Martin Mansergh (Tipperary South, Fianna Fail)

I cannot help but reflect on the irony that on the previous amendment the question was raised by the Opposition as to why the President and the Judiciary were excluded from the pension levy, whereas this amendment seeks to exclude the Central Bank from the operation of the levy. While I will give a full response, I am not convinced the matter deserved the length of time given to it.

I was tempted to reply to Senator Norris last night when he cited the Supreme Court judgment. There is a distinction between a civil servant and a public servant. A public servant is a broader definition. The Supreme Court judgment related to civil servants and nobody suggests the Central Bank is staffed by civil servants.

I cannot accede to this request. The effect of these amendments would be to remove the Central Bank and Financial Services Authority of Ireland from the measures included in the Bill. Senator Norris cited extensively the Supreme Court judgment so I will take that as read.

The Bill provides for the inclusion of the Central Bank and Financial Services Authority of Ireland, because its staff, as defined in section 1, are public servants. The judgment to which the Senator referred, gave a ruling on their status in that they are not "civil servants", but the public service is a wider group, including not only those employed in central Government Departments and offices, but also teachers, gardaí, the permanent Defence Forces, health sector workers and so on, including employees of the Central Bank.

In all the circumstances, given their public service status and pension entitlements, there is no equitable reason for excluding the staff of the Central Bank from the deduction, which it must be stressed is to apply on a wide base and without additional benefits being conferred. While the Central Bank may make profits, it is not a commercial semi-State body. As the Senator pointed out, the Central Bank pension scheme is approved by the Minister for Finance and has the same terms and conditions as the Civil Service scheme.

As Senator Norris stated, the European Central Bank wrote to the Minister for Finance this week in connection with this Bill. The European Central Bank said the Government should make sure plans to levy public servants' pensions do not tread on Central Bank independence or break rules banning Central Banks from funding a budget shortfall. I understand the views of the European Central Bank hang on the question of consultation and the Minister is open to this.

However, as all here are aware, this legislation is important and necessary to control our public expenditure in the context of the rapid and devastating changes that have struck the Irish economy. The Financial Regulator is part of the Central Bank, and in line with the regulatory sector in Ireland generally is non-commercial. It is funded by way of levies on the industry regulated. The Regulator is given the power to levy the banking industry by the Oireachtas. Thus, it is indirectly funded by the Oireachtas and could not self-fund otherwise.