Objections to controversial €400m pension levy ignored

A CONTROVERSIAL levy on private pensions worth more than €400 million a year is to be slapped on savers to help fund the Government’s much heralded jobs initiative being unveiled tomorrow.

Objections from trade unions and some sections of the pension industry have been brushed aside, Government sources confirmed, but Labour is still pushing for last-minute changes so that the less well-off are only hit lightly.

Despite having its title downgraded from a jobs “budget” to a less far-reaching “initiative”, the package of measures is still viewed as the centrepiece of the Government’s first six months in power.

The creation of 5,000 graduate internships will see those on the scheme earning an extra €50 per week on top of their social welfare payments, with another 20,000 back-to-education places set up to ease people off the dole queues.

Education Minister Ruairi Quinn revealed school building repair schemes would receive a €30m boost as part of the initiative. This will see an extra 380 schools benefit from “shovel ready” improvement packages which is expected to create 2,400 direct jobs and 480 supporting ones.

However, the jobs will last on average for just two months and €20m of the money used will be taken from other parts of the existing education budget.

This follows remarks from some Government critics that Enda Kenny’s announcement of a €3,000 “finder’s fee” for people who get foreign associates to create jobs in Ireland is a “gimmick”.

Spokesperson for Enterprise Minister Richard Bruton was unable to give any details on how the “fee” would work, or what its cut-off level would be.

Under the vague proposals announced by the Taoiseach in New York, the creation of 1,000 jobs would lead to €3m being paid to those “attracting” the work to the country via family and personal networks.

Under the terms of the IMF/EU emergency bailout, the jobs initiative must pay for itself by 2014 via cuts in other spending areas or tax increases.

The pensions levy is likely to be set at up to 0.6% on private pension funds for the next four years, raising an expected €400m-€450m a year.

The Irish Congress of Trade Unions has warned the move could badly harm already troubled pension schemes, but ministers insist it is needed to fund cuts in the PRSI rate and some forms of service VAT intended to stimulate job creation.