Noonan hints at pensions change

The Government is planning further changes to the treatment of all pensions in the forthcoming budget, the Minister for Finance Michael Noonan told the Oireachtas sub-committee yesterday.

However, he declined to provide any details.

Mr Noonan was appearing before the committee stage of the Fiscal Responsibility Act, which includes the fiscal rules agreed as part of the Fiscal Stability Treaty and the Fiscal Advisory Council.

Mr Noonan rejected a series of proposed amendments by Sinn Féin’s Pearse Doherty. The Donegal TD had requested that a series of clauses should be introduced to the Fiscal Stability Treaty that took into account the social and economic consequences of the budgetary adjustment process.

Mr Noonan said this was not possible because only what was passed in the referendum could be included in the final bill. “Otherwise it could be challenged in the Supreme Court.”

Mr Doherty invoked the lyrics of the Fields of Athenry in his pleas with the minister to consider the social consequences of his ‘austerity’ policies. Mr Noonan reminded the TD that the song was written by Pete St John in recent times and is based on a fictional character.

Moreover, Mr Noonan said it was necessary to have fiscal rules to ensure that future governments “did not go crazy like the last government.” These rules could not be subjective, he added.

In response to questions by Fianna Fáil’s Michael McGrath, Mr Noonan said there was a harmonised methodology across the eurozone to calculate structural deficits. As part of the act, Ireland will have to move to a 0.5% structural deficit over time.

As it stands, the Government is expected to reach a headline fiscal deficit of 3% by 2015 and the provisional agreement with the EU Commission would be to reach a structural deficit of 0.5% three years later. But this will depend on negotiations between the Government and the commission and the state of the economy, the minister added.

Mr McGrath said the Government’s non-committal response to the Fiscal Advisory Council’s last report was making them feel “unloved.” Mr Doherty pointed out that the Government made a 185-word response to the council.