Damien English (Meath West, Fine Gael)

The main issue I wish to address is the minimum wage but I will come back to it later. Before the Minister for Finance ran out the door, he mentioned taxing bank bonuses at a rate of 90%. Fine Gael has put forward an amendment for tomorrow to tax the AIB bonuses being discussed today at 99%. We could take that amendment tomorrow, which would solve the Minister's problem. I want the Minister to clarify whether he means retrospective bonuses or future bonuses under existing contracts. It is a very important issue. There is nothing more sickening than to read in the newspapers that staff in the banks are still being paid massive bonuses, and for what results?

It is worse to read that staff in the HSE are paid bonuses as well, when the results are just as bad, although that is a different area. This culture of bonuses needs to be examined. In the banks it encourages bad practice and should be dealt with for that reason. However, in other areas such as the HSE and the public service, bonuses are paid simply for their own sake and for staff looking after each other. Both cultures are wrong and both can be changed by Government, although they have not been. The issue must be tackled. I hope the Minister will clarify his vision of the 90% tax rate on bonuses and when he intends to introduce it.

The Minister was less than clear in his budget speech as to how he will reduce the wages and pay structure for CEOs of State bodies. He talked of hopefully reducing the wage to €250,000 and putting a cap on it but he was not very clear that he really intends to do this. It is easy for him to write it into the budget because he is going out the gate in a few weeks anyway and will not have to do it. There is no point in him saying it if he cannot do it. Will he introduce changes to tax CEOs' pay above €250,000 at 99%, which would solve the problem? If he cannot legally change the wages, he can tax them. He should name those involved, one by one, and bring in the tax rate to deal with this. It can be done within the law. If it can be done for bank bonuses, the Minister can do it with regard to high wages in State bodies. The Minister should put his money where his mouth is. He should do it, not just talk about it.

Before leaving the issue of bank bonuses, the Central Bank issued a report last week on the pay structures and pay systems of the banks. I cannot believe that two and a half years since the scandal broke as to what went on in the banks, nothing has changed. The Minister practically owns most of the banks and has a fair say in the ones he does not own, yet nothing has changed when it comes to the system of payment to the top executives - I am not talking about the workers who have to take all the hassle at the front desk. The top executives are still getting away with murder.

The report stated that the pay structures are less than transparent in many situations. We own the banks and the pay structures should be clear. The staff are practically public servants at this stage. The report states that the situation is open to abuse and risk, that bonuses are still encouraged and that the culture and the method of payment is still wrong. The worst point in the report is that the banks are still open to the abuses that caused the difficulty in the first place. I cannot believe the risk still exists years after the disaster that has crippled this country and which is half the reason we are here discussing a draconian budget. The Minister needs to cop on and start doing his job with regard to the banks. He needs to once and for all put manners on those at the top levels.

The Minister referred to how he reached the figure of 4% for the reduction on the pensions. He calculates this by factoring in the first €12,000 at 0%, the next €12,000 at 6%, then 9% and then 12%. Is this same method used to calculate the interest rate of 5.8% for the bailout fund? Is the money Ireland is putting into the fund being charged at 0% and then the rest of the money at other percentages, which brings the real rate down to 5.8%? The Minister has been less than clear to the House what contributes to the 5.8% rate. If this is how he reaches the 4% rate in this case, I presume it is how he reaches the 5.8% rate for the bailout fund. He might take the opportunity to clarify this point. If we are factoring in our own money at 0%, it means the bailout money is much dearer than 5.8%. People have a right to know what they are paying for that money. We know the IMF money comes at a rate of between 4% and 4.5% so somebody is charging us a lot of money for the use of their money. This needs to be transparent. The interest rate is too high for one section of the bailout and the matter needs to be clarified.

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