Joanna Tuffy (Dublin Mid West, Labour)

I recommend Deputy Collins listens to an interview on "Today with Pat Kenny" with the economist Colm Rapple. Some of the points he made would make me believe that Deputy Collins should rethink her position on this particular wealth tax. He made the point that opposition to the levy is being stirred up because in principle it is a wealth tax. It is being opposed because it is a wealth tax, and the pensions industry is doing the stirring, even if it had a different position before, although I have spoken to people who work in the industry who tell me this is a fair tax.

It is 60 cent on €100, as pointed out by Colm Rapple. In April, the average managed fund went up by 7%. He said it was a tax on wealth and is relatively fair. He pointed out that 50% of workers are not in pension schemes - the low paid - and these are the very people who have been paying tax to fund the tax reliefs that have allowed some people to put these funds into pension funds. I asked a parliamentary question last week to find out how much tax was foregone for tax relief on these pension funds. In 2006-7, the figure was €3 billion. The 0.6%, the €470 million over four years, is a minuscule amount in comparison to the wealth that was put into these pension funds over the years.

With this levy, the more a person has, the more he will pay. Colm Rapple pointed out that 80% of the funds put into pension funds come from the wealthiest 20% in the country. There are those on middle incomes who have put money into these funds but these do not make up the bulk of those who pay into these funds and the tax foregone. All of us as taxpayers funded the tax breaks that allowed this wealth to be put into these pension funds.

Pat Kenny asked during the programme if people would not be taxed when they take the money from the pension fund when they retire and it was pointed out that is not generally the case and that average earners would not have paid tax on these pensions. A married couple with an income from a pension of €36,000 between them would not have paid any tax on the pension when they retired. This idea that it will hit people on low incomes is absolute rubbish. It is a disgrace the way Deputy Joan Collins and Deputy Joe Higgins have talked about raids on pension funds while, in the same breath, talking about the need for a wealth tax. Which tax on wealth will the Deputies favour? They will probably oppose a property tax. This is wealth - savings is wealth - that has been put away. Deputy Maureen O'Sullivan said this is a tax on prudence but this is a tax on wealth that was put away at the expense of the taxpayer, the 50% of people who do not have a pension scheme, who are mainly low paid workers and whom Deputy Collins should support. Many unemployed people who paid taxes over the years to help the State pay for the tax foregone will hopefully benefit from the jobs initiative.

Whatever criticism the Deputy has of the jobs initiative, that is fine but to argue against the pension levy leaves her with no credibility at all if she calls herself a socialist. One of the people who texted the radio programme claimed Colm Rapple was an old fashioned, unreconstructed socialist. That is what people used to say about Deputy Joe Higgins but now he is suddenly defending the pension funds industry.

The pension funds industry is not representative. Those who are stirring this up are not speaking for everyone who manages pension funds. I got a letter before Christmas from Owen Dwyer, a senior partner in Irish Pensions and Finance, who wrote to TDs in November 2010 arguing against reducing tax relief on pensions while suggesting a levy on pension funds. I spoke to him today and he said in his opinion the levy was not a bad thing for people with personal, company or AVC pensions. He said it would have a greater impact on those with defined benefit pension schemes.

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