Derek Keating (Dublin Mid West, Fine Gael)
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Question 11: To ask the Minister for Finance if he will consider introducing a new super tax to address the bonuses, generous severance packages or large pensions being paid to senior civil servants, senior public sector workers or any person who comes under his jurisdiction; and if he will make a statement on the matter. [27391/11]

Michael Noonan (Limerick City, Fine Gael)
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The issue of remuneration, which includes the granting of performance-related awards schemes, severance payments and pensions to senior public servants and public sector workers, is a matter for the Minister for Public Expenditure and Reform in the first instance. I have been informed by my colleague, the Minister, Deputy Howlin, that performance-related award schemes were available in the past to certain posts in the following areas of the public service: the Civil Service, the Permanent Defence Force, An Garda Síochána, the health service, the local authorities and a number of non-commercial State agencies. Against the background of the deterioration in the public finances, it was considered that such schemes were no longer appropriate. In this context, the schemes for the Civil Service, the Permanent Defence Force, An Garda Síochána, the health service and the local authorities were suspended in 2009. No awards were made in 2009 in respect of 2008 performances. This remains the position. I do not believe the tax code should be the preferred mechanism to deal with bonuses, severance payments and pensions paid to senior public servants. If performance-related bonuses or severance payments are neither justifiable nor affordable, they should not be paid in the first place rather than being super-taxed after the fact.

Derek Keating (Dublin Mid West, Fine Gael)
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In recent times, I have tabled a series of parliamentary questions to give exposure to the payment of vast sums of money, in some cases, to a small number of senior civil and public servants. It strikes me not only that we can ill afford such amounts of money, but also that we are setting a bad example by making such payments. It sends a bad message to the many people in this country who are suffering because they cannot pay their mortgages or meet the cost of living. When I attended the launch of the Disability Federation of Ireland's pre-budget submission in the Mansion House earlier today, I noticed there was fear on the faces of many people who are concerned about whether services will be provided to them in the future. I appreciate that the Minister and the Government inherited some of the arrangements governing the bad practices of the past from the previous Administration. I am concerned about the bad message that has been transmitted on foot of some of the recent exposures in the media, as well as the cost of these payments to the Exchequer in the current climate.

Michael Noonan (Limerick City, Fine Gael)
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My colleague, the Minister for Public Enterprise and Reform, has taken rigorous action to change things for the future. As a result of arrangements that were made in the past, it is very difficult to deal with certain legal entitlements. Special provision was made for Secretaries General whose terms of appointment included the top level appointments committee exit terms. These terms are currently being reviewed by the Minister, Deputy Howlin. He is changing them completely. When I first came into politics, the Secretaries General of Departments were appointed until the retirement age of 65. That arrangement was brought to an end by the late John Boland when he was Minister for the Public Service. Secretaries General are now appointed under a contract for a specific term. If someone is appointed as a Secretary General at the age of 45 and leaves that position at the age of 53, he or she could receive additional payments on retirement if they were included in the package when it was being negotiated. That is why things have run so big, as in the case of the former Secretary General of the Department of the Taoiseach, which was well publicised recently. All of that is being changed by the Minister, Deputy Howlin. Deputy Keating will have noted that many public servants objected loudly to the new pensions arrangements for public servants when they were published last week. Under those arrangements, the pension levels that are paid will decrease. We are having to make adjustments of this nature as a result of the difficulties we are facing. It is not easy for any beneficiary to have to live under a new regime. It is very hard to make any of these things retrospective.

Derek Keating (Dublin Mid West, Fine Gael)
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I will conclude by saying such reviews and changes are to be welcomed in the circumstances. I thank the Ministers, Deputies Noonan and Howlin.

Pearse Doherty (Donegal South West, Sinn Fein)
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I am glad Deputy Keating is advocating Sinn Féin policy. Perhaps he is considering changing his party once more. The Minister said changes will be made to future pensions, lump sums and bonuses. When he and the Minister, Deputy Burton, were on this side of the House, they argued in favour of a special charge on bankers' bonuses. Bankers are legally entitled to such bonuses, but they should not get them. Deputy Keating has placed such a proposal before us today. Sinn Féin has been advocating it. There is a legal mechanism whereby we can deal with this retrospectively. We are advocating the introduction of a charge such as the bankers' bonus charge, which is a 45% charge on incomes above a certain amount. I put it to the Minister that it is within his capability as Minister for Finance to introduce such a charge in the next budget. It could deal with anything that went before his term of office, including the pensions and bonuses to which certain people are legally entitled.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I welcome Deputy Keating's question. He is pointing to an important issue - the obscene salaries of many people in the top echelons of the civil and public service, who are paid with public money. I do not know if he agrees with me when I suggest his proposal could be extended to cover the obscene salaries at the top of the corporate and private sectors. The Minister and the Government should explain why some sort of super-wealth tax cannot be imposed on people at the top of the public and private sectors at a time when many people are being slaughtered with the universal social charge and various cuts and attacks on their incomes. We need to ensure high earners take some of the pain from people who simply cannot afford it.

Michael Noonan (Limerick City, Fine Gael)
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It was the tradition that the lump sums paid to public servants as part of their pension schemes were tax free. That has been changed. They are now tax free to a certain level only, and then fully taxed after that level has been reached. The last tranche of the former Secretaries General emolument or lump sum would have been taxed at the marginal rate of tax. We tax it at 52%.