Joan Burton (Dublin West, Labour)

The Minister would not take advice from us on the matter at that time. We are now advising him that a sunset clause relating to the pension levy should be included in the Bill. I would be fairly confident in predicting that he will not be Minister for Finance in two years' time. He might, therefore, be glad to be in a position — probably from the Opposition benches — to revisit the levy. If the Minister is asking everyone in this country to put their shoulders to the wheel and work together, he must start from the principle of fairness.

Another reason to review the levy relates to the strategy — or what passes for one — which the Taoiseach put before the House and in which he has chosen to frontload support for the banks. That support includes the €7 billion that will be used to recapitalise Allied Irish Banks and Bank of Ireland and the untold amounts that will be required to pay for the nationalisation of Anglo Irish Bank. He has also chosen to impose the levy to which the Bill relates on public servants and to reduce the early childhood supplement. However, the Taoiseach has not chosen at any point to bring forward, as a priority, legislative measures which would close down the tax loopholes that are a continuing source of scandal to almost everyone in the PAYE sector.

Some of the best tax avoidance experts in the country, particularly those from PricewaterhouseCoopers, PwC — I must declare an interest here because I trained and worked with that firm — are members of the Commission on Taxation. I could write these people's recommendations on taxation now on the back of my copy of the Order Paper because I know that they will be. They will suggest that there should be more tax incentives, propose that there be headline closures of a few loopholes and put forward massive increases in all taxes relating to those on lower and middle incomes. The commission's report has already been written.

The Minister for Finance has offered no indication of the type of social solidarity he expects from the rich. Last week, the chairperson of the Revenue Commissioners disclosed to the Committee of Public Accounts that there are just over 5,000 people who classify themselves as tax exiles. These individuals are resident in the State but for tax purposes they are non-resident. Of those 5,000, some 440 are identified by the Revenue Commissioners as being high net worth individuals. These people have extremely large incomes and wealth and they reside in this country. However, they are not resident here for tax purposes.

The Bill before us is a financial measure and there is, therefore, plenty of scope to address the issues of social solidarity and the contribution extremely rich people will make in the difficult times that lie ahead. The Minister for Finance and the Taoiseach have consciously chosen to ignore these issues. If a sunset clause were included in the Bill, in two years' time we might know a little more about and be able to discuss what Fianna Fáil proposes to do to close down the tax shelters and loopholes which it has specialised in establishing since 2000 in particular. Until 2000, the Government was relatively moderate in its approach to tax shelters. After that date, it lost the run of itself with regard to such shelters. The consequence of this has been the introduction of massive imbalances in the context of those who pay tax in this country.

On each occasion on which this matter is raised, the Minister for Finance states: "Ah, but high income tax payers pay the most tax." As he is well aware, however, the high income earners to which the statistics he quotes refer are composed mainly of senior public servants who are married to other senior public service workers. Those people are in the PAYE system and all of their income is fully recorded. On the whole, there is no evidence that they make any significant use of tax shelters.

What is the position with regard to establishing a social solidarity pact under which those who are extremely well off pay tax? Poorly paid public servants will be expected to pay, on average, a pension levy contribution of 5% after tax, while their better paid counterparts will pay approximately 7%. However, there has been nothing but silence from Fianna Fáil as to the contribution the rich will be expected to make. I refer here to the kind of people who have served as directors of Anglo Irish Bank and other financial institutions. The directors of our major banks have, on average, earned well in excess of €1 million per year in the recent past.

The current issue of Business and Finance contains an article which the Minister for Finance and his officials ought to read. It discusses the fact that many senior banking executives became players in property development and investment. Not only did they receive high salaries but they used them to trigger borrowing from their own banks and counter-party banks in the Irish system. Apparently, these banking executives became participants in a number of property development deals and availed of the tax advantages from which a number of them were structured to benefit. This is a very serious issue because it means that by the time the banks were rescued, the individuals in question had a vested interest both in their respective banks and the property deals in which many of the banks' customers were engaged. They had moved from being bankers to players in the development system. Only time will tell us how much this practice contributed to the damage and destruction experienced in the banking system, particularly Anglo Irish Bank. The Minister is silent on the abuses which have led the country to its current position.

In his amendments the Minister seems most unwilling to address the anomalies all speakers have raised. The proposed sunset clause would enable us to address some of the anomalies in two years and ascertain whether the pension levy will be permanent. If that is the case, the levy will not be funded in that the moneys raised will not be allocated to a fund earmarked or hypothecated to finance future public service pensions. Instead, they will be allocated to the Exchequer on a current basis, with the result that when we return to prosperity in a few years public servants will have no identifiable claims arising from their contributions to the levy to have their future pensions paid.

The Bill and the manner in which the Minister has approached its structure are appalling. My party leader, Deputy Gilmore, indicated we were entering an uncertain period of industrial strife and strikes. Part of the reason for this is the refusal of the Government to address the fundamental issues of fairness and equity. While I do not know if it intends to return to consultation with the social partners, it must address equity issues if it proposes to do so. The Taoiseach, having invested considerable time in negotiating with the social partners, placed the pension levy on the table at the 11th hour. The levy is so complicated that it must have been worked on for weeks beforehand in the Department of Finance and other Departments. I note that last night the Minister profusely thanked a range of public bodies for the work they had clearly been doing on the issue for some time. Why was he not prepared to discuss with the social partners the anomalies in the levy which their members find pressing?

It remains unclear when the levy will commence and whether the public service will be in a position to implement it, given the anomalies in the structure. How will the amount of pay on which it is based be calculated? How will local authorities, vocational education committees and so forth administer it? County council workers, for example, pay full PRSI and a complex formula is used to calculate their pension contribution as they only receive a small additional pension. Furthermore, many adult education teachers employed by the VECs work on non-pensionable contracts but pay PRSI. This means they do not have pension entitlements because they work on a contract basis in special teaching services. Will these employees be subject to the levy and, if so, will all their income be affected? Will all allowances and overtime payments be included? The levy is fraught with anomalies. If the Minister is considering talks with public service unions and seeks to avoid strikes, it would be clever if he were to provide a mechanism for negotiation in order that the anomalies can be addressed.

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