Barry Cowen (Laois-Offaly, Fianna Fail)

The budget announced by the Minister for Finance, Deputy Michael Noonan, on 7 December provided for additional taxation receipts from the targeting of pensioners by the Revenue Commissioners, even though the initiative only emerged last week following demand letters being received by pensioners.

Fine Gael and Labour promised the people they would be upfront and honest with them at all times. In this case, the simple truth is that Fine Gael and Labour factored revenue into the budget a month ago from a planned tax compliance initiative aimed at 115,000 pensioners but failed to inform the pensioners of what was in the pipeline in the hope that their party political interests would be protected.

In the budget documents produced alongside the budget last month, the Department of Finance estimated that an extra €45 million would be collected in 2012 and €55 million in a full year arising from additional enforcement and compliance measures by the Revenue. I quote from the summary of the Estimates:

In recent years the Revenue Commissioners have sought and obtained an increase in their ability to obtain information on payments made by Government bodies and others to third parties. In addition, the Commissioners have continuously upgraded and extended the range of information they receive from the Department of Social Protection. This additional compliance activity from these new enhanced information sources allows the Commissioners to improve its collections.

While the Government has sought to hide behind the Revenue since news emerged of this initiative targeted at pensioners, the truth is that the Government factored into its budget a month ago the expected yield from the initiative. The Government made a political choice not to reveal the details of the initiative at budget time and, instead, allowed the Revenue to scare the living daylights out of thousands of pensioners around the country.

While every citizen has a duty to be fully tax compliant, the manner in which this initiative has been handled has caused widespread confusion and unnecessary fear among pensioners. The Government could have put the full information on the compliance initiative in the public domain as part of the budget to allay concerns of pensioners. That would have allowed them to be fully informed. Instead the Government decided pensioners would receive out of the blue an alarming letter from Revenue; it watched their reaction and then hid behind the same Revenue officials. The chairman of the Revenue Commissioners apologised at today's meeting of the finance committee. He acknowledged that many things could have been done differently by Revenue in its correspondence with pensioners. In recent days Revenue has met various representative bodies of those affected. We welcome this and the clarity it has brought to the matter.

It is now time to ask questions of the Government on the matter. Who in the Government thought it would be a good idea to land just after Christmas a letter on the doorsteps of 115,000 pensioners to inform them that they were not tax compliant? This was done without warning or an explanation or clarity on the approach to be taken. Who in the Government knew that this letter was coming and why did they not insist on there being a proper public information campaign before any such letters were issued? At a time when people are already concerned about how they will manage in the year ahead, terrifying them with the label "tax defaulter" shows a complete lack of empathy and understanding. Did the Revenue Commissioners inform the Minister for Finance, Deputy Michael Noonan, that the mailshot was about to be issued? If so, why did he not believe it was necessary to inform those who would be affected and if not, why not?

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