They took pensioners’ cash and gave it to the tourists

YOU have to hand it to Michael Noonan, he does call a spade a spade, and a Greek a Greek. But he let the cat out of the bag this week when he bluntly stated that the tax reductions for the hotel, restaurant and bar trade are being paid for by the state’s pernicious raid on private pensions. In 2011, the ‘tourist industry’ was presented with the gift of the only tax decrease of any sector during the recession of the last six years, when its VAT rate was reduced from 13.5% to 9%.

The rest of us, by the way, saw the VAT rate on most goods and services, many of which are essential, increase to 23%.

In the same year, the Government introduced powers to allow it to raid the private savings of pensioners by simply taking 0.6% of the private pension funds built up over a lifetime by hard-working taxpayers. The justification for removing – robbing, in my vocabulary – more than €3bn from these savers, is to provide the funds for the tax reduction for hotels, pubs and restaurants.

This pensions raid is gravely unjust for a number of reasons.

Firstly, it was introduced by Government ministers who would not be affected by the new tax.

None of them has to save for a private pension to live on when they reach 65 (extended to 66 now in some pension plans), because their gold-plated taxpayer-funded pensions are so generous that it would simply be impossible for 99% of workers in the country to even dream of funding such payouts. And, of course, retired ministers are ‘entitled’ to their pensions as soon as they leave office if they’ve hit 50. Who voted that in? The very people who will benefit from it, of course.

Secondly, by taking money out of an investment savings fund, the State has depleted the amount needed to support the pensioner for the rest of his or her life.

IT hardly makes it seem any fairer or comprehensible to them to learn that the raid on their savings was given to multinational hoteliers, Michelin-starred restaurants and international drinks company to boost their profits. Last time I bought a pint in a Dublin hotel I paid €6.60 – God knows what it would have been if my pension fund had not been raided to subsidise this nectar. By the way, JD Wetherspoon’s, which recently opened in Ireland and benefits from the reduced tax rate, charges half this for a pint of lager – and many family-run Irish pubs are not far behind.

And it’s good to know that our savings are helping to keep prices just below €100-a-head for dinner in the country’s top restaurants. The Government then boasts that the VAT cut has boosted business. Surely that means it’s self-financing and that, logically, to take pensioners’ money isn’t necessary.

It also ignores the massive boost tourism has got from the collapse of the euro. British visitors now get €14 for every £10 they spend here. What’s not to like?

As for the numbers of Canadian and US visitors, which we are told are also up, again the tax rate gets the credit. There’s no acknowledgement of the part played by emigrants coming back to visit their families. Also, American numbers have jumped because the dollar is nearly worth a euro.

Maybe the British stag parties enjoying the benefits of reduced tourist taxes will spare a thought for the Irish pensioners who can barely afford to go out and are subsidising their jolly in Ireland.