Séamus Brennan (Dublin South, Fianna Fail)

This has been one of the best debates I have heard on this subject, or indeed any other subject, for some time. I have listened very carefully to the contributions. We have touched many fundamental chords and scratched the surface of the question of where the country is going. I detected different trends in the discussion as it ranged across the various philosophies, if not theologies, about the role of the State in pension provision.

Given that time is limited, I will resist entering into a discussion on many of the subjects raised, although I would like to revisit them at some point. I will deal with some of the specific queries raised.

Senators referred to the Pensions Board and questioned its effectiveness, which is a matter for individual judgment. However, it is important to point out that the board is made up of representatives of ICTU, IBEC, the Department of Social and Family Affairs, the Department of Finance, the Insurance Federation, the Senior Citizens Parliament, as well as actuaries, accountancy bodies, pension lawyers, the Director of Consumer Affairs and two nominees appointed by me. The board comprises people who care about this matter who are representative of the wider population.

Senator Terry asked about the costs of the tax breaks and quoted the conflicting figures of €1.5 billion or €2.5 billion. The difference between these figures is capital taxes. The figure of €2.5 billion is correct if one includes the fact that tax relief is given to the output from pension funds. The €2.5 billion includes capital taxes, whereas the ESRI figure of €1.5 billion only includes income tax and employer contributions. Both figures are correct but if one examines the issue in its entirety, the overall relief extended by the taxpayer to the pensions industry is in the order of €2.5 billion.

Reference was made to the assertion by the OECD that Ireland is at the bottom of the league in terms of pension income. However, the OECD only analysed State pension income and did not include income from other sources, like occupational pensions. Furthermore, it did not take into account that Ireland is unique in that it has a very high rate of home ownership, unlike many other countries, which have high levels of rental. The OECD also failed to take into account the household benefits packages or free schemes. Such schemes, for example free electricity and telephone services, are unique to this country and are quite valuable.

While the OECD is technically correct in placing Ireland at the bottom of the pension income league table, it does not include three important factors, namely, home ownership, household benefits and income from other sources. Therefore, the statement that Ireland is at the bottom of the OECD league must carry a health warning. In raw terms, the placement is accurate, but the reality is somewhat different. We are not the worst by any means. The basic State pension in the UK, for example, is between £110 to £115, whereas the State pension here will be €200 by 2007. We are doing a lot more than many other countries in terms of pensions.

I agree with the Senators who argued that we should not consider elderly people to be a problem. I am in favour of getting rid of the phrase "old age pension" because it does not capture adequately the situation of a 65 year old today. At some point in the future we should examine the possibility of changing the name of the pension.