Ireland’s official Savings and Investment Account (SIA) has been a talking point in media and political circles for months now.
Tánaiste and Minister for Finance Simon Harris first raised the idea back in February.
Irish savers could soon plough billions of euro into a tax-efficient, State-backed vehicle that would better the paltry deposit rates offered by the main banks, he said.
“The only people who can actually make a bit of money on their investments are the uber wealthy,” said Harris at the time. “Now, I want the middle classes to have an opportunity here ... This is about making their money work for them.”
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The proposed scheme has received a huge amount of media coverage – and Harris has spoken about it on what seems like an almost weekly basis.
Yet, it is mid-June and the overall shape and composition of the scheme have yet to be settled. Will it be like the Swedish model first mentioned by the Tánaiste – or will it be more like the British Individual Savings Account?
Harris was unclear last week, saying he and his department officials were still assessing the options. Some of his officials are known to be keen on the British model.
Along with criticism that the savings plan will only benefit the already wealthy, Sinn Féin and the Social Democrats have added the delays and apparent uncertainty surrounding the plan to their ongoing political campaigns against Harris.
They have long targeted what they call Harris’s “broken promises” and a tendency to offer media-friendly soundbites and initiatives over actual delivery.
Mary Lou McDonald’s party has highlighted pledges made by the Tánaiste over the years. Among them: promising in 2017 that no child would wait more than four months for scoliosis surgery, and suggesting in 2024 that Fine Gael would abolish student fees and lower taxes.
The Social Democrats have honed in on Harris’s failure to deliver on his own housing targets – saying it was part of a “long tradition” of this Government’s leaders making promises they cannot deliver.
Of course, Harris’s supporters will point out that several of these pledges were made in campaigning mode in advance of a general election and the reality of coalition government means no one party can implement everything it wants. They might also say this is where the luxury of being in Opposition lies.
“He strikes me as very well-meaning – but he does make mad claims,” says Gary Murphy, professor of politics at Dublin City University.
“In the general election leaders’ debate he promised he would bring people’s children home from Australia. I remember watching it and thinking: ‘Jesus Christ what is he talking about?’ He says things that are only going to land him in trouble. Over the next few years of Government he maybe needs to taper that.”
Murphy points in particular to the scoliosis example, believing it unwise to vow an end to the waiting list for surgeries.
“That was a touch of inexperience – to promise something not in his gift to deliver ...he does tend to talk and make suggestions that he doesn’t follow through on.”
He views the current repeated raising of the SIA by Harris as a bit of “kite flying” in an effort to put some distance between Fine Gael and its Coalition partners, Fianna Fáil. It is this dynamic which, he says, may drive many of Harris’s media pronouncements.
However, Aidan Regan, professor of political economy at University College Dublin, says Harris deserves plaudits for his handling of the media.
“I think he is pretty savvy with the media and how the news cycle works,” he says. “You can set the media narrative and story and that is what matters in the highly media-ised world we have. It keeps the party in the news with a positive story.
“But, again where is the delivery, the outcome? I never see it.”
Regan says a focus on media messaging – as opposed to delivering meaningful policy reform – is a system-wide problem.
[ Harris’s savings scheme looks more and more like a sop to Irish financeOpens in new window ]
He compares the current Irish political system to a “technocracy” where the massive influx of windfall corporation tax has meant politicians can comfortably throw money around and avoid having to undertake any big policy initiatives.
This lack of ideological direction among the Government parties means politicians such as Harris instead spend much of their time worrying about keeping the media fed, he says.
“I don’t think it is unique to him – we are badly served at the moment by our political class,” says Regan.
“You need politicians willing to break a few eggs, step on people’s toes, think beyond the next tweet. Our politicians just operate to the media cycle.
“The way our Civil Service works, we have a very traditional Westminster policymaking system, but even the Brits have moved their system on more than we have.”
He identifies what he sees as zero incentive for taking risks or big steps.
“[Civil servants] are fundamentally dependent on the leadership coming from the minister and the government. If you don’t have a minister or a taoiseach that really wants to drive something forward then nothing will happen.”
Harris, however, views the SIA plan as a big idea that can be delivered.
A spokesman for the Tánaiste said the establishment of such accounts was a process by its very nature that would take some time and that Harris had made clear early on that it was to be a budget measure.
He said the Department of Finance had been “engaging with relevant stakeholders on an ongoing basis”, including bank representative groups, financial service groups, consumer representative bodies and insurers.
“Extensive work” was going on, said the spokesman, and “the Tánaiste looks forward to announcing the full details on budget day”.
What Harris has said about his savings plan
Sunday, February 15th: Harris tells RTÉ that the Government is drawing up a savings strategy to give people a greater return.
Thursday, February 19th: At The Irish Times Business Awards, Harris says “in the coming weeks” he plans “to bring a strategy to Government” setting out “the principles and the framework” guiding its approach to the Savings and Investment Account.
Friday, March 13th: Harris tells The Journal that he finds the Swedish model of a low tax “very interesting”.
Tuesday, March 24th: Harris tells Cabinet that capital gains tax will not apply to scheme.
Tuesday March 31st: Speaking at the Annual Savings and Investment Forum, Harris raises the idea of “a real opportunity to empower individuals to make better use of their hard‑earned savings”.
Sunday, April 5th: Harris writes in the Business Post that the plan will “extend benefits enjoyed by the wealthy to everyone”.
Monday, May 4th: He announces he will have a meeting with his Swedish counterpart “with the proposed new Investment Account for 2027 and the Irish presidency as our focus”.
Thursday, May 7th: Harris hits back at criticism, saying the savings account will have a cap on deposits.
Wednesday, May 13th: He outlines plans for the scheme at a meeting of the Fine Gael parliamentary party.
Tuesday, May 19th: At the Banking and Payments Federation Ireland conference, he says the savings account will be launched on budget day and available in 2027.
Monday, June 8th: Harris says the plan is aimed at people from “middle Ireland”.
