Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

While old age pension rates have remained low relative to income levels generally, higher paid workers and those who are most well off are able to take advantage of what I describe as excessively generous tax incentives for private pension schemes. Support for private pensions is costing the State an enormous sum. It is estimated that over the 20-year period from 1980-81 to 2000-01 there was a quadrupling of the tax reliefs on private pension contributions from a sum of €51 million, or 0.4% of GDP in 1980-81, to approximately €197 million, or 1.7% of GDP in 2000-01. I do not know the current figure and it would be unfair to expect the Minister to provide it immediately to the House. However, I warrant it has significantly increased and is perhaps a multiple of 2000-01 figure.

A report by the Combat Poverty Agency on the distribution and impact of Ireland's indirect tax system noted in reference to tax reliefs for private pensions: "In terms of the total value of the relief, the top 20% of earners receive 60% of the benefit while the bottom 20% receive less than 0.5%." This is a damning fact in this respect. We are looking at the further deepening of inequality in our society. We are not addressing the fundamental needs of those who are least able to provide for themselves, and, accordingly, I contend that these tax breaks for private pensions are regressive in nature. The Minister is once again in the throes of preparing the budget. This matter should be addressed and should be seen for what it is, namely, a regressive measure. Those most in need are being left behind.

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