Paschal Mooney (Fianna Fail)

I welcome the Minister of State, Deputy Brian Hayes, back to the House. I also wish him well in his relatively new appointment. Following the summer we will have to cease referring to new appointments, but for now the honeymoon period continues for the Government. Given the huge mandate it received, the criticisms are muted. I have no doubt that this will continue to be the case at least until the Book of Estimates is published and the next budget is introduced.

I do not wish to oppose measures for opposition's sake. My colleagues in the Dáil and the Seanad have focused on the pension levy, as have many other speakers on the Opposition side. The contributions made from the Government side have been remarkable, given the omission of any reference to the levy. Members on the Government side have focused on issues not necessarily relevant or germane to the Bill. However, having recently been on the Government side, I can fully understand the reluctance of Government Senators to be too critical of the Government's proposals. The issues in regard to the pension levy are well aired. It is interesting that, when one looks into it in some detail, one discovers the overwhelming majority of those involved in the pensions industry have not welcomed this move. One of the reasons they have not welcomed it is that, despite assurances to the contrary from the Minister when introducing the proposals, it is suggested it is not a progressive tax primarily because the rate is the same for a person on the bread line as it is for the very wealthy.

Recent reports suggest the rich still control wealth of between €100 billion and €200 billion here. It is argued by Mr. James Fitzsimons, an independent financial adviser specialising in tax and financial planning, that the Government would collect as much revenue from the better off without causing hardship. Mr. Damien Kiberd in The Sunday Times of 22 May stated that people pay the levy whether one's scheme is booming, insolvent or just chugging along. In his reply, the Minister of State might indicate whether there is any discussion about the enormous amount of wealth that is perceived to remain in the country.

I make this suggestion somewhat guardedly as I remember, when I first went to England as a teenager to work, that one of the political catch-cries of the day was that if you elected a Labour government, the money flew out of the country, and if you elected a Tory government, the money flew back. I am not sure, given the configuration of this Government, which is of the centre-right and the centre-left, exactly what that perception might now be. I am cautious, however, and know the Government will be equally cautious to ensure that wealth does not fly out of the country and that it is harnessed for the best interests of the people. On the face of it, there is a considerable amount of money sloshing around out there, despite the lack of consumer demand and the low rate of consumer spending, and that people are actually hoarding it. It is an issue the Minister might address.

I know the Government will justify this on the basis that it has no option and it needs to raise revenue. While this is seen as being one of the easier ways of raising revenue, the point that has been made repeatedly, and which I repeat, is that there is a possibility people could lose faith in pensions. For the past ten or 15 years, certainly from the time of the late Minister for Social and Family Affairs, Mr. Séamus Brennan, there has been a strong, proactive approach by successive Administrations, including this one, to encourage people to take out pension plans because there is a pensions time-bomb of which we are all aware. The former Minister, Mr. Charlie McCreevy's now forgotten but much lauded initiative of introducing the National Pensions Reserve Fund went some way to attempting to head off the serious implications in some 20 to 25 years time of an increasingly greying population in Ireland and of the State not being able to pay adequate pensions to those who have reached the eligible age. This is why I suggest the social welfare Bill that will shortly come before the House, which will result in an increase in the age limit for old age pensions, is being introduced now so as not to arrive at a situation where the time-bomb explodes and the Government of the day will not be able to pay pensions. In that context, it is surprising the Government is now going after pensions through the imposition of a pension levy.

In defence of the argument that the pension levy should not be imposed, while the Government argues that most of the money in pension funds is invested outside the State, Dominic Coyle in The Irish Times of 23 May stated:

This is gombeen economics. ...the notion that pension funds should be invested entirely within the State is so inane that you would wonder about the wisdom of hopes the people of the State have invested in our new leaders. To have invested them entirely within the State would have ensured only that pension savings went the same way as other investments in Irish equities and property in recent years.

My experience has been that for many years, since the noughties or before, much of pension funds was invested here in Ireland because the banks owned many of the pension companies that were providing them, so it is a point I would not necessarily agree with.

The positives in the Bill include the abolition of the air travel tax and the reduction in VAT. My colleagues in the other House have criticised the Government for not reducing the tax on home heating oil, fuel and all the various items to which the 13% VAT rate applies for the general population, including those who are most vulnerable. However, as I have stated in the House previously, I welcome the reduction in VAT to 9% and believe it will make a real difference, not only by protecting jobs in the tourism and service industry but by enhancing that position.

With regard to the air travel tax, I was in correspondence with my good friend and a person I have long admired, Mr. Michael O'Leary, who took me to task about comments I had made. On the evening of the debate on tourism in the House, Senator Seán Barrett referred to a very significant hike in airport charges. There is no doubt the abolition of the travel tax alone will not result in Ryanair and Aer Lingus expanding their routes or increasing visitor numbers to the country. The nettle will have to be grasped in regard to airport charges, as the hike in these charges since 2009 has been totally unsustainable. If it continues, I have no doubt Ryanair and Aer Lingus will come back to the Minister to say that while they are delighted that he abolished the travel tax, to keep landing charges as they are is unsustainable, and this applies to the manner in which this was done as well as everything else. Unless that nettle is grasped, I reluctantly concede there may not the anticipated increase in visitors to this country. I wish it were otherwise but it seems this will be a deal-breaker for Ryanair and perhaps to a lesser extent for Aer Lingus.

I wish the Minister, Deputy Varadkar, well in his consultations and discussions with Ryanair. Ultimately, Mr. Michael O'Leary is a patriot who, despite the fact that for him the bottom line is the dollar, wants to do well by this country. He lives here and pays his taxes here, unlike some of the better known celebrities who have moved their tax bases to other countries. For that reason if for no other, continued and sustained discussion between the Department of Finance and the Department of Transport may result in a positive outcome. Overall, I welcome those two elements of the Bill but it remains to be seen whether the imposition of the levy on pensions will gain universal acclamation. I have a feeling it will be an unending story over the next couple of years.