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RAISING INCOME taxes in order to protect those at risk of poverty may not be a priority for the Government at this time of economic gloom. That is why a report from the Economic and Social Research Institute (ESRI) makes for refreshing reading. It suggests the necessary funding can be raised through reforming the pension system and limiting tax relief to the standard rate for everyone. Savings of €1,500 million a year are envisaged.

It would take political courage to adopt this approach. There has been a great deal of talk in recent years about reforming the pension system. It was urged by the Organisation of Economic Co-operation and Development and is supposed to be high on the Government's "must-do" list. But because 80 per cent of tax relief goes to top income earners, there has been a marked reluctance to give offence. Now, however, economic circumstances and changing demographics may encourage a more assertive approach. And Minister for Finance Brian Lenihan has indicated the Government's first priority is to protect the most vulnerable in society.