Social Welfare and Pensions Bill 2011: Committee and Remaining Stages

I welcome the Minister for Social Protection, Deputy Joan Burton.

Section 1 agreed to.
Amendment No. 1 not moved.
Section 2 agreed to.
SECTION 3
Amendment No. 2 not moved.
Question proposed: "That section 3 stand part of the Bill."

This section relates to the jobs initiative in the context of halving the lower 8.5% rate of employers' PRSI where reckonable earnings in a week do not exceed €356. The lower 8.5% rate comprises a social insurance contribution of 7.8% and the national training levy of 0.7%. The section provides for the halving of the social insurance contribution and the national training levy. The overall objective is not only to maintain jobs but also to create new ones.

There has been some comment as to whether the measure is to be taken with the reduction in VAT to 9%. I heard industry representatives comment on this over the weekend, as I am sure the Minister did. The chief executive officer of the Irish Hotels Federation has exhorted his members to pass on all of the reductions and, by implication, to take advantage of the Government's initiative in creating new jobs. Some of those who have been interviewed and who work at the coal face are suggesting or inferring at best that they might hunker down and not pass on these savings. In fact, they might absorb the original costs into their own business costs. This suggests — I will not go any further than this — that they will not take on any new workers. Obviously, I would be interested in hearing the Minister's views.

I would like to follow up on what Senator Paschal Mooney has said and our Second Stage discussion on this issue. The Minister is establishing a special reform commission to examine the fairness of the social welfare system and the effectiveness of social protection. Perhaps, on or before September 2012, she might submit to the House an impact report on the effectiveness of the PRSI changes being introduced in section 3(1)(c) of the Bill. Such a report should assess the extent to which employment will have been created as a result of this measure, reflect on any defects or amendments the legislation may have produce and suggest possible modifications of this approach that might be necessary as a result of the assessment.

Everyone in the country is being tested and scrutinised. I know this measure has been introduced in good faith to encourage employment creation and reduce the cost of services. If there is any abuse of the measure, it will be worth discovering where it might have happened in order that things will able to proceed thereafter in a more favourable way for the country and citizens.

Although I am not pursuing my amendment, I would be pleased if the Minister were to accept the point I have made about what should be considered when this measure is being reviewed. The special reform commission should be required to examine the effectiveness of this considerable measure, which is to be welcomed.

I agree with the previous speaker. While we are not formally pursuing our amendment, we hope the Minister will take on board what has been suggested in it and in Senator Fidelma Healy Eames's contribution when she thinks about the matter and issues her policy proposals in the next few months.

The jobs initiative was announced at a time of substantial unemployment when the options and finances available to the Government were profoundly restricted. The PRSI change has been designed to bring about an increase in job creation and give employers an incentive to take on additional employees. The various employer groups have been demanding for some time that such a change be made by politicians and the Government. That is why it is important that the thinking behind Senator Fidelma Healy Eames's suggestion be taken on board. In so far as is possible, we should quantify the success of the scheme. This measure can be considered from two ideological angles. Some will ask the Minister to monitor it to ensure it is not being abused and is producing results. At the other end of the spectrum, people will ask that it be monitored to ensure it is enhancing job creation and giving people further incentives to create and take up work. In such circumstances, we might be able to expand the scheme.

The Minister will recall last week's interesting Second Stage debate on the Bill. Virtually every Senator who spoke said there was a need to give people an incentive to go back to work. The incentive to go back to work is not great for those on the margin between work and welfare. That makes it even more difficult for employers to try to create such an incentive. I would not say the contents of this section are novel. This is not exactly rocket science. It is very obvious and we will see how it works out. We should try to quantify its success within a reasonable timeframe. It would be interesting, therefore, if the Minister could report to the Oireachtas on the success of the scheme and try to give some numbers. If it is not working as we would wish, it may have to be amended. If it is working, we can see if it can be expanded upon.

All legislation must be jobs proofed. We must ask ourselves if legislation is helping to create jobs or hindering job creation, none more so than social welfare legislation. I will be interested in the Minister's overall views. In six or 12 months time, based on the figures available at that stage, I will be interested in seeing exactly the consequence of the Bill.

I thank Senators for their contributions. On Senator Mooney's comments in respect of the reductions being passed on to customers, I have heard some of the debate and will be extremely disappointed if, for instance, in the tourism, hotel, hospitality, bar and restaurant sector, the reductions are not passed on to consumers. On the objective of reducing VAT, VAT is a tax charged on the final purchaser, that is, in a restaurant it is charged on the customer and it is passed over by the restaurant to the State. The aim of the reduction in VAT is to provide a stimulus to businesses, particularly in the tourism sector. When one takes the PRSI reduction together with the VAT reduction, it should provide a modest, but significant, stimulus to those industries.

The problems in the tourism sector are partly because we have lost customers, particularly from the United Kingdom, partly to do with the differential between the euro and sterling. We are perceived as being a very expensive destination. Similarly, Ireland is perceived as being quite expensive by many coming from the United States. Reducing prices, even if the price reductions are relatively modest, ought to give people in those trades more custom. That is the objective of the exercise. I heard the chief executive of the hotels federation suggest strongly that it would be passed on and that this would be the federation's recommendation to its members. That was wise advice. The message that must go out is that Irish hotel tourism products are good value for money and that people can come to Ireland, have a good experience at a reasonable cost and enjoy a holiday, either for themselves or for their families.

There was a measure similar to this in France several years ago where the VAT rate was reduced. It was on foot of a long-running wrangle with the European Commission to allow VAT rates in terms of labour content to be lowered and, after long years of dispute, the French won the point. In even small restaurants in France, because I happened to be in France at the time, there were notices stating that a cup of coffee was being reduced by a small amount — it could have been merely 15 cent — but at least the customer saw that an action by the French Government to lower the VAT was being carried through in however modest a way, was reflected on the menu board and was outside on the board on the pavement.

In response to Senator Healy Eames, I indicated that I am not in a position to accept the amendment because the Bill will be signed by the President tomorrow. We want to start the national internship scheme, the reduction in PRSI and the reduction in VAT on 1 July. Given that we have been on a tight timescale, I do not propose to accept the amendments. In any event, the amendment was not moved.

The issue in respect of calculating and coming back with a report on the number of jobs created was raised and this is something I am keen to do. Let us remember there are two elements to this, as we remarked last week. We wish to retain jobs and create extra jobs. As Members are aware, throughout the country businesses are hanging on by their fingernails. I hope small reductions, such as this, will give them the extra space necessary to bring the business successfully through the remarkably tough times the economy is in now.

The way to calculate an increase in jobs poses a technical difficulty but if there is a general stimulus we will see it in terms of a general impact on the economy. I would be pleased to come back to the House in this regard. On the other hand, if businesses and employers do not pass on some of what the Government is doing by way of stimulus the measure is time-limited. There is a sunset clause of December 2013 on the PRSI measure. If it proves to have no impact, the Minister for Finance and I will have no difficulty in coming to an agreement that if the measure is irrelevant from the point of achieving its objectives, then the industries involved will create their own arguments to allow the measure to wither at the end of 2013.

All of the parts of the jobs initiative make up a stimulus package and we must start somewhere. We will watch very closely to see the impact and the response of industry. As people are aware, the foreign-traded goods and services sector is doing well at the moment. There is an amount of job creation under way which is satisfying and there have been good outcomes from organisations such as IDA Ireland and Enterprise Ireland in terms of interest by multinational companies. Such companies as Google emphasise again and again how pleased they are with their experience of working and investing in Ireland. The difficulty is with our domestic economy and we must stimulate the domestic economy.

The measures in this legislation form one element of a patchwork of measures. With the Taoiseach, I will launch the VAT and PRSI reductions and a series of other measures, including the national internship scheme, in the morning. Senator Bradford emphasised the need to give value to customers and to use the measures in the way intended by Government. We will monitor the situation closely to ensure this is what businesses do.

I call Senator Crown on section 3.

The Acting Chairman will forgive my unfamiliarity and rustiness on points of procedure. I did not realise my comments were confined to section 3 at this stage. I will wait until later to comment.

I confess I admire the Minister's bravura in the context of indicating that if this initiative does not work by 2013 she expects industry to hand it back gladly. As this Government is finding out and as the last Government found out much to its electoral cost and otherwise, when one gives something to people and then tries to take it back, human nature being what it is, the people take to the streets. I wish the Minister well in an overall sense. As I explained on Second Stage I have no difficulty with this initiative but it is important to tease out plan B. One element of the Minister's reply which should be amplified more is the experience in France. From next week, there is an obligation on those in the services sector not only to pass on the VAT reduction but to alert the public to that reduction. The Minister is absolutely right that there is a widespread perception among visitors that Ireland is an expensive destination despite the reduction in hotel room prices we have already seen and the general lowering of food prices across the retail sector. Perhaps the Minister and I heard the same clip on the "News at One" in which a tour operator who brings tourists around Britain and Ireland observed that there are invariably comments from his customers that Ireland remains expensive. One presumes these comments relate to the price of dining rather than accommodation, which would not arise in that instance.

At the time of the somewhat ill-fated Carling Nations Cup in the Aviva Stadium involving Northern Ireland, Wales, the Republic of Ireland and Scotland in a quadrangular tournament, Mr. Roddy Forsyth, the much respected sports commentator with BBC Radio 5 — the Minister will forgive me if I am indulging in a little bit of anorak here, being a great admirer of both Mr. Forsyth and BBC Radio 5 — commented on Pat Kenny's show, when asked by the host about the experience of Scottish football fans, who are used to travelling everywhere, that the one constant among them was their conclusion that Dublin is an expensive city. I presume again that this referred to drinking and dining. There is a significant obligation on those who are being given this opportunity to trumpet it from the rooftops and to pass on the reductions to customers.

Prices often vary widely throughout the State, with a cup of coffee, for example, costing anything between €2.50 and €4.50. Perhaps we could use that as a benchmark to monitor prices nationally, in the same way that McDonald's Big Mac is used as a benchmark internationally for price comparison purposes. The Government might launch some type of initiative to encourage people to pass on the reductions and to show them Big Brother is watching. In that context, I applaud Joe Duffy's €5 Fridays initiative to tie in with the introduction of the reductions. All of this should generate a great deal of heat and light; I hope it will put a moral responsibility on those who might see it as an opportunity to absorb costs. They should bear in mind something Governments sometimes forget, namely, that reducing a form of taxation or the price of a product or service, instead of leading to a reduction in income may instead lead to increased incomes.

I watched with a somewhat jaundiced eye as the proposal was put forward from the other side of the House. I already referred to the decision of the last Government to reduce the minimum wage and that this initiative was taken at the time following forceful and active lobbying by the industry. I recall proposals being put forward along similar lines to what is being proposed today, namely, that there should be some time limit placed on the provision or some type of monitoring or evaluation after a specified period. These proposals were not rubbished, but the steadfast response was that the industry had made its case that a reduction in the minimum wage would generate jobs. This turned out not to be the case and I was happy to concede that point last week. In the context of the amendment being put forward by the Government, the phrase that comes to mind — though I do not speak French — is "plus ça change . . .”.

I thank the Minister of State for her comments. I was particularly interested in her reference to the French experience where the effects of VAT rate reductions were quantified and made known. It would be useful, in these times of austerity, to show that we are seeking accountability from those on whom benefits are conferred. It would be worthwhile for the Minister to make such a call on the industry.

Will the Minister explain why it will be difficult to quantify whether employment is created as a result of these changes? I understand that is difficult in respect of the retention of jobs, but surely we are only looking at employers who are paying €365 or less. Consequently, it will be easy to calculate by mid-term, that is, by September 2012 approximately, whether there has been an increase in employment. This should be easy to do. While the Minister has noted the sunset clause will take effect in two and a half years time, that is a considerable length of time and I seek a brief reply as to the reason this would be difficult to do.

As I stated, I will be happy to return to the Seanad to advise on this measure's progress. Obviously however, the package's progress will be reflected in general levels of economic activity. For instance, Ireland has a very high level of savings at present. People are paying down debt, are worried about their levels of indebtedness and are saving because they may be nervous about the future of their employment, business or salary levels. Ireland needs a return of consumer confidence, whereby consumers would resume spending, for instance, on home maintenance and investment through upgrades and insulation related refurbishment and so on. The Government's jobs initiative is designed to cover many such areas. I refer to measures such as encouraging people to retrofit and insulate their houses, the measures in this Bill to reduce PRSI in respect of people in receipt of €356 per week or less and the restoration of the minimum wage, which entails the restoration of a full euro per hour, as well as those put forward by the Minister for Finance, Deputy Noonan, to reduce the lower rate of VAT in respect of tourism in particular and personal services such as hairdressing. It would be reasonable to expect that businesses which will benefit from the VAT reduction should be able to show how that has carried through into their pricing structures.

There certainly is a strong feelgood factor associated with seeing even a small price reduction for a service, given all the salary reductions suffered by those who are in and have remained in employment. It is often forgotten in this recession that there are significant numbers of people whose income, while affected, remains very large. Nevertheless, those people are not confident about spending, even though they can afford to do so. One indicator in this regard is evident on Grafton Street. Unlike a few years ago, when one might bump into people carrying two or three bags, were one to walk along Grafton Street today to see how many shopping bags people — women in particular — are carrying, in many cases it would be none at all and in other cases just one bag. This marks a great change from the position a couple of years ago and is related to confidence about spending.

Moreover, there are areas in which spending on, for instance, retrofitting or insulating houses will save money and reduce our carbon footprint. Such spending is not simply for the purpose of conspicuous consumption but makes much economic sense. It is clear, however, that people must build up their confidence levels about the economy's recovery and, in this respect, if they are listening to this debate, the ECB-IMF-EU troika also could be of particular assistance. However, I will monitor this issue closely.

From a social protection perspective, the biggest problem facing the economy at present is that increasing numbers of people, younger men in particular, are entering long-term unemployment. I refer to those men who had been working highly successfully and hard in the construction industry. While they had been enjoying it and had been deriving good wages from it, the construction sector has died away and will not be returning to its previous levels for a very long time. Current unemployment statistics indicate that large numbers of people are on short working hours or are engaged in part-time work of two or three days per week. In addition, a huge number of people and young men in particular are entering long-term unemployment. These measures are designed to stimulate and when consumers feel more confident about spending and employers feel more confident that consumers have started to spend, this is generally when an economy will see a return to strong retention of employment followed by growth in employment. This is what the measures in this Bill and the Government's overall jobs incentive package are designed to achieve.

I am grateful to the Minister for her clarity. I can understand the reasons and motivation behind Senator Healy Eames's amendment. I pose the question in the context of the Minister's emphasis, rightly so, on consumer confidence. As the Minister will be aware, as late as this morning or yesterday, the latest consumer confidence index shows a 2% drop from 58% down to 56%. I understand that a measure at 50% or less is into deflationary territory. I presume the Government is hoping the next CSO figure will show an increase in consumer confidence. Keeping in mind that the Minister for Finance, Deputy Noonan, was quoted over the weekend and last week suggesting that people should get out and spend more, it was rather salutary that the vox pop interviews carried out for the weekend news programmes at various shopping centres showed the majority of those interviewed as being unemployed. This was somewhat poignant as they were going around shopping centres with hardly one bag which had nothing in it. The challenges for the Government include the breakdown in consumer confidence.

I agree in principle that some form of evaluation should be carried out. The Minister may be receiving information by way of the CSO statistics that, if consumer confidence is rising, this indicates at least that the measures are having an effect. I could not help but reflect on the time when the former Minister, Mary Harney, suggested people should shop around and as a result the whole world dumped on top of her. Like Mary Harney, the Minister, Deputy Noonan, was making what I regarded as a very sensible request and it is interesting to note the negative reaction. He is absolutely right, in my view. A total of €120 billion is held in savings accounts in the country, an increase from €98 billion a year ago. The figures were quite constant up to three or four years ago, with somewhere in the order of 4% of the national wealth being in savings. Now it is 12% or 13%. This is a very high figure. One can only deduce from those figures that it is not the elite, the super-rich, who are saving but ordinary people.

The special savings initiative which ran for five years has been long forgotten. It was, effectively, the Government giving money away. In the immediate aftermath of the termination of the scheme in 2007 and 2008, all economists were suggesting there would be a splurge of spending and that the economy would benefit to the tune of billions of euro but, in fact, people were much more cautious, even in 2007 and 2008. They did not go out and spend to the extent anticipated. They were very careful in how they husbanded their money. They paid off debts and whatever they spent had a value-added dimension, such as house extensions. According to the consumer statistics at the time they did not go off on foreign holidays to the same extent nor did they buy new cars. Perhaps there is an inherent caution within the Irish psyche which was not identified until recent years, that irrespective of the economic difficulties, we are a little like the Germans, and that perhaps we save our money. We have been advising people to save their money and now we are trying to turn them around, like turning an oil tanker in the middle of the Atlantic.

I am sure the Government is looking at this issue of the €120 billion. It must be very frustrating to see this pile of money sitting there and which is non-productive in a sense and even a small portion of which would help to maintain and expand the job market. This may be a debate for another day but it was important to highlight it in the House because it is part of the overall picture which this particular section of the Bill is attempting to address. As I said on Second Stage and my colleagues said in the other House, we support the Government in any initiative in this regard because it will be for the benefit of all. I wish the Government a fair wind.

I am reading from the explanatory memorandum rather than the Bill. It informs us that section 3 amends changes made in the Social Welfare and Pensions Act 2010 to the recording of weekly social insurance contributions as a result of the abolition of the employee PRSI relief and pension contributions as they are no longer considered necessary. Could the Minister clarify what the phrase "no longer considered necessary" means? What is not being recorded? Are contributions no longer being made and therefore nil contributions will not be recorded? In our clinics from time to time we come across difficulties with contributions, generally from the self-employed. I do not understand to what the phrase refers.

Can the Senator give me the line reference in the Bill?

I am reading from the explanatory memorandum. I cannot attach it to the Bill. A Department saying something is no longer considered necessary is a bit unusual. They are generally very precise in their language.

It is part of section 3 as per the explanatory memorandum so I would suspect it is. I am unable to ascertain from the section a legal meaning for what the explanatory memorandum tells us the section provides for. I am always conscious of the recording of social insurance contributions and problems down the line.

It refers to weekly social insurance contributions. In regard to the recording of weekly social insurance contributions, as a result of the abolition of the employee PRSI relief on employee pension contributions, it is no longer considered necessary. In the budget last December the Government made changes in the Finance Act to the deductibility of employee PRSI contributions for relief on pension contributions. In effect, it is no longer necessary from that point of view because the deduction for taxation purposes and tax relief was removed.

We do not have to record it because there are no——

The relief for employee PRSI contributions against pension contributions is no longer in place. In other words, the last Government at the time of the last budget removed some of the deductibility of PRSI for pension relief purposes.

Question put and agreed to.
NEW SECTIONS

I move amendment No. 3:

In page 6, before section 4, to insert the following new section:

"4.—The provisions ofsection 3 shall apply to new jobs only.”.

I want to outline the thinking behind the amendment from the Sinn Féin perspective. The Bill is intended to halve the employers' rate of PRSI on jobs that pay up to €356 per week. This move is unlikely to create many new jobs.

Instead it will likely precipitate extensive wage cuts because employers will be strongly incentivised to bring wages that are currently in or around the €400 mark down to that level. We in Sinn Féin are concerned that, given the way the Bill is currently drafted, it would act as an incentive to employers to cut wages. The purpose of our amendment, therefore, is to act as a barrier to that happening. The wage cuts that will inevitably ensue will have a serious, negative impact on Exchequer finances. Not only will the revenue raised from employer PRSI contributions and that from employees' taxes be reduced, the State will also end up spending much more on in-work benefits such as the family income supplement.

Some 90,000 workers live in relative poverty and it is madness to risk adding substantially to that number. The sum of €356 per week is below the poverty line for many family sizes. The current employer PRSI rate is not the reason there are so few jobs. The collapse in domestic consumer purchasing power is the key problem. We see evidence of this in the large drop of 4% in GNP in the first quarter. This Bill incentivises lower wages, which will compound that collapse and, in turn, the jobs crisis. The same failed approach that we have seen from the previous Fianna Fáil Government is being maintained by the Fine Gael-Labour Party Government, and it will not work.

High energy and rent costs are two more significant factors preventing employers from creating jobs. The Government has not moved on either of those factors. In addition, we need an urgent rent and rates review. The purpose of our amendment is to limit the new lower rate of employers' PRSI to jobs that are clearly new. There is a question as to how that will be policed. It could be done in one of two ways or a combination of the same. For example, each employer who wants to avail of the reduced rate could send an application with some accompanying evidence to a panel of officials from the Department of Jobs, Enterprise and Innovation, as well as trade union and employer representatives, who within two weeks would assess whether the post is new. If they are satisfied it is, they could sign off on the reduced PRSI rate.

Alternatively, a person who earns more than €356 and who has come under pressure to take a pay cut to €356 or who has been let go either during or upon completion of a contract only to be replaced by someone on the wage of €356 could challenge this at the Rights Commissioner's office or in the Employment Appeals Tribunal. That could be done in much the same way as an unfair selection for redundancy can currently be challenged. I commend the amendment to section 3.

While I accept the Senator's concerns, under the current arrangements that apply before the lower rate of employer PRSI is applied, a wage reduction in the example the Senator gave — from €390 to €356 per week — results in a saving in wage reductions of €34 a week to the employer. The lower rate of employers' PRSI that applies at that level from budgets by the previous Government, there would also be a PRSI saving of €11.67 per week. That is there already. In the context of the Dáil debate, I asked my officials to look at the evidence because a point was raised by the Senator's colleague, Deputy Ó Snodaigh. There was no great evidence of employers reducing wages to get the reduction in employers' PRSI, the reason being that people wanted to keep their existing staff. In existing employments, employers do not tend to lower wages arbitrarily by the level the Senator mentioned. There was no great evidence of that in the research undertaken for me.

As to the changes that will come into effect on Monday, if an employer lowers a wage of €390 to €356, there is a saving to the employer of €34. The actual PRSI reduction will be about €26.80 per week. There is, therefore, an overall potential saving to the employer of €61 per week. That is a significant amount. All I can say in that respect is that with the current arrangements in place, parallel reductions of up to €45.67 a week are already available. There is no great evidence that employers have dropped wages as a consequence. Again we will have to wait and see, but I would be concerned if this was being done on a widespread basis.

The important point, however, and as was said about earlier sections, is to actively encourage employers to retain employment. There are many industries where, because of difficulties in terms of rent, rates and other costs, employers are hanging on by their fingernails, as the Senator said. The biggest difficulty arises where many small employers are heavily compromised in terms of difficulties with their banks and personal mortgages. In many cases the owners of small businesses may have taken out personal home loans, the repayments on which they now find difficult to meet. They may also have got involved in small-scale property transactions in small towns and villages throughout the country. There are a range of difficulties that small businesses face arising from the general crash.

Where employers, especially in lower paid employments, have built up a core of reliable employees, there is no great evidence of arbitrary wage cuts of the kind the Senator suggested. Obviously in cases where a business may be on the point of closure, there may be negotiations between the employer and employees. As to the arbitrary wage cutting to which the Senator referred, I asked my officials to look for specific such examples in the context of the debate in the Dáil and there was very little evidence of that. It is something we will certainly keep under review and check as time passes. I hope the focus in these measures will be on generating greater activity and more revenue and, by doing that, generating a better platform for a business to return to good health if it is in difficulty or, in the case of a business that is doing okay, to do even better and to expand employment.

I thank the Minister for her comprehensive reply. Even if there is very little evidence that this is happening, there is evidence of it. That is the reason we proposed the amendment to protect those few people concerned, especially in the current difficult economic scenario. It would act as a deterrent to employers who are not fully scrupulous and who might try to exploit people in various ways and means. It would not take from the Bill in any sense but it would copperfasten the position and act as a deterrent to those employers who might think of going down this route in future.

It is interesting to debate this amendment but the Minister's response to the earlier amendment in which she clarified the sunset clause is, in one sense, possibly the best guarantee the proposers of the amendment have that the matter is up for review. On the broader scale, the Bill seeks to give an incentive to employment and employers. We have to approach it from the perspective that the country needs more, not fewer, employers, more, not less, employment, and more, not fewer, incentives. This is modest legislation and a modest concession at a time when virtually every employer in the country is under extraordinary pressure. We should also take account of the countries against which our employers are competing worldwide and the advance of industrial development in the Far East, especially China and Vietnam. While such countries might fly under a different ideological flag, rampant capitalism means there is virtually no regulation, no rights for workers and exceptionally cheap costs of production. Our industry and employers are competing against these, making life difficult for the former.

We have enough restriction and monitoring of employers, although I must concede that there will always be a few bad apples in every walk of life. The sunset clause, as the Minister calls it, at the end of 2013 will give us the best guarantee possible. The legislation's message must be one of generosity and support from the House and the Government for employers who want to create and maintain employment.

We are bound by red tape, bureaucracy and restrictions. How many of the small industrialists and employers we meet from time to time tell us that, apart from the difficulty in obtaining finance, their greatest difficulties are bureaucracy, account keeping, returns and so on? We must make every possible effort to make it easier rather than more difficult for employers, in particular small employers, to create and maintain jobs.

The Minister's approach is fair and balanced. We do not want the legislation to be a charter for wage reductions. As the mover of the amendment rightly stated, the more money we keep in the economy, the better and the more money we remove from it, the worse. By redressing the minimum wage cut, the Government is trying to keep money in people's pockets, but we must try to strike a balance. In these difficult times, the legislation gets the balance as correct as we could have hoped.

As Senator Bradford reminded the House, the Bill provides for the restoration of the €1 per hour cut in the minimum wage. While €1 per hour is neither here nor there for people on high incomes, its restoration is worth up to €40 per week for someone at or close to the minimum wage. If one is only earning €350 per week, this is a significant increase. I stress that the Bill contains a balance of measures. From 1 July, the restoration of the minimum wage will give people on low incomes an increase of €40 per week.

This is a balancing measure alongside the cut in employer's PRSI. If an employer is employing people at the reduced minimum wage, he or she will be restoring their wages by €1 per hour on the one hand while, on the other, the Government will provide a reduction in employer's PRSI. This will have a balancing effect overall for employers, particularly those who are paying recently hired staff at the reduced rate, in that the minimum wage will be reinstated and employers will receive a concession from the Government in the form of a 50% reduction in employer's PRSI.

I am confident that the arrangements being made will not lead to employers pursuing wage reductions. Instead, we hope that employers will retain and expand the number of jobs, particularly in the tourism and related sectors where the lower rate of VAT applies.

We welcome the restoration of the minimum wage, which was Sinn Féin's policy. However, the people who will be caught in the net are those who will also be subject to JLC reviews. On Senator Paul Bradford's point on employers, Sinn Féin would also like to support them, but we must at all times be cognisant of the rights of employees. Contrary to the Senator's experience, we are aware of people who are being manipulated by and subject to less than scrupulous employers. In some cases, employers are reducing the working hours of employees in respect of whom the minimum wage must be reintroduced.

Like Senator Trevor Ó Clochartaigh, I, too, was concerned that those who would be affected by this provision would also be affected by JLC reviews. I put this point to a number of the hoteliers who appeared before us and was encouraged to hear them say they would only apply the measure to new, not existing employees. As the Minister said, having carried out her own research following what Deputy Aengus Ó Snodaigh had to say in the Dáil, employers care about this measure and, therefore, we must give them the benefit of the doubt. The bottom line is that an employer is a multiplier. In this environment we must encourage those who can get more people working. Let us give this measure a chance. I am willing to give it the time needed to work. We must encourage employment creation.

Amendment, by leave, withdrawn.
Amendment No. 4 not moved.

I move amendment No. 5:

In page 6, before section 4, to insert the following new section:

4.—Twelve months following the passage of the Act the Minister shall report to the Dáil on the impact of its operations including—

(a) the number of new jobs created;

(b) wage trends over the period with particular attention to the scale of wage reductions to the €356 level; and

(c) the number of complaints made.”.

As drafted, the Bill provides that the reduced rate of employers' PRSI will remain in place for two and a half years. The amendment would provide that the Minister would have 12 months to prove that the reduction was working in terms of the creation of jobs and if it is not, it should fall. That is essential as, if it is not working, it will incentivise the driving down of wages and likely result in reduced revenue which we can hardly afford.

Senator Fidelma Healy Eames tabled a similar amendment in regard to the report. I am not willing to accept this amendment. I am anxious that the President sign the Bill into law tomorrow or on Thursday and that it come into effect on 1 or 2 July. It is important this should happen. As I stated, I will be closely monitoring the outcome of the changes introduced in the Bill. In respect of the PRSI reduction, there is a sunset clause of the end of 2013. If it appears that employers have not been utilising this provision or, as the Senator suggested, that in some cases it is being used by them as an excuse to introduce large-scale wage reductions, notwithstanding the fact that they will also be obliged by law to restore €1 per hour to the minimum wage, I will discuss with my colleague, the Minister for Finance, Deputy Michael Noonan, whether it should be continued. It is part of an economic stimulus. If the economy recovers, the level of stimulus required via taxation and PRSI measures will have reduced. Obviously, the PRSI structure is important in providing funds to meet all of the extensive demands on the social welfare budget, including pensions, jobseekers' benefit and so on. I will undertake to keep the measures under review and report to the Seanad in due course on how they have proceeded. However, I am not willing to accept the amendment.

Amendment, by leave, withdrawn.
Sections 4 and 5 agreed to.
SECTION 6
Question proposed: "That section 6 stand part of the Bill."

Sinn Féin is opposed to sections 6 and 7. The right to a pension is a long-standing Irish republican principle. The 1919 democratic programme promised to provide for the care of the nation's aged and infirm "who shall not be regarded as a burden but rather entitled to the nation's gratitude and consideration". All those who subscribe to this principle must defend and extend, rather than cut, social protections for older people.

Section 6 deals with the transition to the State pension and as such takes the first step in raising the pension age to 66 years. This will affect people on low incomes who will not have occupational or private pensions or savings and, therefore, will have no choice but to continue working until the later age. Wealthy individuals will continue to have the option of retiring on private savings or pension income. Those on lower incomes tend to be in more manual or blue collar employment which takes a greater toll on the body physically, particularly in later life. Some people's contracts are scheduled to expire at the age of 65 years. It is madness to expect the people concerned to receive jobseeker's benefit at that stage of their lives. Forcing older people to remain in employment will mean there will be fewer jobs for young people and all those forced to emigrate. It is simply not possible to make 50-year predictions about the ratios of pensioners to workers and State pension affordability. There are too many volatile factors to consider, including, for example, the level of employment, the level of migration, birth trends and the rate of economic growth.

Paying the State pension would be affordable for many years into the future if the Government were to standardise tax reliefs on private pension contributions and lower the cap on pension contributions to €75,000. This amounts to a cut of 16% in State pension entitlements. Such a change is utterly opposed by lobby groups for the elderly such as the Irish Senior Citizens Parliament, Older and Bolder, Age Action, as well as by the trade unions, including SIPTU, which rightly claim it will lead to the creation of poverty traps. Older workers' contracts will expire at 65 years when they will be pushed onto the dole queues. Jobseekers in the 50 years plus age category who have lost their jobs are finding it difficult to find new employment, despite actively seeking it. People will also be forced to spend the final years of their working lives on the dole, following a lifetime of paying taxes, building the nation and creating the wealth we are passing on to foreign bankers.

The level of poverty among older people, particularly among those living alone and those who do not own their home, is unacceptably high. According to an ESRI report on poverty levels published last year, 24% of older people living alone remain in poverty, as are 23% of older people with disabilities. The State pension and associated benefits are the single most effective tool in reducing the level of poverty among this group. The statistics demonstrate that the increases in the State pension between 2004 and 2007 were a key factor at the time in reducing the level of poverty among older people. According to the report, Measured or Missed? Poverty and Deprivation Among Older People in a Changing Ireland, published by Older and Bolder last October, 84% of older people aged 65 to 74 years were living in relative poverty before social transfers, namely, the State pension and associated benefits. The report's author, Professor Mary Daly, concluded, having looked at the position of older peoplevis-à-vis other sectors of the population, that their heavy reliance on the State pension as a means of staying out of poverty was striking. The fact that income poverty rates among older people have come down underlines the importance of having a decent State pension as having a pension plays a key role in keeping people out of poverty. Almost three quarters of those aged over 65 years receive three quarters or more of their income by way of social transfers. That is how important the pension is to them.

If older people are forced to go on jobseeker's payments instead of a contributory pension, they will be hit by a cut of €42 per week. If they are forced to go on jobseeker's payments instead of a non-contributory pension, they will be hit by a cut of €31 per week. They will be excluded from the fuel allowance and the household benefits package which are available to those on pensions. The fuel allowance is worth €20 per week for 32 weeks and the household benefits package is worth €160 for a television licence, €26 per month for the telephone, 24,000 units of electricity, €40 for bottled gas each month or €52 every two months in the summer, or €111 for natural gas every two months in the winter.

Older people are already disproportionately hit by the effects of fuel poverty. Between 1,500 and 2,000 avoidable deaths occur each year as a result of the extremes of winter. This literally becomes a question of survival and the €40 per week basic cut, coupled with the loss of the fuel allowance and the household benefits package, will push many older people under.

Jobseeker payments are below the poverty line; therefore, anyone who votes for this Bill is voting to condemn swathes of older people to poverty. The pension age is being raised, with almost zero comment appearing in the media. Most people out there have no idea their pension is being cut by 16% and their working life extended by three years, as we speak. This contrasts starkly with the public response in France and Slovenia. The media in particular need to wake up to this assault on older people. The right to a pension is a fundamental workers' right, and it must be seen as such. Resistance to any attack on the basic pension entitlements of ordinary workers should be a priority for the trade union movement. It is certainly a priority for Sinn Féin.

I remind the Senator it is not usual to read a speech on Committee Stage but I have given him some latitude in this case.

I welcome the Minister, Deputy Burton. It is a pleasure to have the opportunity to interact professionally with her and I hope we will have many opportunities to do so in the years to come.

I wish to make some points which echo those I made to a Minister of State who addressed us in the Chamber several weeks ago, one whom I thought if things had worked out differently might be answering to the Minister, Deputy Burton, in the great scheme of government. Two issues are relevant to the current amendment. They relate to the fact that while we can agree there is a broad thrust in current pensions and retirement policy, which reflects a reality of where the country is economically, we need to change our attitude to the age of pensionability and also in regard to changing the relationship which the State has had with private pension funds. These two policies, while well-intentioned and while addressing issues which are important and potentially exploitable for the benefit of the citizenry, could none the less be done better.

In the first instance, I would address the issue of the appearance of coercion, although I do not mean to be emotional. People who had a certain expectation at the time they entered the workforce of an age at which they would leave the workforce and become pensionable find that the rules are changing. My second objection is that I believe there is a way which would be better for the citizens involved and which would also raise more money.

To go further into the two points, my feeling is that it is utterly anachronistic for us now to consider a mandatory retirement age. It is impossible to link the issue of State pensions with the issue of mandatory retirement across the public and private sectors. I had occasion to research this a little in preparation for an article I was writing recently. When the first ever national old age pension, as it was then called, was introduced by Bismarck in 1879, the average age of death was 45 whereas for someone born now it is likely to be close to 90 and will certainly be in the 80s. What is more, for someone of that era who survived the perils of childhood, and what were very dangerous childbirth years for women, and who actually made it to 65, the average number of pensionable years at that time was four to five years. It is now our expectation that someone who is alive at 65 will very likely live to be 90.

At the same time, we have a tremendous demographic crisis brewing across the western world, which is the growing imbalance in the number of workers versus the number of pensioners. We must tie this to the fact many individuals who approach mandatory retirement in their jobs in the public and private sectors feel they are not being liberated but, instead, are being victimised because they are being forced to make decisions which they would not make if they were not legally mandated to do so.

I believe there will be a great opportunity to voluntarily, without coercion and in a way that will be much more efficient, alter the ratio of taxpayers to pensioners. Without boring my colleagues who heard me make a similar speech several weeks ago to a Minister of State from the Department of Finance, the reality is that we are all, certainly in my profession and in other areas where I interact, aware of many people who are doing tremendously active, intellectually and physically taxing jobs up to the age of 65 but who are suddenly deemed surplus to requirements and, uniquely, are being told not only can they not work but the State, which is bankrupt, is forcing them to become a dependent on the State by forcing them to leave employment. We need to examine this issue much more fundamentally. Rather than arbitrarily raising an involuntary retirement age, we should consider the prospect of voluntarily allowing people to work until they are no longer willing or fit to do so, thereby, first, improving the civil rights situation of those people, second, improving the dependency ratio in our society, and, third, allowing people who are highly productive to continue working and paying tax.

On a related issue which again is relevant to the Minister's Department and to those of her Cabinet colleagues, the financial crisis which is facing the country has forced us to look for all manner of alternative funds to try to fund routine activities of Government. We are all aware we are currently dependent on what is being called a bailout, although I believe we are doing the bailing out, and also on the uncertain prospect of returning to the commercial lending markets. Apropos of what the Minister said earlier about shopping bags in Grafton Street, which was an excellent analogy and one any of us who ever like to walk on Grafton Street would also have noticed, the reality is that one of the other reasons people are not spending money is the crushing burden of debt on many individuals.

I know many people who have high incomes but who are facing very high burdens of debt, not because they did something wild, reckless or crazy, as is being portrayed in the pages ofDer Spiegel, or because they wish to live in the casinos of some kind of island version of Dodge City hanging off the coast of western Europe, but because they bought a house. They did the thing which mothers, fathers, families, bank advisers, mortgage advisers and everyone else advised them was the smart and wise thing to do. We were told the rules had changed. We were told that the imbalance between one’s income and one’s mortgage was acceptable because the conditions were different. Those are the people who cannot spend, invest, develop businesses or let their entrepreneurial skills go to full flow. However, many of them have money they cannot access because it is held in privately held pension funds.

I have recently seen figures that suggest €100 billion of Irish citizens' money is held in pension funds, 95% of which is invested outside the State. If there was some way that individuals who are groaning under a burden of debt could, through legislative amendment, get access to their pension funds prior to the maturity of those funds for the specific purpose of paying down debt, we would, I believe, have a triple whammy win for our society. First, individuals who are worried about the burden of personal debt could reduce that debt, perhaps taking them out of negative equity and making them more confident about spending, buying and investing. Second, it would also give us the opportunity to gain tax revenue for the State. Obviously, built into pension provisions is the notion that people have had some degree of taxation protection in return for investing in their future through a pension fund. Of course, no one is naive enough to believe that if people were allowed premature access to moneys which they had a preferential opportunity to save with tax breaks, they would not have to pay a higher level of tax; therefore, that would be good for the State. Every €1 billion we would realise in that way would be €1 billion less that would have to come from other sources. Third, such a move could provide liquidity for our banking system. The fact being continually emphasised is that entrepreneurs, business people and so on cannot access credit liquidity at present to fund their ideas. If much of what were bad debts and negative equity debts were transformed into debts which could be realised and paid off, it would free up a great amount of money.

One must also ask if there is some way to consider amending pensions law to incentivise pension funds held outside the State to be reinvested in some new financial institution in the State — call it a repatriation bank, if you wish. Even if a small percentage of that money was brought back, it could provide the seed fund for several business initiatives. I hope the Minister will have the opportunity in considering this and future legislation to perhaps give some thought to some of these proposals. I thank the Minister for her attention.

On hearing about the raising of the pension age from 65 to 68, my first reaction was that we will be working forever. However, when I learned that currently, there are six workers for every one person on a pension and that if the current trend continues, there will be two workers for every one person on a pension by 2050, I just knew we must do something about it. From that point of view, I see this as a reforming measure. I understand it is a requirement under the EU-IMF deal.

It will be a culture change for everybody. I see some merit in what Senator Crown said in regard to providing a means to access private pension funds prior to maturity and the concept of a repatriation bank. We need to consider such approaches because everything must be on the table.

There is no doubt but that people are under severe stress as a result of personal debt — more than we, in this House, are speaking about. Anything which can lift that burden will not only help people but will benefit their health. I am concerned about the effect this is having on health. At a constituency level, I am witnessing a cycle of anxiety, depression and disability. I am not saying one causes the next but that is the cycle I am witnessing. We need to come up with new ways to help people feel more free financially.

On Second Stage, Senator Zappone spoke about research she carried out on the dangers of poverty traps for low paid workers, in particular manual workers who may not be physically fit to continue to work to 68 years of age but who will have to do so under this measure instead of retiring at 65. There is the possibility they could avail of welfare if they could not continue to work but was the situation in regard to such people thought out? I do not know about the dignity of reaching the age of 65 and then going on to welfare as opposed to getting a pension. How does the Minister propose to address this? Is it purely a financial measure? Will this measure to raise the pension age from 65 to 68 years of age affect those on public service pensions?

The Minister will learn in the next few years that Committee Stage debates in the Seanad are very interesting. We engage in all types of philosophical meandering and often go down culs-de-sac, especially when discussing social welfare policy. From my perspective, this debate on the State pension is interesting because several years ago, this House took the first step to remove the term "old age pension" from the Statute Book and I will give myself a pat on the back in that regard, if it is politically correct to do so.

The Minister who took the step to remove the term "old age pension" from the Statute Book and introduce the term "State pension" was the late Mr. Séamus Brennan and he did so as a result of a Second Stage contribution I made on a social welfare Bill perhaps six or seven years ago. I told him about a couple who had reached 66 years of age at the same time who came to my constituency office in Mallow on a Friday evening. As I was completing their old age pension application forms, they joked that they did not feel old at the age of 66 and that the term "old age pension" was no longer appropriate. As the social welfare Bill happened to be passing through the House a week or two later, I made the point to the then Minister that 70 years or so after the old age pension was introduced, it was perhaps time we stopped calling people of 66 years old. He agreed with me and came back some weeks later and informed us that he would remove the term "old age pension" from social welfare terminology and introduce the term "State pension".

I appreciate from where the mover of the amendment is coming. He is concerned that people expecting a State pension on reaching the age of 66 or 67 will now have to wait. However, we must recognise that one of the biggest disappointments for many people reaching the age of 66 is that they must give up work. They want to continue to work for perhaps another 12 months or two years. A few weeks ago I believe Senator Crown spoke about a surgeon who was doing complicated important work — a heart bypass or something — on a Friday afternoon but the following Monday morning he was told he was retired. Society is changing greatly and we must reflect on the fact that employers who reach the age of 65 or 66 do not necessarily shut down their businesses and say they are pensioners. Many people reaching pension age would like the choice to work for another 12 months or two years and believe they have much to offer not only to their employer but, more importantly, to themselves.

As a first step, we should try to be more flexible. I know this is being foisted upon us as a result of our current economic plight but it might be a difficulty which we could turn into an opportunity. We should not see the extension of the working life as a negative as for many people, it will be a positive.

The Senator who moved the amendment referred to some of the free schemes and benefits which sometimes accrue to people on reaching the age of 66. We do not have to decide on it today, because the change in the pension age will happen further down the line, but perhaps benefits, such as free travel and free electricity, and flexibility with medical cards could remain for 66 year olds even if they are not entitled to draw down their pension until they reach the age of 67 or 68. Once a person reaches 66 years of age, free travel, for instance, could be made available along with the household benefits. The system could be changed gradually.

As Senator Healy-Eames said, we must recognise that if the current trend in terms of the number of people at work as against the number of people on pensions continues, the system will be unaffordable. However, on the plus side, we must recognise that life expectancy has, thankfully, increased quite dramatically and will continue to increase.

I believe Lloyd George was Prime Minister when the Old Age Pensions Act was introduced here. I remember seeing an amateur production of a play which I believe was entitled "Spring" in which at the start a youngster rushed home from school with the great news that the pension was payable to old people in Ireland. It dates back that far and the world has moved on since 1910. Thankfully, life expectancy has increased dramatically. A big proportion of people reaching pension age would love a bit of flexibility, although we are talking about the process being mandatory down the line. We must recognise how life expectancy and lifestyles have changed and we must plan accordingly.

These sections face the brutal economic reality that by 2021 or 2028 we will not survive economically if for every pensioner there are only two or three workers. We must be realistic and face the positives also, as people are living longer and many older people would love to remain at work. We should consider introducing changes on a gradual basis to encourage people who are 65 or 66 to work two or three days a week rather than just retiring overnight. The message we now get from people in their 60s is that they do not see themselves as people with nothing to offer society or as facing the scrap heap. They still have much to offer.

Looking across the states of Europe and the world today we can see that senior citizens are on the march, although not in a negative fashion. They are contributing to society in all walks of life. There will be a presidential election here within months, for example, and people in their 60s want to be President. That is laudable and it may come about. We are not decreeing that the President or the Taoiseach must be under 65, or that a person older than 65 can no longer stand for Dáil Éireann or Seanad Éireann. We are not putting a political bar on people's aspirations because of age.

People of senior years have much to offer society and many wish to remain working for as long as possible. Many employers will have people aged 66 and 67 working for them. I am thankful that society is changing from a health and employment perspective. As the Minister plans for the future we can try to ensure that some benefits accruing to people when they reach 66 — what was considered retirement age — could still apply, although perhaps on a reduced scale if people are still working. Those incentives must be offered. New thinking must inform our politics and legislation over the course of the next decade. The world does not stand still and people are now growing older in a much more healthy and active fashion. They want to continue contributing to society and we should see that as a positive as much as a negative.

This section deals with the pension age but there must be a much more holistic and inclusive debate about the role of the elderly. Just as we decided to change the term "old-age pension" to "State pension" we must reflect on the world "elderly." What constitutes elderly? People of 65, 66 or 70 are no longer the elderly as they are contributing to society. In many cases they are returning to college and heading up community associations and voluntary bodies. They are travelling because they were never able to do so before, informing themselves and others. We could have a debate on the concept of the elderly.

We require an urgent national debate on the pension industry and what we expect from pension funds. What are people's expectations of public and private sector pensions? The debate should tie into today's discussion. I welcome the amendment as it gives us cause to reflect on and debate what defines "old", "pension" and appropriate retirement ages. We are getting a message from more people that they want to work in a flexible fashion and when they hit the magic age of 66 they no longer automatically feel old, infirm or incapable of work. They wish to contribute to society in an ongoing fashion and that flexibility should be seen as part of this legislation. We are not just discussing penalties here as there is a question of flexibility and opportunity, which does not automatically end when a person reaches 66.

I had not intended contributing on this section, mainly because I would have been interested to hear the Minister's comments on other sections. My good friend and colleague, Senator Bradford, either by accident or design has now effectively talked out the Bill on just one section. We are all entitled to make contributions.

The Government which had Mr. Charlie McCreevy as Minister for Finance recognised what became known, colloquially, as a pensions time bomb by introducing the pensions reserve fund, which has been tossed around like a political football prior to and subsequent to the election. Sinn Féin would like to take €7 billion from it for an economic stimulus and I would love to know how the party sees that as helping matters.

It is better than putting it into the banks.

That is a debate for another day.

No economic stimulus has worked anywhere. That is the point I am making.

Issues have been addressed in this debate and Sinn Féin has put down an amendment. It is interesting that several bodies and institutions which represent the aged seem to have a very serious problem with the issue. There is also the problem of the gap year going forward. Perhaps the Government should consider contracts entered into by employers insisting that people leave at 65 years of age. I assume such a figure was used because it tallied with the existing retirement age of 65. Such matters must be addressed and it is unfortunate that with the time available it seems we will not get to other important elements of the Bill. I know the Minister would like to have clarified such matters.

I remind the House that at 5.45 p.m. I will put the question. The Minister may now respond.

A large number of issues were raised. The discussion has been ongoing since 2007 about the way in which demographics have been changing in Ireland. To our great success and credit, probably due to people like Professor Crown, more people are enjoying an extended old age. It is anticipated that life expectancy will rise significantly in future and whereas currently there are between five and six workers for every person on a pension, it is anticipated that by 2050 there will only be two workers to each pensioner. Here, a generous system of credits was developed, which allows people who take time out of the work force to look after children or elderly relatives to sign on for pension credits and get a pension in due course. That was a good innovation and it has been here for several decades. There is a cost and we must consider how to structure working and meet the costs of providing an adequate retirement income for people when they are older.

With regard to Senator Crown's comments, it is well worth exploring the notion of people being allowed to work for longer, perhaps deferring a pension and receiving an enhanced pension entitlement having worked for longer. That would be very appropriate in future as many people are now staying on in further education, training and travelling, only really commencing long-term contract, permanent or self-employment in their middle to late 20s. The people referred to have done hard manual work. They often started work at 16 years of age and were more than happy to retire at 60 or 65 years of age or even younger, if that were possible. There are very big demographic changes taking place. The framework being applied in terms of the age changes was set out by the previous Government in 2010 and adopted in the IMF memorandum of understanding. A commitment was given by the previous Government that the changes would be reflected in law by the end of the second quarter, that is, the end of June. We are doing this as part of the IMF structure because we have committed to doing so but also because the underlying demographic changes have to be provided for.

Senator John Crown also raised the issue of people being able to take some money out of their pension funds. Certainly, that is an issue that needs to be examined. While it is quite risky and would have to be examined in a careful and restrained manner, it occurs in some jurisdictions at a modest level. People have been talking about this issue in the context of a person in negative equity who is in so much debt, be it personal or business, that he or she is in danger of losing either the family home or being forced into bankruptcy. The matter would have to be addressed very carefully. They would have to refund the tax relief gained when putting the money into pension fund schemes. Certainly, the issue deserves examination, but it would not be for everybody. It would not be advisable for a person with a very small pension fund to exhaust all of his or her pension fund if on reaching pensionable age he or she would depend entirely on the State.

The question of incentivising pension funds to invest here was raised. We would like to see this happen. One of the ways this could be done is through the provision of a pension bond. People will recall the experience of the National Pension Reserve Fund which was utilised for the bank guarantee. High levels of assurance would be needed. For the investment a rate of return would be needed and it should be locked away and prevented from being utilised other than for pension purposes. Certainly, it would provide for an extra strong item on the balance sheet of Ireland rather than seeing the money being invested around the world. One of the problems, according to the most recent Pensions Board report on Irish defined benefit pension schemes, is that funds have been heavily invested in equities which because of the financial crisis in Europe have not done so well. That is an additional factor defined benefit pension schemes have not done well in Ireland. Perhaps, saving, as opposed to playing the market for retirement, ought to be the watchword, that is, one saves and takes a reduced risk and a more conservative return. The level of security with such a more cautious investment would be higher than for many of those who took advantage of the arrangements introduced by Charlie McCreevy, whereby the safest way to provide for one's pension was to spread one's investment around the Irish banks. Those who directed the bulk of their pension funds at such an investment have been wiped out. That is unfortunate and we all have lessons to learn from the pensions crisis.

That people who are fit, able and well can work and contribute for longer is critical. I am advised by my colleague, the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, that he will bring forward legislative changes to permit those in the public service to work for longer and to alter pension arrangements in parallel with the arrangements being made in this instance. Equally, there are people who, for health reasons and because of the work they have been doing, may wish to retire earlier. What we need to do when we recover our financial sovereignty and financial well being is have a more flexible approach to the age of retirement. We should bear in mind our recent visitors, Queen Elizabeth II who is 85 years of age and the Duke of Edinburgh who is 90. I saw both of them march up a steep staircase in Dublin Castle unaided. I have been informed that among Supreme Court judges in the United States, for whom retirement at around 85 years of age is recommended, there has hardly been a case of Alzheimer's disease or dementia because they have been constantly engaged. Obviously, it has enabled them to remain extremely active into what we would describe in Ireland as old age. Sometimes people talk about——

I am sorry to interrupt the Minister, but tá an t-am istigh. I am under the cosh because of the arrangement agreed to on the Order of Business. As it is now 5.45 p.m., I am required to put the following question in accordance with an order of the Seanad of this day: "That the sections undisposed are hereby agreed to in Committee——

I hope the decision made by the Government to guillotine the debate on the Bill will be a salutary lesson for those on this side of the House that it is something inherently anti-democratic. On a Bill with 43 sections, we have reached section 6.

Unfortunately——

This is the first example for new Members of the House of just how inherently anti-democratic is the guillotine process.

The Senator has made his point.

It never happened during the last Seanad.

The Senator has made his point.

It rarely happened. It was a matter of principle. The previous Leader of the House said it was a matter of principle not to guillotine debates.

Will the Senator, please, resume his seat?

One cannot argue one side and then the other.

Unfortunately, once the Order of Business has been agreed, I cannot accept any contributions. That is a matter for another day. The question is: "That each of the sections undisposed is hereby agreed to in Committee, that the Title is hereby agreed to in Committee, that the Bill is, accordingly, reported to the House without amendment, received for final consideration and passed."

Question put and declared carried.