Feargal Quinn (Independent)

I welcome the Minister and I wish him well in his new role. I am also pleased that Senators O'Malley and Cannon tabled the motion because, as Senator MacSharry stated, Green Papers must be discussed. This is exactly the forum at which the debate on them should take place.

One of the options examined in the Green Paper is the question of introducing some form of compulsory pension system. I hope this option will be considered carefully because, realistically, it is the only option that will deliver what we want and need in this area. Sooner or later, we will accept that compulsory pensions are inevitable. It is very much in our interest that this should happen sooner rather than later. I accept, however, that this is a difficult nettle to grasp.

The truth is that too few people want to make voluntary provision for their pensions. 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 our financial position nearly half a century hence requires more foresight than most young people in their 20s possess. As someone pointed out to me recently, many people expect to win the lottery at least once in 50 years. If one is 20 years old, one will assume that one will win the lottery before one reaches 70. Perhaps this is one of the reasons people do not start to make provision for their pensions at the start of their working lives.

Most people only start to consider providing for a pension, if at all, when they get married. By that 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 incomes. The result is that a shockingly small percentage of our population approach pensionable age having made a proper provision for their declining years.

Given that, as individuals, we are reluctant to face up to the consequences of this challenge, as a society we have 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 it. If this necessitates making unpopular but correct decisions, so be it. No one ever said that government involved making only the easy decisions.

The only way out of the problem we face in respect of pensions is to make it compulsory for everyone at work to contribute to his or her 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 respect. If people are to have decent pensions to provide for them in retirement, they must pay out more than they do at present. If they expect a future Government to play fairy godmother to them, 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. I forecast that the position will not change for as long as we continue to consider pension provision to be a voluntary matter. I say this in the knowledge that a large number of people involved in business are frightened at the thought of that. They say that if we are to maintain competitiveness in this country we must be extremely careful in the context of how we monitor our costs. People in business recognise that something must be done and that it is the Government's duty to take action. The Green Paper gives us the opportunity to debate the matter.

There is nothing outlandish in the idea that pension provision should be compulsory. Several countries already operate schemes of this kind, all of them with, as far as I am aware, conspicuous success. Finland, Germany, Singapore and Switzerland operate compulsory pension schemes and Australia is, I understand, phasing in a new scheme. I am not pushing an idea that has not been tried before. On the contrary, compulsory pensions work and a number of countries already have them.

One of the great benefits of the compulsory approach is that people start providing for their pensions 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 careers, 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. In the past when I suggested to an employee aged between 19 and 25 years that he or she should set money aside for his or her pension, I discovered that he or she did not regard this as a major concern and it was not high on his or her list of priorities. Young people setting up home and having children are tempted to put off providing for retirement because they face additional costs at that time. One day we will have to face up to it and the sooner we do so the better it will be.

The case was made to me on the difficulties caused by defined contributions as opposed to defined benefits. We cannot argue with this. We live in a world where it will be defined contributions and not defined benefits and we must recognise this. The State has its own headaches with this but we have managed to convince our citizens to recognise that their pensions will be based on what they contribute and not on defined benefits. We face a challenge. I am pleased this motion was tabled this evening. I am pleased the Green Paper provides us with the opportunity to debate it. This should be the start of a debate in which the Minister will take an interest. I am confident he will not allow this to be put on the long finger and will act on it.