Minister for Social and Family Affairs Séamus Brennan hailed yesterday's increase in the minimum wage as "another historic milestone in workers' rights and pay levels in Ireland".
But as Mr Brennan was pointing out that the increase, which came into effect yesterday, makes Ireland's minimum wage the second highest in the EU, Labour's Joan Burton said it would bring thousands of low-paid workers back into the tax net.
Her party supported the decision to increase the minimum wage from €7 to €7.65 an hour, but she called on Minister for Finance Brian Cowen to take all workers on the minimum wage out of the tax net.
In a statement yesterday Mr Brennan said that Fianna Fáil introduced the minimum wage over five years ago "to ensure that workers were given the legal entitlement to a guaranteed wage level. Over the years, we have looked to increase the level and today's increase marks a significant development for workers.
"As a Fianna Fáil Minister, I am proud that in Government we are ensuring that economic growth is benefiting all people. It was our careful management of the Irish economy through a turbulent economic period that has now provided the resources for us to help those in our society who need it most, including our low paid. Fianna Fáil firmly believes that a strong economy can be coupled with real social advance."
He said he looked forward "to being at the forefront of easing the burden of those less well-off in our society".
However, Ms Burton said the failure of the Minister for Finance to raise the exemption from tax sufficiently in the December budget meant that 37,000 low- paid workers would find themselves paying tax again.
"The net result of this will be that many low-paid workers will find that the welcome increase of 67 cent per hour in the minimum wage will be eaten into by the tax deductions they will now face. It seems that the Government gives with one hand and takes away with the other," she said.
"It is not acceptable that workers on low incomes and who should not be paying tax are taken out of the tax net and then dragged back in when they get even a modest increase in their incomes. We need sufficient changes in tax structures in the next budget to take those on the national minimum wage out of the tax net and keep them out," she said.