The government will publish a five-year roadmap for pension reform which will include the introduction of an auto enrollment pension scheme, Leo Varadkar said last night.
In a speech to employers group Ibec last night, the Taoiseach also said his Government will outlaw zero-hour contracts in new legislation which take precedence during this Dáil term.
Mr Varadkar outlined pension reform as one of the five key principles of the Government’s economic policy and said this ‘roadmap’ will be published by the end of the year.
Mr Varadkar said this reform will include the introduction of an ‘auto-enrollment pension scheme for private sector workers, two-thirds of whom currently have no occupational pension to supplement their state pension’.
‘I anticipate the first payments being made into those new individually held funds by 2021.
‘We will work closely and consult with employers on the design of this scheme, and on all of these reforms,’ he added.
Mr Varadkar said that he wants to help create well-paid jobs, with good conditions, and pension entitlements.
‘We believe that work should pay and we want everyone, including those on middle incomes, to gain from the system they fund through their taxes.
‘High taxes that take away 49% of the overtime you do, the extra hours you work, or the pay increase you earned are a barrier to opportunity and to work. They are a cap on aspiration and there should be no cap on aspiration in the Ireland we wish to build.’ He said he also wanted to achieve not just full employment, but ‘good employment’, with ‘well-paying jobs, good conditions, and pension entitlements’.
‘Taken together, we want to ensure that in the future people are able to plan for themselves and their families, confident about where they work and where they live, how they travel, and about growing old,’ he said.
‘The Government will legislate to help employees whose contracts do not reflect the reality of the hours they work, and will prohibit so-called zero hour contracts.’ Despite Fianna Fáil complaints this week, Mr Varadkar said: ‘We’ve taken the decision, rather than abolishing the USC outright, that we will merge the USC and PRSI over time.’ Micheál Martin’s party insists the Budget is bound by the Confidence and Supply Agreement with Fianna Fáil – which instead specifies a reduction in USC.
Mr Varadkar said the merger was a complex and challenging task, and it will take many Budgets to do it, ‘but when completed it means we will have the kind of social insurance system that exists in other European countries.’ He said he had three key assurances – that the Government was fully engaged with the Brexit challenge, determined to protect our national tax policy (opposing any moves on corporate tax), and committed to extra capital investment as a buffer against future problems. He added that the Government is also constrained by the need to exercise fiscal responsibility.
National debt amounts to (EURO)42,000 for every person in the State, the Taoiseach said, saying it was one of the reasons the Government would balance the books in next month’s Budget.
‘So the Government must balance necessary public capital investment with prudent fiscal policy,’ The Government had five key economic principles, he said.
There were a prudent fiscal policy, ensuring that work pays by reducing personal taxation, an ambitious programme for capital infrastructure, a foreign policy that keeps Ireland at the centre of Europe, and achieving full employment.
He said that Government will publish a five year roadmap for pension reform before the end of the year.
Source: Irish Daily Mail