Willie O'Dea (Limerick City, Fianna Fail)
Link to this: Individually | In context

Question 130: To ask the Minister for Finance the proportion of the revenue raised via the pension levy that was used for job creation as promised in the jobs initiative; and if he will make a statement on the matter. [28851/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

The Jobs Initiative is about focusing our now more limited resources on measures that offer the greatest potential for expansion and employment creation in the domestic economy. The aim is to target key sectors of the economy that can assist in getting people back to work, providing opportunities for those who have lost their jobs to re-skill and building confidence in order to encourage consumer activity. A range of measures were introduced under the Jobs Initiative. These include the new temporary second reduced rate of VAT of 9%, aimed primarily at the tourism sector, the halving of the lower rate of employers PRSI and the small additional amounts of current and capital expenditure.

Given our commitments under the EU/IMF Programme of Financial Support, and our current public finance difficulties, the Jobs Initiative is budgetary neutral over the period to 2014 and is being funded through the introduction of a temporary levy on pension funds.

The measures introduced as part of the Jobs Initiative are expected to result in a net gain for the Exchequer in 2011. This is because the yield from the temporary levy on pension funds is expected to more than offset the estimated cost of the other measures introduced. These included the new temporary second reduced rate of VAT of 9%, aimed primarily at the tourism sector, the halving of the lower rate of employers PRSI and the small additional amounts of current and capital expenditure.

In 2012, a net loss to the Exchequer is expected as the full year cost of the measures introduced is estimated to be greater than the forecast yield from the temporary levy on pension funds.