Michael McCarthy (Labour)

I welcome the Minister of State. People throughout the country are sitting around kitchen tables discussing the downturn in our economic fortunes. Many of them have lost their jobs and those of them who were not unlucky enough to lose their jobs are earning much less. They are still paying the same bills, struggling to pay mortgages, send children to school and trying to make ends meet. There is a whole generation of people who have never had to countenance such a situation

There are people who never had to seriously consider emigration. There are people who do not realise what the tax rates were. I went to school back in the 1980s when income tax was at 60%, interest rates were 22% and thousands of people were leaving our shores every week to seek better pay and conditions in other countries. The country was in an economic mess.

For the first time ever, we are now in a situation that I believe is, quite frankly, much worse than obtained in the 1980s. If one considers what people have had since and the level of personal debt, there are major pressures on people nowadays. It is probably the most serious financial and economic crisis this country has ever witnessed. There are many aspects of this Bill that merit vigorous and long debate. It would be impossible in the short timeframe we have in this debate to make a lot of points so I will only make a few.

The pension levy should be called what it actually is, which is a tax and a pay cut. That is precisely what it is. I made this point on the Order of Business. The Government is legally prohibited from introducing a tax without introducing a budget. Therefore, it introduced a pay cut or tax and called it a pension levy. What this debate requires to begin with is a level of honesty. Let us be honest with people. This is a tax and not a pension levy. It is a pay cut for thousands of public sector workers.

We need not forget these are the very same people who were subjected to an income levy in the budget last October. It is the second blow many of these workers have been dealt. It is very regrettable that public sector workers have been singled out and targeted by this Government. The income levy itself made a mockery of the social partnership process and the talks. It was introduced at the eleventh hour. There was no consultation. In fact, some social partners were outside Government buildings late that morning and did not even get the courtesy of a visit from a Minister.

It was put on the table and in all reason and reality could not possibly have been dealt with by any degree of debate. It did not merit any level of attention because it was introduced so late. The situation was to take it or leave it. It was Hobson's choice. There is a complete absence of fairness or balance in the pension levy and pay cut. There is a wide body of belief that we are in deep economic trouble and a major effort is required by all to get us out of this mess. A fair and balanced effort is required, but unfortunately this Bill is not it.

Why are the people who have caused the turmoil not affected by this taxation? Why are they getting off scot free? Why are they not included in the remit of this legislation? A common mantra among many Ministers is that we are all in this together. If we are all in this together, where are the bank executives, the board executives, the property developers and the people who got us into this mess in the first place? If we are all in this together, why is the chief executive officer of Bank of Ireland earning just under €2 million per annum and why does he not pay a levy? Why does he not pay a tax, albeit he is on a much lamented reduction from €3 million to €2 million? Why is a public sector worker earning one eighth of what the CEO of Bank of Ireland earns paying €1,000 in pension levy, which is actually a pay cut? If we are all in this together, why is the Government not touching the 6,500 self-administered pension schemes which attract huge tax relief? A national consensus could be reached and if we are to get out of this mess, it must be reached. However, I would not hold out much prospect for economic recovery if there is not a genuine attempt to bring everybody on board.

The week prior to this announcement, the Taoiseach said, albeit in the heat of the moment in the Lower House, that it was his way or the highway. In many ways, that describes how this whole issue was approached. The 11th hour Hobson's choice has aggravated people and has made them justifiably angry.

There were a number of high profile comments from people in IBEC. As Senator Norris rightly pointed out on the Order of Business last week, on Monday of last week a stockbroker from Davys had the temerity and the cheek to suggest that because there was negative inflation and prices had come down, we should reduce social welfare. That is from a stockbroker who will never have to countenance living on just over €200 per week. He had the cheek to start to dictate to those on social welfare. IBEC's solution was almost as ridiculous, that is, put more people on the dole and that will get us out of this mess.

The much lauded speech the Taoiseach made to the Dublin Chamber of Commerce this night three weeks ago, which was partially broadcast on "Morning Ireland" the following day, was a rousing one and received many plaudits from commentators. Why did the Taoiseach not display the same level of enthusiasm and command of his belief in either the Dáil or the Seanad? The Dublin Chamber of Commerce is not an appropriate forum to start to explain our way out of the current difficult situation.

Why have tax cuts over the past ten or 12 years favoured the super wealthy? Why do we allow people who have made millions of euro from being Irish to avail of generous tax schemes whereby they do not contribute one single cent and behave like Cinderella, flying out of the country at 12 a.m.? They can fly off to Washington and sing at Barrack Obama's inauguration, but I do not consider that patriotic, I consider it treason.

Why did the Minister for Education and Science announce €9 million in cuts in special education two weeks ago? If we are serious about putting our shoulders to the wheel and expect the public to support cuts, we should not go into a special needs classroom and sack the teacher, or pick on the most vulnerable people in our society. Any measures required to bring us out of this economic mess require fairness and balance. There is a marked absence of fairness in all this. Those who contributed most to this problem should be the ones to contribute most to the solution.

The march last Saturday, organised by the Irish Congress of Trade Unions, when more than 100,000 people took to the streets of Dublin, the march by 3,000 members of the GRA yesterday — like it or lump it, that is democracy and they are entitled to air their views — the picket this morning by the CPSU and the level of support from private sector workers remind us that the wedge the Government has tried to drive between public and private sector workers has not worked. That is a good thing in the sense that workers have united in the spirit of unity for fairness and balance. It suits people to imply that public and private sector workers live on different planets.

The bankers, the people who lent recklessly and irresponsibly, incentivised by generous salaries and bonuses, have yet to be held accountable. We have bailed them out and they have not yet returned any guarantees. There does not seem to be a system of accountability whereby those people have suffered. I do not say that lightly. I mean it in terms of accountability, that is, with salaries capped and no bonuses.

Does the Minister realise that if a young garda is asked to do overtime by a chief superintendent, he or she is obliged to do it? If he or she refuses, he or she is subjected to disciplinary action. If a garda is around Trinity College at 2 a.m. or 3 a.m. dealing with a couple of drunken yobs, the money he or she earns for that hour will be subject to this levy. The money he or she earns is not pensionable but it is now subject to pension levy. Does the Minister accept that is unconstitutional? Has the Government taken legal advice on this? Has the Government any shame? Has it any word of hope to offer the young teacher, the young nurse or the young garda who negotiated a mortgage in the past two to three years based on earnings which did not allow for the 1% income levy or the pension levy?

Another example of the unfairness of this tax is that somebody earning €37,000 will be required to pay €1,960 in this pension levy, that is, tax cut, while somebody earning €40,000 will pay €1,622.50. Does the Minister believe that is fair? Does he accept that we will starve this country of a decent public service, whether the health service, with young nurses and midwives, or the police force? Is he giving an advantage to criminals, who will now see a public sector police force that is not being given the resources it needs and a recruitment campaign that effectively has been abandoned?

When will we see a jobs creation strategy and a jobs protection strategy from this Government? In the past 12 months, more than 145,000 people have lost jobs. If this is the first instalment in the Government trying to restore public finances, it has fallen at the first fence.