Joan Burton (Dublin West, Labour)

The Minister must accept that probably the most unfair aspect of the entire Irish tax code is that dealing with pension relief. This fact is borne out by the study commissioned and written by the Minister's officials, as volume 3 of the study into tax breaks. It showed an extraordinary position. Of the six or seven case studies in the report, two deal with separate individuals who have accumulated pension funds of €100 million each, will receive a €25 million tax free payout and be given an opportunity to invest the remaining €75 million in approved retirement funds that appear to carry other significant tax advantages, such as transferring the funds tax free to spouses and, probably, children.

The study contains a number of other examples of people who I assume are, for the most part, proprietary directors. Their companies made contributions of €5 million, €6 million, €7 million or more to their pension funds, thereby attracting very large tax breaks. We must be clear that if a proprietary company wishes to provide a pension fund for its directors, that is its business, but I do not know how it would be the State's business to provide a large tax benefit of approximately 42% of the sum contributed by the company. These are tax arrangements of the purest kind that serve to mitigate income tax and put people in that situation in advantageous positions.

In an amendment I have retabled I will ask the Minister why the House cannot be given the information on the 6,000 or so special self-administered pension funds, such as the details of their capital amounts, tax breaks attaching to them and the cost of such to the State. Why can the House not be given similar information on approved retirement funds with amounts that are in excess of a certain minimum?

If a community group or community-based or private crèche receives a grant of a few thousand euro, the information is available somewhere in the reports of various public bodies and is essentially in the public domain. However, while some receive extraordinary pension benefits from the State and earn far more in tax breaks than most people earn in a lifetime, the information is not disclosed. This is wrong and the matter of privileged sections of people being exempt from tax for one reason or another has bedevilled the debate on tax. The ordinary PAYE taxpayer has no way of knowing how much these tax benefits are worth and to whom they are paid. A tax benefit and tax forgone are as valuable to high income people, if not more so, than a direct payment of a State grant.

The failure to cost tax expenditures, especially in the pension area, is wrong. The Minister publicised his scheme for low income earners with SSIAs and no pension provisions. For example, if a person saves €7,500 of his or her SSIA money in approved pension products and meets the conditions, he or she will get a bonus from the State of €2,500, a third of the amount. Multimillionaires with special arrangements get incredible deals, but they are all confidential. The deal is in excess of the amount a person with no pension provision should get.

It is sensible, proper and correct of the State to support people in saving for retirement and I have no quibble with it. However, the amounts given to some people are disproportionate and are, effectively, welfare for the rich. Deputies get hot under the collar because a lone parent gets a few bob but these types of tax breaks are the highest form of State welfare for the rich. The Government does not seem to care. The Minister will put a ceiling on reliefs in the Bill but people already with money in pension funds of the type described in the officials' report will get away with it.

How will we ensure fairness and equity in what is happening? I read the report of the National Pensions Reserve Fund and welcome that the fund is doing well. We must bear in mind that 48.1% of workers do not have pension cover. The National Pensions Reserve Fund will do nothing for them. The fund's proceeds are intended to meet the pensions of public servants and the like from 2025 on. We are left with a group of citizens without pension cover, many of whom are women who left the workforce to look after families.

Some type of fairness should be a consideration in the allocation of significant tax benefits in respect of pensions. I am uncertain of the annual cost of such benefits on the Exchequer. It must be at least €1 billion and it has been suggested the cost is €2 billion to €3 billion. The reports did not contain costings. All we know is that the benefits are very expensive and skewed towards people at the top end of the income scale. Members of the Oireachtas and the senior Department of Finance officials with the Minister are well paid by Irish public service standards but most of us could not avail of these pension products because we do not have enough money or annual income to invest the €100,000 needed to make gains and are not self-employed, meaning we do not qualify to take part in the most lucrative of the pension schemes.

When he speaks about the costs of various tax breaks, the Minister often refers to pensions as though the whole country and citizenry benefit equally from pension benefits. They do not. Until we are given the detailed breakdown of the figures and see how much the high income earners earn from pension tax breaks as opposed to people on modest and low incomes or public servants who are strictly limited in what they can claim, a situation will continue in which pensions are the critical area in transferring large amounts of money tax-free to be used at a later date by people who are already very well off. The Minister for Social and Family Affairs is suggesting introducing mandatory pensions. From what he says there is no difference between mandatory pensions and mandatory taxation. Small, self administered pension funds and approved retirement funds for the wealthy reveal the true nature of specialised tax relief. The Minister must provide us with more information on this. The report by the Minister's officials shows this matter is a scandal.

Tomorrow is international women's day and the majority of the 49% of workers not covered by pension relief are women. If the Minister wished to make a difference to women in this country he should bring forward imaginative schemes to allow women who have left the work force to contribute and receive pension relief. Currently, tax relief is tilted in one direction and the more one has, the more one receives.

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