The Taoiseach is renowned for his rhetoric to the effect that he will deliver for those who get up early, such as the low and middle income earners of this country. At the weekend we learned from an ESRI analysis of budget 2019 that a decision not to link changes in tax and benefit rates to expected wage growth will reduce the average disposable household income by 0.7%. It was said that lower income households would see proportionately greater losses than higher income households. It is a bit like the mistake President Macron has made in France where he is looking after the wealthy at the expense of the vast majority.

The Taoiseach should probably learn some lessons from his pal. The need to link the changes in those tax rates to the expected growth in wages is very clear. Otherwise, what the Government is doing is looking after a tiny milieu of wealthy people when other research shows they have made the greatest gains over the past eight years when compared with average workers and low income earners.

I thank the Deputy. Time is up.

Will the Taoiseach commit to linking changes in tax and benefit rates to expected wage growth to deliver what he says he will?

I am delighted the Deputy has raised this matter. I had thought People Before Profit and the Socialist Party were against tax cuts. If we were to index tax credits and tax bands to anticipated wage growth, we would have had to cut taxes by much more than we did in the budget. I had thought the Deputy was criticising us for cutting taxes. Now, it appears her position is that we did not cut taxes enough.

I am pointing out an anomaly in Government policy.

It is rather perverse. I agree with her that we did not cut taxes enough-----

Their incomes will decrease.

We did not cut taxes by enough. If we have more say over the next budget, we will cut taxes more. The answer to the Deputy's question is "Yes".

This is what he calls the squeezed middle.

I thank the Taoiseach. It is better not to get into an argument.

It is an important point. The ESRI report is based on something called the hypothetical wage index budget. There are, of course, other ways to index: one can index against inflation or one can not index at all. Depending on which model is used, one gets a different outcome. Essentially, what the ESRI report says is that there are increases in pensions, increases in welfare, cuts to income tax and cuts to USC, but, because over 1 million people are also getting a pay rise, everyone is worse off. It is a pretty strange index, if one looks at it that way.

I thank the Taoiseach. We are way over time.

The facts are that because of those measures, because of wage increases, including the minimum wage increase, because of income tax cuts and USC cuts and because of pension increases and welfare increases - all in this budget - everyone will be better off in cash terms next year. People will be better off even when we take inflation into account.

The Taoiseach rejects the ESRI report.

No, I understand it. That is the difference.