MINISTER FOR Finance Michael Noonan said he could not rule out tax increases or reductions in future budgets. “I say this at a level of principle,” he added, “I have nothing in mind.”

Mr Noonan said the national finances were in a fraught situation. A fiscal correction of €6 billion was under way this year and, so far, the Government was on target. “We are slightly under profile on tax collection but we are also under profile on expenditure,” he added.

During the committee stage debate on the Finance Bill, providing for the pension levy to fund the jobs initiative, Mr Noonan said the fiscal correction required next year was €3.6 billion.

“Over the two years, therefore, we will approach a correction of €10 billion, a huge amount of money. In those circumstances, I will not rule out any tax initiative, increase or reduction.”

Michael McGrath (FF) asked if Mr Noonan was including income tax in any possible increases.

He replied that the House was moving away from the Bill’s content. “If the deputy refers to the programme for government, that will give him the principles on which we will base our tax approach. I will not recite them now in the middle of the committee stage of a Bill which is focused on other issues.”

Mr McGrath claimed that was a contradiction of what Mr Noonan had said earlier.

Willie O’Dea (FF) said the programme for government had included a fairly specific commitment that income tax would not be interfered with and that tax bands or credits would not be narrowed or reduced.

“The indications in the Minister’s response to Deputy McGrath seemed to depart from that, however,” he added. “My reading of his reply is that it did not close off the possibility of such changes.”

Shane Ross (Ind) said he was suspicious of the people representing the pensions industry. “I doubt that they represent the actual contributors to the pension scheme . . . though whether they know that themselves is a different issue.”

Mr Ross said administrators and custodians charged fees and there were legal and all sorts of hidden charges. “If the pensions industry was efficient, transparent and honest, it would have agreed that area should be the source of the funds and that we should forget about the people who put in their money every week and every month.”

Mr Ross claimed the pensions industry was an untapped and untouched gravy train, a sacred cow. Pension fund managers were a kind of mysterious elite in the financial world.

“Most of them are answerable to banks; most of the principal managers are owned by the banks,” he said. “Most of them become extraordinarily rich and hand out large fees to the Bank of Ireland, AIB, Irish Life and all the usual suspects.”

Mr Noonan said he had advised pensions industry representatives that they should endeavour to absorb the levy within their own cost base. “Even if we got them to absorb some, if we got them to tighten up a little . . . everybody in the country is tightening up and managing with less,” he added.

He said he didn’t know how much progress he would make, but intended pursuing the issue.