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Now we face working until we are 70... if Government follows think tank advice

Independent.ie logo Independent.ie 13/09/2017 Independent.ie Newsdesk
Finance Minister Paschal Donohoe Photo: Tom Burke © Provided by Irish Independent Finance Minister Paschal Donohoe Photo: Tom Burke

A think tank is set to warn that pension age should be raised to 70, while also recommending that Budget Day tax cuts are postponed.

In a warning to Finance Minister Paschal Donohoe, the Economic and Social Research Institute (ESRI) will recommend a number of measures to avoid “the same overheating difficulty experienced prior to the 2007/08 financial crash”, the Irish Independent reports.

The body will tell a Dáil committee today that a “neutral budget” is needed to maintain economic progress. 

A presentation today will also advise the Government to plan for Brexit's impact, invest in social housing and introduced a vacant site tax.

There is also a firm warning that planning needs to get under way for dealing with an older population.

Among the ways to offset the cost of an aging population is the extension of the pension age to 70, keeping people in work for longer. 

The qualifying age is already set to rise to 67 in 2021 and then to 68 in 2028.

The body suggests the Government should at least consider “a mix of increased contributions, delayed payments and extended working lives”.

In relation to the upcoming budget the think tank says: “We believe budgetary policy should be neutral, in that it should not seek to actively stimulate or contract the economy.”

However, Mr Donohoe has indicated he intends to introduce some tax cuts which would be seen as an economic stimulant.

Speaking yesterday he said workers deserved some pay-back after “a period of shock and awe in relation to personal taxation”.

He has committed to bring forward a “broadly balanced budget” which will prioritise the self-employed.

“And in relation to personal taxation I believe the issues relating to the standard rate cut off point and levels of USC for people on low and middle income are areas where we have to make steady progress,” he said.

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