Peter Mathews (Dublin South, Independent) | Oireachtas source

The budget booklet from the Department of Finance states as follows:

The rate of retention tax that applies to deposit interest, together with the rates of exit tax that apply to life assurance policies and investment funds, is being increased and will now be 41% whether payments are made annually or more frequently (previously 33%) or are made less frequently than annually (previously 36%). The increased rates will apply to payments, including deemed payments, made on or after 1 January 2014.

Following on from what the last speaker said, we need to see examples here. Otherwise we are supporting, not supporting or abstaining on an issue that is not clearly understood. I do not like making decisions without seeing how something works. I like to see underneath the bonnet of the car before I buy it. In the case of life assurance policies and investment funds, I have an example which is pertinent here. About 25 or 26 years ago my wife and I started a life assurance savings fund with New Ireland. The purpose of the fund was to provide for fees for university or whatever might arise in 20 years time. Is that one of the life assurance policies and investment funds referred to by the Minister? What sort of exit tax would apply? The idea of those funds was that one saved up in the early years, accumulating with growth to a point where one could start drawing down money to pay fees or to support one's child in college and so forth. If I thought there would be an exit tax on any savings I made at anything resembling the level being proposed here, I would never have set up that fund. In that sense, the Government is discouraging people from being prudent. However, I could be wrong here. Maybe that is not the sort of fund that is being identified for this purpose. I would like an explanation and I would like a few examples so that the people outside can know what is involved. Otherwise it is voodoo land that we are in.

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