TAX CHANGES would be added to the public sector pension levy, Minister for Finance Brian Lenihan told the Dáil. He ruled out a time limit on the levy and the Bill passed all stages in the Dáil late last night, by 81 votes to 72, and now goes to the Seanad.
Mr Lenihan said questions were raised about whether income tax could have been used as an alternative to the Financial Emergency Measures in the Public Interest Bill, which passed all stages in the Dáil last night.
Mr Lenihan said he could assure the House that the levy, introduced under the income tax code, “will be supplemented in due course by income tax changes to be announced in the budget later in the year”.
Opposition demands that a time limit be imposed on the pension levy were rejected during the committee stage debate on the Bill yesterday. Mr Lenihan said it was not temporary legislation but emergency legislation. “It was never expressed to be temporary legislation and is designed to deal with an economic emergency which is increasingly being acknowledged on all sides of the House.”
Mr Lenihan said there was a provision for an annual Dáil and Seanad review of the operation of the measures in the Bill.
Labour’s Pat Rabbitte suggested a “sunset clause” would go a long way to assuage the feeling among public servants that they had been unfairly singled out. Mr Rabbitte was supporting his party’s amendment that the levy expire in two years unless renewed by the Oireachtas. A “sunset clause” would at least allow people to understand that normality would return after a period of financial crisis, Mr Rabbitte added.
Fine Gael spokesman Richard Bruton said it would be appropriate to include a “sunset clause” in the Bill because the proposals effectively amounted to tax masquerading as a pension levy. “It is not a fair, balanced, proportionate and long-term measure. The Government should recognise that it is a temporary measure.”
Supporting a “sunset clause”, Sinn Féin’s Arthur Morgan said he did not believe it was a pension levy. “If it were a pension levy, it would be paid into a pension fund, but the money is going into a black hole.”
Introducing the Labour amendment earlier, party finance spokeswoman Joan Burton said she had no doubt that the former Taoiseach Bertie Ahern was more than fully aware of the goings-on in Anglo Irish Bank, seeing that he was particularly wont to hang around with golden and privileged circles. When Mr Lenihan challenged Ms Burton on her claim, she said that Mr Ahern had described the former chairman of the bank as his friend, “Seánie”.
