Mr. Tim Duggan:

The Deputy should remember that the CPA is going to be a State entity operating on behalf of the people; it is not going to be a private commercial operation. If it states it wants an investment in Irish bonds, the investment managers will have to follow its instructions. Equally, if Irish bonds are not performing as well as bonds elsewhere, the same flexibility will have to apply, such that the CPA can issue investment instructions to ensure the best outcome for the participants in the scheme. I will always fall back on that because it is people's money, not the State's.

On the issue of the top-up versus tax relief, the way the Deputy set it out is correct. Our analysis during the public consultation showed that the vast majority of people just do not get tax relief. I do not mean they do not receive it but that they do not understand it. It is not obvious to them what it means or how it benefits them. That was really clear in the consultation we did. As Ms Dowling has often put it, people understand money given to them much better than money that is not taken away from them. Tax relief is money that is not taken away from them whereas the top-up is money given to them. People understand that much better. Members will have heard previous Ministers describe this approach as akin to that associated with the special savings investment account, SSIA. It is, except that it is much better than the SSIA ever was. It is about understandability.

The second point concerns equity and fairness. The Deputy is right that somebody who pays tax at a rate 40% will get tax relief at a rate of 40% and therefore get a far bigger incentive from the Government than somebody who pays tax at a rate of 20% or who does not pay tax at all. We and the Government took the view that incentivising does not necessarily mean tax relief; what it means is encouraging and helping people to do something. It should be fair. Regardless of one's income level, the income bands that auto-enrolment will cover and how much tax one pays, one should get an incentive at the same level. Consequently, the Government decided on the top-up approach rather than a tax-relief approach. That means-----