I want to give the Taoiseach some credit today. I was glad to hear him speak a piece of his mind last week. He spoke so well that he caused some type of media frenzy, a type of love-in of the words of the Taoiseach. If it was not so serious, it would be great. The fact we have more than 326,000 people out of work, that there is a crisis of confidence in the banking system and no sign of a visible plan or strategy from Government means desperation for hundreds of thousands of families. A person rang me after the Taoiseach's contribution and said that if Deputy Brian Cowen made two more speeches like that the recession would be over. If matters were not as serious as they are, that would be funny.

The Taoiseach made some fundamentally important points in that contribution, such as understanding who we are, what the national interest is, engaging, listening to people, working in solidarity and co-ordination in order to move Ireland out of the financial and economic crisis. One of the methods being adopted by Government is the pension levy. I want the Taoiseach to understand that, given the extent of the cutbacks and savings required, the Fine Gael Party agrees with the figure of €2 billion put up by the Government. All sections of society, particularly the public sector, which did not cause the problem but is being asked to pay for the majority of it, are willing to play their part in moving the economy out of the crisis caused by the mismanagement of Government over the years. It appears to me, from talking to a broad range of people, that they are prepared to play their part, but they want the system to be fair and balanced. It is clear, however, that anomalies have arisen from the Government's conclusions and the announcement of the pension levy scheme. The lower paid are being crucified as a consequence of the pension levy, and there are examples of those on higher earnings having to pay less than some on lower incomes.

In the interests of what the Taoiseach said last week about fairness, engagement, solidarity, listening and pulling the country out of the mess, does he believe the contributions now expected as a consequence of the pension levy scheme are fair and balanced?

The question of fairness can be an objective or subjective matter. I do not deny for a moment that this is an imposition on public service workers. It is set against a context in which adjustments are being made across all sectors of the economy, including the private sector, to deal with an unprecedented situation.

I must emphasise the seriousness of the situation in which we find ourselves and the need to continue working through it. The €2 billion in savings that were announced are a signal of the further measures which will have to be taken. We have indicated how we will go about doing that both in terms of the committee looking at public service numbers and expenditure in all areas in the public service and the report of the Commission on Taxation, which I am sure will make important recommendations.

What is important for us to realise is that we are in a new situation and are unlikely to return to the high levels of growth we saw in the past. We can return to growth as soon as the upturn comes provided we take the right steps in the meantime. One of the matters we have to address is the position of the public finances. This is not only important in its own right — we had this debate last week — but also in terms of retaining the maximum number of jobs and maintaining and rebuilding confidence in the economy both internally and externally. The issue of external confidence is important in the context of the financial crisis with which we are all trying to contend.

We have to take these steps and send these signals. Although they represent an imposition, they are progressive in the sense that the levy increases from 3% to 7.5% on average and almost 10% at the highest end. While there was no agreement at the end of the day, it was agreed in principle that €2 billion is the amount with which we need to deal at present, that the question of public service pay and pensions provided us with the means by which many of these savings would be identified and that we need to continue working on a range of other necessary issues as we try to identify further savings and taxation measures which can help us address the gap in the public finances. That was the motivation behind what we did and why we did it, and why this is an important part but not the full response. It is mirrored in other sectors of the economy where job security is at risk and jobs are being lost.

Part of the reason for introducing the measure is because there has been no clear strategy from the Government on how to sort this out. It brought forward its budget last year and made proposals which it was forced to reverse because of public embarrassment and pressure. It launched another economic document before Christmas and now we are where we are.

The question I asked the Taoiseach was whether he considers the proposals from the Government on the pension levy to be fair and balanced. I will provide three examples. In regard to single taxpayers, John earns €15,000. His net reduction in take home pay will be €450, or a cut of 3%. His cousin works up the road and earns €19,500. His net reduction in take home pay will be €105 because given the nature of the taxation system, he pays 0.5%. A single public servant who earns €36,400 will have his or her pay reduced by €1,769 per annum, whereas a single person earning €40,000 will have a reduction of €1,649. The take home pay of a married person earning €45,400 will be reduced by €2,537, whereas if one earns €55,000, one's take home will only be reduced by €2,403. These are clear anomalies in a system that is not fair or balanced.

Yesterday, I listened to 250 public service workers whose anger was focused on the unfairness and imbalance of this measure. There is no desire for social unrest or industrial disputes. The Taoiseach rightly said last week that he is prepared to listen and, if possible, to tweak the scheme to allow for progress. In view of the anomalies which impact on thousands of cases of low paid workers or at the lower end of the public sector and for those above and below the marginal rate, in respect of whom a difference now applies, is the Taoiseach prepared to tweak the proposal put forward by the Government in the interest of fairness and balance and to avoid social unrest, industrial disputes and frustration and consternation?

What is the Government's accurate assessment of the savings to be made from the scheme? There were reports of €2 billion, a figure which was subsequently reduced to just over €1 billion. What is the actual figure as assessed by the Government?

When the legislation is produced and provided to the House for discussion, the Deputy can examine it in considerable detail. He will find that some of the suggested anomalies will not in fact exist when all considerations and the various credits and allowances are taken into account.

In regard to the amounts, the estimated savings take into account the revenue lost on the other side. In the stabilisation update we submitted to the European Commission, we have allowed for the loss of revenue represented by the imposition of the levy where that saving of €2 billion is involved. The figures take account of the loss of revenue this represents in terms of reduced wages and, therefore, less tax being paid as a result of the pension levy being introduced.