Noel Ahern (Dublin North West, Fianna Fail)

I thank Senator Brian Hayes for his kind comments and I apologise for the absence of the Minister for Finance who is otherwise engaged. He has a busy afternoon ahead of him

I understand Senator Hayes's comments but I cannot accept them fully. The Government recognizes the crucial importance of providing not just for the short term but for a sustainable future in the longer term. We have taken a range of measures to develop and encourage this, such as the national pensions reserve fund and major developments in encouraging pensions provision. We recognise the importance of facilitating individuals to provide for the medium and long term by regular saving.

Accordingly the Government introduced an innovative scheme, the special savings incentive account (SSIA) scheme to encuorage people to save on a regular basis. Some 1.17 million people have chosen to avail of the scheme. The widespread and popular participation in this scheme is a vindication of the principle behind it. When the scheme was introduced the Minister for Finance made it clear that the cost would depend on its success and that he was hoping it would be very successful. The number of people who applied was high.

The goal of the scheme is to encourage people to save over a period of at least five years. Recognising that it would be necessary to provide an incentive to people to put away their money for a longer period, the scheme provides for a tax incentive by way of a 25% top-up on savings by the Government. It would run counter to the intention of the scheme, which is to encourage a pattern of regular savings over the medium term, if someone could withdraw the money, including top-up, after a very short period. The effect of the proposal from Senator Hayes would be to allow just that.