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Levy suspension debate pre-empted by gov't Bill

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  • Levy suspension debate pre-empted by gov't Bill

IRELAND -  The debate on a private member's motion calling for the suspension of a new public sector pension levy is expected to conclude tonight, after the government publishes final legislation on the proposed pay deduction.

Last night the Irish Labour Party proposed the Motion in the Dáil Éireann, the house of representatives in the Irish parliament, calling on the government to re-enter negotiations with stakeholders, such as the trade unions, to reach agreement on a "fair and equitable set of proposals" that would meet the target of reducing public expenditure by €2bn.

The Labour Party claimed the pension levy, which was announced by the Ministry of Finance earlier this month, is "unfair" as it places an "unacceptable burden on public servants on modest incomes". (See earlier IPE article: Irish gov't unveils public pension levy)

Eamon Gilmore, leader of the Labour Party, said: "Public servants are angry the levy will be imposed on those with the lowest earnings, that it will be imposed on all income, including income which is not reckonable for pension purposes, and that it is structured in such a way that some workers will pay a greater proportion of their income than higher earning colleagues."

The motion also stated the levy does not take account of the different arrangements for pension and social welfare contributions in the public sector, and said it "deplores the attempts to scapegoat public service workers and to create divisions between those who work in the public and private sectors".

Representatives of the Labour Party therefore called on the government to "suspend the introduction of legislation to impose the levy and to re-enter negotiations with the social partners".

Gilmore said: "It is now clear that public servants and the government are on a collision course and unless some steps are taken to resolve the impasse there is a real danger of industrial relations conflict. This is the last thing the country needs in the current climate."

"I hope that our motion will cause the government to see sense, that they will not proceed with the legislation which is planned for Thursday and return to the negotiating table to secure an agreement acceptable to all parties," he added.

However the conclusion of the motion debate may be irrelevant, as the government has published the 'Financial Emergency Measures In The Public Interest Bill 2009', which provides the detailed legislation of the pension levy, alongside other cost reduction measures.

The explanatory memorandum included with the bill stated the purpose of the legislation is to introduce a number of financial emergency measures in the public interest, including "the making of a new deduction from the remuneration of public servants who are members of a public service pension scheme or who have an analogous arrangement".

Details of the legislation showed the deduction would apply to total earnings, including allowances and overtime, while the levy would apply to "the remuneration accruing from 1 March 2009 at the rates decided by the government - a 3% deduction on the first €15,000, 6% on the next €5,000, and 10% on the remainder".

The Bill confirmed that "no additional pension benefit is conferred by the deduction", but highlighted that deductions would be refunded to workers that leave the public sector with "no preserved pension benefit", for example if they have less than two years service. 

However unions have reacted strongly to the idea of a pension levy with many organisations, including IMPACT and the Teachers Union of Ireland (TUI), scheduling meetings with members to discuss potential action such as industrial strikes, while the Irish Congress of Trade Unions (ICTU) has planned a mass demonstration in the centre of Dublin on 21 February 2009. (See earlier IPE article: Irish public sector workers plan action over levy)

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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