Mick Wallace (Wexford, Independent)
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66. To ask the Minister for Finance the reason in view of recent research by TASC, the ESRI, and the Department for Social Protection highlighting the regressive nature of elements of budget 2013 and its disproportionate impact on certain sections of Irish society, there are still no plans to equality-proof the next budget; and if he will make a statement on the matter. [47706/13]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, the Programme for Government contains a commitment to require all public bodies to take due note of equality and human rights in carrying out their functions. Furthermore, the Cabinet handbook requires a statement on the likely effects of the decision sought on equality and persons experiencing or at risk of poverty or social exclusion to be included in Memoranda to Government. Consequently, Government does consider each of these important issues at an individual policy or programme level. Furthermore, I would remind the Deputy that the State and its bodies take the provisions of equality legislation into account in the development and delivery of policies and services.

I would also like to inform the Deputy that a distributional analysis of taxation measures is performed based on various income levels for the different categories of income earners. These categories include single individuals, married one-earner couples with no children and married one-earner couples with children. A distributional analysis which models the impacts on disposable income by income decile using SWITCH, the ESRI Tax-Benefit model, is also undertaken in evaluating various taxation options. Illustrative examples continue to be included in Budget documents.

In future, as part of our annual Budget, Ireland will submit a draft budgetary plan to the Commission no later than 15 October. This is under Regulation 473/2013, which specifies that all euro area Member States not in a macroeconomic adjustment programme will be required to submit this plan.

As part of the material supplied, Article 6 (3) (d) requires where possible, “indications on the expected distributional impact of the main expenditure and revenue measures” should be included. This distributional analysis will be conducted through the SWITCH model, as has been seen in previous Budgets.

I feel it is important to highlight the progressive nature of the Irish taxation system when discussing matters of equality. The European Commission compares progressivity of taxation by taking the OECD tax wedge for an individual earning 167% of the average wage and dividing it by the tax wedge for an individual earning 67% of the average wage. On a rating system where less than 100 is regressive and above 100 is progressive, most EU countries have a progressivity rate of between 120 and 140. Ireland, in comparison, has a progressivity rate of 190. While Ireland’s progressivity rate decreased from 220 to 190 in 2012 following the changes introduced in Budget 2011 and 2012. This is still far more progressive than any other EU member of the OECD.