Paudge Connolly (Cavan-Monaghan, Independent)
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Question 324: To ask the Minister for Finance the effect that the increase in the national minimum wage to €7.65 per hour will have on restoring persons on the minimum wage to the tax net; if he has plans to exempt such persons from the tax net in future; and if he will make a statement on the matter. [19979/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Since the Government introduced the minimum wage in April 2000, it has increased in value by almost 37%, taking account the latest increase on 1 May 2005. We now have one of the highest minimum wages in Europe. On an annualised basis, it stands at €15,515, based on a 39-hour week.

The present entry point to income tax is €14,250 per annum for a single person aged under 65. The Revenue Commissioners provisionally estimate that there will be roughly 37,000 income earners in an income range which would bring them into the tax net if their annual earnings reflected fully the increase in the national minimum wage. However, that group will of necessity include part-time workers earning more than the minimum hourly wage, and certain pensioners whose earnings are in the equivalent range. The 37,000 should therefore be seen as the upper band for any estimate of the number who may ultimately come into the tax net on a full year basis as a result of the minimum wage increase.

The Government is committed to having the minimum wage exempt from tax. However, we are also committed to sustaining economic growth and keeping the public finances in a healthy condition. The question of restoring the position which applied after budget 2005, where those earning the minimum wage were removed from the tax net, will be a matter for consideration in the context of the annual budgets in the next few years, consistent with the Government's overall economic and budgetary strategy.