Pat Leahy: Chief problem with pension provision is that someone always has to pay

Almost everything about the pensions debate is not just depressing, it’s worryingly symptomatic of a political system that seems to be losing the ability to make decisions that are difficult in the short term but wise in the long term.

The responsibility for making those decisions lies with the government of the day. It is the job of ministers to deliver good government and make the right choices for the future of the country. But all governments operate within a political paradigm they do not control, political expediency and the requirements for short-term advantage are increasingly pushing political decision-makers away from the right policy choices.

In refusing to raise the mandatory pension age, this Government has shirked a tough call that every administration for more than a decade has known was coming. Since the country became wealthy — take the year 2000 as your benchmark — average lifespans have extended by six years. It’s increased by 12 years in the last half-century. The implications of this trend are so well known now that they hardly need to be summarised here — State pensions are not paid for by savings, they are paid out of current tax receipts. And as the number of retirees goes up, they will gradually become unaffordable under the current arrangements. So the pensions system needs to change — assuming no government will cut the pension, either the retirement age goes up substantially, or the taxes levied to pay for the pensions go up substantially. Or both go up a bit.

Simple enough, you’d think. But the Government announced that contrary to the settled will of Fianna Fáil and Fine Gael before the last election, and the recommendations of the specialist commission that it asked to examine the issue, there would be no mandatory increase in the retirement age. Instead, there would be a voluntary option for people to work until they are 70 if they wished. And what would be the costs of this? They didn’t say. And how would the additional costs be met? Through increases in PRSI. And what would they be? They didn’t say. There will be another review to examine that. Of course.

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If the Government flunked the test, the behaviour of the Opposition was worse. At least the Government admitted that there would be a cost and it would have to be paid by everyone. The Opposition suggested that if there was a cost, then someone else would have to pay for it.

Sinn Féin leader Mary Lou McDonald insisted the plan to keep the mandatory retirement age at 66 was in fact a plan to raise it to 70. She called it a “Trojan Horse”. It’s a while since I read my Homer, but I seem to recall some subterfuge on the part of the crafty Greeks was involved. Whereas the pension age cannot be raised unless a majority of the Dáil votes for it. Where the Greeks pulled a fast one on the Trojans, this is the opposite of a fast one. It’s an imperceptibly slow one.

It comes back in a direct way to younger voters, about whose woes, both genuine and exaggerated, we hear much about right now

There is no mystery about why the entire political system is unwilling to take on the pensions issue. As long-time governor of New York Mario Cuomo used to say about social security in the US, likening it to the city’s subway, pensions are the third rail of Irish politics — touch it and you die.

“Typical Irish Times,” said one Government insider when tackled on the subject during the week. “Willing to fight to the last drop of our blood.”

The pensions issue blew up in the middle of the last general election campaign. The fuse was lit by the trade unions, fanned by Labour and detonated by Sinn Féin. Fine Gael and Fianna Fáil scurried away from the site of the explosion with their tails between their legs. Nobody has been willing to touch it since. We are left with a pensions policy that very many people — most of them — in Government believe is wrong but also believe is impossible to change.

You can bemoan the timorousness and opportunism of politicians all you like. You can say that if Sinn Féin becomes part of the next government, it will quickly find out that there is no way of avoiding unpopular decisions forever. You can note that the present Government’s claims of economic prudence are hanging by a frayed thread, and that simply not being as mind-bogglingly profligate as the Opposition is not the definition of prudence. And you’d be right. But ultimately, this comes back to voters.

If voters demand unrealistic economic policies that store up trouble for the future, then that assuredly is what politicians will give them. I wonder would our current politics be able to do any of the things which truly led to the transformation of Ireland? Would we be able to do rural electrification? Or free secondary education? Or even joining the EEC?

It comes back in a direct way to younger voters, about whose woes, both genuine and exaggerated, we hear much about right now. My middle-aged contemporaries and I, nursing our strains and sprains from ill-advised midweek sports perhaps more suitable to younger participants, might be delighted that younger people will pay for our retirements with their increased PRSI contributions. It is very nice of them, to be sure. I am puzzled, however, about why young people should be so happy to do so.

Homer warned to beware of Greeks bearing gifts. But everyone — especially younger people — should also beware of politicians telling you that nobody has to pay for anything. Somebody always has to pay.