FUNDS STORED away in the national pension reserve fund should be used to finance important social and infrastructural developments, the Government was advised yesterday.
The Cori Justice Commission, a member of the community and voluntary pillar in the social partnership talks, told Government officials yesterday that it did not make sense to borrow money to make annual contributions to the pensions reserve.
Instead, Fr Seán Healy of Cori said some of the funds - which total about €20 billion - could be used to pay for urgent projects such as social housing. He said any funds borrowed should be repaid at a time when there is less pressure on finances.
It is one of a series of measures suggested by Cori aimed at protecting more vulnerable members of society over the coming years.
Fr Healy said the Government was obliged to meet the obligation it signed up to in the Towards 2016 social partnership agreement to ensure the least well-off are protected in an economic downturn.
"A society is measured by how it treats its most vulnerable and consequently the Government is facing a key moment as it decides how to treat the most vulnerable over the coming months and years," Fr Healy said.
He said those in most need of protection were the working poor, people outside the labour force dependent on social welfare, people with disabilities or illnesses, adults with literacy problems and those in need of social housing.
Fr Healy said addressing these issues also made economic sense, even if the economy was in difficulty. For example, investment in social housing would result in more jobs in the construction sector, while addressing literacy would make more people available to join the labour force.
Other measures suggested by the commission include widening the tax base and eliminating tax breaks that are not proving to be tax effective.
Fr Healy said tax breaks in use in any given year are the equivalent to about 20 per cent of the tax-take.
Certain tax breaks, such as those available for contributions to private pensions, could be scaled downwards, he suggested.
The commission has also recommended that the Government breach EU guidelines which stipulate that member states should not borrow more than 3 per cent of the gross domestic product in any given year.
"We should be able to borrow beyond the 3 per cent limit. It's important for the Government to make the case that we're different to Germany, France and many other EU member states," Fr Healy said.