Harris to bring savings and investment account plan to Cabinet in ‘coming weeks’

By Bairbre Holmes, Press Association

Simon Harris has said he intends to take the first steps towards the introduction of a savings and investment account (SIA) in the next few weeks.

Speaking at the Irish Times Business Awards the Tánaiste and Minister for Finance said the scheme “is a key priority for me over the course of the next two budgets”.

“In the coming weeks, I intend to bring a strategy to Government that will set out the principles and the framework that will guide our approach,” he added.

Last week, the Banking & Payments Federation Ireland (BPFI) called on the Government to introduce a domestic savings and investment account.

Its chief executive Brian Hayes said such an account “would give Irish households a simple, internationally competitive way to build assets over time while ensuring more domestic capital is available for Irish businesses and the wider European economy”.

Typically, savings and investment accounts are tax efficient, long-term savings products where the deposits are invested in shares, bonds or funds.

The European Commission is encouraging all member states to establish SIAs, and they are already available in several EU countries.

Hayes said even partially replicating successful systems from other countries would “materially expand the pool of long-term domestic savings and support investment in strategic growth sectors”.

He said the current 33 per cent capital gains tax rate and the tax rules on Exchange Traded Funds act as “strong disincentives” to diversified long-term investing.

On Thursday, Harris acknowledged Ireland is “lagging behind other countries when it comes to supporting retail investment and long-term savings”.

He said there is “approximately €170 billion on deposit in Irish bank accounts today” and said it shows Irish households are good at saving but also said “this money is, to be frank, sitting idle.

“It generates very little return for the people who are consciously trying to build that bit of security for themselves and their families.”