A large cohort of Irish people are struggling with the rising cost of living and, unfortunately, receive little Government support or media attention. These people are Ireland's middle class. They are cash poor and time poor. They are the people who go out to work every day and do not earn enough to be well-off but earn too much to qualify for many State supports. Many of these are young families who are struggling with the soaring cost of living, the cost of groceries, rising energy prices and even the rising cost of fuel, which hits these people hardest as they spend longer in their cars every week commuting to work. This situation is compounded by the fact that some are paying sky-high rents because they earn too much to qualify for social housing or the housing assistance payment, HAP, and cannot possibly buy their own homes on the open market at affordable rates. Others are being crucified by rising mortgage interest rates.

A constituent who came to see me recently is now afraid to open the mail as his mortgage repayments have doubled in the past year. He simply cannot afford any further hikes. This constituent is one of tens of thousands of people struggling to pay their mortgages after the European Central Bank, ECB, increased interest rates ten times since last July.

The cost-of-living crisis is also an enormous problem for older people on fixed incomes and pensions. They have seen their real incomes decline as they also struggle with the rising cost of living. These people are growing increasingly disillusioned. Understandably, many ask why they should get up early and work for a living. The squeezed middle class never feel like a priority and yet they continue to make a huge contribution to the success of our economy and society. All of this is happening while the media report that Ireland will have a record budget surplus of €10 billion this year. In an interview last year, the Taoiseach stated that he wanted the Government to commit to significantly reducing the cost of living for working and middle-income families and to make work pay. He said that people who go to work should earn enough to have a decent standard of living. Unfortunately, the previous budget measures of small tax credit increases have been swallowed up by the rising cost of living. These people continue to find themselves worse off rather than better off. Will the Taoiseach look after the squeezed middle class, older people on fixed incomes and pensions and the most vulnerable in our society in the forthcoming budget?

I thank the Deputy. The answer to his question is that I will. Helping middle Ireland and middle-income people has always been a priority for me and is a priority for this Government. We have done a lot already in recent years but there is always more to do and I acknowledge that. One of our major priorities in the forthcoming budget is to help middle income people and middle Ireland with the high cost of living. There are a number of different ways in which we can do that. As I often say, any household budget has three elements. There is the amount you get paid, the amount you get to keep after income tax, universal social charge, USC and PRSI, and how far the money goes. That is linked, of course, to the cost of services. That is where we are helping. Pay has gone up. The minimum wage for working people went up by 7.8% this year, higher than the rate of inflation, and many people have got pay increases of, on average, approximately 5% across the economy this year. There will be further increases in pay next year. We can reduce income tax, which we have done in the last couple of budgets, and will do again in this budget. Because it is incremental, people sometimes do not add up how much it has been worth to them but we started reducing income tax and USC in 2014. People earning €40,000 or more today pay €3,000 per year less in income tax and PRSI than they did in 2014. A couple who earn €80,000 between them pay €6,000 less in income tax and USC than was the case if they were earning the same amount of money in 2014. That is the cost of what a left-led government would be to middle income people. It would cost them approximately €3,000 per year and €6,000 per year for a couple. That gap is widening with every budget as we reduce income tax and USC and the left-wing parties vote down our efforts to do so.

The third area with which we help is universal benefits. Middle-income people generally do not qualify for support through means tests because they are over the limits. That is why we have ensured that some of the cost-of-living improvements we have made are universal, such as the reduction in the college contribution costs, the extension of free schoolbooks to all primary schoolchildren without a means test and the reduction in childcare costs, which have reduced fees by approximately 25% in the past year. Middle-income working people are the ones who benefit the most from those measures.

On the issue of mortgages, I represent a constituency full of people who are paying mortgages. It has been a big shock for people who have received ten letters in the post in the past year telling them their mortgages have gone up, particularly for those with tracker mortgages. Even people with modest mortgages of €200,000 or €250,000 are probably paying €500 more per month. That is a big increase and a shock to people. It is, however, coming against a backdrop where we had extremely low interest rates for a prolonged period. That needs to be borne in mind.

I understand that cost-of-living measures were introduced in last year's budget. Those were very much appreciated. However, many of them were once-off measures. The forgotten middle class are the people who are paying for everything and availing of practically nothing. It was reported in the Irish Independent last Saturday that 1.1 million of Ireland's full-time workers pay the higher rate of tax. Many of these people are not well-paid. Many are just marginally over the threshold of the 40% tax rate. It is time to give these people much-needed relief as these are the people who often feel forgotten about. Will the Taoiseach introduce significant tax benefits, including a reduction in the hated USC, and a mortgage interest relief scheme to give these people some hope? They are completely disillusioned.

The Taoiseach is right in what he said about the letters people are receiving about their mortgage repayments. The many people who contact my office and those of many Deputies here are afraid to open the letters that come from financial institutions. For some of them, their mortgage repayments have doubled since last July. That is putting an enormous burden on middle-class families. I ask the Taoiseach to look after them in the forthcoming budget.

I thank the Deputy. He is right that more than 1 million people pay the highest rate of income tax in Ireland. One hits the highest rate of tax at a much lower level than would be the case in the majority of our competitor countries. We have raised that threshold. Not so long ago it was €33,000 a year and it is now €40,000. We want to raise it further in forthcoming budgets. We will do as much as we can afford to do within the budgetary constraints with regard to the tax package. The Deputy should bear in mind that unlike some of the one-off measures we have announced in budgets in recent times, tax reductions are cumulative. The tax package of €1.1 billion in the forthcoming budget is on top of the tax package of €1.1 billion in the previous budget, which makes €2.2 billion. We had tax packages of €0.5 billion in previous budgets, so it is all adding up to €4 billion, €5 billion and €6 billion less in tax that those middle-income people pay because this Government is in office and the alternative is not.