Dan Boyle (Cork South Central, Green Party)

Tax relief on pensions is, to paraphrase Oscar Wilde, the tax relief that dare not speak its name. It is the most pernicious and iniquitous method of relief in the system. The Minister has missed a major opportunity to tackle one of the most unequal aspects of our tax code. This became apparent when tax forgone began to equal the amount paid annually in the State pension and it has now surpassed that amount. This gap will now be widened because of the lack of action. Why do we pay €2.7 billion in State pensions while forgoing €3 billion?

Raising the State pension above €200 before the end of the Government's term is a gimmick as this figure is among the lowest in Europe as a percentage of average income. Any fair pension policy would have this as its mainstay and would not rely on taxation and tax relief as a means to provide for our citizens in later years. The need for equity in the system, the principle advanced in Deputy Bruton's agreement, is one with which I readily agree although I do not agree with the mechanism he suggests.

Inequity exists between taxpayers at the standard rate and those at the higher rate. Inequity is also suffered by those in the workforce but not in the tax net and women neither in the work force nor in the tax net, to whom Deputy Burton referred. We need mechanisms to address pension needs and if tax relief is such a mechanism it should be a refundable tax credit in order to cater for these sectors and provide the same effective relief. Neither the Minister nor the Government has this degree of imagination.

Providing tax relief to those with a disposable income of €100,000 is a disgrace. Why does this exist in our tax code? A sum of €100,000 per year for an individual is the equivalent of eight years for those on the highest rate of the State pension. Females can expect to enjoy this for 15 years of their life while males can enjoy it for ten years of their life. If there was sanity in the pension system we would average these figures and provide the highest possible State pension. We would not provide the expectation that the rich can enjoy the same income entitlement and standard of living when they cease to be economically active. Currently, those earning six figure sums before retirement can earn six figure pensions. In a society where the majority of our elderly population does not live in that realm we cannot support such iniquitous policies.

Government legislation on PRSAs prevents people from accessing the fund for ten to 15 years. At the higher end of the scale, those who sold the funds are entitled to withdraw the equivalent of 1% of the value of the fund during the same period. Is there any justice or equity in the pension policy pursued by this Government? The Minister advocates one policy while his counterpart in the Department of Social and Family Affairs indicates another. Any move towards reform will have the rabid Rottweiler of Ranelagh up in arms, addressing the inequity of being rich and staying rich in the unwieldy society this Government has helped create.

If the Minister wishes to achieve something in his term of office he must ensure those at the lower end of the scale can live on their incomes and that these increase at a rate greater than inflation. The opposite approach is the current policy. Tax relief of significant proportions is provided to the richest in society and these are out of sync with cost of living increases. I wish to hear the Minister admit the system is not working and needs to be radically changed. The opportunities the Minister has had have been missed and we will pay the price in years to come in increasing inequality.

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