Kieran O'Donnell (Limerick East, Fine Gael)

I am delighted to speak on the Labour Party's Private Members' motion on the pension levy. I specifically wish to speak to the Fine Gael amendment. The Minister for Finance referred to the pension levy as being fair. However, for something to be fair people are entitled to get a return on what they are paying. It is akin to another income tax on the low paid. Many young married public servants whose partners stay at home will only qualify for the contributory old age pension and they will not receive a benefit from their contribution to the pension levy. A Minister of State said last Sunday on RTE that the Government would tweak the levy but the Minister did not mention this in his contribution. What is meant by "tweaking"?

I refer to another anomaly. A public servant on a low income will pay a higher contribution after tax than somebody on a high income. When this proposal was announced, the Taoiseach said the Government would save €1.4 billion but, after tax relief, that amount will decrease to approximately €800 million. The overall package announced by the Government will save probably €1 billion and not €2 billion as it claims. The Government parties are portraying themselves as the great saviours of the economy but the principal measure proposed is grossly unfair and unbalanced. Low paid workers in the public and private sectors are having difficulties making ends meet. Companies such as Dell and Banta in my constituency are closing with many job losses. Many other jobs are being lost in the private sector, particularly among the low paid.

The pension levy is grossly unfair and I would like the Minister to outline his proposed tweaks. A Minister of State cannot go on the airwaves saying the Minister will change the levy while the Minister makes no mention of changes when he comes into the House. It is extremely important that this issue be clarified by the Minister tomorrow night.

The recapitalisation of the two main banks will cost €7 billion and it is intended to improve the flow of credit to small businesses, mortgage holders and mortgage applicants and to ensure people's houses are not repossessed. However, it also appears the funds will result in business as usual for the banks. The chief executive officer of Bank of Ireland said he would earn the paltry salary of €2 million this year. However, last week the Government introduced cutbacks totalling €7 million affecting 127 special needs children and his salary is approximately one third of that amount. How does the Minister expect public servants to think that is fair? A cap on salaries should have been introduced. The Minister said the salaries of bankers would reduce by 33% in 2009 but the guarantee scheme extends to September 2010 and he provided €7 billion to the banks last week. The Minister has told bankers that after this year, they can take whatever salaries they want. He said nothing to the contrary in his contribution.

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