Ruairi Quinn (Dublin South East, Labour)
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Question 132: To ask the Minister for Finance when the Government will honour the commitment given in An Agreed Programme for Government that 80% of all earners will 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. [33069/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The 80% target in An Agreed Programme for Government is given in the context of a broader economic and budgetary strategy which provides, among other things, that the public finances will be kept in a healthy condition and that personal and business taxes will be kept down in order to strengthen and maintain the competitive position of the Irish economy.

Further progress in this area will be a matter for consideration in the context of the annual budgets over the next number of years consistent with the Government's overall economic and budgetary strategy. However, I point out to the Deputy that the Government's tax policies since 1997 have ensured that Ireland now has the lowest tax wedge in the EU, and one of the very lowest in the entire OECD as measured by that organisation using comparative data relating to those earning an average production wage. In addition, after tax income, adjusted for CPI inflation, for a person on the average industrial wage, is now 40% higher than it was in 1997. About half of this increase is due to lower taxes.

Moreover, I should add that one reason many income earners pay at the higher rate is because incomes have increased significantly. This is an indication, not of a problem, but of a major economic success.