Micheál Martin
Question:182. Deputy Micheál Martin asked the Minister for Finance his views on the pension levy and its link to job creation; and if he will make a statement on the matter. [46202/13]
View answerTuesday, 19 November 2013
Questions (182)
Written answers
The pension fund levy applies to the market value, on the valuation date, of assets under management in pension funds and pension plans approved under Irish tax legislation.
The moneys raised from the pension fund levy are being used to pay for the Government’s Jobs Initiative introduced in May 2011. The measures introduced as part of the Jobs Initiative include a new 9% VAT rate on certain activities, the halving of the lower rate of PRSI and other additional current and capital expenditure measures.
I announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 will be abolished from the 31st of December 2014. I will however, introduce an additional levy on pension funds at 0.15%. I am doing this, among other things, to continue to help fund the Jobs Initiative, including the continuation of the reduced 9% VAT rate detailed below. The additional levy within the existing legal framework will apply to pension fund assets in 2014 and 2015.
The impact of the Jobs Initiative can be seen by the increase in employment levels, particularly in the accommodation and food services sector. The Jobs Initiative included the reduction of VAT on tourism services to 9% from 13.5% on a temporary basis until the end of 2013. This measure has proved to be a major success, helping create over 15,000 new jobs as well as protecting existing jobs. It was due to end this year. However, it is important that we reinforce success when possible, so I have decided to continue this reduced rate. This will support the increased number of jobs already in place and accelerate the creation of new jobs.
The Deputy will be aware that I announced the reduction of the Air Travel Tax to zero with effect from 1st April 2014. The decision to remove the tax, together with the retention of the 9% VAT rate for tourism services, will help maintain the momentum created by the success of The Gathering this year. Since the Budget announcement, airlines have announced the opening up of new routes resulting in a significant increase in passenger numbers with the associated increase in tourism activity and employment.
The Jobs Initiative also included a number of current and capital expenditure measures, including a number aimed at retraining the workforce. I would ask the Deputy to note that my colleague the Minister for Social Protection, Joan Burton T.D., with responsibility for JobBridge, the National Internship scheme, recently announced that the number of internships, originally planned at 5,000 has now exceeded 20,000. Indecon Economic Consultants undertook an evaluation of the JobBridge scheme in 2012 (published in April 2013) and their report found that 61.4% of the JobBridge survey respondents were in employment within 5 months of finishing their internships.
Under education measures, the Springboard scheme as announced in the Jobs Initiative had initially provided for 5,900 places. During 2011 and 2012, over 10,000 people enrolled on programmes under the Springboard scheme. The scheme has been extended further with my colleague, the Minister for Education and Skills, Ruairí Quinn T.D. announcing in June this year, another 6,000 places under the third Springboard allocation. Further rollouts of the springboard scheme will be considered in the context of the findings of an on-going evaluation.
Finally, I want to reiterate that addressing the difficulties in the labour market remains the Government’s biggest challenge and, accordingly, the Government is giving its highest priority to job protection and job creation.