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Pensions and Retirement Lump Sums: Motion (Resumed) [Private Members]

Wednesday, 7 November 2012

Dáil Éireann Debate
Vol. 781 No. 2

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Pensions and Retirement Lump Sums: Motion (Resumed) [Private Members]

The following motion was moved by Deputy Mattie McGrath on Tuesday, 6 November 2012:

That Dáil Éireann:

in view of the Government’s:
— exhortations to Irish citizens to embrace austerity;

— decision to raid ordinary citizens’ pension funds;

— threat to end tax relief on ordinary citizens’ pension contributions in the forthcoming budget; and

— recent changes to the qualifying conditions for the contributory state pension;
calls on the Government to end the current system of paying grossly over generous pensions and massive lump sums on retirement to office holders such as Cabinet Ministers, taoisigh, Deputies, Senators, senior public servants, State regulators including the Financial Regulator, members of the Judiciary and the CEOs of semi-State bodies and State-funded banks.

  Debate resumed on amendment No. 1:

To delete all words after “Dáil Éireann” and substitute the following:
“takes note of the Government’s leadership and strong policy of remuneration restraint and sustainable pension reforms since taking office in March 2011, and in particular:

— acknowledges that all members of the Government accepted reductions in their pay on their first day in office;

— notes that this pay reduction will reduce the pensions paid to members of this Government on retirement;

— agrees that the pension levy stamp duty introduced by the Finance (No. 2) Act 2011 is a timely and legitimate source of revenue to the Exchequer;

— notes the significant reduction in public service pensions in payment before end-February this year introduced by the Financial Emergency Measures in the Public Interest Act 2010;

— notes the reduction in public service pensions coming into payment since end-February this year that results from the pay cut introduced by the Financial Emergency Measures in the Public Interest (No. 2) Act 2009;

— welcomes and supports major pension reforms brought forward by the Minister for Public Expenditure and Reform, including:
— legislating for the single public service pension scheme;

— widening the application of pension abatement and service caps across the public service; and

— introducing a higher top rate of the public service pension reduction for those in receipt of public service pensions above €100,000;
— recognises that pensions are deferred income and are property rights; and

— acknowledges that the general public policy in the Financial Emergency Measures legislation, including the pension-related deduction, pay cuts and the pension reduction, is to reduce, in a reasonable and proportionate way, public service expenditure and in particular that the pension reduction applies in a tapered and progressive manner to public service pensioners.”

- (Minister of State at the Department of Public Expenditure and Reform, Deputy Brian Hayes).

Deputy Mary Lou McDonald: Information on Mary Lou McDonald Zoom on Mary Lou McDonald With the agreement of the House, I will share time with Deputy Pearse Doherty.

I am pleased to contribute to this debate, given that the issue of pensions in all its guises has loomed large in public debate in the last number of months. The pension has been threatened, the Government has looted private pension funds, allegedly to fund investment in jobs, although the jobs have not materialised, and the issue of the large pension pots enjoyed by bankers, former politicians and senior civil servants was raised earlier today in the House.

The Government amendment to the motion is galling and bewildering. On what planet does paying oneself €200,000 a year conform with professing leadership and a strong policy of remuneration restraint? Just when we thought the brass necks of Fine Gael and the Labour Party could not shine any brighter they propose a counter motion such as this and dazzle us all the more. Far from being defenders of pay equity, Government Ministers have reduced themselves to giving voice to disgruntled senior civil servants some of whom feel hard done by on their six figure salaries. Last month, at a meeting of the Committee of Public Accounts, the Minister for Public Expenditure and Reform told the story of how, at a previous meeting, a senior public servant passed him a note complaining that he was now earning only half of what he had earned in the private sector. Poor him. The Minister's Secretary General rowed in to tell the committee that a salary of a measly €200,000 a year was not the only problem. Apparently, accountability to the Oireachtas was also an issue, and this was something he said "we needed to reflect on".

Far from delivering the democratic revolution, the Government is creating a new kind of elite at the top of the public sector. I have no doubt the irony of this is not lost on citizens. While Labour and Fine Gael Ministers clap themselves on the backs, low and middle income families are worse off under the stewardship of the Government.

Women, in particular, are feeling the brunt of Labour's austerity policies. The Minister for Social Protection, Deputy Joan Burton, has her eyes firmly set on women in her mean-spirited and unnecessary cuts to the State pension. Deputy Burton knows full well that the new requirements she introduced in September for new claimants to State pension hit women hardest. Many of the women affected were forced to leave work because of the marriage bar, as it was called. Many of them cared for children, families and elderly parents, and now they are penalised. Deputy Burton actually described this regressive measure, as she introduced it in September, as fair and equitable. The Government, and Labour in the middle of it, is intent on dismantling every element of progressive social policy that was fought for over the last century.

The motion before us is weak. It does not express sufficiently the support those who feel their pensions are threatened deserve. How can the proponents of the motion make an argument against the standardisation of tax reliefs in respect of pensions? That is, clearly, a fair thing to do. Under the current regime, 80% of pension tax reliefs go to the top 20% of earners. That is not fair. I do not understand why the blanket call to protect those reliefs is being made and I do not share it. Fianna Fáil, as ever, has a nerve to argue for a review of excessive pensions which they designed and delivered.

I hope the Government, in its final response to the motion, will clarify that there will be no further attack on the State pension.

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty This week, an elderly couple came into my constituency office. One was 80 years of age and the other was 90. One of them was visually impaired. They were distressed because they had received a letter from the Health Service Executive to say their medical card was up for review, even though they were able to show the staff in my office that their card does not expire until 2015. The entitlement they thought they had was being snatched from them by the HSE as a result of the Government's austerity proposals.

That couple are not unique. Many couples and individuals have contacted my office about the same issue. The Government has brought tears to their eyes, as a result of the letters that have been issued in the last number of days. People are fearful of the next letter in the post. What entitlement will they lose and what extra payment will they be asked to make? For many people, such a letter will push them over the edge, financially. If the stress and strain of this was not enough, the same families turn on the television and see bankers and politicians, many of whom were involved in the destruction of the economy, and hear about the lavish pensions and lifestyles they still avail of, despite their hand in bankrupting the State. Mr. Brian Goggin, former chief executive of Bank of Ireland, gets an annual pension of €650,000. Mr. Eugene Sheehy, who is in the media, gets €529,000. I acknowledge that he has accepted a voluntary deduction, but it does not go far enough. Mr. Colm Doherty has a pension entitlement of €300,000 a year and Mr. Michael Fingleton was entitled to a pension pot of €28 million.

The list does not end there. Former Ministers and leaders of Fine Gael, Fianna Fáil and the Labour Party are in receipt of large pensions, paid by the State.

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