Cowen 'timid' in approach to pensions

Opposition: The Opposition parties last night accused Minister for Finance Brian Cowen of timidity in his approach to pensions in the Finance Bill and for creating a range of new property based tax loopholes for the wealthy.

The Fine Gael spokesman for Finance, Richard Bruton TD, said the incentive for people to turn their SSIA accounts into pensions was far too limited, as it would exclude more than half the State's taxpayers who were paying the 42 per cent rate.

"This was the time to undertake a significant reform of pension relief to give a real boost to the pension habit for lower earners. The Minister has ignored the Fine Gael proposal endorsed by the Pension Board of a € 1 for € 1 scheme for such people to start and sustain a real habit of pension provision," said Mr Bruton.

He also maintained that the moves to curtail the use of tax reliefs by the rich to reduce their tax liability to zero were also far too timid.

"People can still put up to €350,000 of their income into various shelters and pay no tax. It is only those who seek to shelter more than this, who will face any restriction. The public have been let down by this government in relation to its tax policy. Since the general election 2002, this Government has increased the tax paid per family by € 9,000 and has reneged on its promise to confine the 42 per cent tax rate to just 20 per cent of taxpayers."

The Labour spokeswoman on Finance, Joan Burton TD, said it was wrong of the Minister to extend property based tax reliefs to the private health sector. "Although Brian Cowen is proposing to limit some property based tax reliefs, as promised in the Budget, he is also opening and extending new ones in the private health sector, including for the first time tax breaks for private psychiatric facilities.

"Nursing homes which may be closed by the health authority, and therefore lose tax breaks could now under this Finance Bill be turned into psychiatric institutions and carry over valuable tax breaks," she said.

Ms Burton said that high income earners who paid no tax did not have too much to worry about as the Minister's reforms would only apply to those with income over € 250,000 a year with tapering relief for people with income between €250,000 and €500,000.

Green Party Finance spokesperson Dan Boyle said that while the Minister's proposals on pensions and low income SSIA holders would be welcomed by many, it did not address the issue at the heart of our future pensions problem.

Mr Boyle said Mr Cowen needed to address pension provision for those living in poverty, and who did not have the means to invest in SSIAs. Instead he had opted for a pre-election ploy.

Sinn Féin Dáil Finance spokesman Caoimhghin Ó Caoláin TD described as "disgraceful" the decision to widen tax reliefs for private hospitals.