Eamon Gilmore (Dún Laoghaire, Labour)
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Question 32: To ask the Minister for Finance when the Government expects to honour the commitment given in An Agreed Programme for Government that 80% of all earners would pay tax only at the standard rate, especially in view of the fact that the proportion of taxpayers paying at the higher rate is expected to increase from 32.61% in 2004 to 33.17% in 2005; and if he will make a statement on the matter. [7153/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Government remains committed to the aim of having 80% of all earners paying tax only at the standard rate and I will be looking at how best we can achieve this over my next two budgets. An Agreed Programme for Government specifically indicates that progress in relation to taxation commitments would be "over the next five years". The five years began in 2002 and extend to 2007.

However, I draw the Deputy's attention to the fact that An Agreed Programme for Government also contains an over-arching commitment about the need to pursue responsible fiscal policies and to maintain the public finances in a healthy condition. Accordingly, actions in relation to taxation must have regard to the prevailing budgetary circumstances and the resources available to me at budget time.

In budget 2005 I decided to use the major portion of resources available for a personal tax package to achieving the priority of taking those on the current minimum wage out of the tax net. I also devoted money as a priority to increasing the age exemption limits, which assist the elderly, for the fourth year in a row.

To the extent that further resources were available for tax reductions in the budget 2005 income tax package, they were used essentially to widen the standard rate bands so as to raise the entry level to the higher rate of tax. The increases in the standard rate band will ensure that an extra 52,000 taxpayers will not pay tax at the higher rate in 2005 and that an estimated 33% of income earners will pay tax at the higher rate in 2005 compared with a projected 36% of income earners if no such measure had been included in the budget.

It should be noted that all income earners benefited from the tax changes in the recent Budget. It should also be noted that in 2005 a single PAYE worker on the average industrial wage will pay over €200 less in tax in 2005 than in 1997 on a wage which is over €11,000 greater in value.

Tom Hayes (Tipperary South, Fine Gael)
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Question 33: To ask the Minister for Finance if his attention has been drawn to the apparent anomaly in the tax relief scheme for hospitals whereby it excludes certain psychiatric hospitals; and if he will make a statement on the matter. [7081/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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When the scheme of capital allowances for the construction of private hospitals was introduced in 2001, the question of including psychiatric hospitals and geriatric-psychiatric hospitals within the ambit of this scheme did not arise.

In recent months I have received proposals with regard to the provision of capital allowances for psychiatric hospitals. These proposals are being examined in my Department.