Irish savers 'screwed over' by punitive tax system and low interest rates, says Simon Harris
Vivienne Clarke
Tánaiste Simon Harris has said that Irish people were being “screwed over” by a punitive tax system and interest rates that are too low.
He said the Irish are amongst the best savers in the European Union "but we're getting screwed over, quite frankly, as savers by a tax system that is punitive and by interest rates that are too low,” he told RTÉ Radio’s Today with David McCullagh show.
Describing plans for a State savings scheme, he said, "What we're intending to do is set up a product, an opportunity for people to set aside some money in an investment account that will give them a better yield. I think there's very significant appetite for this. The details will be outlined on budget day. The accounts will be available from next year.
“This is not something that moves the dial in the next month or year; this is something that brings about generational change."
He said the contribution that the State will make this time is on the tax side, by offering a tax-free amount you can have in the account and by charging only a very low flat rate of tax above that.”
Harris said the wealthy did not need his help. He was in politics “for the garda married to the nurse, or the teacher married to the small business person, who wants to try and build up their own resilience". He said these people are "getting screwed over at the moment by the system that's too complex".
“There will be caps on the amount that can totally be put into the account, so there will be plenty of safeguards in this scheme. This is not about the wealthy; they're doing fine, this is about the squeezed middle who are trying to play by the rules, trying to save, but actually the savings that they're putting aside are actually going down in value over time. That's not fair.
"It's not right, but also at a macro level it's not good for the country because we need people to be able to prepare for their own future and to be more resilient.”
His priority was to bring about a cultural change over a period of time around investment and to set up a simple product “that can be open and accessible to all".
Later, speaking on Newstalk, Harris offered his full support to the Minister for Justice Jim O’Callaghan over his controversial plans for reform of the legal aid system.
“He is doing a good job”, Harris told Ciara Doherty on Newstalk’s Claire Byrne show.
“It is the government's position, not Jim O'Callaghan's position. Sometimes in media discussion it gets made about the individual minister. Ministers act as a collective. Jim is the Justice Minister. I do want to obviously see, as I know Jim does, an end to this dispute."
