Joan Burton (Dublin West, Labour)

We drafted the amendment in very general terms because the establishment of such a fund would be complicated and require bipartisan discussion with all parties in the House. What I am putting to the Minister is the principle behind the idea, which is that if the Minister calls this a public service pension levy and asks public servants to accept an extraordinary level of sacrifice — it is a big sacrifice for many of them, particularly the lower paid — the least to which he could agree is that when the economy returns to better circumstances, the Government will repay, by putting it into a fund for public service pensions, the amount deducted which over a three-year period — the Minister's officials will have the figure — will probably amount to about €5 billion, or slightly less if there is a pay pause. The Minister suggested the gross figure would be €1.4 billion a year. It is to be hoped three years is the maximum period before the country begins an economic recovery. We may still have a deficit for up to five years; we know this from the figures the Minister has submitted to the European Union under the Stability and Growth Pact. He should remember, however, that people pay PRSI which is added to what is called the social insurance fund. A rough count is kept of what goes into the fund and the amounts paid out in unemployment benefit and so on. I mentioned the Beveridge report, according to which the contributory principle is a fundamental aspect of modern social and Christian democracy. Under this principle, people contribute to society through taxation. In respect of particular headings such as pensions or against the possibility of becoming unemployed, they make positive contributions which give them entitlements if they become unemployed or ill or when they retire. In other words, they take back some of what they have contributed. It is part of a social contract between the citizen and the State.

General taxation is different in that it is put to the purposes the Government which is elected by the people decides. Next week or next month the Government may decide it is in the interest of the State for Ministers to go abroad for St. Patrick's Day. This is funded from general taxation. However, an individual's PRSI contributions are earmarked for social welfare in order that if the unhappy day comes when one becomes unemployed, one is entitled to an unemployment payment. If one does not have social welfare contributions, one must undergo a means test to qualify. What I am suggesting is the creation of a funding concept that would mean public servants would be assured by the Government and the other parties in the House that they would have some entitlement to draw down their public service pensions. We can argue later how much of a contribution this constitutes with regard to the various public service pension benefits, but it would be the beginning of a funding idea, particularly for lower paid workers in the public service. It would help to remove some of the unfairness from the levy structure the Minister is imposing. In economic terms, it is a tax that is only being levied on the public service and in an unfair way because those who are lower paid will in some instances pay more than those who are higher paid.

We left the wording consciously vague in order to offer the amendment to the Government in a bipartisan way to address the fundamental equity issues. It would also be useful in dealing with the public service unions. "Strikes in Ireland" will go up in red lights on news ticker displays — Bloomberg and so on — for 20 seconds, which will affect our rating as a country. I disagree with the Minister's statement made a few minutes ago that if he were to tweak or make amendments to the levy in order to implement it in a fairer way, the international markets would downgrade Ireland. That is a load of rubbish. It would not take from the money being levied but would constitute a hypothecation of what public servants who pay the levy would gain by way of entitlements. The international markets would not interfere in a scenario in which the Minister made the levy fairer but which perhaps retained the same revenue-raising capacity. That would be an internal matter. I would go further and say that if we do not have widespread public sector strikes, the international markets will think a lot better of Ireland.

We offer the amendment as a strategy for the Minister but are open to negotiation on the matter. The Taoiseach constantly challenges the Opposition to be positive. The challenge is to the Minister to respond positively to the amendment.

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