MINISTER FOR Finance Brian Lenihan signalled the end of performance-related bonuses for senior civil servants.

He said the Government had decided to abolish those bonuses “subject to discussions on the implementation of the decision with the relevant association’’.

He added that he would prepare a detailed paper on the matter in conjunction with the legislation, which was already being drafted in his department.

Replying to Opposition questions, Mr Lenihan said he accepted it would not be easy to implement the public sector pension levy and that many people were affected by it.

“Public servants have always served the State to the best of their abilities and done tremendous work,’’ he added.

“We are appealing to them to come with us on this journey . . . because it is a difficult journey . . . but it is one in which the public service can play a signal part.’’ Questioned on the detail of the scheme, Mr Lenihan said that tax relief clearly applied at the marginal rate to the levy.

In principle, it applied to all gross income. If a public servant was engaged in part-time employment for a part-time income, the levy “may’’ apply to that income, said Mr Lenihan.

The Minister said that if the Government wanted to create jobs, the first item it must address was creating credibility in terms of the public finances.

“Of course, the Government will make a stream of decisions on job retention and creation, and has been doing so in recent months,’’ said Mr Lenihan.

The Minister said that the reduction in medical and legal fees related to Government contracts and arrangements and would require legislation because the State was, in effect, altering contractual or legal arrangements.

“It will apply to all medical and legal professionals, so in principle it will apply to persons who act at tribunals,” he added.

“On the questions of whether private clients of professional persons, who have a dual practice, can be affected by this, that misses the point about the demonstration effect of what this announcement is about,’’ said Mr Lenihan.

“It is about improving competitiveness in the economy and the public sector must lead the way.’’ Mr Lenihan said that the private sector must also respond.

The Government’s pension levy proposals were carried by 76 votes to 67.