Jim Walsh (Fianna Fail) | Oireachtas source

Okay. I will try to finish sooner. I wish to mention a few headline issues. We should look at a number of public expenditure issues that came very much into vogue and into focus when the economic crisis broke. I refer, for example, to the rates of pay across the public service and indeed the rates of pay generally in the country. I was amazed that a 2008 survey done by the University of Glasgow showed that urban pay rates in Ireland represented approximately 29% of the pay of the whole country. We were actually at the top of the league, with an average of €43,000. The nearest was Denmark at €36,000. The figure for Germany, which is the paymaster of Europe, was €31,000. Britain was at €29,000. France, which is a highly unionised and labour-organised country, was at €23,000. The survey in question showed how far out of line we were. We should ensure that never happens again. When I hear about the restoration of pay in the public service and all of that, it strikes me that we need benchmarking, although not the kind of mar dhea benchmarking that existed in the past. I would have made this point in the Seanad when benchmarking was first raised. We should benchmark against similar positions in the public service in western European countries. If we do that and keep within those parameters, we will keep ourselves competitive. That is the first point I want to make.

My second point relates to pensions. If I remember correctly, the additional pension contribution that we have all had to make as a consequence of the difficulties of recent years is approximately 7%, on top of the existing 6% contribution. I do not think that should be unwound. Those of us who are working in the public service should recognise that we would not be able to get a similar pension system in the private sector, as it would be unaffordable and we just could not pay for it. Most of the private sector has moved from defined benefit schemes to defined contribution schemes. This has been done to protect against the type of inflationary issues that confronted many of the trustees of pension funds during the last decade or more. I know people have pension rights, but I would leave the additional contribution as it is, at 13% or 14%, for those who wish to stay in a defined benefit public service scheme. I suggest that if one does an actuarial assessment of that, one will find that the real cost of it is probably around 34% or 35%. I accept that a minor proportion is being paid by staff towards the cost of it. I think we need to do that. I would give each person in the public service the option of changing part of his or her pension arrangement to a defined contribution scheme, on a voluntary basis, and coming back to the 6% level. People should not be afraid of that because many people in the United States who were working in employment did exceptionally well in the last couple of decades by investing in mutual funds as part of their pensions. Many of them created a wealth that they would never have had without that. I think we should look at it that way.

I would like to mention while the Minister of State is here that a number of things need to be looked at on the taxation side. In my opinion, capital gains tax is an absolute mess. People who have suffered significant losses on investments are unable to write off those losses. Some of them are related to insurance. It has become far too complicated. In addition, the rate of 33% is far too high and needs to be looked at. Capital acquisitions tax has also been mentioned. I am sure some of my colleagues have spoken about it. We have seen examples of people who inherited houses having to sell those houses even though they needed them. That is wrong. I think it needs to be looked at.

I will conclude by speaking about the universal social charge. As the Minister and the Government have said, it was an emergency measure. It was clearly stated at the time that it was being introduced to meet the needs of the fiscal crisis of the time and would be unwound as soon as we got into better and calmer waters.That commitment should be honoured.