Press Release

SIPTU NEC expresses disappointment at low yield from pension tax relief for very high earners

Date Released: 24 October 2013

The National Executive Council (NEC) of SIPTU has declared its deep disappointment at yesterday’s revelation that the Budget changes to pension tax relief for very high earners will now yield only €120 million as against the €250 million promised this time last year. In a statement issued during its monthly meeting today, the NEC also said that it is absolutely dismayed that the €130 million shortfall is now to be funded by the increased levy on workers’ pension funds which it described as another classic example of working people subsidising the rich.

“We are deeply disappointed that the promised changes to pension tax relief for very high earners which offered some token gesture towards fairness have now been tapered back so that they will yield a mere €120 million as against the €250 million promised this time last year. Moreover, we are absolutely dismayed that it would appear that the €130m shortfall is to be made up by an increased levy on pension funds. In other words, workers and pensioners will end up making up the difference from their meagre savings so that the rich can be spared. 

“We call on the Minister for Finance, Michael Noonan, and the Government to rectify this gross injustice in the Finance Bill so that top earners at least make this minimum contribution which was signalled in the Budget.  There is still time to do it. This is a further example of Fine Gael mollycoddling the pensions industry which is sitting on €80 billion of assets owned by people who live and work in Ireland and who have very little say on how it is deployed.” 

“If a mere 5% of this €80bn was deployed to co-fund projects with the Strategic Investment Fund and the European Investment Bank, it could release between €10 billion and €12 billion into the economy over the next four years. This would generate something of the order of 100,000 jobs - alleviating the misery of unemployment, while providing social and economic infrastructure and greatly enhancing the country’s fiscal position.  This, in turn, would alleviate the pressure for cuts on young workers’ Jobseekers allowances, old age pensioners’ telephone allowances and on medical card provision.  Instead, the Irish taxpayer is expending resources on tax reliefs for the rich to facilitate speculative investment to build other economies across the globe.”   

“We call on Mr Noonan and the Government to stop mollycoddling the pensions industry and better-off pension savers.  Instead, it should be made very clear to them now, as the Finance Bill is meandering its way through the Oireachtas, that unless they get the pensions industry to step up to the mark and deploy a mere 5% of the funds under its control to co-fund job creation projects, it will be faced with a very different tax regime from Budget 2015 onwards. This is the only language it will understand.”


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