Friday 22 November 2019

Middle Ireland is left to carry can once again

The unfairness of the situation vis-a-vis public and private pensions is clear, says Marc Coleman

IF you are sad enough to keep such things around the house, dig out Fine Gael's 2011 election manifesto and turn to page 67. There, in black and white, you will see that last Tuesday's pension levy was clearly flagged in no uncertain terms by a commitment to "a temporary, annual 0.5 per cent contribution for all private pension funds so that older beneficiaries of past tax relief make some contribution to deficit reduction".

It's worth noting in passing for two reasons: Firstly, commentators who supported Fine Gael in the election but now rail against the levy really should have done their homework. Secondly, it is only fair to to point out that Fine Gael -- the sly addition of 0.1 per cent aside -- were up front on the issue before polling day.

That, sadly, is where the fairness ends. Providing for one's old age is a basic right. Far from people being "beneficiaries" of past tax relief, those affected by last Tuesday's measure have committed no crime other than to save the State the cost of providing for their retirement by doing so themselves. The fact that Fine Gael regards exempting their efforts from taxation as some generous gift from the State speaks volumes about the statist bias in a Cabinet most of whose members are former public servants.

Statist logic was also evident in one of the more ludicrous arguments advanced to defend the levy. Private pension funds had, we were told, committed a kind of treason by investing abroad.

As rightly required by the regulator our private sector pension funds have invested far and wide and diversely. In doing so they are being the real patriots as the taxpayer won't have to bail these funds out.

Contrast this with the €2bn bailout of the combined pension liabilities of university staff pension funds now borne by the taxpayer, precisely because those funds were "patriotically" over-invested in Ireland. And significant though it is, that cost is but a small fraction of a public pension liability of around €100bn.

All things considered, it is hard to know which is worse: The sheer unfairness of the levy or the idiocy of the "green jersey" argument advanced in its favour. The unfairness of the current situation vis-a-vis public and private pensions is clear to even the most entrenched public sector cheerleader.

The €470m netted from savers is almost identical to the €450m that could have been obtained had the Gov-ernment showed a strong hand negotiating down the rate of interest applied on the ECB/IMF loan. Once again the politically weakest constituency in the country -- Middle Ireland -- has been made to carry the can for the mistakes and selfishness of others.

Marc Coleman presents 'Coleman at Large' each Tuesday and Wednesday from 10pm on Newstalk 106-108fm.

Sunday Independent

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