Pádraic McCormack
Question:40 Mr. McCormack asked the Minister for Finance if he plans to undertake a study of the impact of the maturity of SSIAs on the economy; and if he will make a statement on the matter. [2549/05]
View answerTuesday, 1 February 2005
Questions (44, 45)
Richard Bruton
Question:142 Mr. Bruton asked the Minister for Finance if he plans to undertake a study of the impact of the maturity of SSIAs on the economy; and if he will make a statement on the matter. [2793/05]
View answerWritten answers
I propose to take Questions Nos. 40 and 142 together.
The SSIA scheme opened on 1 May 2001 and entry to it closed on 30 April 2002. The accounts are due to mature between May 2006 and April 2007 at the end of the five-year period. A total of 1.17 million accounts were opened during the period outlined.
The impact of such maturing funds on consumer demand in 2006 and 2007 is difficult to estimate and will depend on how the accumulated SSIA savings are spent or saved, how that portion of an individual's income that was previously saved in SSIAs is used, and the extent to which savings are rolled over into other investment products. The economic effect depends on the State of the economy otherwise in 2007, when the bulk of SSIA funds — around 55% — mature. To date, a number of reports have been done regarding the impact of the SSIAs including research done by Goodbody stockbrokers, Lansdowne Market Research, Bank of Ireland and the Irish Mortgage Corporation. However, there is no consensus in these reports as to how these funds may be allocated between consumption and saving. The ESRI, in its autumn 2004 bulletin, did not hypothesise about the likely impact on the economy of the release of SSIA funds because it believes there are too many uncertainties around the likely behaviour of fund recipients.
I have not commissioned any specific study on the impact of the release of the funds. My Department is keeping the issue under review in the context of the normal assessment of the economic and budgetary position going forward. In the stability programme December 2004 update, I outlined that the release of SSIA funds will support personal expenditure growth in 2006 and 2007, but that the exact impact was difficult to predict.