Brendan Howlin (Wexford, Labour)

I thank Deputies for their support for the measure.

The 100% levy rate for every euro over €100,000 in a public service pension, as proposed by Deputy McDonald, is tantamount to confiscation. There may be a rationale to that as we are in a desperate state and it should be debated as to whether it is an appropriate step. The advice from the Office of the Attorney General is extremely important. It states preserved pensions are vested property rights which have been earned and are constitutionally protected.

In the context of such advice, a levy of 100% on every euro over €100,000 would be clearly excessive. It puts at risk the entire FEMPI, financial emergency measures in the public interest, architecture. Introducing such a rate would give a clear path for someone to attack the FEMPI legislation on the basis that it is disproportionate and confiscatory of a property right people had earned and expected.

Deputy Ó Snodaigh spoke about regaining trust which is important. There is also a balance to be struck. Take, for example, a retired senior consultant who decided 40 years ago to practice exclusively in the public system at the cutting edge of medicine. Should we attack his pension instead of the consultant who decided to work exclusively in the private system and who may have a significant pension pot which was allowed 100% tax breaks for up to €5 million a time? Many public servants stayed in the public service when they could have earned more outside but the attraction was they got a decent pension at the end.

The quantum of pension at the top, in my judgment, is too great. That is why the Government has addressed this from the start. I have changed the TLAC, top level appointments committee, terms. It must be remembered this did not grow up in the past couple of years. The TLAC terms which apply to Secretaries General were in place from 1987. Many long-serving Members were unaware of the value of these terms to retiring senior public servants. I have changed them for all new incumbents.

We have gone as far as we can go without putting at risk the fundamental FEMPI architecture which is essential for our national survival. FEMPI is a critical part of the architecture of getting resources to the State to maintain essential public services. I am not minded to put any of that at risk.

Deputy McDonald said I am timid. I have been accused of many things but never timidity. I will be prudent with this legislation's provisions, not foolhardy. Neither, as I have said before, will I grandstand. If I have been given clear advices that to introduce this 100% rate would be unconstitutional and risk pulling down not only this but the broader FEMPI provisions, I will not introduce it.

The end result of such imposing such a levy would not be enormous. The justification for the financial emergency measures in the public interest legislation is the reality of the emergency that exists with public spending. The burden to be levied has to be proportionate and cannot be sector specific. That is why we were very careful in the way we constructed the amendment on judges' pay, for example. Any imposition on them had to be proportionate and in line with what is happening to analogous groups in the public service. These are a careful and balanced set of measures to bring about fairness as best we can without putting greater elements at risk. I do not want to make the legislation vulnerable to attack.

Deputy Sean Fleming made the point that the level of marginal tax on amounts above €100,000 is of the order of 69%. Once upon a time, such a rate would be described as a 1960s-type extortionate tax. It is fair and needed for that contribution to be made in the interest of our national recovery.

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