Róisín Shortall (Dublin North West, Labour)

I wish to put on the record of the House an item that is not included in this year's Social Welfare Bill but which should have been if the Government had kept its promise. One of the key promises made by Fianna Fáil prior to the last general election was to halve the rate of PRSI. This was probably the main plank in Fianna Fáil's election platform in respect of taxation. It is arguable that a considerable number of votes received by the party in the election were as a result of this promise to cut the tax rate. Yet, there was no mention of this in the budget nor in this Bill. It is all the more reprehensible that Fianna Fáil went ahead and made that promise to the electorate while it had in its possession the actuarial report on the social insurance fund, while knowing full well it was not possible to provide for that kind of cut in PRSI rates. It would have known that the social insurance fund would run into difficulties fairly soon and that major issues would arise about the sustainability of the fund. Yet, knowing this information since last April, Fianna Fáil went ahead and the Taoiseach made that promise to the public. One must ask whether it is any wonder people are cynical about politics when this was a blatant misrepresentation of the situation and a blatant attempt to buy the election, knowing there was no possibility of that promise being kept.

The estimate for that promised cut in PRSI is €645 million. There was never any prospect of that cut being made. It is important to put on the record of the House the kind of deception in which Fianna Fáil engaged in the earlier part of this year prior to the election. It is worth reminding people of that deception and the tactics employed by Fianna Fáil in the election. If people are fooled once, it is a shame on the Government, but if they are fooled twice it is a shame on them for believing Fianna Fáil. People have very short memories, but they fell for it again. The Taoiseach made those promises and I have no doubt the people will rue the day they were foolish enough to believe the Taoiseach that he would deliver on promises. This was a central plank of the pre-election promise and it has not materialised.

Other promises were made before the election to increase the State pension to €300 per week. I ask the Minister to provide information on the costing of this promise. The budget omitted to refer to supplementary pensions. I appreciate that the Green Paper process is in train but it is important the Minister indicates his intentions to the public, in particular with respect to the over-reliance on tax relief in the pensions area. There is effectively a rich man-poor man approach to pensions. The State is subsidising the pensions of the very wealthy. The rate of transfer to the wealthy is approximately 33 times the rate of transfer to a person on the average industrial wage, simply because the better off can afford to stash away more for their pension. There is no justification for the State subsidising the pensions of people such as Michael O'Leary, for example.

In spite of this, the whole thrust of the supplementary pension policy being pursued by the Minister is, first, to provide tax relief at the top rate and then to provide a very generous ceiling up to which people can claim tax relief, which gives rise to the entirely inequitable situation where wealthy people are doing very well, whereas those who cannot afford to put away money are getting no benefit from the State. Clearly that situation has to change and I hope this will emerge from the Green Paper process. It would have been helpful if the Minister had indicated his intention in this regard in the budget because that has been the sole strategy used by him in respect of supplementary pensions and, on the grounds of equity, this has to come to an end.

I hope the Minister does not use the Green Paper process to further long-finger key decisions on pensions so that this time next year we will be here discussing a social welfare Bill that includes proposals in respect of supplementary pensions. I previously welcomed the Green Paper, which is a comprehensive document, and commended the various interests that were involved in contributing to it. I would welcome a commitment from the Minister that he intends to close the consultation process by mid-2008, that he will be in a position to bring forward proposals for the budget at the end of next year and that these proposals will be contained in the social welfare Bill we will debate in 12 months' time.

I do not agree with the position of the Government and the social partners that benchmarking the lowest social welfare rates to 30% of gross average industrial earnings is sufficient. To do this in respect of pensions or other social welfare payments is to suggest that less than €200 a week is sufficient to live on.

See this speech in context