I move:
That leave be granted to introduce a Bill entitled an Act to provide for a prohibition on legislation which would unilaterally impose a levy, or similar charge, on pension funds.
This Bill would provide for a constitutional referendum to prevent any future levy on private pension funds. I do this in the context of a very serious looming crisis for pensions in this country. The context is an ageing population and a situation in which the ratio of workers to people over 65, which at present is 6:1, will be 2:1 by 2050. It will be impossible for the State to sustain our State pension system, even at present levels, when this comes about. It is almost upon us. The situation is changing as we speak.
I propose that in future the Government be prohibited from raiding private pension funds. We must encourage people to save. We cannot have a situation in which people sit back, do what they like and depend on the State to sustain them in their old age. This will not be financially possible as we go forward. Various systems are in place to encourage people to save, such as tax relief on pension contributions, although there are arguments about that, and it has been contended that it has unduly favoured the wealthy and has been very expensive for the State.
If we cannot afford to do what we can to encourage people to save, at least we should stop discouraging people. The one thing that discourages people from providing for their pensions and for retirement is the possibility that at a moment's notice the Government can expropriate part of the pension pots they have built up. This is precisely what has been done over the past five years, as €2.5 billion has been prised out of people's private savings. As the Taoiseach is well aware, these are people who scrimped and saved and sacrificed to make provision for themselves so they would not be unduly reliant on the State. They have denied themselves holidays and lowered their standard of living simply to be able to provide for themselves in old age. It is grossly perverse and immoral for the State to move in and seize part of their private savings. All of us in the House were shocked by the actions of the Government in Cyprus some time ago when it seized bank deposits held by its citizens. This is exactly the same. There is no material difference between what this State has done over the past five years and what the Government of Cyprus has done.
I have been in government myself and I know the pressures and the temptations. Other governments have resorted to similar methods, including in Hungary and Poland, to a lesser extent recently in France, and also in Russia. When there is a huge pot of private savings, a government is naturally tempted in times of financial crisis to raid this resource to avoid the more difficult decision of raising taxes or cutting expenditure. I do not think it is an option that should be open to any government. I propose this legislation, which would provide for a constitutional referendum to ensure in future that any government that wants to raid the savings people have built up for their retirement due to their own sacrifice and hard work can only do so with the consent of the people. That is the least those savers can expect.
