I move: That the Bill be now read a Second Time.
The annual Appropriation Bill gives statutory effect to the departmental Estimates for the supply services, both non-capital and capital, including all Supplementary Estimates that were voted and approved by the Dáil since the enactment of the previous Appropriation Act.
This year's Bill appropriates to the various services set out in the Schedule, the sum of £7,199,991,000 comprising the estimates totalling £6,991,629,000 as set out in this year's revised post-budget Book of Estimates and Supplementary Estimates totalling £208,362,000. As usual the Bill also authorises the use of certain departmental receipts amounting to £917,581,000 as Appropriations-in-Aid.
I should like to point out that although Supplementary Estimates of over £208 million have been passed by the House this year, this does not mean that Exchequer spending is overrunning by that amount. As Deputies will no doubt have noticed, the 1992 Abridged Estimates Volume which I published last Tuesday shows the provisional outturn for total voted services at £7,143 million, some £57 million lower than the total amount appropriated in this year's Bill. This reflects of course the fact that savings in certain spending areas will help defray the extra resources required on those Votes for which Supplementary Estimates were needed. I will return to the emerging budgetary position for 1991 later.
Apart from giving statutory effect to the Estimates, the Appropriation Bill has another vitally important function. That is, it provides a statutory basis for calculation of the "four-fifths" issues which the Minister for Finance is authorised, under the Central Fund (Permanent Provisions) Act, 1965, to make from the Exchequer towards meeting the cost of the following year's services during the period before the Dáil has an opportunity to consider and pass the various individual Estimates.
This allows for the smooth continuation of services from one year to the next. If the Appropriation Bill is not passed by both Houses of the Oireachtas before Christmas, the provisions of the 1965 Act could not apply and there would then be no statutory authority to spend voted moneys in 1992, at least until the Dáil resumes.
This year the Appropriation Bill is also being used to make a technical amendment to the Provisional Collection of Taxes Act, 1927. The amendment is set out in section 2. The necessity for this section arises out of the proposal, contained in the review of the Programme for Government, that the Dáil sits on Fridays. As Members are aware, under the Provisional Collection of Taxes Act, 1927, the Dáil can impose taxes by Financial Resolution, but taxes imposed in this manner will lapse unless they are ratified by being incorporated in the subsequent Finance Act.
So as to ensure that this House is afforded the right, within a reasonable time, to debate and examine in detail taxes imposed by Financial Resolution, the Provisional Collection of Taxes Act imposes strict deadlines on the passing of the subsequent Finance Act. If these deadlines are not met, taxes imposed by Resolution on the preceding budget day will lapse. These deadlines are: (i) The Dáil must complete the Second Stage of the Finance Bill within 30 sitting days after budget day and (ii) the Bill must be signed by the President within four calendar months of budget day.
As I said, the necessity for the legislation contained in section 2 arises from the proposal that the Dáil should meet on Fridays. Up to the present, the practice has been for the Dáil to sit on three days each week. If the Dáil is now to sit on Fridays, there will be four sitting days per week and the 30 sitting day rule would leave insufficient time to prepare the Finance Bill for presentation to the House.
Up to the present, with three day sittings per week, the "30 sitting day" rule allowed a Minister for Finance about 12 weeks to prepare the Finance Bill. The budget is normally on the last Wednesday of January and 30 sitting days after this day amounted to ten weeks of Dáil business. Taking account of a break for St. Patrick's Day, ten weeks after the last Wednesday in January invariably overlapped with the Easter recess. So depending on the length of that recess, the Minister for Finance normally had 12 or 13 weeks to present the Bill to the House. If the House is now to meet on four days per week, the 30 day rule would allow no more than seven to eight weeks to prepare the Bill. The legislation could not be prepared within this timescale.
No doubt Members will wonder why the Bill could not be ready in eight weeks. The process of preparing the Finance Bill is as follows. Every proposal for inclusion in the legislation has to be examined in the greatest detail by my officials. All foreseeable problems, whether problems of principle or of administrative feasibility, must be solved satisfactorily. This process involves close co-operation with the officials of the Revenue Commissioners and in certain cases, with officials of other Departments. Each proposal is then submitted to me for approval. When I have considered, and amended or approved, a proposal, officials of the Revenue Commissioners prepare a preliminary draft of the proposed section. This is sent to the parliamentary draftsman and a text for each section of the Bill is prepared. When this process has been gone through for the 100 or more sections that normally comprise the Bill, the draft legislation is assembled and submitted to Government for consideration and approval.
The Bill must then be printed and checked. It has to be published in time to allow all Members of this House time to examine it before the Second Stage is taken. It would be my firm wish to have the Bill ready for this House as quickly as possible after budget day, but it would be unrealistic to undertake that it could be got ready in less than 12 weeks or so than it normally takes.
The intention of section 2 which we are now considering is to accommodate a move to Friday sitting while continuing to afford the Government 12 weeks to prepare the legislation and to have the Second Stage taken.
However, a rigid 84 day rule would not be practicable. Because of the variability of Easter, there would be years when an 84 day rule would allow only nine or ten weeks for the preparation of the Bill, as the House would be in recess when the 84th day elapsed. Because of this, the legislation before the House provides that if the House is in recess on the 82nd, 83rd or 84th day following the budget, the Second Stage must be passed within five sitting days of the resumption.
As a consequence of changing the "30 day rule" to an "84 day rule", it is necessary to provide for a situation where the House is dissolved between budget day and the passing of the Second Stage. Under the "30 sitting day rule", were the House to be dissolved, a problem does not arise. By definition the House is not sitting and so for the purposes of the Provisional Collection of Taxes Act, no sitting days elapse. Under the proposed "84 day rule", however, a dissolution of the House would eat into the 84 days and it could happen that Financial Resolutions would lapse as a consequence. Therefore, section 2 (b) provides that should the House be dissolved, the period of the dissolution will be added to the time limits, that is, the "84 day rule" and the four month rule will also be extended by the length of the dissolution.
I now want to return briefly to the main purpose of the Bill — the appropriation of moneys to the various services provided in the Estimates, and to put the 1991 expenditure figure I mentioned earlier in the wider budgetary context. In speaking to this House last night on the Take Note motion on the 1992 Estimates, I referred to the international uncertainty against which the 1991 budget was set.
My predecessor, Deputy Albert Reynolds, made it very plain at budget time this year that the budget was based on certain critical assumptions — it was assumed, for example, that the international slowdown would restrict our growth rate to no more than 2.25 per cent — a dramatic reduction on the growth achieved over 1989 and 1990, which had averaged over 6 per cent per annum. No-one tried to disguise the risk that the international downturn could be worse than had been allowed for, and that this would adversely affect us. Attention was drawn to the manner in which such a slowdown could have repercussions for unemployment and therefore public expenditure. We now know of course that the recession in the UK and the US has been much deeper than anybody had anticipated.
When the end-June Exchequer returns were published it was abundantly clear that problems were emerging on the budget both as to expenditure overruns and revenue shortfalls. On the receipts side, significant shortfalls were evident in tax revenues. While on the expenditure side, the economic slowdown was increasing unemployment costs due mainly to the virtual cessation of emigration. These factors, together with some slippage emerging on other fronts, especially health, left the Government facing an overrun of at least £200 million at that time.
While some of these factors were outside our control and had to be provided for, the Government were firmly of the view that the threatened level of overrun had to be addressed in a decisive way so as to reduce the impact in 1991 and to mitigate the adverse knock-on effects for the 1992 opening budgetary position. The Government, therefore, set in train a wide-ranging and detailed line-by-line examination of 1991 expenditure allocations, and other non-tax areas to see where savings could be made to help alleviate the overrun then emerging. The result of this examination was a package of adjustment measures of over £100 million. This resolute action by the Government has helped contain the budgetary drift this year to a level well below the threatened overrun of £200 million emerging at mid-year. I am confident that the outturn on the EBR can be held to about 2.5 per cent of GNP as compared with the initial budget target of 1.9 per cent. In reality, of course, the proceeds from the Irish Life flotation will bring the actual EBR well below the budget target of 1.9 per cent of GNP.
Firm control of the public finances remains a Government priority. We have again demonstrated our resolve in this regard with the publication of the 1992 spending Estimates earlier this week which show continuing restraint on spending. Continued firm control of spending is an essential precondition for achieving the Government's medium term target and it is my firm intention to ensure that these targets are attained for the benefit of all.
