Feargal Quinn (Independent)

I welcome the Minister to the House. We look forward to hearing his views each time he attends.

Each year when this Bill comes before the House, I look at it slightly differently from others. I am influenced this year by a conversation I had in January with the Secretary of State for Labour in the United States, a bright young Asian woman, the first Asian woman to sit at the Cabinet table in the White House. She talked about her objective and that of the Cabinet being the creation of the environment where the private sector can create jobs. That is what we would expect to hear from a Republican Government.

She then criticised other countries that allowed their costs to get so high that jobs became unsustainable, losing business to other countries. France was one of the countries that cropped up in the conversation. It did a wonderful thing for its citizens some years ago by introducing a 35 hour working week, with the objective of solving the unemployment problem because more people would be at work even though they were only working 35 hours. The result was the opposite because costs have gone up to the extent that it is no longer attractive for foreign direct investment. The French Government, in the last week, tried to address youth unemployment but because costs are so high, the effort to change the situation will not survive because of the outrage against it. The intention is good but it will be difficult to solve.

Where am I going with this? Listening to the calls for paid parental leave, I am concerned that if we do not watch carefully the costs we lay on industries that will create jobs in the years ahead, we will lose business to our competitors because we will be less attractive to foreign direct investment.

In recent years, younger people have forgotten what the situation was like 20 years ago. When my daughter left university in 1986, 37 from a class of 38 emigrated. If we are not careful we may find ourselves in the opposite position, we may be too complacent. I am looking at this Bill to see if there is a danger of that happening and I want to focus my contributions on just two aspects of this complex and welcome Bill, which I support — the child care allowance and the general question of pension provision.

I applaud the decision which makes the child care allowance available to the parents of all children, regardless of whether they are receiving child care outside the home. That is the right decision and was by no means obvious. These days we pay so much attention to getting more women into the workforce that we do not hesitate to discriminate in our tax regime against those women who choose instead to look after their own children at home rather than go out and work.

This is an issue that brings us right up against the question of whether we are running an economy or a society. If one views this question in purely economic terms, one will consider as an unalloyed good the fact that as many women as possible form part of the workforce. If, on the other hand, one views it from the point of view of society as a whole, one must then balance the desirability of women working, on the one hand, with the desirability of women staying at home to look after their young children, on the other. The forces of economics pull us in one direction while the forces of society pull us in the other.

This decision should be made at the level of individual families and the Government should be as even-handed as possible in the matter. There is no doubt that many families do not have a choice in this matter because simple economics force women to work, even though they would much prefer to look after their children at home. These economics are not totally outside our competence in that they are at least partially due to the manner in which we have allowed the price of housing to spiral out of control.

Notwithstanding this, the Government should not make matters any worse by tipping the balance against women who choose to be homemakers rather than employees. This is the reason that despite sympathising with those who found themselves caught up in the opposite trap, I consider the decision to introduce tax individualisation to be fundamentally wrong. At least this time around, the Government has not compounded its mistake and all families with young children will receive the new child care allowance, and that is a correct decision.

As to the question of the extent to which the new payment will defuse the child care problem we have ignored for so many years, only time will tell. At least, however, it is a step in the right direction and I applaud the Minister both for taking it and the manner in which it was taken. Senators Cox and Terry alluded to future citizens. When asked recently whether she worked, my daughter, who looks after four children at home, nearly went wild and argued that it was wrong to say the work she does is not real work. We all make the mistake of failing to distinguish between the work of rearing our future citizens, upon whom we will rely to create wealth when we need pensions in the years ahead, and those in formal employment.

Rather than focusing on the pension provisions provided for in the Bill, welcome and important as they are, I will address a broader issue. A few months ago, the Minister had the courage to fly a kite when he suggested that the time may have come to consider making it compulsory for everyone at work to provide for his or her pension, only to find that it was promptly shot down. While I can understand the reason for this, I was sorry it occurred. My objective today is to determine whether we can patch up the Minister's kite and somehow get it to fly again.

Few people want to make voluntary provision for their pension. When one is young and at the beginning of one's career, one fools oneself into believing one will always be young and healthy. Looking ahead to what will be one's financial position nearly half a century hence requires more foresight than most young people aged in their 20s possess. After all, as someone pointed out to me recently, many people expect to win the lottery at least once in 50 years. Perhaps this is one of the reasons we do not start to make provision for our pensions at the start of our working lives.

Most people only start to consider providing for a pension, if at all, when they get married, by which time they are older and providing for a pension is more expensive. Moreover, this is a period in their lives when they must cope with many additional calls on their income. The result is that a shockingly small percentage of our population approach pensionable age with a proper provision for their declining years. This Bill shows that relative to other countries, Ireland provides comparatively generous State pensions. However, despite the generosity of our welfare system, the fact remains that it is difficult to live comfortably on what the State can provide. The real point is that if this is true today, it will be even more true in the future. The current system is possible only because we have a sufficient number of people at work to support the number of people drawing pensions. If this balance shifts, as it certainly will, the continuation of current benefit levels will quickly become unsustainable.

Given that, as individuals, we are reluctant to face up to the consequences of this challenge, we have, as a society, no option but to take collective action. All Governments have a responsibility not only to serve the voters of today but also to protect the interests of the next generation and the generation beyond that. If this necessitates making unpopular but correct decisions, so be it. No one ever said that government was about making only the easy decisions.

The only way out of the pension problem we face is to make it compulsory for everyone at work to contribute to their own pension. While one could argue that we do this already through the PRSI mechanism — providing for pensions was the original purpose of the scheme — we must face up to the fact that the sums simply do not add up in that regard. If people are to have decent pensions to provide for them in retirement, they must pay out more than they currently do. If they expect a future Government to play fairy godmother to them on this question, they are only fooling themselves.

By now we have had more than enough experience of the voluntary approach to know that it simply does not work to the extent required. Only a tiny minority of the population has proper pension provision and I forecast that the position will not change for as long as we continue to consider pension provision to be a voluntary matter. I accept this is a tricky subject and I do not propose to demand that the Minister address it given that he has already flown a kite which was shot down. Nevertheless, there is nothing outlandish in the idea that pension provision should be compulsory. Yesterday, I examined the approach taken by several countries which operate schemes of this kind, all of them with conspicuous success. Finland, Germany, Singapore and Switzerland operate compulsory pension schemes and Australia is, I understand, phasing in a new scheme. The Minister will know more about them than I do.

One of the great benefits of the compulsory approach is that people start providing for their pension from their first day at work. In other words, they start paying in to their pension at precisely the best time for them to do so. By putting aside money for their pension throughout their working career, individuals make it possible to get a decent pension at a reasonable cost, which is not the case if they leave the matter until they are in their 30s or 40s.

If, as an employer, I suggested to an employee aged between 19 and 25 years that he or she should set aside money for his or her pension, I would soon find that pensions are far from a major concern. Young people setting up home and having children are tempted to further put off making provision for retirement because they face many additional costs.

The Minister flew his kite and the vested interests promptly shot it down but that should not be the end of the matter. We simply cannot afford to let the matter rest. Instead, we must bring this horse back to the water again and again in the hope that one day it will see sense and begin to drink. It is a challenge which we cannot put on the long finger for too long. Someone must face up to it and I wonder whether this Minister will have an opportunity to do so.