THE LABOUR Party has tabled a Dáil motion calling on the Government to reverse its decision to impose a pension levy on public servants.
The party’s Private Members Motion, which will be debated on Tuesday and Wednesday, urges the Coalition to reconsider its decision and re-enter negotiations with the social partners with a view to finding alternative ways of saving €2 billion.
Party leader Eamon Gilmore said that the reason it was pursuing the issue was because of what he said was the inequity and unfairness of the Government’s proposals. He said his party supported the need for €2 billion in cuts but disagrees with how they should be achieved.
The motion notes that the levy is unfair in the way it places an unacceptable burden on public servants on modest incomes and also that it applies to all income, even earnings not taken into account for pension purposes.
Outlining the rationale of the motion Mr Gilmore said: “Nobody can be in any doubt about the level of anger felt by many public servants since the breakdown of the social partnership talks last week and the Government’s decision to unilaterally impose this levy.
“Public servants also believe, with justification, they are being singled out for the imposition of a penal levy when those who contributed so much to the current economic crisis are being bailed out by the State.”
He said that people should be asked to contribute according to their means. Public servants did not create this problem, he continued, and should not be singled out for “unfair treatment”.
Minister of State for Trade Billy Kelleher said that the Labour Party seemed to accept the need for a €2 billion reduction in public spending but had come up with no credible or coherent proposals as to how that would be achieved.
“This week Labour called for a temporary cut in VAT but no details were given. If it were equivalent to the rate reduction in the UK, it would cost in excess of €1.1 billion a year.
“Labour also calls for a spending stimulus of €1 billion. The effect of both together means that there would be no savings for the Government in 2009,” he claimed.
However, Mr Gilmore refuted the claim and the earlier comments by Taoiseach Brian Cowen that Labour was resorting to easy and populist opposition, without proposing tangible measures on how cuts in public spending would be achieved.
“The Labour Party has been more specific than any Opposition party has ever been. It’s not just about cuts and that’s where the Taoiseach is fundamentally wrong,” he said.
“We are proposing that the Government should suspend the plan of putting a levy on pensions, go into discussions and agree to the €2 billion [in savings].”
He said specific proposals made by Labour included ending tax reliefs for company directors and also tax relief schemes for property, which he said would cumulatively save about €1 billion. He said that money could be saved by making unpaid leave available to 350,000 public servants.
He also said that nobody disagreed with public servants making a contribution towards a pension but added that it had to be fairly imposed.
Meanwhile, speaking in Mullingar the Taoiseach defended the Government’s economic decisions and criticised those who say the bank recapitalisation is motivated by “a sectional interest priority by Government”.
He said the €7 billion injection from the pension reserve fund, where it earns 2 per cent interest, into the two main banks is an investment for the taxpayer, not a bailout and will earn a return of 8 per cent per year.
However, he added that “there are many who seek to portray that as in some way, some sort of a sectional interest priority by Government. Nothing could be further from the truth”.
He said this was being done “because there aren’t options” not because it is “a benefit to some sector of the community”. Without that recapitalisation “we would put at risk the very stability of the system which is a pre-requisite for the wider economy to operate”.
“Every decision that Government has taken is based on our assessment of what is in the public interest, what is in the interest of the economy at this difficult time.”
On the day the Association of Secondary School Teachers Ireland announced plans to ballot its members on industrial action he said the public service pension levy is “not in any way meant as a targeting to any particular sector of the community”.