Richard Boyd Barrett on pension cuts and rising retirement age

The bitter and lasting fruits of the savage austerity that was imposed on working people, first by Fianna Fáil and the Green Party and then by Fine Gael and Labour, are very plain to see with the brutal housing crisis we're facing, with the shocking situation in our health service. But events in France over the last five days where massive demonstrations and strikes are taking place remind us of another bitter and lasting, very long lasting consequence of the unjust austerity that was imposed in this country on working people, namely the attack on the pension rights of people. It might be of interest to workers in this country that French workers are fighting to protect a pension entitlement age of 62. 62. For some workers who work hard physical jobs, they get their pension at the age of 55 and people are on the streets in their millions striking to prevent the pension entitlement age going to 64. 64. But in this country, we're in a much worse situation. In March 2010, just to remind people, the Fianna Fáil and Green government made a decision to commence three phases of attacks on pension entitlements. They loaded the gun to attack pension rights and then Fine Gael and Labour and Minister Joan Burton pulled the trigger in 2014 to make it a situation that people would not get their pension until the age of 66. 64. But as of 2021, workers born after 1955 will not get it until they are age 67 and as of 2028, workers will not get their pension until they are 68. 64. And it is worth saying that that will mean that workers in this country will be in the worst situation in the OECD, in the developed world, in terms of their pension rights and entitlements. They will have to work longer than anybody else in order to get pensions, which also in many cases have been significantly reduced. Again, comparisons are worthwhile. In Norway, you get your pension at 61. In Sweden, you get it at 62. In Spain, Belgium, Denmark, Switzerland, you get it at 65. And the UK, 65. But workers in this country will get it at either 67 or 68. It is currently 66. It is also worth saying, Taoiseach, that Irish workers are the most productive anywhere in the Western world. Anywhere in the Western world. Even when you strip out the impact of transfer pricing. Now, I ask you, Taoiseach, this was all justified in the name of austerity. Austerity is over. We are now one of the richest countries in the world. Fastest-growing economy in Western Europe. Do you think it is fair that workers in this country should work longer, harder, for less, or do you think we should take a lead from what French workers are doing now and fight to reverse those attacks on the pension rights and entitlements of working people in this country who have paid and worked hard for their pensions? Tisha to respond. Thanks. Thanks very much, Deputy. This has nothing to do with austerity, and austerity is over. Thankfully, in Ireland, austerity has been over for more than three years at this stage. And as a result of that, unemployment is a third of what it was not too long ago in 2012. Incomes are rising. Poverty is falling. Deprivation is falling. And as we know from the CSO, silk figures released the only other day, income inequality is at its second lowest since records began. So we have delivered on all of those things in the past couple of years, and indeed secured a position whereby we have one of the fastest-growing economies in Europe. And thank you for acknowledging that. And I accept the backhanded compliment that our policies have been successful. But this isn't about austerity, Deputy. The objective of this policy is to make sure that the state pension continues to be adequate and continues to be sustainable into the long term. We have what is one of the highest state pensions in the European Union. And we want to keep it that way and keep increasing it over the next couple of years, in line with inflation, if not in line with wages. But that's what we should aim to do. And we also want to make sure that people who are now in their 40s and 50s will still have a state pension system when they retire. So the way it works is that people pay PRSI, and employers pay PRSI, and it all goes into something called the Social Insurance Fund. And out of that Social Insurance Fund comes the State Contributory Pension. Because the economy now is very strong, that Social Insurance Fund is in surplus. However, it's projected to go into deficit, because of our ageing population and changes in demographics. And if the economy were to slow down, or if there was another downturn, it would go into deficit very quickly. So we need to act now. Because when the system was set up in the 70s, things were very different. The average man lived to about 68. The average woman lived to about 72. So people paid a relatively small amount of PRSI in every year, but were only retired for a small number of years. Now, what's changed since then is something wonderful. Life expectancy has improved. Most people now live into their 80s, and that's brilliant. But it does have a consequence that the cost of pensions is rising all the time, and will rise faster than the rate at which PRSI is paid into the Social Insurance Fund. So we have to act. And we can either do it by significantly increasing PRSI, or increasing the retirement age. And we think the prudent thing to do is to increase the retirement age in line with life expectancy. It still means that people get 10, 20 years of retirement, but we increase it in line with life expectancy. And that makes sense. Because if we don't do that, the Social Insurance Fund will go into deficit, would be faced with a pension crisis, and would then be in a position where pensions would have to be reduced. And we never want to do that. We want to keep increasing pensions in line with inflation and in line with earnings. One minute. Tell pensioners who have to struggle with high rents, with property taxes on their pensions, on the cost of living, that our pension is so wonderful, Taoiseach. But you see, it is a fact that the countries that have the highest age where you have to get to before you get your pension are the ones that were affected by austerity. Greece, Ireland, Italy, yeah, those countries. Whereas other countries in Europe, who are not as fast growing, in some cases not as wealthy as Europe, people can retire earlier. Now why is that? And get their pension, and get their pension earlier. Why is that Taoiseach? And I'm glad you mentioned employers PRSI, because the reason is, because employers don't pay their fair share of PRSI in this country. If they did, we wouldn't be forcing people to wait until the age of 68 in order to get their pension. Workers in this country pay the same average amount of PRSI as their European counterparts, but employers pay about half of that. That's the problem. So why, instead of forcing people to wait until they're 68 or 67 to get their pension, why don't you just make employers pay the average level of PRSI contribution so that people can enjoy their latter years and not have to wait until they're 68, go through the indignity of having to sign on Job Seeker's Allowance when they get to 65, as many are having to do. Why don't you reverse that unjust attack on people's pension rights? Thanks Deputy. One of the other facts that you neglected to mention is that actually pretty much every country in Europe is increasing their retirement age. They are increasing at different rates and at different times, but every country is increasing their retirement age. Because every country knows that that's how we'll have to respond to the fact that life expectancy is rising. It's a reasonable response to a good thing, which is life expectancy rising. But I think once again the Deputy has demonstrated the fact that he just doesn't understand how the social market economy works. His solution to the emerging pension crisis is to tax employers more, to tax jobs, to put up employers PRSI. Has it ever occurred to him why unemployment is down to a third of what it was when my party came into office? Has it ever occurred to him why we have the fastest growing economy in Europe? Has it ever occurred to him why we're able to generate so many tax revenues to fund the public services that we need? Part of that is because we have kept tax on business and employers low. Countries that you talk about have unemployment rates of 10%, 15%, 20%. And yeah, they do tax their employers twice as much. But did it ever occur to you that that's why they might have high unemployment? And yeah, they do tax their employers as much. They do tax on business. And that's how we think that's going to be. So let's do this information. Just put your taxes on the right, if you go to the right. And then you'll be kind of thinking about the money cycle. And then you'll have to let me just start now. Leading to my approval. And then you'll be ready for that. I've got them. I've got them. Let's start with that. Oh man. I've got them. I've got them. I've got them. I've got them. I've got them.