Sheila Terry (Fine Gael)

I understand that. As regards the section, I wish to compliment the Minister on the measures he has taken to try to eliminate in some small way the abuse of tax relief incentives for pensions. That is one of the abuses that has been used by wealthy people. Neither the current Minister nor any of his predecessors intended this type of tax relief to be used for that purpose. Tax incentives for pensions encourage people to pay into their pension funds, which is admirable. So many debates have taken place both here and in the other House about how we can provide for future pensions. What we have done to date, however, has not done anything to increase the number of people who have their own occupational schemes. Rather, the tax incentives have been abused by wealthy people to put money by for themselves.

I recognise that the Minister has reduced to €1.25 million the maximum tax-free lump sum for draw-downs from a pension fund made on or after 7 December 2005 but that is still an outrageous figure. I would have supported Senator McDowell's suggestion in that regard. Having a cap of €5 million on a pension fund for tax purposes is also far too high. Who are we trying to encourage or incentivise? We should be trying to incentivise the ordinary worker to provide for his or her pension. The money that could be saved in tax relief would be better spent on those people who are on State pensions. Can the Minister inform the House how much tax relief on pensions cost the State in 2004 or 2005? At least one individual drew down approximately €25 million as a tax-free lump sum. I am glad the Minister put a stop to it, but what did it cost in either 2004 or 2005?

We were unable to obtain from the Minister's Department the information about this individual, we got it from the Indecon report and that is not good enough. A parliamentary question was asked by a Member of the other House — we are unable to do so — regarding the largest amount any individual drew down as a lump sum. However, the Minister was unable to provide the figure.

In his next budget the Minister should reduce the amount that can be drawn down as a tax-free lump sum. It should be at least half of what is provided for at present. We will see greater savings in 2006 now that wealthy people can no longer avail of this tax incentive. It will be interesting to see the amount of savings made at the end of 2006. What is the value of allowing people to take out a tax-free lump sum? We know what it is in monetary terms to the wealthy. Financially, it is extremely worthwhile, which is the reason people used it. There was nothing illegal about what they did but it was an abuse.

We must consider the ordinary middle-income worker. We want to ensure he or she will have an adequate pension on retirement. I appreciate that the Minister must obtain information but it is difficult——