Good afternoon Tánaiste. He is back from the luxury ski resort. I am sure he did not do a Eugene Murphy and sleep in the back of a car, so I am curious to know how much the rooms cost in Davos this year and what was the all-in price of the trip.

For some time the Tánaiste has been solemnly warning about the dangers of a wage-price spiral. It seems his analysis is up to serious challenge these days. For example, writing in the Business Post last weekend, Dr. Aidan Regan of the school of politics and international relations at UCD highlighted research by the US Economic Policy Institute that showed since 2020, 55% of US inflation had been caused by corporate profiteering. How much of it was caused by wages? It was 8%. He also quoted European Central Bank board member Dr. Isabel Schnabel who gave a major speech last week where she backed up that analysis and indicated it was very much applicable to Europe as well. Regan concluded in his article that new corporate taxes on excessive profits would do significantly more to combat inflation than holding back wages. I have heard the Tánaiste say he is bringing a proposal on the living wage before summer. That is very good. You would not feed the pigeons with the minimum wage these days. However, to be clear the figure of €12.90 was set before this inflation crisis and before rents started regularly topping €2,500 per month. What is needed as an hourly wage just to survive, to live, these days? I say it is €15 per hour and would like to hear the Tánaiste's comment on that.

In his reply he might also update us on where things stand with his living wage proposal. The Minister for Public Expenditure and Reform said at the weekend that Department officials would meet the ICTU this week to discuss public sector pay. Will the Tánaiste update us on what is happening there? Public sector workers need pay increases that match inflation. Is the Government prepared to engage on this basis? Last week, 2,000 medical scientists gave a small glimpse of the potential power of more than 300,000 public sector workers when they went on strike. The Government might think it has the measure of the union leadership but it would be wise not to underestimate the strength of feeling on these issues from ordinary trade unionists at the grassroots. I conclude with a question. Is the Government going to risk plunging the country into an autumn of discontent or is it going to engage seriously with public sector staff about wage increases that match the rate of inflation?

I thank the Deputy. I spent Monday and Tuesday in Davos representing the country at the World Economic Forum. I was happy to do so. The Taoiseach is there now. It is important we are represented and it gives us an opportunity to tell our story, whether in relation to the protocol, what is happening in Northern Ireland or to our own economy. I flew commercially and stayed in four-star hotel. No doubt they charged for it but it was nonetheless a four-star hotel and a commercial flight.

There were some very interesting sessions. I spoke at one on the future of work. One of the megatrends affecting all parts of the world is low levels of unemployment, which are a good thing. Employers are struggling to get staff in almost every sector and we know that is the case here as well. In some countries, thankfully not this one - at least not statistically anyway - there is widening income inequality. Among the solutions I advocated there was greater technology use, greater use of automation, but also better wages and better terms and conditions. This Government is serious about that. We have the sixth highest minimum wage in the world, or in the western world anyway, based on purchasing power parity. We intend to improve on that through the move to a living wage, the introduction of auto-enrolment to ensure everyone who works in Ireland has access to an occupational pension in addition to the State pension and also the kind of laws I am bringing in at the moment, for example, on statutory sick pay. At the moment about half of people have it and half do not. By the end of this year everyone will. There is also legislation to protect tips and gratuities. We therefore have a very ambitious agenda as a Government when it comes to increasing pay, improving terms and conditions of workers and ensuring we eliminate pension inequality between the public and private sector, and that is what we are pursuing.

However, we also need to be honest with people. I am not suggesting in any way the Deputy is being dishonest, but I say it as a general point. Pay rises can only be part of the solution because they have to be funded.

Like Robert Watt's.

Employers who give pay rises often fund them by increasing the prices they charge their customers for the goods and services they produce. If a company with a few hundred employees increases pay by say, 7% or 8%, it will seek to fund that, at least in part, by increasing what it charges ordinary customers and people for the goods and services it produces. That is why we want to try to avoid a situation like the one that existed in the 1970s where people got substantial pay increases every year but it did not do them any good because prices went up by just as much. That is why we need to look at the thing in the round. We must look at what we are going to do on welfare, pay, income taxes and the cost of things like childcare and education. That is the kind of conversation we are now having with employers and unions to try to come up with a bigger bargain, if you like, that means if people get a pay increase it benefits them and is not swallowed up by inflation.

It is interesting the Tánaiste has gone back half a century and used the 1970s for his analysis of inflation. He did not engage with the examples I gave him. They are real, new, fresh and are coming from the US and Europe, including from members of the executive board of the ECB. That in itself says much, as the Tánaiste engages with the Minister, about the weakness of his line of argument.

He talked about employers struggling to find staff. It is little wonder. Yesterday in Cork City an estate agent got nearly 1,000 inquiries in the space of one day for a property that had been put up - it was a full house - for rent at €2,750 per month. How can someone on the minimum wage, that the Tánaiste has just lauded, survive in a housing market like that? How could someone on €12.90 per hour survive in a housing market such as that? I put it to him again that is a powerful argument for further increasing the minimum wage to at least €15 per hour.

I thank the Deputy. I was interested to hear him cite the US. Many economists, including ones from both left and right, would say one of the reasons the US is facing such high levels of inflation, that are much higher than what we are experiencing here, is at least in part due to the level of spending by government there through the fiscal stimulus and also the extent to which the Federal Reserve has printed dollars through quantitative easing.

The exact policies the Deputy advocates are being implemented in America and have caused inflation. The 1970s is an important decade to cite because it is what we want to avoid. That was a period of high inflation, high pay rises and lots of strikes. That might be the type of decade the Deputy wants, but it is not the decade we want. We want to ensure over the course of the next decade that there is continued incremental progress, with people getting pay rises that are meaningful and that do not get swallowed up by inflation. That is why we must look at this in the round and try to come up with a package that means, first, that pay rises are increases that people can keep because taxes are not too high and, second, that we bring prices under control so people can benefit from the pay rises they get.