asked the Minister for Tourism and Transport the basis on which the CIE subsidy for 1987 was determined; the increase in unit costs assumed; the rate of increase in fares assumed in deciding the estimate; and if he will make a statement on the matter.
Ceisteanna-Questions. Oral Answers. - CIE Exchequer Subvention.
5.
Since 1984 the general Exchequer subvention payable to CIE has been based on a formula which determines the subvention as 50 per cent of CIE revenue or 33? per cent of expenditure, whichever is the lesser. At the same time there was imposed on CIE a requirement to reduce the board's expenditure by 2½ per cent in real terms annually between 1984 and 1988. In late 1984 it was decided to extend the 2½ per cent reduction in expenditure for a further year to 1989 but, in the case of mainline rail expenditure, the reduction was increased to 3.7 per cent annually between 1985 and 1989. The purpose of these arrangements was to reduce CIE dependence on the Exchequer while, at the same time, providing a firm basis for CIE financial planning.
Since the introduction of the formula the CIE subvention has been based on 33? per cent of expenditure, a figure calculated on the basis of the board's 1983 expenditure, adjusted for inflation over the relevant years, and after allowing for the deductions required in respect of expenditure. To date the formula has worked successfully.
On the basis of the formula, the subvention for 1987 would amount to £98.421 million. Because of the general financial stringency, the previous Government fixed the allocation at £96.421 million, a reduction of £2 million. The Government, on coming into office, saw no alternative to adopting the figure of £96.421 million.
The breakdown of that figure between the three subsidiary companies is as follows:
Íarnrod Éireann, £74.671 million; Bus Átha Cliath, £17.250 million; Bus Éireann, £4.500 million.
Unit costs and levels of fares are matters for consideration by CIE in preparing their budgets.
If the object of the exercise is to reduce the subsidy to CIE why is the subsidy for the bus portion up 6 per cent or 7 per cent in this year's estimates?
I did not quite catch the Deputy's question.
Why has the subsidy been increased this year by just over 6 per cent?
The overall subsidy?
No, the subsidy to the Dublin bus company?
As I have stated, the object of the exercise is to reduce the cost to the taxpayer. There are a whole lot of skeletons in the cupboard in regard to the financing of CIE which are not relevant to this question and about which this House will hear when I introduce my Departmental Estimate.