Paddy Burke (Fine Gael)

I welcome the Minister for Finance to the House. He is a great person for coming into this House, often at short notice, to deal with various issues.

I wish to respond to a number of points he made. The independence of the fund must be respected by everybody. That is only right. The Minister said that the establishment of the National Pensions Reserve Fund will not, on its own, solve the pensions issue. Everybody will agree with that point. That is the reason I agree with the amendment to the motion put forward by my colleague, Senator Terry, outlining that the Government can and should do more to provide pension cover for everybody concerned.

I compliment the former Minister for Finance, Charlie McCreevy, who is now a Commissioner, on setting up this fund. He was far-sighted in doing so. As pointed out by the Minister, it is a model for other European countries.

The CSO came up with interesting figures in the not too distant past when it indicated that around half the workforce do not have a pension scheme. Figures from the Irish Association of Pension Funds show the average contribution to pension schemes is 10%, however, in order to maintain an adequate income in retirement the figure should be around 15% to 25%.

The CSO also estimates that the number of people aged over 65 will rise to 858,800 by 2031, which will represent almost one in five people in the State. The average age will also rise from 34 years to 42 years. The CSO also said that in the mid-east region, comprising Kildare, Meath and Wicklow, the number of people over the age of the 65 will rise by 211% and by 140% in the Dublin area. It is thought that by the 2050 there will be only two working people for every pensioner in the State. In light of those figures, the Government can do more to provide pension cover for our people.

Senator Ross presented interesting figures on how the National Pensions Reserve Fund has performed during the past three months. The growth rates in all the stock markets, which is where it has invested most of its funds, have beaten the growth rate of the fund. The growth rate of the UK market, the Irish market and the European zone have passed out the National Pensions Reserve Fund growth of 5.4% over the first three months of this year.

This brings me to Senator Terry's point, as to the reason moneys in the National Pensions Reserve Fund cannot be used to invest in infrastructural projects. Moneys from the fund could be invested in many areas including roads, water and sewerage schemes, the rail network and airports.

The new 40 k.m. motorway which opened recently bypassing Kinnegad, Enfield and other towns, did not require the investment of a significant amount of money, yet its growth in terms of a return is high. People would accept the tolling of roads more easily if they knew that the return on such investment in road projects was being used to provide a pension not only for themselves but for future generations. Moneys from the fund could be invested in hospitals, schools and road projects. The fund should examine investment in such projects. The Minister for Finance said there is no problem with capital funding for such projects, which I can understand. There is a queue to invest in such projects because there is a high return on such investment. I cannot understand the reason the National Pensions Reserve Fund has not got in on the act.

Several speakers alluded to the problem of the provision of pensions for future generations. Some former Telecom employees retired on what they thought was a good pension. They had paid into the pension fund but subsequently realised their pension was not much more than the old age pension. In many cases, there was no increase in their pension over the years. We must provide for pensions that increase in line with inflation. There is an onus on this and future Governments to index link all pensions, regardless of the individuals concerned and when they retire.