Joe Costello (Dublin Central, Labour)

Deputy Tuffy was in possession.

This Bill gives legal effect to the measures in the jobs initiative, namely, the reduction in PRSI, the restoration of the minimum wage, the abolition of the airport travel tax, the reduction in the VAT rate for certain goods and services, particularly those associated with the tourism industry, and the proposed pension levy.

A significant amount of spin and misinformation about this levy is being created by a number of vested interests. It was refreshing to hear Colm Rapple on the "Today with Pat Kenny" radio show yesterday morning debunking much of the misinformation and rightly pointing out that the pension and insurance industry is engaging in scare tactics to frighten pensioners and workers paying into pension funds.

The jobs initiative is a significant step towards getting the country back to work. It is not a cure-all and does not pretend to be such but it is evidence of the Government's serious commitment to tackling the horrendous problems the country is facing in a fair and balanced way.

The unemployment statistics are horrendous. The extent of the problem of unemployment cannot be overstated. Nationally, unemployment rose a colossal 300%, from 4.5% at the end of 2007, to 14.6% at the end of April 2011, while the EU average is 9%. The number signing on the live register nationally is at an unprecedented 442,627 people. Dublin accounts for almost quarter of those. My constituency of Dublin Central is particularly hard hit.

In recent years, the country has been haemorrhaging jobs. In the four months to the end of April 2011 we have already lost 17,218 jobs. In 2010 there were 58,932 redundancies. In 2009 redundancy statistics reached an astonishing 77,000, with 31,000 of these in Dublin. This was an increase of 90% on the 2008 figures and represented a massive 202% increase on the 2007 figures.

We are constrained by the terms of EU-IMF bailout deal in terms of what we can do but that is not an excuse for standing idly by, and this Government certainly does not intend to do so.

We must remember that behind each of these statistics is a tragic human story - the family in danger of losing their home, the struggle for survival, the exodus of the brightest and best of our workers and young people leaving the country in search of a new future and the broken-hearted families left at home to struggle on. Each week, my clinics are filled with people who struggle to survive, save their homes, save their families and maintain their dignity.

The main focus of the recent election was jobs and getting the people back to work. We could not and did not promise a quick fix, but a fair and balanced approach to job creation. The Labour Party is determined that investment in job creation will not be at the expense of the low-paid workers.

I believe that the measures proposed in the jobs initiative and the provisions of this Bill are fair and balanced. The reversal of the savage and unnecessary cut in the minimum wage is to be welcomed. This has been achieved. The halving of the lower rate of PRSI on jobs that pay up to €356 per week will further stimulate new job creation. The tourism industry which has lost a third of its 2007 levels over the past three years is especially targeted with a huge VAT reduction from 13.5% to 9% across the entire industry. At the same time the regressive air travel tax on passengers has been abolished. The onus is now on the airlines to deliver the tourists they claim failed to travel on account of this tax. That issue will be looked at very carefully.

These actions will provide a much needed stimulus to the tourism and services sectors which already received a major stimulus from the recent successful visits of Queen Elizabeth and President Obama.

The jobs initiative contains many innovative proposals for job creation and stimulating growth. The EU-IMF bailout deal requires that the jobs initiative proposals be budget neutral. Nevertheless these proposals have a significant cost and we need to find as fair a way as possible to pay for them. This leads to the pension levy.

Section 4 of the Finance (No. 2) Bill 2011 provides for an annual stamp duty of 0.6% on the market value of assets under management and pension schemes approved by the Revenue Commissioners under Irish tax law. The new temporary pension levy of 0.6% over a four year period will provide €470 million a year which is to be ringfenced for job creation.

It is important to have a sense of perspective on the pension levy. The pension levy at 0.6% represents only 60 cent in every €100. It is limited in time to four years and it is targeted at those who can best afford to pay. The pension levy is aimed at the vast sums of wealth which have accumulated in private pension funds, funds which have been generated with 100% tax relief from the taxpayers of this country every year over the working life of those who have accumulated those funds and who are still doing so. Moreover, as the economist Colm Rapple pointed out on RTÉ yesterday, 80% of the money in pension schemes is owned by the highest earners. Perhaps some people sitting to my left might remember that.

Pension tax relief is the most generous tax relief granted by the State to any sector of the tax-paying population. Proposals contained in last year's budget to reduce tax relief on pension funds were inexplicably withdrawn by the Minister for Finance at the last moment when he introduced the Finance Bill.

It is also worth noting that this levy does not apply to the 50% of lowest paid workers, who cannot afford to pay into a private pension fund, or to public sector workers who have already been hard hit by the public service pension levy of approximately 4%. These workers have contributed their taxes to help fund the tax reliefs which in turn funded these private pensions.

The 0.6% annual levy is taken in two 0.3% tranches and will cease after a maximum of four years. It is less than half the amount of the annual cost of administration and management charges levied by the pension managers. That puts it into perspective. These are the same pension managers who often mismanaged the same funds with consequent reduction in their value.

There is scope in the provisions of the legislation for the levy to be built into administration and management costs. I believe that it would be an act of responsibility and generosity for those same managers to deduct the 0.6% from their management fees, salaries and administration costs for the next four years or to take a reduction over a more extended period. This Bill is about the economic renewal and regeneration of the country. It is a start to the difficult job of rebuilding our society.

I am amazed at the reaction of Members of the Opposition to the pension levy. Maybe it is not so surprising that Fianna Fáil continues to defend and protect the wealthy bankers and financiers who caused outrage in recent months by siphoning off income into pension funds to avoid paying tax. It is surprising that Sinn Féin and other Members of the Opposition, who claim to represent the ordinary worker, most of whom cannot afford to pay into a private pensions, have reacted in a similar vein especially when the levy is targeted exclusively at creating employment for the unemployed.

We should be in no doubt that it is vested interests and those with large pension pots who are stirring up a storm and engaging in scare tactics in relation to this pension levy. It is disappointing to see some Members of this House championing their cause.

This Bill is about recovery, job creation and economic renewal. The principles underlying it are sound. If Members on the Opposition benches have difficulty with some provisions of the Bill, they should table amendments not oppose its substance.

The Finance (No. 2) Bill 2011 deserves the support of all Members of this House.

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