Brian Cowen (Laois-Offaly, Fianna Fail)

At last Tuesday's press conference, I was asked what attitude I would take in respect of proposals that might be made in respect of the levy. I indicated that if the scheme had the effect that was being suggested in some quarters, we would examine it. I did not say we would not look at it. Obviously, the substance of any proposal would have to be considered. I made it clear that its content would have to enable one to raise the €1.4 billion the scheme is designed to raise. As Deputy Kenny knows, it applies to all workers in all sectors of the public service, including civil servants, health care workers, members of the Defence Forces and teachers. I take the point that any levy, by its nature, is an imposition. We have had to consider this issue in the context of the need for a wider economic response to the budgetary situation in the public finances and to aspects of the wider economy such as competitiveness. We made it clear in our discussions that the bulk of the savings would have to come in this area. If we did not do so, we would have had to consider making savings in the social welfare system or through the dislocation of services in non-pay areas. That was the decision the Government took. It motivated the decision that was announced last week. As Deputy Kenny said, some people at the lower end of the scale have been taken out of the tax net altogether as a result of the introduction in recent years of a more progressive income tax system. Questions such as future pension entitlements, and the security of tenure one enjoys in the meantime, also arise. These are all considerations. Some people will have a difficulty with it in any event, regardless of the line of argument that is taken. Decisions were taken on the basis of the situation the Government had to confront.

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