Brian Cowen (Laois-Offaly, Fianna Fail)

The Government made efforts to bring forward necessary measures. For the supplementary budget, we have made it clear that we are available to take any constructive ideas from anyone, including people inside and outside this House, on how best to address the serious issues confronting us at present. None of it will be painless and none of it will be immediately popular but it is necessary and it is the duty of Government to discharge that responsibility and I look forward to people on the other side of the House constructively contributing to that if they so wish.

Deputy Ó Caoláin refers to the pension levy as a tax on public service. It is not intended as a tax on public service, it is the imposition of a further contribution well short of the economic cost of a public service pension which is being sought from those who work in the public service and will have the benefit of that pension after their working life is over. That is an asset or benefit that is not available to many hundreds of thousands of workers in other sectors of the economy, some of whom have sought to prepare for retirement by providing the full economic cost of a supplementary pension that will not now be available to them because of the serious deterioration of pension fund values, one of the main casualties of the recent crisis.

We do have a fair and progressive tax system in this country and the levy is in keeping with that principle. Working examples concerning actual pay demonstrate that, as a rule, total deductions as a percentage of gross pay after the pension contribution are greater for those on higher rates of pay than lower ones. For example, an executive officer on the first point of the pay scale, €32,179, who joined after 1995 will have a total deduction of 22% of gross pay; whereas an assistant principal, also on the first point of the pay scale at €69,659, who joined after 1995, will have a total deduction of 38% of gross pay, when one takes everything into account.

The progressive trend is also observed in examples of pre-1995 civil servants. An executive officer on the first point of scale at €30,566, will have a total deduction of 18% of gross pay; whereas an assistant principal, also on the first point of the scale at €66,179, will have a total deduction of 33% of gross pay.

Across the Civil Service on all grades and all pay scales, from clerical officer to principal officer, the total deductions are higher as a percentage of gross pay as the pay goes higher. That is a progressive principle.

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