It is ten years since Ireland's economic collapse. When the economy collapsed, Ireland's tax base was exposed as fragile and narrow. Ten years ago, tax receipts fell by 30% in one year. This did not happen by accident. For a decade, Fianna Fáil had riddled the tax system with all sorts of tax breaks and bought popularity at budget time by cutting personal taxes to a level far below those of other European countries. The property boom meant that windfall tax receipts from stamp duties and VAT brought in the necessary cash for public spending. This all ended with the economic collapse, leaving Ireland unable to pay for basic public services such as schools, hospitals and the Garda. We all know the history because the people of Ireland suffered and endured it. It is not clear that the current Government has learned the lessons of history. I am determined that we will not return to a situation where our basic health and social services are vulnerable to collapse because our tax system is weak.

Tax lobbyists are seeking cuts to income taxes, with comparisons being made with personal tax levels of ten years ago. From my perspective, income taxes in 2008 were excessively low. Government spokespeople have suggested in the last week or ten days that the local property tax should no longer be linked to property values, which totally undermines the logic of a tax on assets and undermines the economic benefits of such a tax in dampening the growth in property prices. This Government is now, I believe, embarked on the same process of driving down income tax. From what we have heard in terms of the kites that have been flown over the past ten days, its focus is almost entirely on the top 20% of income earners. Reports from the Revenue Commissioners make it crystal clear that only the top 19% of taxpayers pay any tax at the higher rate, which means over 80% do not. Yet the Taoiseach insists on calling this 19% of taxpayers "the middle", as he did again today. They are not "the middle". The Taoiseach obsesses about the marginal rate of income tax. I remind him that I was directly involved in the negotiations in respect of which the Taoiseach referenced Fine Gael having taken the lowest paid workers out of the income tax system. The Labour Party insisted on that. I negotiated directly with the Minister for Finance. Fine Gael's plan was to reduce the top rate of income tax but by agreement, we took the lowest paid out of the universal social charge. Despite that almost all north-western European countries have higher rates of personal income tax than Ireland, the Government is talking about reducing income tax. My point is there is a real risk of repeating the disasters mistakes of the past.

Will the Taoiseach confirm that only the top 19% of income taxpayers pay tax at the marginal rate at present and will the Government confirm its intention to strengthen rather than weaken the overall tax base of this economy in the forthcoming budget to ensure we provide decent and sustainable public services into the future?

The Deputy raises some valid points. In respect of our tax base, ten years ago we relied heavily on stamp duty, tax revenues from capital gains tax and tax receipts from the property sector. Now, our tax base is much more broadly based. We have a local property tax which, unpopular as it may be, has broadened our tax base. We also have a sugar tax and a carbon tax and as such we have a much more broadly based system than we had ten years ago. The area of vulnerability is corporation profit tax. In the past couple of years, we have had a windfall in terms of big increases in taxes from big companies. We cannot make long-term spending commitments with this money because we cannot be sure it will available to us in a year or two. While I acknowledge the issue the Deputy raises, it is important to make that the point that we do have a much more broadly based tax system now. If there is a vulnerability, it is not around income tax but corporation profit tax and whether we will be able to take in as much money from corporations in two or three years' time as we do now.

The Deputy also mentioned that there are a lot of people talking about a return to the low taxes we had ten years ago as if ten years ago, pre-crash, was somehow normal. This applies to other areas as well. There are people talking about a return to the pay levels we had ten years ago and to the house prices we had ten years ago, as if ten years ago was normal. If we return to the pay levels, house prices and low taxes we had ten years ago we are heading for another crash. This Government needs to be responsible and to try to contain the increase in house prices, the increase in demands for higher pay and the increase in demands for lower taxes. If people think that what we had in Ireland ten years ago was normal, we are heading for another crash. This Government will be responsible and make sure that does not happen on any of those levels - tax, pay, spending or property prices.

On income tax, I can assure the Deputy that our plan is to raise more from income tax in 2019 than we will in 2018. This is largely due to increasing employment and higher incomes and not due to rising taxes. We do not intend to cut the marginal rate. Our focus is on average incomes. The average person in Ireland working full-time, excluding students, earns approximately €44,000 per annum, some of which is subject to tax at the higher rate. I believe people who earn €40,000 or €50,000 are "the middle". The Deputy may say they are in the top 19% and that they are the rich.

It is a fact.

When one factors out part-time workers, students and pensioners the average person in Ireland working full-time, the type of people we all know and meet every day, earn €44,000 per annum.

I know a lot of people who earn a lot less.

Those people pay tax on some of their income at the highest rate. That is the anomaly and that is unfair. People on middle incomes who get a pay increase, an increment or do overtime lose more than half of that income in income tax. I do think that is unfair and it is something we want to change. We cannot do it in one go but we will do it in this budget, the next budget and the one after that if we are given the opportunity.

I welcome the Taoiseach's acknowledgement of the vulnerability of our tax base but all of his actions and all of the kites being flown in recent times undermine that. The Taoiseach spoke about sustainable house prices. There are no sustainable house prices. In many parts of the country, house prices are back to the unaffordable level we had during the boom. The issue is that people's incomes have not recovered, such that they are worse off in terms of affordability.

What is demonstrable now is the priority for our economy must be to invest in quality public services. This is what all of the people want. The Government proposes to give a marginal tax break to 19% of taxpayers. There will be no benefit for 81% of taxpayers. A marginal tax break for 19% of taxpayers is not a tax break for "the middle". I am sure that if asked directly, that 19% of taxpayers would prefer to have that money invested in health and education.

I ask for that to be the priority as the Government approaches the budget, rather than falling into the notion that everything can be done at once and that it can give tax breaks and invest in quality public services at the same time. The Government cannot do both if it is going to have a sustainable economic policy.

The Deputy and I are not as far apart as he may think or wish people to believe. There will be three priorities in the budget coming before the House in two weeks. The first priority is that it be broadly balanced and that we do not repeat the mistakes of the past by ramping up spending and slashing taxes when the economy is strong and doing well. We will reduce the deficit and our national debt will fall as a percentage of gross domestic product, GDP. The first principle is to be prudent.

The second priority is investment in public infrastructure and services. We will increase spending on public infrastructure and services by €3.4 billion next year at least. There will be a 25% increase in capital spending on new homes, healthcare facilities, schools, transport infrastructure and broadband. Anything more than that would probably drive up construction inflation and would not allow us to build any more.

The third priority is that there will be a tax and welfare package which will put money back in people's pockets, not just middle income tax payers but also pensioners and people on welfare. While we have not signed off or agreed on the budget as yet, I firmly hope that it will be the budget that finally reverses the cuts made to weekly welfare payments made by a Government in the past.