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Dáil
‹ Ceisteanna—Questions. Oral Answers. - Taxation Proposals.

PAYE tax relief under recovery programme

Summary

The Minister said the £225 million package would save the average PAYE taxpayer about £295 over three years, with the timing and allocation to be decided in future budgets. Opposition members argued this was merely token relief and that tax payments could still rise; the Minister cited borrowing constraints and defended the negotiated concession.

asked the Minister for Finance the average yearly saving to PAYE workers arising from the income tax proposals in the Programme for National Recovery.

Comment on this

The exact manner in which the income tax proposals contained in the Programme for National Recovery will be implemented will be considered by the Government in the context of the 1988 and subsequent budgets. It is not possible, therefore, at this stage to indicate the average yearly saving to PAYE workers in each year of the programme from these proposals. However, the overall package of £225 million will result in total savings of about £295 for the average PAYE taxpayer over the period of the programme.

Comment on this

I can accept the Minister's statement that until the budget we cannot have exact figures. He does give a figure of an average of £295 per taxpayer. Since the average amount paid by PAYE workers has increased — the figures that I have are that in 1982 they amounted to £1,672 and in 1986, to £2,768 on average, the latter increase——

Comment on this
James C. Tunney An Leas-Cheann Comhairle Fianna Fáil

Deputy Mac Giolla is now making a statement. Would he ask a question, please?

Comment on this

In view of that continuous increase, is the Minister saying now that the 1988 figures will show an actual reduction of £295 on that average yearly take from PAYE taxpayers?

Comment on this

I do not think that the Deputy heard what I said, which was that the overall package of £225 million will result in total savings of about £295 for the average PAYE taxpayer over the period of the programme.

Comment on this

That is over a three year period?

Comment on this

Yes.

Comment on this

So that is about £70, or £80 a year?

Comment on this

To work it out annually you will have to wait and see at budget time.

Comment on this

Would the Minister agree that it is quite extraordinary that for the first time in the history of the State a Minister for Finance has told the House that the average tax benefit for each of the next three years will be £295, or £98 per annum, or for a single PAYE worker, £1.18p a week and a maximum £2 for a married person? Would he regard an alleged concession of that nature as being utterly derisory? In fact, over the period it will result in a net increase of payment of income tax by PAYE workers.

Comment on this

All I can say is that the Deputy is entitled to his opinion. It might, however, be no harm for all of us to recall the fact — and we accept it — that income tax and taxation generally are too high but the level of borrowing we have in this economy amounts to £1,858 million, which is the extent to which we as a community as a whole are living beyond our means and until such time as we drastically reduce that amount we cannot, unfortunately, be talking about any greater concession than what was negotiated and discussed by the social partners and agreed by them for the next three year period, as I outlined in my reply.

Comment on this

Would the Minister not agree that far from this being a much lauded concession it would have been more honest for the Minister and the Taoiseach and his colleagues to have said that it was purely a token payment which, in effect, is not a taxation relief at all and that on the basis of £1.18p per week for a single worker, the figure is so low that it would hardly be worth putting into any programme? Far from being the great concession and great gain that the Government are alleging——

Comment on this
James C. Tunney An Leas-Cheann Comhairle Fianna Fáil

The Deputy is making a speech. We must progress.

Comment on this

——in fact, it is the absolute minimum——

Comment on this
James C. Tunney An Leas-Cheann Comhairle Fianna Fáil

We are moving on to Question No. 3.

Comment on this

I am sorry if the Deputy is disappointed that the trend is downwards.

Comment on this

I am putting it in its correct context.

Comment on this
James C. Tunney An Leas-Cheann Comhairle Fianna Fáil

I would ask the House to agree that Question Time deals with seeking information. It has been given. It does not refer to debating particular issues. You are all aware of that.

Comment on this

Would the Minister agree that the Taoiseach's speech on the Estimates which stated that there would be a reduction——

Comment on this
James C. Tunney An Leas-Cheann Comhairle Fianna Fáil

The Taoiseach's speech on the Estimates would not come into the question. I am moving on to Question No. 3.

Comment on this

If you would permit me to finish my question——

Comment on this
James C. Tunney An Leas-Cheann Comhairle Fianna Fáil

The Taoiseach's statement——

Comment on this

I am entitled to ask the question that I was going to ask.

Comment on this
James C. Tunney An Leas-Cheann Comhairle Fianna Fáil

You are not entitled to ask questions that do not refer to the information given.

Comment on this

It was precisely with regard to the £225 million mentioned that I was going to ask a question.

Comment on this
James C. Tunney An Leas-Cheann Comhairle Fianna Fáil

Then would the Deputy please ask the question and not be too long?

Comment on this

Would the Minister agree that there is no reduction in income tax planned by the sum of £225 million? The most that can be said is that there is a halt in its projected growth by the sum of £225 million over the next couple of years. Is that not the reality?

Comment on this

We will have relief to the extent of £225 million over the three years.

Comment on this

But it will continue to grow.

Comment on this
James C. Tunney An Leas-Cheann Comhairle Fianna Fáil

I call Deputy Mac Giolla as a colleague of Deputy Sherlock and then a final question from Deputy Noonan.

Comment on this

This is specifically on the question of the £225 million over the three years. In view of the fact that there is to be a 2½ per cent increase in wages to PAYE workers, is it not a fact that there will actually be an increase in take from these workers over the period of 3 years rather than a reduction, that it will be higher in three years' time than it is now?

Comment on this

That does not alter the fact that this concession is being given.

Comment on this

(Limerick East): Is it the Minister's intention to use the total of £225 million for relief of income tax for PAYE workers exclusively and will there be any relief for other income tax payers?

Comment on this

That will be a matter for budgetary decision on the day.

Comment on this

(Limerick East): It could be less?

Comment on this

We will await that decision. It is there in global terms.

3.

Comment on this