Róisín Shortall (Dublin North West, Independent) | Oireachtas source

It is incredible that when it comes to pension tax relief, this is the only proposal the Government has been able to introduce. The pension tax relief in this country is unbelievably generous and makes no sense from an economic or social point of view.

The regime costs the Exchequer and us all about €2.5 billion. We know that about 80% of that tax relief goes to 20% of top earners. It is an extremely regressive regime. Given the regressive and anti-family nature of this budget, it is not surprising that the Government flunked this issue as well. We have had all the talk about child benefit and the fairly savage cuts implemented across the board for people on all incomes. People in receipt of child benefit, be they very poor or very rich, are still suffering the same cut in child benefit.

That is very regressive but the Government chose to target child benefit, which at least is given to every child, while completely ignoring pension tax relief. The cost to the Exchequer is about the same at approximately €2.5 billion. On what basis does the Tánaiste believe it is in any way fair that a person should be able to receive a lump sum of €200,000 tax free? What is the basis for continuing with that regime given that many thousands of taxpayers and others who cannot afford to make pension provision for themselves are in effect paying for the significant tax-free pension lump sums of some of the wealthiest people in the country? There is no justification for that. The Government inherited that regime and last year it indicated that it would do something about it this year. This year, it has failed yet again to tackle this gross inequality.

The Government promised that it might do it next year. What is the excuse for leaving that very generous and inequitable regime in place this year and failing to tackle pension tax relief for the rich? Not only is it not doing anything about significant lump sums, it also continues to allow the current level of tax relief on pension contributions. Again, that means that the poorest people and those on very modest incomes pay for the pensions of the very well-off. Has this something to do with the fact that those responsible for crafting this budget - the four senior Ministers in Cabinet, their four Secretaries General and their four advisers - are all in the bracket that can benefit substantially from the largesse of the existing ridiculously generous pension relief regime?

It is extremely disappointing that this is all the Government could come up with in respect of an area where there was potential to make savings of at least €400 million if it had delivered on the commitments in the programme for Government and introduced the cap on pension tax relief to allow a still very generous pension regime to continue where people on incomes of €120,000 could retain an entitlement to tax relief on pensions up to €60,000. That is still very generous and yet the Government was not prepared to take that decision to bring some element of fairness into the tax relief regime.

The Tánaiste has flunked it in a very serious way. Instead of tackling this area which was a stand out in terms of unfairness in our tax system, he chose to hit families and ensure that every family where there are two incomes of over a mere €18,000 will be caught for about €1,000 per year. There is no recognition of ability to pay in the burden imposed by the budget on working families. There was much talk about looking after working families. This pension regime and the budget generally represent an assault on ordinary working families and are disgraceful. I would very much welcome the Tánaiste's views on what possible justification he could have for not tackling the gross unfairness of the pension tax regime which he is allowing to continue this year.

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