1% Levy on Unit-Linked Savings and Investments

I'm a bit piqued by the 'not for turning' attitude on the Government on this Levy; as introduced in the Finance Bill.

Let's call a spade a spade; this Levy will have a negative affect my business but it also affects me as a consumer as I have a preference for saving/investing through these products. I don't fancy handing over 1% of every payment I make, to save for my family's future, to subsidise a Government that can't think beyond tomorrow.

In 1985 the Government introduced a 'temporary' insurance levy of 2% on General Insurance (house, motor etc.) premiums to assist with the bailing out of the Insurance Corporation of Ireland. 25 years later, it's still there and it was increased by 50% in 2009.

Now, the Governments attention is focused on Life Insurance Protection type policies (mortgage protection, term insurance etc.) as well as Unit-Linked Savings and Investments. They had initially planned to apply the 1% Levy to private Pension policies but did a u-turn on the wisdom of that between the publication of the Budget and Finance Bill. The 'great minds' that had the temerity to even think about slapping a levy on these pension policies should be the ones that are emigrating.

Anyway, back to the title of this post. I understand that Government need to raise revenue to bail out the reckless spending and lending that has landed us in the mess we are in, but I don't understand the train of thought that goes along with some of the areas they are hitting.

Here is a summary of why I think that the 1% Levy on Unit-Linked Savings and Investments is a bad fecking idea :

# It's Anti-Competitive - It does not apply to all similar type products in this sector.
# It's a deterrent to save/invest - Folk should be encouraged to save so that they have something to fall back on when their Country goes bust, just to keep the show on the road.
# I would have serious doubts about the anticipated revenue it will raise - Do they (DoF) even know?
# The Government take tax at 41% of the growth on these funds already.
# Consumer groups have been campaigning for a long time to reduce the costs of these products - not increase them.
# There seems to have been no thought given to the costs of administering the collection of the levy.
# It punishes those that are being prudent with their money by saving for the long-term - Unlike you-know-who.
# It will drive savers/investors to the doors of the Banks and Post Office - Think about that one!
# There is no 'plan' as to how long this levy will apply - "Shur they'll get used to it like the Insurance Levy".
# It comes at a time when the Government are introducing their own medium to long-term savings scheme via the National Solidarity Bond - No levy on that then. Ahem!!!


Folks, would there be any appetite out there to get the Government to reverse this levy on Unit-Linked Savings and Investments? They haven't listened to the Industry heads. Do you think that they might listen to the consumers?

UPDATED 30/12/2011

The 1% Levy on the Savings & Investment product available at www.InvestAndSave.ie will not apply for the term of the contract.