The €461M levy taken from pension schemes by the Government in September has been used to boost the Government coffers and give the exchequer figures the appearance of looking better to the tune of over €200M, according to Fianna Fáil Finance Spokesperson Michael McGrath.
Deputy McGrath stated, ‘The Minister for Finance has confirmed by parliamentary question that €461 million was collected in September from the levy on pension funds. At the time the Jobs Initiative was announced in May, the Minister estimated that the cost of the various measures in 2011 to be funded by the pension levy would be:
• €120M for the VAT reduction;
• €15M for the abolition of the air travel tax;
• €85M for the halving of Employer PRSI for low paid employees;
• €9.5M for the abolition of employer PRSI on share based remuneration;
• €29M for labour activation measures;
• €30M for the retrofit energy programme;
• €30M for school capital works;
• €75M for regional and local roads and smarter travel projects.
‘The Government has not abolished the air travel tax so that lost revenue is excluded. By the Government’s own figures, the total cost in 2011 of the measures in the jobs initiative is €379M. However, the Jobs Initiative booklet confirms that €124M of the €164M being spent on labour activation / retrofit / school capital works and roads / smarter travel is coming from budget reallocations, meaning that only €40M extra is being spent on these measures.
‘Therefore, the actual cost of the additional measures in 2011 is €255M. With the pension levy bringing in €461M, the levy is improving the appearance of the exchequer figures by over €200M in 2011.
‘The amount by which the pension levy is a net contributor to the exchequer for 2011 may well be greater than €200M since it is not at all clear how much of the additional €40M allocated to certain measures has actually been spent to date or will be spent by year end.
‘The pension levy is a grossly unfair imposition on the savings of current and future pensioners. In addition, it is now clear the Government is using the pension levy to put a more positive gloss on tax revenue figures for 2011 by not spending all the money raised on the jobs initiative.’