Labour has accused the Government of adding €75 million to the cost of the SSIA scheme by fuelling pre Budget speculation it was about to set a cap on contributions.
The Minister for Finance, Mr McCreevy yesterday told the Dáil that the expected cost of the SSIA scheme had been increased from €525 million to €600 million. Mr McCreevy said there was evidence 'that significant numbers of account holders recently raised their monthly contributions.'
The Labour Party spokeswoman on finance, Ms Joan Burton, said "The rush to increase SSIA payments was a direct result of pre-Budget spin that Minister McCreevy was about to cap contributions to SSIAs. In the run-up to the Budget, the Minister had ample opportunity to quash that speculation, but chose not to do so."
The result is a cost to the exchequer of €75 million next year, and probably at least €300 million over the life of the scheme, she said.
"This must be the most expensive and irresponsible piece of news management in the history of the state. The Government deliberately create expectations of a harsh budget, in the hope of generating 'budget not as bad as expected' headlines," she added.
Ms Burton said the Government's "wag-the-dog" approach created a rush to increase contributions to SSIAs at huge cost to the State.