Dáil Éireann Debate, Thursday - 7 February 2013
52. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 98 of 16 January 2013, if he will state the actual amounts spent from the pension fund levy and if he will provide the details of that expenditure to the end of December 2012; and the number of defined benefit funds affected by the levy which are in deficit and or have been closed since it was introduced. [6417/13]
View answerAmounts received from the pension fund levy are paid into the Exchequer central fund. Central fund is made up of tax revenue, non-tax revenue and borrowing. These funds are used in the day-to-day running of the State and it is therefore extremely difficult to quantify which specific funds are used for which purpose. That said, it is possible to cost the measures contained in the Jobs Initiative and examine their effect on the relevant sectors. As part of the Jobs Initiative , a new reduced rate of VAT at 9%, with effect from 1st of July 2011 until 31st December 2013, was introduced. This reduced rate targeted services and goods relating to the employment intensive tourism sector. This measure was estimated to cost the Exchequer €470 million in reduced VAT receipts by end 2012.
Upon assessment of this measure in late 2012, contained in the Medium Term Fiscal Statement, it was shown that there was significant pass through of the VAT reduction to tourism related goods and services. It can reasonably be inferred that this policy measure has contributed to the employment growth evident in the food and accommodations services sector since the measure was introduced.
One way to help job creation and improve our labour cost competitiveness is to ease the costs on employers of taking on new employees. Accordingly, the Jobs Initiative announced the lowering of employers PRSI for lower paid employment until end 2013. PRSI initiatives were estimated to cost over €303m in the two years to 2012.
In line with the Government’s priority of fostering growth and creating jobs, the Finance Bill 2012 gave effect to measures supporting employment for both the FDI and SME sectors. These measures included a special assignee relief programme to encourage foreign companies to invest in Ireland, a foreign earnings deduction to assist the expansion into emerging markets and changes to the R&D tax credit scheme to aid the SME sector. These measures are estimated to cost the Exchequer €16 million on a yearly basis.
As the Deputy is aware, a significant portion of the policies contained in the Jobs Initiative related to labour market activation and capital projects. Monies spent under these schemes are a matter for my colleagues, the Minister for Education and Skills and the Minister for Public Expenditure and Reform.
Finally, I would like to emphasise the point that the impact of the Jobs Initiative, as specified on announcement day, will be budgetary neutral.
I do not have the information on Defined Benefit pension funds requested by the Deputy as these schemes or other occupational pension schemes are not required to report to my Department. The regulatory authority for occupational pension schemes is the Pensions Board, which operates under the aegis of the Minister for Social Protection.
