Brendan Howlin (Wexford, Labour)

I thank the Chair for its indulgence. I have been trying to perfect the art of bilocation. I was speaking in the Lower House until 3.05 p.m.

I thank the Senator for his contribution on the amendment he tabled. I dealt with a similar amendment in the Dáil. I explained that the proposal in this amendment to repeal sections 6 and 7 of the 1963 Act could only have a prospective effect. One could not make it retrospective. The reason, as I explained in the other House, is that pensions are property rights protected by the Constitution. It is a simple fact. I know the advice the Senator would get from any authoritative legal source would be the same. Even if one accepted these changes, it would only impact on people appointed into the future. Since this Bill captures everybody who is appointed into the future, there is no point in doing that.

The anomalies to which he referred have caused disquiet. On becoming Minister for Public Expenditure and Reform, I discovered the Top Level Appointment Committee, TLAC terms that applied to Secretaries General. I abolished them within a few months of taking office. Those terms had been in place since 1987, which surprised many of us who have been around since that time. Clearly the terms were overly generous and in my view could not be sustained in the current economic environment. We have substantially altered them. Many of the unacceptable features that the TLAC terms represented do not now apply to a Secretary General appointed since shortly after this Government came into power. We have taken a range of other measures on top level pay. We put a ceiling of €200,000 on pay in the Civil Service, which is the rate set for the Taoiseach. Of course, his net pay is a great deal less than that because of the significant tax and universal social charges which apply across the board. We should also be aware that the marginal tax rate for anybody earning over €100,000 in the public service, if one counts everything the pension levy, the universal social charge and tax, is 62%, which is a high marginal tax rate.

People have asked me to mention the fact that we should always talk in net terms. When we talk about social welfare payments, we refer to the gross figure because it is not subject to tax, but to express a person's earned income in gross terms is unfair because it is not the amount of take home pay. If one is to compare like with like, we should speak in terms of what people get into their hand.

I do not disagree with the reasoning behind the Senator's proposal today but for the reasons I have outlined it can only have a prospective and not a retrospective impact. This new legislation will apply to all, including Secretaries General and to everybody else appointed in the public service once it is enacted.