Jimmy Harte (Labour)

Senator O'Brien should allow me to finish my point. The buzz word in the country in the past 15 years was that people should buy a house to act as a pension, be it an apartment in Bulgaria or a property anywhere in the world as it would do much better as an investment than any pension fund. I was involved in the insurance brokerage business when pensions were taken out for proper reasons. As Senator Crown indicated, people who were in business put their money away each month. They could work out fairly easily what they would get back, based on a 5% or 8% growth rate. It was a pretty straightforward business until we were told that pensions were only for ordinary people and the real money was to be made in property. That came across. We all know that talk at dinner parties and in bars was about how much one's house or apartment was worth in London or Paris. That is the road we went down and that is what has brought us to the situation where we must talk about taking money from the pension fund.

The Minister referred yesterday to the massive commission earned by investment banks. I agree wholeheartedly. Pension funds and managers make a lot of money. One is talking about half of 0.6% twice a year. We should make them work a bit harder for their money. If I was investing a lot of money directly with an investment banker I would ask him how it was performing and why I am only getting 4% if another fund is getting 5%. Everyone else is taking a hit so there is no reason investment bankers cannot. One can see in the news how investment banks around the world are still making serious money in spite of the collapse of many banks. That is where the real money is made. Even in this country big salaries are paid to investment bankers not the ordinary teller at the bank desk or the local bank manager. I do not know whether the Government has any influence on pension fund managers in terms of them taking a cut. It is a commercial issue but it is something they should be encouraged to do if not made do.

Anyone in business is currently finding it difficult to put money into their pension. If the 0.6% is taken away from a fund to create jobs it will bring money back into the system which is a good long-term investment. I cannot comprehend the short-term criticism of it. We are not talking about a massive amount of money. It is not being done for the next 20 years. It is being done to stimulate growth. I know many people in business who cannot afford to put any money into their pension because they cannot afford to run their business. They just stopped paying it. Having spoken to insurance brokers who deal in the pensions market, it is clear there has been a massive fall-off in pension retention. Most people in business find it difficult, but many people just stop paying it. Their fund is not growing at any percentage rate because markets are so bad, but in the case of a retailer or any business where liquidity in the market is needed, the only way that can happen is by stimulating job creation. Obviously, the money circulates and then the pension fund matters, but it does not matter if someone is getting 0.6% of a pension fund if there is no fund to speak of. The bottom line is that we must get money back into the system to encourage people to invest in their pensions.

In terms of releasing the flow of credit, the Minister of State may not have been present yesterday when I asked that the issue of the Credit Review Office be examined because it is difficult for people to go to the Credit Review Office after the bank has turned them down. Small business persons say that they need not bother going to the Credit Review Office if the bank has refused them credit . If the process was reversed for a while and small business persons or anyone could go to the Credit Review Office first and get a good report, they could then go to the bank with some encouragement. If I was refused money by the bank, I might decide to give up. Many people in business do not have the energy to go to the bank twice and their business might have closed or been compromised. I ask the Minister of State to examine that because the board of the Credit Review Office is made up of former bankers from all the big banks and perhaps people should get its imprimatur first rather than after the bank has refused credit. There is little point in the Credit Review Office agreeing someone should get credit only for the bank to refuse it but the Credit Review Office does not have any powers in that regard. I do not know if that is a runner, so to speak, with the Minister of State or whether a view could be got from the Credit Review Office because, from what I read, it is not too busy at the moment. My suggestion may speed up the process and give a small company some encouragement to go to the bank subsequently rather than the other way around.

I wish the Minister of State good luck with the Bill. Pension funds will always turn around in the long term and 0.6% is not a great percentage. The bigger issue is getting started early, but we did not encourage that. As Senators will be aware, the graph on contributions to pension funds indicates that, if someone starts contributing at the age of 25 or 45, the difference in the fund on retirement is phenomenal. We should encourage people to set up pension funds at an early age and as soon as they are eligible. Even a small amount builds up. The longer one waits, the more difficult it will be and the funds will be so small at the end of the term, they will be worth very little.