John Crown (Independent)

I welcome the Minister, Deputy Burton. It is a pleasure to have the opportunity to interact professionally with her and I hope we will have many opportunities to do so in the years to come.

I wish to make some points which echo those I made to a Minister of State who addressed us in the Chamber several weeks ago, one whom I thought if things had worked out differently might be answering to the Minister, Deputy Burton, in the great scheme of government. Two issues are relevant to the current amendment. They relate to the fact that while we can agree there is a broad thrust in current pensions and retirement policy, which reflects a reality of where the country is economically, we need to change our attitude to the age of pensionability and also in regard to changing the relationship which the State has had with private pension funds. These two policies, while well-intentioned and while addressing issues which are important and potentially exploitable for the benefit of the citizenry, could none the less be done better.

In the first instance, I would address the issue of the appearance of coercion, although I do not mean to be emotional. People who had a certain expectation at the time they entered the workforce of an age at which they would leave the workforce and become pensionable find that the rules are changing. My second objection is that I believe there is a way which would be better for the citizens involved and which would also raise more money.

To go further into the two points, my feeling is that it is utterly anachronistic for us now to consider a mandatory retirement age. It is impossible to link the issue of State pensions with the issue of mandatory retirement across the public and private sectors. I had occasion to research this a little in preparation for an article I was writing recently. When the first ever national old age pension, as it was then called, was introduced by Bismarck in 1879, the average age of death was 45 whereas for someone born now it is likely to be close to 90 and will certainly be in the 80s. What is more, for someone of that era who survived the perils of childhood, and what were very dangerous childbirth years for women, and who actually made it to 65, the average number of pensionable years at that time was four to five years. It is now our expectation that someone who is alive at 65 will very likely live to be 90.

At the same time, we have a tremendous demographic crisis brewing across the western world, which is the growing imbalance in the number of workers versus the number of pensioners. We must tie this to the fact many individuals who approach mandatory retirement in their jobs in the public and private sectors feel they are not being liberated but, instead, are being victimised because they are being forced to make decisions which they would not make if they were not legally mandated to do so.

I believe there will be a great opportunity to voluntarily, without coercion and in a way that will be much more efficient, alter the ratio of taxpayers to pensioners. Without boring my colleagues who heard me make a similar speech several weeks ago to a Minister of State from the Department of Finance, the reality is that we are all, certainly in my profession and in other areas where I interact, aware of many people who are doing tremendously active, intellectually and physically taxing jobs up to the age of 65 but who are suddenly deemed surplus to requirements and, uniquely, are being told not only can they not work but the State, which is bankrupt, is forcing them to become a dependent on the State by forcing them to leave employment. We need to examine this issue much more fundamentally. Rather than arbitrarily raising an involuntary retirement age, we should consider the prospect of voluntarily allowing people to work until they are no longer willing or fit to do so, thereby, first, improving the civil rights situation of those people, second, improving the dependency ratio in our society, and, third, allowing people who are highly productive to continue working and paying tax.

On a related issue which again is relevant to the Minister's Department and to those of her Cabinet colleagues, the financial crisis which is facing the country has forced us to look for all manner of alternative funds to try to fund routine activities of Government. We are all aware we are currently dependent on what is being called a bailout, although I believe we are doing the bailing out, and also on the uncertain prospect of returning to the commercial lending markets. Apropos of what the Minister said earlier about shopping bags in Grafton Street, which was an excellent analogy and one any of us who ever like to walk on Grafton Street would also have noticed, the reality is that one of the other reasons people are not spending money is the crushing burden of debt on many individuals.

I know many people who have high incomes but who are facing very high burdens of debt, not because they did something wild, reckless or crazy, as is being portrayed in the pages of Der Spiegel, or because they wish to live in the casinos of some kind of island version of Dodge City hanging off the coast of western Europe, but because they bought a house. They did the thing which mothers, fathers, families, bank advisers, mortgage advisers and everyone else advised them was the smart and wise thing to do. We were told the rules had changed. We were told that the imbalance between one's income and one's mortgage was acceptable because the conditions were different. Those are the people who cannot spend, invest, develop businesses or let their entrepreneurial skills go to full flow. However, many of them have money they cannot access because it is held in privately held pension funds.

I have recently seen figures that suggest €100 billion of Irish citizen's money is held in pension funds, 95% of which is invested outside the State. If there was some way that individuals who are groaning under a burden of debt could, through legislative amendment, get access to their pension funds prior to the maturity of those funds for the specific purpose of paying down debt, we would, I believe, have a triple whammy win for our society. First, individuals who are worried about the burden of personal debt could reduce that debt, perhaps taking them out of negative equity and making them more confident about spending, buying and investing. Second, it would also give us the opportunity to gain tax revenue for the State. Obviously, built into pension provisions is the notion that people have had some degree of taxation protection in return for investing in their future through a pension fund. Of course, no one is naive enough to believe that if people were allowed premature access to moneys which they had a preferential opportunity to save with tax breaks, they would not have to pay a higher level of tax, so that would be good for the State. Every €1 billion we would realise in that way would be €1 billion less that would have to come from other sources. Third, such a move could provide liquidity for our banking system. The fact being continually emphasised is that entrepreneurs, business people and so on cannot access credit liquidity at present to fund their ideas. If much of what were bad debts and negative equity debts were transformed into debts which could be realised and paid off, it would free up a great amount of money.