Brian Cowen (Laois-Offaly, Fianna Fail)

The question of the pension levy formed a major part of the €2 billion in necessary savings which were agreed within the framework of social partnership. The alternatives were to consider social welfare provisions or non-pay, non-social welfare current expenditure. We had to seek savings from non-pay, non-social welfare current expenditure of more than €300 million in addition to the €1.4 billion from the pension levy and a further €300 million in capital savings. Everyone understood and agreed that immediate savings had to be found. If everyone agrees that was the amount to be found, one has to make an alternative proposal on what part of the service provision or social welfare provision the Deputy considers it fairer to reduce in order to deal with what he regards as unfairness. Every additional imposition presents a difficulty from somebody's point of view. An attempt was made to portray this as a simple initiative taken in isolation but it is part of a wider process of adjustment which has to take place and, indeed, a requirement that is all the greater given the deterioration in the public finances since its announcement.

As a public service employer, the reason we had to consider the pensions aspect and seek a larger contribution towards the availability of a public service pension after retirement is because it represents a significant asset compared to what those in the private sector now have available to them given the serious deterioration and, in some cases, the extinction of pensions for which they have paid. The economic costs of these private sector pensions have been met in full. It is well recognised and not disputed that the full cost of providing a public service pension would be a far greater imposition than what we have now decided upon. This simply represents an increased contribution as distinct from seeking the full economic costs of the pension, which would be the requirement of a private pension provision. These are important distinctions and the advantage now resides with public service workers in a way that is not available to private sector workers. Apart from that there is a greater degree of job security for those in the public sector and that is an important aspect given the many job losses we are seeing in the private sector as a result of the change in the market place and the reduction in demand for goods and services on an ongoing basis. It is in that context that the question of fairness must be discussed.

One does not expect a unanimous outcome to that debate but there must be an objective analysis of the difficult choices available to Government as to where the savings could be found and who could best provide them in terms of the benefits that accrue with employment in the public service vis-À-vis social welfare allowances, the money that goes to providing health services and the day to day costs of providing materials, goods and services necessary for services for the public.

If one were to look at it in that way, perhaps one would see the Government's decisions in this matter were grounded in trying to be fair in all circumstances, recognising that any extra imposition is regarded by anyone when it is not universal as being more unfair on them than on others.

There are considerations in that area that must be articulated so that people will understand the motivation behind the necessity for this €2 billion expenditure measure and the fact that it is the first of many adjustments that will have to be made, both in terms of expenditure and taxation in the months and years ahead as we try to ensure the economic viability of the State is maintained.

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