Ministers should act now to prevent cash from maturing special savings incentive accounts (SSIA) flooding the economy in 2006, a conference in Dublin will hear today. Dominic Coyle reports
The Government should provide some incentive to encourage the 1.4 million savers to transfer their money from SSIA into Personal Retirement Savings Accounts, the recently-introduced initiative to raise the level of private pension provision in the State, or other long-term savings plans, Trinity economist Prof Philip Lane says.
Addressing the ESRI Budget Perspectives conference, he will also suggest the Government design a new scheme to encourage people to continue to save. However, the Government-contribution to any such scheme should be lower than the SSIA level of €1 for every €4 saved, which has widely been seen as over-generous. The level of contribution might be adjusted to take account of groups less inclined to save - such as those on lower incomes.
Prof Lane will also tell delegates that the Government's National Pensions Reserve Fund should avoid getting involved in public-private partnerships, which could see it becoming politicised.
In a wide-ranging address, he will encourage the increased reliance on "user fees" such as bin charges, the taxation of child benefit, the introduction of property and carbon taxes and the end of many tax reliefs.
Carbon taxes will feature prominently at the sixth annual ESRI pre-Budget conference, with Prof Stephen Smith of University College London saying such a measure is "indispensable" in controlling emissions under the Kyoto accord.
Prof Smith will argue that emission permits, along the lines proposed by the Government, will damage industrial competitiveness.
Expenditure in education is the subject of special attention at this year's conference. A paper by the ESRI's Dr Selina McCoy and Dr Emer Smyth says programmes to counter educational disadvantage in Ireland are fragmented.
Prof Tim Callan and Mr John Walsh of the ESRI, with economist Dr Arthur van Soest, of the Rand Corporation, say reform involving a widening of the standard rate tax band and a sharp increase in child benefit should see more women entering the workforce.