Feargal Quinn (Independent) | Oireachtas source

I welcome the Minister to the House. He seems to be becoming fond of the Seanad, given his regular visits to the Chamber.

While this is a relatively technical Bill, the overall aim of the European Stability Mechanism is to provide an insurance scheme against future shocks to the financial system. The Minister explained the position very well. Unfortunately, we have still not separated the debt of ordinary customers and the massive and reckless debts of certain banks. A fundamental principle needs to be implemented in mechanisms such as the ESM to prevent another financial crisis in future. We all hope that will not be the case but predictions of another financial crisis have been made on and off over the years. Whether the experts are right or wrong, we should at least pay heed to them. Is it possible that we would pay for an insurance policy through the European Stability Mechanism and find there is no money left in it in a crisis? Will the Minister comment on this possibility, however remote it may seem?

It has been repeatedly stated that the ESM cannot be used as a way to invest in countries to help them out of a crisis. As an alternative, however, the European Investment Bank may be given more funds. Will the Minister comment on whether Ireland may obtain more funds through the EIB? If that is the case, what are the Government's priorities for such funding?

As previous speakers correctly noted, we need to secure a deal on retroactive bank capitalisation, if possible. While I realise negotiations may be ongoing behind closed doors and do not expect the Minister to brief the House on their progress, it seems to be rather quiet in this regard.

Given that we have let go of the "double Irish" arrangement - I congratulate the Minister on his handling of the issue on budget day - could we get anything back in terms of bank debt? I would like to see business-headed negotiations to get us the best deal possible. I would appreciate if the Minister could give the House an update on the situation.
The other matter I wish to raise is the question of a credit history amnesty for Irish businesses and individuals. As we are aware, banks are afforded massive protection and leeway but ordinary customers have lost out and had to pay massive amounts of cash to bail out the banks. I draw the Minister's attention to an interesting development in South Africa whereby people there will have negative information removed from their credit histories under a so-called amnesty. Under the law introduced there, credit bureaus have two months to erase adverse credit information from their records. We had a massive problem with too much free credit in Ireland during the boom. Could we work out something to ensure that negative credit histories do not affect SMEs that are seeking loans to expand? While consumers hold some responsibility for overspending, the banks clearly have a responsibility as they lent too much. However, the problem now is that there is not enough credit, and individuals and businesses are being hindered by poor credit histories. Could some of the boom time credit history be considered as separate from the normal history of the business so that they are less likely to be refused credit? I think there is something to be learned from the South African example.
Can people be allowed more access to their pensions? I am aware that the Minister responded last year and the previous year to a suggestion made in this House - and made, I am sure, by others as well - to do something like that. Given that the banks are getting so much help compared to the regular person on the street, I believe we can do more to allow people actual access to cash. I really welcome the move introduced by the Minister in the past few years to allow people access to 30% of their additional voluntary pension contributions, but the Government should extend the scheme to allow people more access to tax-free cash to get more cash flowing into the economy. The fact is that access to AVCs is releasing cash into the economy. It is helping people and it is helping businesses to survive. What is most needed by these two groups is cash. Has the Government got figures on the number of people who have availed of the scheme so far? Can the Minister tell the House how much cash has been released into the economy through the AVC scheme? The concept is very good and it would be interesting to know how well it has worked.
I draw the Minister's attention to news from the UK this month. The plan there is that people will be able to use their pension pots like bank accounts from the age of 55 and withdraw thousands of pounds to save, invest or spend as they wish on holidays or other purposes. The UK Chancellor, George Osborne, said:

People who have worked hard and saved all their lives should be free to choose what they do with their money, and that freedom is central to our long-term economic plan. From next year they'll be able to access as much or as little of their defined contribution pension as they want and pass on their hard-earned pensions to their families tax free.

Under current rules in the UK, people from the age of 55 can take 25% of pension savings as a tax-free lump sum. In future, savers will be able to dip into their pension pots when they want, and each time 25% of what they take out will be tax free. People will be able to use their pension pots like bank accounts from the age of 55 and withdraw thousands of pounds to save, invest or spend as they wish on holidays or other purchases. I think we could release the tight grip on such pension funds. It would be a sensible move. I would like to hear the Minister comment on these moves in the UK and whether he would be willing to conduct a study on the feasibility of similar measures to be introduced in Ireland. While I welcome moves to protect financial institutions, we can do much more to help ordinary citizens - people who are starting up businesses who can play a massive part in restoring financial and economic stability to our overall system.

Many of the answers are in our own hands. I think it is time we did a little more to encourage those start-ups.

One part of the budget that did worry me was the reference to self-employed people paying tax. It concerned those earning a considerable sum of money, but self-employed people have to pay a higher rate of tax than those who are not self-employed. I do not quite understand that, at a time when we should be encouraging people to leave their 9 a.m. to 5 p.m. jobs and set up businesses, we then introduce something that seems to distinguish between employees and the self-employed. I would be interested to know the Minister's view on that.