Prospects for Irish Economy: Statements (Resumed) (Continued)

Wednesday, 24 October 2012

Dáil Éireann Debate
Unrevised

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Deputy Shane Ross: Information on Shane P.N. Ross Zoom on Shane P.N. Ross I wish to share time with Deputy Donnelly and we will take five minutes each.

I note the Minister's jibe about opportunism. Sometimes I wonder whether the Government could have taken a lesson from those whom it accuses of opportunism and taken certain opportunities on various occasions when it could have during this short Dáil, especially in light of the story that broke yesterday on the report on pensions. The Government decided to introduce the pensions levy more than one year ago. I suggested - it was an opportunistic suggestion but a practical one - to the Taoiseach that the way to get rid of this levy was to take the money out of the industry rather than the fund members. The Taoiseach said that it was a good idea, that the Government would look at it and that it was always keen to hear constructive suggestions. That sounded reasonable to me and an entente cordiale developed between the Government and the Opposition which was welcome in a time of national emergency. What did the Taoiseach do with that suggestion? Eventually, it found its way to a committee. That committee took considerably more than one year to report, but it reported yesterday. It found exactly the facts as enunciated in this House more than a year ago - that is, that the industry was ripping off members of pension funds.

The report echoed something found out by George Lee more than a year ago in a programme he presented entitled "Future Shock", which found once again that the industry was ripping off pensioners. Instead of acknowledging this at the time, those in the Government decided that there was a big pot of money, amounting to €80 billion, and that they would put their hands in it and take money off pensioners at a rate of 0.6%. If the Government is serious about not being captured by industries such as the pensions industry, it would have acknowledged at the time that investment managers, bankers, lawyers, auditors and brokers had their hands in this pensions pot. The Government might as well have put its hands on these actors rather than taking the money from pensioners in the way it did. The naked figures from the report yesterday are startling and illustrate to the Minister, to me and to others that although there is a crock of gold in the pensions industry, it is all being taken by the top dogs in that industry, and this is continuing. There is a crock of gold, but for some reason the Government is captured by those in the industry and is taking no action whatsoever.

Investment managers are possibly the most overpaid group of people in the country and they are being paid for doing something which they do extraordinarily badly. Pension funds in Ireland have had the worst performance in the world in the past decade, yet pension funds continue to be ripped off. One figure from the report yesterday stated that an average person putting €250 per month into an occupational pension fund would get, over 30 years, a return of approximately €10,000 if there were not so many people dipping into that pot. Instead, such a person gets €6,900 per annum. The difference is going to the greedy fat cats by whom this Government and successive Governments have been captured.

Deputy Pat Rabbitte: Information on Pat Rabbitte Zoom on Pat Rabbitte That is why we did the report.

Deputy Shane Ross: Information on Shane P.N. Ross Zoom on Shane P.N. Ross The report took one and a quarter years to find out things that we knew about already. That is typical. There should be a sense of urgency.

Deputy Pat Rabbitte: Information on Pat Rabbitte Zoom on Pat Rabbitte We cannot proceed on anecdotal evidence.

Deputy Shane Ross: Information on Shane P.N. Ross Zoom on Shane P.N. Ross It was not anecdotal evidence. It was absolutely established and obvious to anyone.

Deputy Sean Sherlock: Information on Seán Sherlock Zoom on Seán Sherlock Is that George Lee, the former Member?

(Interruptions).

Deputy Shane Ross: Information on Shane P.N. Ross Zoom on Shane P.N. Ross It is simply a measure of the fact that those in government cannot possibly take decisions without referring first to the Civil Service. Some of the people on the committee to which they referred this task were people by whom they have been captured. Two of these were top civil servants, who enjoy a sacred level of pay and working conditions, which the Government seems reluctant to attack. Another was the chief executive of the Pensions Board. Why, in the name of God, when the Government was looking into reform of the pensions industry, did it approach the chief executive of the Pensions Board to be an arbiter of the process, when he has been in charge of this rotten industry for so long?

Deputy Stephen S. Donnelly: Information on Stephen Donnelly Zoom on Stephen Donnelly The Minister said he looked forward to opportunistic noise from this side of the House, but in his new way of doing politics he has chosen to leave the House straight away. Obviously he has had enough. I confess to not having the Minister's county council experience, which he seems to think necessary to understand macroeconomics, but I will do my best nonetheless.

I have only one message to get across to the Government in preparation for 2013. The regressive nature of last year's budget cannot be allowed to happen again. Analysis of last year's budget by the ESRI showed that there was a perfect correlation between household income and how much pain a household was required to take. Unfortunately, the correlation was as follows: the less money one had, the greater the share of the burden the Government asked one to carry. This has been independently verified by the ESRI. There is a perfect correlation between having less and being asked to pay more by the Government. Last year, a single parent with three children was asked to stump up €4,600 while an individual earning €200,000 was asked to stump up €100. This is what the Government did last year by choice. It made a lone parent with three children contribute 46 times more to correcting the deficit than a high earner earning €200,000.

Are we surprised to hear that one in ten children in our country are living in food poverty? This is one of the most developed nations on earth and a country that still has one of the highest average incomes in the world; the fact that it allows one in ten of its children to suffer from food poverty is nothing short of disgusting. Not only did last year's budget not alleviate this, it made it happen. I do not say this lightly or for effect, despite cheap jibes from senior Ministers. Every Labour Party and Fine Gael Cabinet member should feel a deep sense of shame for agreeing last year's budget.

I suggest two things to try to avoid such an occurrence this year. An impact analysis of the proposed measures should be carried out before they are announced. We need a poverty impact assessment. This is standard practice in other countries. We need to know how many more Irish children will be in food poverty after this budget. We need to know how many more families will fall below the poverty line. We need a gender impact analysis. When the vast majority of decision makers are men, policies tend to be unbalanced. Eighty-five percent of Members of Dáil Éireann are male and 88% of Cabinet members are male. The statement of the Minister for Finance, Deputy Noonan, on the budget earlier today is a perfect example. In his contribution on the labour market, the only sector of the economy he referred to was the construction sector. The vast majority of jobs which will, I hope, be created by the €17 billion capital expenditure programme will be for males. This is despite the live register figures showing that the greatest increase in unemployment has been suffered not by men but by women.

I propose that the Government consider more investment-led options. Investment capital can be raised from a range of sources. We have existing cash reserves which could be used. We can target taxes to raise some of the funds. We could have sensible expenditure savings - for example, a pause in increments, for which €170 million is factored into the budget this year.


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