Minister for Finance Brian Lenihan has rejected Opposition claims that the public sector pension levy is unfair on lower-paid workers and insisted Ireland was "fighting for its economic future".
Speaking during a Dáil debate today on the Bill which gives effect to the public sector pension levy and other cost-saving measures, Mr Lenihan denied the levy would affect lower paid staff more deeply than others.
"I don't accept the pension levy is unfair or is disproportionately affecting the lower paid. This is not true. Those on a higher wage will pay more. It is progressive," he said.
Mr Lenihan said the country was "fighting for its economic future" and that "painful decisions" needed to be taken. "We face exceptional circumstances. We had no option other than to take clear and decisive action."
In addition to the pension-related deduction for the public service, other key elements of the Financial Emergency Measures in the Public Interest Bill 2009 include a reduction in professional fees paid by the State, changes in the early childcare supplement, and the deferral of certain payments under the Farm Waste Management Scheme. The measures are designed to to save the exchequer €2 billion in a full year.
Fine Gael finance spokesman Richard Bruton accused the Government of failing to produce a coherent strategy to deal with the economic crisis.
“The Government hasn’t set out a clear five-year plan. There is no sense that the burden is being shared equally nor is the Government being seen to address the source of our problems. They haven’t imposed an income tax on bank executives or insisted on new boards in these banks,” he said.
“It’s a pathetic document. These are not ideas that are developed in any shape or form. It’s a bulldog clip put around documents we’ve seen for years. It’s a hit and hope document.”
Mr Bruton said his party did not support the pension levy but recognised that savings in public service pay needed to be made. He said people needed to feel, however, that they were not being unfairly targeted.
Labour finance spokeswoman Joan Burton said public servants were being scapegoated and that the Government “seemed to be set on driving a wedge between public and private sector workers.”
“There’s a lot of anger among public servants out there. It’s not that they are unwilling to share the burden but they resent being scapegoated,” she said.
Ms Bruton allowed that Mr Lenihan “had been thrown in at the deep-end” but said he did not inspire confidence in people. "He doesn't induce confidence in the markets, in the ECB or in this house," she said.
“This Government lacks any comprehensive strategy in relation to the economy. They can say the levy is progressive all they want. It is actually regressive, with those on a modest income losing a greater proportion of their take-home-pay than those on higher incomes.”
“And we have bankers complaining that their salary is less than €2 million,” she added.