I wrote the following piece for the Irish Mirror on Monday, 4th October, 2013….
Now, I know pensions policy is not the most exciting thing to be reading about in the newspaper. But I’m going to tell you about it anyway. Just to make your blood boil.
You see an awful lot of taxpayer’s money- between €2 and €3 billion as a matter of fact – is spent on pension tax reliefs. As a general rule, the richest 20% in our society get 80% of the benefits of these tax reliefs. This is because the richer you are the more spare cash you have to lock away for your retirement so the better able you are to avail of the very generous tax reliefs. Sure why wouldn’t you?
It is essentially taking from the poor to give to the rich. And at a time when we need all the consumer spending we can get, the Government is promoting the hoarding of money instead of people spending it in shops.
In 2011, the new Government promised to introduce measures to ensure that tax reliefs could not be used to provide an annual pension of more than €60,000. This is basically how the British tackled the problem. By capping the amount of benefit in this way, this was fair to both public and private sectors where there were several different types of pension schemes.
We waited for an announcement. It didn’t happen in Budget 2012. It didn’t happen in Budget 2013.
Then last month, it came. The Government would finally introduce measures to give effect to the promised changes. Only it slowly emerged from the Budget detail that in fact only the private sector had been hit, and even then only part of the private sector.
So the highest earners in the public service will not be affected by these changes. And guess who that includes – that’s right, Ministers, their senior advisers, and senior Civil Servants. Turkeys clearly, do not vote for Christmas.
There was big talk in Minister Noonan’s Budget speech about gold-plated entitlements. But it seems the only gold-plated entitlements that were not mentioned were the protected pensions of Ministers and the senior people who have their ear. Now doesn’t that make your blood boil?