Social dialogue is important at all times, regardless of the status of discussions and whether there are agreements. Institutions are in place such as the National Implementation Body in industrial relations terms, the National Economic and Social Council in terms of common macroeconomic analysis and the steering committee for the Towards 2016 agreement. All of those bodies are important means by which dialogue and an open approach between the Government and the social partners are created. That is necessary in order to ensure that everyone understands where everyone is coming from on various issues as they arise. The idea that we wish to collapse social partnership is totally without foundation. In my view, these areas of activity must continue in any event, regardless of whether we can successfully conclude an accord. We are trying to conclude an accord but there are difficult issues and we are not there as yet. We have agreed to reflect and come back on those points.
On the pension levy question, given the financial situation the country was facing, it was made clear by me at all times that we had until the end of January to see whether we could find agreement on the savings of €2 billion that needed to be identified and obtained. It was not possible to find agreement. I respect that. If people cannot agree to something, they do not give their agreement to it. By the same token, it was designed to avoid a situation where, for example, a pay cut would have an effect on pensioners in a way that the pension levy does not have an effect on them. Therefore, there was an attempt to discriminate in that respect. That involves an imposition, but one was making those choices to avoid a situation where service levels would have been seriously depleted.
Apart from that, there was a level of job security in the public sector that was not available to the same extent in the private sector. The economic cost of pensions available in the public sector is not demanded of those who work in the sector because in the present circumstances if one were to pay the full economic cost of pension provisions it would in the region of 23% of income. That was not something the Government was contemplating, but some contribution had to be made and provision was made for the average 7.5% imposition. In addition, other expenditure savings had to be identified in any event.
On the question on the Construction Industry Council and the pension fund industry, the Minister for Finance set out his position in his Budget Statement. He indicated that discussions have been continuing in this regard to see whether it is possible to identify other sources of funding, given the serious lack of room for manoeuvre, for example, on the public finances, which one could seek to utilise for the wider public good to meet Government priorities. Even allowing for the difficult situation we are in at the moment, we are still spending an enormous amount of capital this year, at 5% of GNP, which is one of the highest ratios in the world. This already supports 100,000 jobs, and the reduction in tender prices means we can do more with less.
The Government is prepared to look at new ways to fund needed capital investment and support more jobs, provided the terms are right and in the taxpayers' favour, that the investment makes economic sense, that value for money is secured and that the private sector shares the appropriate level of risk. I would like to see money invested abroad put to work here, if a sensible and workable proposal emerges.
There have been talks between Department officials and the pensions industry and several other parties to discuss alternative funding proposals, which includes the likely sources of funding and what would be needed to access such funding. Further meetings will take place in the coming weeks as well.