Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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88. To ask the Minister for Finance the future of the pension levy; the number of years it is expected to last and the rate; the amount it is anticipated will be raised by it; what the money raised is being allocated to; if he intends to bring forward legislation ring-fencing it for any particular purpose; and if he will make a statement on the matter. [51876/13]

Michael Noonan (Limerick City, Fine Gael)
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I announced in my 2014 Budget speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 will be abolished from the 31st of December 2014. I will, however, introduce an additional levy on pension funds at 0.15%. I am doing this to continue to help fund the Jobs Initiative, including the continuation of the reduced 9% VAT rate detailed below and to make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties. The additional levy within the existing legal framework will apply to pension fund assets in 2014 and 2015. The yield from the pension fund levy in 2014 is estimated at €675 million. The yield from the pension fund levy at the reduced rate of 0.15% in 2015 is estimated at €135 million.

The revenues arising to the Exchequer from the levy are, in common with Exchequer revenues generally, not hypothecated to any particular item of expenditure or liability but have been used to help fund the various measures introduced by the Jobs Initiative. I have no plans to change this approach. One of the very significant and successful measures introduced by the Jobs Initiative – the reduced VAT rate of 9% on tourism and certain other services – was due to end this year. In my Budget speech, I announced the continuation of the reduced 9% VAT rate. I also announced that the Air Travel Tax is being reduced to zero with effect from 1 April 2014. The combined cost of these initiatives is estimated at close to €400 million in a full year.

The Jobs Initiative also included a number of current and capital expenditure measures. While the details of the expenditure on these measures are a matter for my colleagues in Cabinet, I would ask the Deputy to note that the Jobs Initiative originally provided for 5,000 places under Jobbridge, the National Internship scheme and 5,900 places under the Springboard scheme. Numbers who have participated in Jobbridge have now exceeded 20,000 with an evaluation by Indecon Economic Consultants finding that 61.4% of survey respondents were in employment within 5 months of finishing their internships. The Springboard scheme, now in its third iteration, has expanded to over 16,500 places. The expansion of these schemes, reflective of their success, will require further funding from the Exchequer.

The extent of the potential State liabilities from the pre-existing or future pension fund difficulties is a matter primarily for my colleague the Minister for Social Protection. However, I can say that agreement has been secured for these liabilities to be met by the Exchequer, where they arise. As I have already indicated, however, the proceeds from the levy that accrue to the Exchequer are not set aside in the manner suggested in the question and expenditure decisions on the use of those and other funds will be made as they arise in the normal way.