Michael Noonan (Limerick City, Fine Gael)

I thank all Deputies for their contributions. We are covering some of the ground already covered this morning but that is the reason we are here so everyone can have a say. A Deputy on this side of the House gave a very good example when he suggested that a person with €1,000 in a pension fund was given tax relief of €410 and is now being asked now to pay €6 back by way of the levy to help the unemployed. That is a modest enough figure and when it is confined to four years it amounts to €24 out of a tax relief of €410. I think some people - not here in this House but outside - with vested interests, have completely exaggerated the impact of the levy. Other people genuinely misunderstand what the impact will be, even people with the training in accountancy and law of Deputy O'Dea. I refer to the example he gave in which he talked about a very modest pension fund of €150,000 and he said a levy of 0.6% on that would be €900. He said it would be reasonable to expect that a small fund of €150,000 would throw up a pension of €10,000. He then went on to say that one would lose €900 off the €10,000, which is €9,100 and after four years it would have nearly disappeared, like the cat that kept going around in circles. What one is losing is the potential earnings on the amount that is taken by the levy. If one does the sum again, €10,000 out of €150,000 is slightly over 7% and if €900 is the levy, 7% of that sum is €63. One is therefore not losing €900 but rather €63 and that is the worst case scenario where a completely impaired pension fund was forced to reduce the payment to people on pensions, which is a totally extreme case because in the generality of pension funds, those at work continue to pay and they sustain the payments into the future of those who have retired. There is a lot of misunderstanding about this. I know Deputy O'Dea was genuine but he slipped into that little arithmetical error and I saw Deputy Fleming smiling at him when he was reciting it so I knew there was something wrong and I decided to check the figures. I note Deputy O'Dea has returned and he will note that his €900 has been reduced to €63 in his absence from the Chamber.

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