Richard Bruton (Dublin North Central, Fine Gael)

We need that one-for-one scheme. I would support that. I do not know the position of other parties in the House but the Fine Gael Party would support it. We have advocated that and the Pensions Board has endorsed it. The Finance Bill should contain such a provision. The Minister's scheme is confined to people on the 20% rate of tax so half the tax paying population is automatically ruled out. He has not delivered the promise in regard to people who pay tax above the standard rate and he is capping the sum that can be invested at €2,500. People who have no pensions and those who could not afford to have an SSIA, which is a huge swathe of those who have no pensions, are entirely excluded. I will not turn it down but it will not make the sort of impact the Minister could have made on the pension issue this year when it would have been timely to do so. It would also have been sensible to try to pull a considerable amount of money out of the SSIA to prevent it being spent in the economy and to have it squirrelled away for the long-term financial security of families. The Minister should have seized that opportunity. If these issues are still under review I suggest that this provision should be re-examined.

A number of issues arise and I will briefly go through them. I am disappointed the Minister has not tackled the issue of paying back to people the money which has been paid to the Exchequer. If one examines the amount of spending people are incurring on private medical expenses it is clear they are getting tax relief on only about a quarter of medical expenses that are properly tax allowable. That is a scandal. No serious effort is made to refund people who are compliant taxpayers. If the boot was on the other foot and these people had failed to pay hundreds of millions of euro, which is what it tots up to, we would be rightly clamouring for the Revenue to be out after them. The Minister would reply that new powers were required and we would agree to give these new powers.

The amount of unclaimed tax relief on health alone is probably about €200 million but there is no similar urgency from either the Department or the Revenue Commissioners to put in place ways that would facilitate people in getting this money back, such as, for example, simple chits that could be signed and sent in to the Revenue Commissioners at the time the medical expenses are incurred. Those things are easy to do. If the same imagination was put into making sure that people were not taxed too much, as goes into ensuring that the money due is collected, we would have done these things years ago. The Minister could do much more.

I noted the information on approved retirement fund, ARF, abuse. Will the Minister indicate if it only relates to larger funds? If people have small amounts of money in ARFs, if they are just a standard, common or garden pension provider, does the Minister still want to tax them at 1%, 2% and 3% per annum? I do not quite understand this issue but perhaps the Minister can clarify it when we come to the end of Second Stage or on Committee Stage.

Another issue that arises in terms of pensions is employers' contributions. Perhaps I am wrong but, as I understand it, one can write off pension on up to €254,000 of one's personal income but there is no ceiling on what an employer can put into the pension fund of a privileged manager. If one is talking about equity, should caps not also be applied to the amount an employer can invest? In many cases, senior management is effectively in a position to decide what the employer does. They are not arms-length arrangements but packages put together by the parties involved and to which the taxpayer contributes a significant amount. Perhaps we should do something in this regard if the aim is to produce equity. I am surprised nothing was done but there may be more to be read in these things that may explain why it was not done.

The other matter that has raised some eyebrows is the automatic reporting requirement. It appears to me that thresholds should be introduced at some point. The Minister is hardly trying to find out about pensioners who have a few thousand euro on deposit. That is not the purpose for which these powers were intended. In trying to identify problems, a great deal of worry can be generated if there is a belief that Revenue is looking for a few bob from people like that. The Revenue powers report put these powers in the context that one had to prove that it was worthwhile and that the benefits to the Revenue justified what was being asked of people in terms of compliance. All I see in this is an enabling provision; I do not see any cost.

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