Derek McDowell (Labour)

I have always admired the capacity of Members, particularly those from the Fianna Fáil Party, to welcome a Bill and then spend the rest of their speech condemning everything in it, as Senator Ormonde has done for the past ten minutes. Her argument may have more effect, coming from that quarter, than it would were it to come from this side of the House.

I agree with almost everything said by those who essentially oppose the central tenets of the Bill, although I am inclined to be slightly less exercised by it. This is odd legislation which will not come into effect for 20 to 30 years. In that sense, despite the desire of the Minister to make his mark by passing it, the Bill will not affect anybody for a long time and his successors will have the option of changing it at any time. Other than provisions which specifically relate to politicians, it is not clear if the legislation is required as most of the issues could have been addressed through normal industrial relations mechanisms.

In a sense, the Minister is trying to stop the tide of social change. Important changes have taken place in recent years in terms of how people have approached their later years. From the age of 65 onwards, people now look at a range of options. As Senator O'Toole correctly pointed out, they do not necessarily work full-time until they reach 65 years and then stop work completely. Frequently people work part-time or stop working altogether from the age of 55 onwards in an effort to create choices which suit the lifestyle they have chosen. The Minister is seeking to call a halt to this by telling people they cannot have such a choice or develop such flexibility and, if they choose to do so, they must meet the costs. The Government is indicating that people must work until the age of 65 years and after that their choices are entirely their own business. This cannot be achieved through a relatively short Bill such as this one, which we will have to revisit long before its provisions come into play.

I agree with Senator O'Toole that the presumptions underpinning the Bill are based on conjecture — I will not say they are wrong. The Bill relies on two or three central presumptions, including demographics, which are not amenable to accurate calculations. While it is true that the birth rate is now lower than it was 20 or 30 years ago, it has undergone several different changes in the intervening period. In the 1970s, for example, it was among the highest in Europe. It then collapsed to become one of the lowest in Europe in the 1980s before recovering in the 1990s. While we may be able to make a reasonable guess as to what the birth rate will be in 20 years, we cannot be in any way certain about it.

Even more uncertain — Senator Mansergh correctly pointed this out — are developments in the labour force, which will be crucially important in terms of our ability to pay for pensions. In 1990, fewer than one million people were at work. This figure now stands at approximately 1.7 million, which has major implications for our capacity to pay for pensions. Given that this dramatic change took place over a period of slightly more than ten years, it is nonsense to claim it is possible to state with some certainty what the position will be in 2056.

The figures underpinning the consideration of this issue just three or four years ago by the commission, of which Senator O'Toole was a member, were from 1997 and 1998, although attempts were later made to update them. Even now, it is clear the figures used are wrong. They did not calculate, for example, that we would have net migration of some 30,000 to 35,000 in each of the intervening years and, as such, did not take into account the consequent change in the dependency ratio. We cannot state with any degree of certainty the number of likely immigrants during the next 20 or 30 years, or for that matter during the next two years.

It is remarkable that we are having this debate on a day when we must acknowledge that we cannot predict the number of people from the accession countries who may seek to come here in 15 or 18 weeks. Producing a five year old report to try to guess the dependency ration in 2056 can only be described as guess work. I was about to describe the process as informed guesswork but that would do it too much of a service.

Based on the experience of the past five to ten years, the dependency ratio is significantly better than anybody would have guessed ten years ago. It is, therefore, premature at best to introduce a measure as insignificant as this legislation to address the issue. Even if we were to accept all the figures, as the commission pointed out, the cost of public service pensions as a proportion of GNP will increase from approximately 1.6% now to approximately 2.4% in 2027, not a crippling or, to use the commission's phrase, "unaffordable" burden. One must, therefore, wonder why the Minister is taking this course of action.

It is also true that while the number of pensioners is not a matter the Government can control, it has a measure of control over the number of public service pensioners because it controls to some degree the number of public servants. I understand that the number of public service pensioners will peak in the third decade — from around 2020 onwards — because of the significant intake of public servants during the late 1970s and 1980s when we recruited a large number of additional public servants. The legacy of the Charlie Haughey years is even now——