John Dolan: If we really want to spend billions on better society, we have to raise pension age to 70

THE big difference between being a newspaper columnist and being a politician (aside from the financial rewards, naturally!), is that I say what I want you to hear, and they have to say what you want to hear.

How else to explain the fact that election manifestos, grandstanding speeches and Programmes for Government are chock full of ideals and positives: explanations of how your life will be so much better in every way, if only they were running the show.

While the detail about how this is all going to be paid for, how much, and by whom, is swept under the carpet — which is then rolled up and locked away in a dusty cupboard in party HQ.

In a way, you can’t really blame the politicians — collectively, voters need to have more cop-on and understand that if a party’s promises of riches for all, with no tax rises or cuts in other areas, are too good to be true, then. maybe, just maybe, they are too good to be true.

The three-pronged coalition’s Programme for Government was a case in point, being notably low on negative vibes.

When you consider we are coming out of a pandemic, which may come back with a vengeance at any time, and our economy has just flatlined for four months, you would think there would be some concrete steps in place to confront this economic elephant in the living room head on.

We’ll need to borrow €30billion this year and must come up with a plan on when we can start to pay this back in the medium term — assuming we proceed with the short-term financial stimulus most of us accept is required to jump-start our economy.

But no, the money tree is in full bloom and the Programme for Government was like a fairytale, in which every member of society will live happily ever after.

Lots more housing? Yes please!

Extra staff and beds for the health service? No doubt!

Raised taxes or cuts elsewhere? Er, who said that?

I appreciate that we all want a better health and housing system, but where will the money come from to fund it, if our tax revenue inevitably plunges in a recession?

We can’t keep borrowing billions forever more, or the folks bailing us out will get antsy.

This drive to constantly accentuate the positive and spare us any bad news is exacerbated by social media, where millions blithely ‘like’ every positive party pledge and give an angry emoji to any attempt to fund it.

You wouldn’t treat your personal finances with such ignorant disdain, so why ignore reality when it comes to state coffers?

There were precious few examples of how extra revenue would be raised in the Programme for Government — carbon tax was one.

However, the one cost-saving measure which really should be implemented relates to our pension age — and this is where the Programme missed a trick.

The current pension age in Ireland is 66 and there had been a plan in place to increase this to 67, and then 68 in 2028. Most experts believe this will eventually reach 70 in the coming decades.

Kudos to Fine Gael for actually recognising this is an area where Ireland can save large sums of money, which can then be used to fund the better society we all want.

However, somewhat out of the blue, the pension age became a General Election issue in February and Fianna Fáil pledged to keep it pegged at 66. Who knows how much of a role that played in Micheál Martin’s party gaining the most seats on polling day?

We’re told this issue was a big bone of contention in the coalition talks right up to the final minutes, until politicians ended up kicking it down the road, and announcing a deferral.

The question of whether to raise the age will now be examined by a newly-established commission on pensions, which will report back in 12 months, with any action it recommends taken within six months of that report.

This was a folly, a classic example of failing to grasp a nettle, just because a few people will get stung. A raising of the pension age in the years ahead is almost inevitable.

It’s generally a given in western society that the age will have to rise to perhaps 70 in the coming decades, as more and more of us enjoy healthy and longer lives.

I know many people in their late sixties and early seventies and they are all well able to do a day’s work, especially now that very few jobs are as physical as they were a generation or two ago.

Why put someone perfectly fit and able in mind and body out to pasture and pay them a weekly pension when they reach the magic age of 66, as though they can no longer contribute to the workplace? It doesn’t make sense.

Sure, I can understand why people approaching that age who have made plans for retirement would be a bit miffed if it was raised by a year just as they were approaching the finish line, but, really, what’s another year — or even two or three?

I only turned 50 last year, but am fully expecting that my working life will continue well past 67 — and why shouldn’t it?

The point here is that the state pensions of the future will swallow vast amounts of coffers in the western world — money which should be targeted at other areas.

It can’t be jam for everyone. In the ideal world, we’d all retire at 60 — strike that, we wouldn’t work at all! The magic money tree would provide for all.

In reality, we, as a country, have to make difficult, unpopular decisions and prioritise certain areas, and that means politicians stepping up to the plate.

Around a fifth of us are now over 65 and the number will triple in the next 30 years.

When people talk about a pensions timebomb, they’re alluding to the fact that in another generation or two there will be just two working people for every pensioner. And these pensioners will be livjng into their eighties and beyond as health treatments improve.

What a burden we will place on that younger generation, if they have to pay sky-high taxes to find gigantic state pension costs!

It’s reckoned that a girl born today has an even-money chance of living to be 100 — can we afford to pay future centenarians child benefit and pensions for more than half their lives?

It would be easy — and yes, populist — to say yes, and to make the child benefit payments and pensions the most generous in Europe to boot... but we really need to inhabit the real world when it comes to public finances.

Other EU countries are taking action in this area and most have plans to raise the retirement age to 67 or 68 in this decade.

Recessions like the one caused by Covid-19 only increase the pressure to move it back.

A recent report by Legal & General in the UK claimed that one person in six aged over 50 and in work thinks they will delay retirement by an average of three years because of the pandemic, with one in ten expecting to spend an extra five years or more in work.

What kind of cloud cuckoo land do we inhabit, if we think we in Ireland can resist the pressure to row back the age of retirement?