As we head into the summer months and preparations for the forthcoming budget start in earnest, I seek an assurance from the Taoiseach and the Government that one section of society will be looked after - the people of middle Ireland whom he likes to describe as those who get up early in the morning. No matter how early they get up, those not on the lower edges economically or at the upper levels, find life a constant struggle. Often referred to as the squeezed middle, they bear the biggest burden of demands on their income and receive the least amount of help from the State. They could be called the forgotten middle because that is what it feels like for them. They are the ones who go to work every day and pay their taxes which are higher than they were a decade ago. They are the ones who carried the country through the recession to reach the point we are at today, but they are getting nothing back. Their rent payments are soaring; their insurance bills have gone through the roof and their school and childcare costs have gone up. Fuel prices are probably at their highest ever level; medical costs are rising, as is the cost of electricity. Some are living with their parents, often with three or four children, while trying to save for a deposit on a house. They cannot find a house in the current market scramble which could be made even worse by the activities of the Housing Agency in buying large blocks of houses in private estates. They are the people who do not receive State benefits or grants to help their children to attend third level education, despite fees having increased by 131% since 2005. They are more or less being ignored by the Government which has most of its focus on other sectors of society to the detriment of those in the middle who make the greatest contribution to the economy. Once an Irish worker earns €34,550 a year, he or she pays half of every euro earned above the figure in direct taxes. Almost half of every €10 above that figure is taken in income tax, the universal social charge, USC, and pay-related social insurance, PRSI, leaving them with just over €5. It is all building to being a problem for the country in the future. The Irish Tax Institute has warned, for instance, that the income tax regime is hindering us in the global race for talent. I acknowledge that some slight progress was made in the last budget, inlcuding a small reduction in income tax for the self-employed and a minor reduction in the universal social charge. There will be greater fiscal space in the next budget to do more. My question to the Taoiseach is how will he look after those in middle Ireland next October in a way that will make a real and substantial difference to them?

As I said previously, the priority in the budget will be to increase spending on public services and infrastructure. These are areas in which everyone can benefit. Everyone in society, no matter who he or she is, will benefit from greater investment in infrastructure, whether it be housing, healthcare, schools, broadband or actions against climate change. They will also benefit from improvements in public services such as education. The priority will be to increase resources and spending on public services and infrastructure. However, in the budget package we will and should - the Deputy is right - find space to ensure we do something to improve the living standards of hard-working people, the people the Deputy mentioned who get up early in the morning, work late, work shifts and work weekends, the people who are just about managing and very much in middle Ireland.

On the types of thing we anticipate doing, we will be following on what was done in previous budgets. For example, in the last budget we were able to reduce the cost of prescription charges for everyone, not only those with medical cards but also those who received a refund under the drugs payment scheme. We will be examining ways to do so again to reduce the cost of prescriptions.

In the last two budgets we improved access to childcare and early childhood education. Everyone is now guaranteed free preschool for two years for their children. That benefits everyone. In addition, there is subsidised childcare for the same length of time. We will also examine ways to improve it. We can help people in many ways and reducing the cost of accessing services can be as important as a pay increase or a tax cut.

As always, the self-employed will be prioritised. The Deputy will be aware that we have increased the earned income tax credit for those who are self-employed. We will be examining if the resources are available to do the same again. In recent years we have extended benefits in return for PRSI contributions to persons who are self-employed. They include, for example, access to invalidity pension and treatment benefits for the first time. One thing struck me during the recession when I was knocking on doors and meeting people who were self-employed. Often they had worked in construction as fitters, for example, or architects and had lost their jobs when they were entitled to virtually no social protection because somebody else in the household had an income which very often had been the second income. As a result, they were entitled to nothing. That is why we extended invalidity pension to persons who were self-employed. We are looking at ways to also extend jobseeker's benefit in some form to the self-employed.

The Deputy is right that there is real unfairness and a real anomaly in the tax system under which people on very modest incomes pay income tax at the highest rate. That is not the norm in other western European countries. It means that somebody on an average income who receives a pay increase, a bonus, an increment or works extra hours will lose more than half in tax and USC. The first thing we had to do - it was the right thing to do - was reduce USC to take nearly 1 million people out of that net entirely. We have done that in the past few years, but the priority now, having taken so many low paid workers out of the income tax net altogether, is to provide relief for those on middle incomes by increasing the point at which people pay at the higher rate.

While I acknowledge the Taoiseach's response and what has been done, it is simply not enough. These are the people who bailed out Ireland during the economic crisis. They paid higher amounts in income tax and the universal social charge was introduced. They also pay the local property tax and most of them paid their water charges, but they believe they have been forgotten and not reaped the rewards for their hard work. On the surface, many of them have good jobs and salaries, but they struggle to make ends meet and are time and cash poor. Will the Taoiseach give a commitment to the people he personally described as those who get up early in the morning that they will be looked after properly, not just given small tokens here and there when the budget is brought forward in October?

The short answer to the Deputy's question is yes. Part of my mission in politics is to make sure everyone will experience an increase in his or her standard of living. In that context, we should not forget all those who receive very little by way of support from the State. I refer to people who pay a lot of tax but do not qualify for any or many of the benefits the State provides because of means-testing and so on. That is the reason I have a particular interest in removing that real unfairness in the tax system. The average person working full-time in Ireland earns about €44,000 a year, yet at a figure of €36,000 he or she hits the higher rate of income tax, which is far too soon. I would like to see fewer people pay at the highest rate of income tax and want to see people pay less of their income at it. It is a real disincentive and needs to be improved. However, we must do all of this in the context of prudent management of the public finances. We want to balance the books and reduce the national debt. The economy is growing well and fast. We are approaching full employment and I want to make sure we will not repeat the mistakes of the past. I will not fund increases in public spending or tax cuts through additional borrowing, even though some would like us to do so.