Joe Costello (Dublin Central, Labour)
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Question 105: To ask the Minister for Defence if there are plans to impose pay cuts for personnel serving at any level within the Defence Forces; and if he will make a statement on the matter. [3500/09]

Willie O'Dea (Limerick East, Fianna Fail)
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As the Deputy is aware, the Taoiseach announced yesterday a series of measures taken as part of the implementation of the framework for stabilisation, social solidarity and economic renewal. One measure announced was on the method of achieving savings of €1.4 billion on the public service pay bill. The bulk of the proposed savings will be achieved through a new pension-related payment to be made by public servants. This will apply to members of the Defence Forces. I reflect the Taoiseach's view, expressed yesterday, that this is regrettable. However, it is clear that strong action is needed to address the economic crisis that now confronts us.

The levy will apply across the public service and is not specific to the Defence Forces. The Government appreciates the tremendous work that has been done and is being done by the Defence Forces at home and in many troubled areas of the world and the sacrifices that members and their families make in the cause of international peace.

The development and modernisation of the Defence Forces in the past decade comprise one of the big success stories of public sector modernisation. The process of modernisation created great challenges and demands for the Defence Forces. The men and women of the Defence Forces have, over the years, risen admirably to those challenges. They are now being asked, along with other public servants, to raise to the current challenge and I have no doubt they will do so with the same sense of public service they have displayed in the past.

Brian O'Shea (Waterford, Labour)
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I take it from what the Minister has said that the levy will apply to all Defence Forces personnel. If so, does he consider it fair that personnel in relatively low-paid ranks will have to pay it? Will it apply to allowances, such as that paid in respect of service in Chad?

Willie O'Dea (Limerick East, Fianna Fail)
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I take Deputy O'Shea's point that many people in the Defence Forces are not particularly well paid. I will not get into an economic debate about it; suffice it to say the levy applies across the public sector. There are staff in other sections of the public sector who could equally be regarded as not being terribly well paid, yet they must also accept the levy. As the Deputy knows, it is being applied according to a sliding scale such that it rises as one goes up the salary scale. The levy will apply to all members of the Defence Forces.

On the question of allowances, I am aware that allowances for serving overseas are not taxable. Whether the pension levy applies to them is still not decided. It will be a matter for discussion by the Government and it will be clarified when the legislation to implement the levy on contributory pensions is introduced in the House. The simple answer to the Deputy's question is that I do not know as yet.

Brian O'Shea (Waterford, Labour)
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The total reduction for the Department of Defence is to be €140 million, €50 million of which was to be used to make the pay award on 1 September. This award is now not being paid. This €50 million stays with the Exchequer. However, I am not quite clear on a certain figure. The statement on the Department's position indicates there will be pay and non-pay savings but I find it hard to understand the remark that savings of €15 million will be found across a range of defence expenditure categories, including equipment purchase. There are already headings pertaining to procurement and I therefore want to know the distinction. Could the saving of €15 million also have an impact on pay?

Willie O'Dea (Limerick East, Fianna Fail)
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It will not have an impact on pay. It is an additional €15 million we were asked to find during the course of the recent social solidarity negotiations.