Finian McGrath (Dublin North Central, Independent)

Workers and the unemployed did not cause this economic crisis and they should not be penalised. Also pensioners and children with a disability should not be penalised for the greedy actions of senior bankers, bad Government decisions, bad regulation and other greedy interests in Irish society.

Section 3 amends the Value Added Tax Consolidation Act 2010 to provide for a second reduced VAT rate of 9% in respect of certain goods and services for the period 1 July 2011 to 31 December 2013. Let us be vigilant in this regard. I suggest we follow the French on this matter. I appreciate Mr. Sarkozy and Ms Lagarde may not be popular with many in Ireland at present but, in fairness to the French, when it reduced its VAT on hotels and restaurants and other tourist services three years ago, businesses erected signs showing the tax cut for consumers. It was open and transparent and great for customers and businesses. We should consider this approach in the light of the current debate on the cost base of employment. Let us hope all the businesses affected by the reduction in VAT follow the French example. Rather than getting carried out away with other issues, perhaps we should be more transparent and democratic and adopt the French approach.

I welcome the positive aspects of the Bill which have the potential to lead to job creation. They will have my support, even if only a couple of hundred new jobs are delivered. Forgive me, however, if I am missing something in the debate on job creation. How can the Government, especially the Labour Party, justify cutting 250 language support teachers for children with special needs? These are real people in real jobs providing real services and cutting them amounts to educational vandalism. Shame on the Labour Party for supporting cuts in services to the most vulnerable.

On the levy on pension funds provided for in section 4, I will use my vote to prevent any attempt by pension fund administrators to pass on to their customers the 0.6% job creation fund tax levy proposed by the Government. I support the position taken by the Irish Nurses and Midwives Organisation, INMO, which has, on behalf of its members, raised this issue with pension fund administrators and providers of additional voluntary contribution, AVC, schemes. The levy will be imposed on the trustees or administrators - in the majority of cases, this is the insurer or life company - rather than directly on the member's fund. Based on a previous levy proposed in 1998, the industry is assuming it will be given an option to pass on the levy and has run a slick campaign suggesting it will not have any other choice. The Government must prevent it from taking this option. Since the announcement of the Government's jobs initiative, the pensions industry, through highly articulate spokespersons, has managed to convey the impression that this payment towards the nation's recovery must be extracted from the contributors to pension funds. The levy should be imposed on the profits of the pensions industry or, more appropriately, its wholly unnecessary marketing and hospitality funds. The Government repeatedly argues that Technical Group and Independent Deputies do not make constructive suggestions. I have made one such constructive proposal which I urge the Government to adopt.

The impression is being given that every private sector worker will have to pay the levy. Up to 70% of private sector workers are not covered by occupational pension schemes. Further, the industry has in recent decades persuaded many workers to pay into a defined contribution scheme rather than a defined benefit scheme by suggesting the former provides richer returns. Pension companies then played the markets in a manner unbecoming of an industry charged with the responsibility of providing security for its customers. So bad has been the management of pension companies that many defined benefit schemes have required massive injections of additional funds to meet their commitments, despite the companies administering them enjoying years of high profits. I call on the Minister to ensure the pensions industry is not given the option of passing on the levy to consumers. I strongly support the INMO, the members of which have endured the imposition of the pension levy, pay cuts and increased taxes. They and other workers need evidence that pension companies are prepared to contribute to national economic recovery.

Section 2 provides for the abolition of the air travel tax. I support this measure as a means of attracting tourists. While I do not know if it will deliver on this objective, it is an essential step if we are to reap the potential financial benefits of having more tourists visit the country. We must develop our national assets, particularly our beautiful countryside, language, culture and scenery.

Section 3 amends the Value-Added Tax Consolidation Act 2010. The plight of small businesses appears to have fallen off the political agenda. We must support such businesses. I support local small business associations in Raheny and Drumcondra and regularly raise issues on their behalf in the House. Where possible, we should shop local and buy Irish and not be afraid or ashamed to call on people to do so in the current economic circumstances. As I noted, independent assessments have shown that if everyone spent an additional €20 per week in his or her local shop, factory, chip shop or pub, 20,000 new jobs would be created. I welcome the important provision to reduce to 9% the VAT rate paid by restaurants.

We should not be afraid to target pension fund managers and those who have made money and exploited workers. In this connection, the Government gave a commitment to consider a number of useful proposals on the pension levy made by Deputy Shane Ross last week. When will it respond to the sensible proposals made by Technical Group Deputies?

Section 5 deals with the management of taxes and duties, the people's money. Those who mismanaged public moneys in recent years should hang their heads in shame. Public funds must be treated with respect and spent in a sensible manner. I remind the House that a lack of regulation and accountability caused the current crisis. For this reason, many people are sick and tired of comments made by Ministers about sections of the public service. I remind the Government that public servants were at the forefront of recent high profile visits to the State. I strongly disagree with the comment by the Minister without Portfolio, Deputy Brendan Howlin, that the public service is not fit for purpose. How dare a Minister make such a statement about public servants? It is an unacceptable remark, especially when one considers the work done by nurses, teachers, gardaí and social workers. Public servants are fit for purpose and embracing and delivering change and reform. They are not talking but taking action. I am appalled that the Minister was able to make such a comment without being challenged on the matter. We are all in favour of an efficient, high quality public service, but how dare anyone claim it is not fit for purpose?

I am concerned by the latest OECD report on economic growth which suggests the economy will stagnate this year, although I am aware the Government disagrees with the OECD's view. Many back bench Labour Party Deputies are sympathetic to my view that one cannot cut one's way out of a recession. What does one expect when one adopts the slash and burn policies of the previous Government? I note also from newspaper reports this morning that further pay cuts are imminent. The Government must take a more balanced and measured approach. If one continually cuts, at some point one will destroy the economy. While I accept that the public finances must be managed, the issue of job creation must also be on the pitch. Trade unions and employers must come together and work in the national interest.

The current climate has given rise to considerable hostility towards trade unions. I acknowledge that with so many out of work, people are cheesed off and experiencing problems, but certain individuals are showing excessive hostility towards the trade unions. What really gets up my nose is that some of these people were part of the problem in causing the economic crisis, yet they are the very ones who start bashing trade unions.

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