Pearse Doherty (Donegal South West, Sinn Fein)

At the start of Committee Stage on the Finance (No. 2) Bill, the Minister has landed an almighty bombshell in the middle of the debate. He stated that a review of the biggest ticket item of this Bill, the reduction of the VAT rate to 9% which will cost €350 million in a full year, is built in because we may not be able to afford the measure in the future. The review is to be completed before the end of 2012 in order to inform the Minister's decision in regard to budget 2013. However, the levy being imposed on people who have saved will carry on until 2014. The Minister is trying to sell this issue, namely, the pension levy, whereby this Government will tap into the savings of hundreds of thousands of people, as a quid pro quo for creating jobs. He did not say that the initiative may be suspended before its time. Most likely it will continue until 2014. However, the idea a reduction in VAT for specifically focused tourism sectors may be abolished in 2012, or whatever date, is not what the Minister stated in his jobs initiative; I have that script here. It was very clear that the review would be carried out to ensure the sector was benefiting from that decision, not because we might not be able to afford the measure in future.

Will the Minister give a guarantee that the pension levy is linked to the VAT reduction? If the Government decides following the 2012 review that it will discontinue the 9% VAT reduction in specific sectors, will the pension levy no longer exist? The Government is trying to tell the public that this is all about jobs. It is asking people why they should not relinquish 0.6% of their pensions, given that the money will be used to create jobs in towns across Ireland. When the Taoiseach has spoken about this, he has pulled on the heartstrings of the 450,000 people who are unemployed. It now seems that the pension levy could be used to fund other mechanisms. It is possible that the initiatives announced could be reversed while the pension levy remains in existence. I am asking a genuine question. Will the Minister clarify the position? As he has emphasised on many occasions, these initiatives had to be fiscally neutral. We cannot allow the Government to overturn its decision to reduce the rate of VAT that applies to the tourism sector, while at the same time continuing to tap into the private pensions of individuals. The moneys gathered from that source cannot be used to pay some of the State's other deficits. We all know the State will have to make an annual injection into Anglo Irish Bank, for example. That is not right. I ask the Minister to clarify his initial statement this morning.

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