Taoiseach insists our personal savings are safe
Published 12/05/2011 | 05:00
Taoiseach Enda Kenny was forced to move last night to quell fears the Government will tax personal savings after raiding pension savings.
Finance Minister Michael Noonan and Public Expenditure Minister Brendan Howlin both failed to close off claims that savings could be next on their list.
Financial advisers say the pension levy in the jobs budget has prompted fears that bank savings will also be targeted.
And Fianna Fail said a line had been crossed with the pension tax and the Government needs to clearly state its intentions.
The Government imposed a levy of €470m a year on private sector pension funds to pay for the so-called jobs budget.
But Mr Kenny said this did not mean the coalition was planning any move on savings.
"I've listened to some quite astonishing irresponsible commentary since the jobs initiative was announced yesterday. The Government have no intention of going near people's savings in that regard," he said.
Defending the introduction of the new levy, Mr Kenny said the pension funds were built up with substantial tax incentives.
"There is no need for people to be scared like that. I have listened to some commentaries, people are perfectly entitled to comment but they don't speak for the Government," he said.
Mr Noonan and Mr Howlin had opportunities after the announcement of the jobs initiative to kill off the speculation about savings being in the firing line.
Instead, both ministers dismissively claimed those making the suggestions hadn't heard of DIRT tax.
Deposit Interest Retention Tax is the tax applied to interest made on deposits. Fianna Fail public expenditure spokesman Michael McGrath said the Government had crossed a threshold by applying the levy on the pension funds.
"DIRT is a tax on interest. This levy applies to the capital value of funds. It opens up the possibility of the Government applying the same principle to other assets people may hold," he said.
Mr McGrath added that the pension levy was a form of wealth tax.