Claim pension levy unfair is rejected

TAOISEACH Brian Cowen rejected a claim that the public service pension levy was unfair.

“Obviously, the question of fairness can be an objective thing or a subjective thing, and obviously I don’t deny for a moment that this is an imposition on public service workers,” said Mr Cowen.

“And it is in the context in which adjustments are being made across all sectors of the economy, including the private sector, to deal with what is an unprecedented situation,” Mr Cowen said.

He said he wanted to emphasise again the seriousness of the situation in which the State found itself, and the need to work through it. He said the €2 billion in savings were “a signal, if you like, to further measures that will have to be taken, and we have indicated how we would go about doing that”.

The Taoiseach was replying to Fine Gael leader Enda Kenny, who said that his party agreed with the €2 billion in cutbacks put up by the Government.

He said all sections of society, particularly the public sector who did not cause this problem, but were asked to pay for the majority of it, were quite willing to make their contribution and to play their part in moving the economy out of the crisis caused by the Government’s mismanagement of the economy.

It appeared to him, he said, that public servants wanted the system to be fair and balanced. When the scheme for the levy was announ- ced, there were clearly anomalies and the lower paid were being crucified.

He asked the Taoiseach, “in the interests of what you said last week about fairness, engagement, solidarity, listening, and about pulling our country out of this mess”, if he believed that the contributions now expected from the levy were fair and balanced.

Mr Kenny instanced the case of a public servant on €15,000 who would have a net reduction in take-home pay of €450, a decline of 3 per cent. Somebody on €19,500 would have a net reduction of €105 because he or she paid 0.5 per cent due to the taxation system.

A single public servant earning €36,400 would have pay reduced by €1,769, while another single person on €40,000 would suffer a reduction of €1,649. A married person earning €45,400 would have take-home pay reduced by €2,537, but somebody earning €55,000 would have €2,403 deducted. “These are clearly anomalous situations,” said Mr Kenny.

Mr Cowen said when the legislation was introduced in the House, it would be found that some of the anomalies did not exist.