Stephen Donnelly (Wicklow, Independent)

I have a question for the Minister on the upward only linking to CPI. We are legislating now for public expenditure in respect of 65 to 70 years into the future. It is entirely possible that 40, 50, 60 or 70 years into the future there could be a year-on-year CPI increase of 10% followed by a year-on-year CPI decrease of 10%. We have no idea what price fluctuations will occur in Ireland 70 years from now. If, for example, we had to deal with a high inflation rate for a few years, amounting to 50% over five years, and then experienced a 50% reduction over five years, then under this Bill as drafted the State would be faced with a 50% increase in pension payments which would reflect a real 50% purchasing power increase for pensioners. Is it wise to allow the CPI only track upwards? When one looks back over the past 100 years one notes times when CPI increased quickly and similarly reduced quickly. This could be dangerous, although none of us may be around to deal with the ensuing headache. Perhaps the Minister will consider taking another look at this provision.

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