciate 20% is an arbitrary percentage but approximately 33% of earners are still paying tax at the top rate and the Government is not moving nearer to honouring its commitment. This is not a zero sum game. The Minister was not faced with removing those on the lowest rung of the income ladder from the tax net or delivering on the commitment to reduce the number paying tax at the top rate. Given the additional billions of euro generated annually in tax revenues, both objectives could have been realised but the Government decided its priorities lay elsewhere, which meant increases in public expenditure across a range of Departments. Along with colleagues I sought this for Departments where increases in expenditure were necessary. However, there are many Departments where increases are unnecessary and where good money is thrown after bad on a daily basis.

I applaud the efforts of the Minister to remove those on lower incomes from the tax net. Everybody agrees that is the most effective way of improving their lot. The notion that it was an either-or situation does not stand up when one realises the pot of money available to the Minister continues to grow exponentially each year and the Minister has real options with regard to addressing a number of issues. He is in an enviable position because he has resources at his disposal available to none of his predecessors. The Minister has made some positive moves with regard to lower income earners. However, I do not accept his argument that it was a case of either-or. Both objectives could have been realised.

I do not expect the Minister to say he will proceed as I have suggested and that tomorrow he will succeed in having 20% of the workforce paying tax at the top rate. However, I would like some indication that we will move towards that commitment.