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Dáil Éireann debate -
Tuesday, 24 Nov 1998

Vol. 497 No. 2

Book of Estimates, 1999: Statements.

I welcome the opportunity provided by this debate to review the 1999 spending Estimates published on 11 November. I welcome it because it is important that the Government's expenditure policies are explained and understood to the greatest extent possible. In particular, it is important that there is a full and open account on the record of how the Government has succeeded in meeting its commitment to limit the growth in current spending to 4 per cent.

I reject any criticism that the figures in this year's Estimates, or the presentation of those figures, have been manipulated in any way so as to create a misleading impression of what the true increase in spending is. In my statement on the publication of the Estimates on 11 November, I set out in a clear and unambiguous way the basis on which the annual average increase of 3.9 per cent represented by the 1999 Estimates was calculated. The figures were presented in an open and transparent manner. There is nothing to be gained by attempting to conceal the facts and, as I said when presenting the Estimates, whether one agrees with the Government's 4 per cent limit, there can be no doubt as to the basis on which that limit is measured.

I am glad, therefore, to have this opportunity to set out clearly again for the Dáil and the public the Government's approach to public expenditure and how it is reflected in the 1999 Estimates. The Government takes very seriously its commitment to limit expenditure growth. If the growth of public spending is not controlled, we risk undermining the prudent budgetary policies which have done so much for the success of the economy in recent years. The Government is not prepared to let this happen.

Before I set out the position on the Government's spending plans for 1999, I would like to review the general economic position since it provides the context within which budgetary and expenditure policy must be seen. On the whole, 1998 has turned out to be another year of very strong economic growth, well balanced between exports and domestic demand. It is very encouraging that strong growth in output has again been translated into strong growth in employment. Employment has risen by about 4 per cent for the second year in a row. There are more than 100,000 more people at work now than there were two years ago. Unemployment has fallen to below the EU average.

Over the past five years or so, Ireland has managed to combine very strong growth with modest inflation. However, exchange rate movements in 1997 and the early part of this year saw a significant depreciation in the Irish pound's trade weighted exchange rate. Largely as a result of this depreciation, there was a pick up in inflation here from 1 per cent in August 1997 to 3.2 per cent in August of this year. Since then, inflation has fallen back to 2.9 per cent in October and should fall further in the coming months. However our inflation rate is still well above the EU average and there are inflationary pressures in the housing sector and in terms of labour shortages and wage pressures.

As we prepare to join EMU in less than six weeks' time, it is vital that price stability be maintained so as to sustain our international competitiveness at a time of slower world growth and very low inflation in our trading partners' economies.

Our economic assessment for 1999 and the following two years will be presented in our first stability programme which is being prepared in accordance with the terms of the Stability and Growth Pact. This will be published on budget day, 2 December, so I do not propose to go into detail on this today.

It is already clear, however, that next week's budget is being framed against the background of more than usual international economic uncertainty. The IMF and OECD have reduced their forecasts for economic growth for next year. In short, we are facing a significant slowdown in growth in the United States and the UK, two of our most important trading partners, and greater uncertainty regarding the international economic scene.

As a small and very open economy we cannot expect to remain immune from a world economic slowdown. We are likely to see its impact in terms of slower export growth and a slower rate of growth in foreign direct investment into this country.

Our budgetary planning and our expectations generally must take account of these realities. We cannot prudently base our plans for the future on the assumption that the extraordinary rates of economic growth we have seen in the past will go on forever.

I do not wish to discuss the 1999 budgetary position today. On budget day I will outline the economic and budgetary prospects for next year and up to the year 2001. The economic success we have achieved is based on sound budgetary policy and on the consensus between the Government and the other social partners. Prudent fiscal policies have allowed the Government to reduce taxation and to increase spending on key social programmes.

Stable budgetary policy will become even more important in the new environment which we will be entering on the establishment of the euro on 1 January next. This will mark the beginning of a new phase for the Irish economy with new challenges and also new opportunities. Ireland must be in a position to take advantage of these new opportunities. The maintenance of prudent and stable budgetary policies will be crucial in ensuring that we can do this. In these new circumstances, firm and effective control of public expenditure will play a key role.

If we want to make certain that significant reductions in taxation can continue to be delivered over the medium to long-term and that the competitiveness of our economy can continue to be improved through wage moderation and strong social consensus, the growth in public spending must be contained within reasonable limits.

I use the word "reasonable" deliberately. I am aware that there is a perception in people's minds when the phrase "control of public expenditure" is mentioned, a perception of severe cutbacks in public services and the hardship which that entails for ordinary people. However, I can assure the House that this Government's commitment to the control of public spending does not and will not result in such cutbacks or hardship for the public.

This Government fully accepts that our society faces many social and economic pressures. Many sections of our community continue to feel excluded from the general economic progress of recent years and the increased wealth which this has created. I assure the House that neither I nor the Government are complacent about this. On the contrary we are acutely aware of these problems and the need to ensure that they are addressed in a fair and equitable manner.

As the economy grows and more resources become available, it is inevitable that there will be pressure to increase spending on improving public services. The Government is constantly faced with demands from strong and vocal interest groups seeking more resources. It is simply not possible to meet all the demands that are made. It must be recognised that there must be prudent limits on the amount of resources we can commit to improving public services. This is why the Government's programme includes a commitment to limit the increase in net spending to 4 per cent on average over its lifetime.

I am satisfied that this objective strikes the right balance between the requirements of a tight budgetary policy, particularly in the context of our participation in EMU, and the need to provide real additional resources to meet pressing social and economic priorities. The Government knows that if expenditure plans do not strike this balance it will be all the more difficult to sustain the progress of recent years.

I am satisfied that our approach to controlling spending is a concrete expression of the Government's desire to see that economic progress is accompanied by real social advance for those in genuine need.

I will now turn to the Government's expenditure plans for 1999.

I want to stress at this point that the overriding aim in the Government's consideration of the 1999 Estimates was to ensure that the commitment to limit the annual average increase in net current spending to 4 per cent over the lifetime of the Government was respected. This has been achieved.

The 1999 Estimates show net current expenditure as defined in our programme, increasing by an annual average of 3.9 per cent in 1999 over the 1997 outturn. Budget day spending measures will add somewhat to expenditure. However, the Government's planning and preparation for the budget are based on adherence to the 4 per cent limit.

The 1999 Estimates also provide for a very substantial increase in capital expenditure. Exchequer capital spending will increase by almost 27 per cent in 1999 over 1998. The increase in 1999 follows a similar large increase in 1998 which will bring the cumulative increase in capital spending to 58 per cent over the two years. The Government is determined that the continuation of strong economic growth in the future is not put at risk by deficiencies in our infrastructure. Public capital investment has to be increased to ensure that bottlenecks which could hinder growth and development are removed. The level of increase in capital expenditure in 1998 and 1999 underlines the Government's commitment to public investment which will help to sustain the growth and development of the Irish economy over the medium to long-term.

I now want to review briefly 1998 spending and set out the position on 1999 expenditure. My remarks today on both 1998 and 1999 are based on the figures published in the Abridged Estimates Volume on 11 November and take no account of any budget day spending changes.

The Abridged Estimates published on 11 November included summary tables showing the latest assessment of the 1998 outturn for each Vote. As the 1999 budget will be announced on 2 December, it is appropriate that the Dáil and the public were given in the Abridged Estimates Volume information about actual emerging 1998 position. The outturn figures given in the volume include spending which will require Supplementary Estimates for which the Government will be seeking Dáil approval before the end of the year. As the general note at the front of the Estimates Volume indicated, the 1998 outturn figures reflect present knowledge and they have to be revised. Present indications are that the outturn figure for the total net voted current spending will be somewhat higher than that published in the Abridged Estimates. However, it is expected that the outturn will still be lower than the original Estimate.

The 1998 Revised Estimates Volume provided for total net voted current spending of £11,020 million. This was an increase of 6.6 per cent on the 1997 outturn. The figures published in the Abridged Estimates indicate that net voted current expenditure in 1998 is estimated at £10,991 million, £29 million lower than the budget figure and 6.3 per cent higher than 1997.

The Government has had to face pressures for increased spending in a number of areas this year, the main one being public service pay. It has been possible, however, to keep overall net voted current spending within budget due to lower spending in some areas, most notably on social welfare.

The main changes on the budget day figures are as follows: as I have already mentioned, the pay bill is estimated to be £131 million higher than originally expected. The main reasons for the increase are the Garda pay agreement and the Garda and prison officer overtime which, together, will add an extra £80 million to the original Estimate on the Justice Group of Votes. As a result of this and additional costs in other areas, the Exchequer pay and pensions bill for 1998 will be 9 per cent greater than the previous year. Extra spending of £29 million will arise in agriculture and food, primarily because of the package of measures approved by the Government to support farmers. Spending on social welfare will be significantly lower as a result of lower than anticipated numbers on the live register and increased PRSI receipts.

There has been much comment in this House and elsewhere since the Abridged Estimates were published on the position of health spending in 1998. The Minister for Health and Children and I have explained the position at great length to the House and I do not intend to go over this ground again today. I will simply repeat the fundamental point that the gross allocations of the Department of Health and Children in this year's Estimates will be fully applied to improving the health services. It is absolutely incorrect and misleading to suggest that moneys allocated to health agencies will remain unspent.

The 1998 Estimate for capital expenditure was £1,948 million. The outturn is expected to be £1,928 million, some £20 million lower. The main changes on the Estimate are that £22 million education capital was allocated to allow for the primary and second level schools building programme, an extra £13 million was provided for IDA building grants and for the county enterprise boards and lower spending in other areas resulted in a reduction of overall spending of £20 million.

I will now outline the 1999 current supply service expenditure Estimates. The abridged Estimates volume shows that total net current supply services spending will increase from an estimated outturn of £10,991 million this year to £11,939 in 1999, an increase of £948 million. Of this increase, £301 million, or one third, is to cover additional Exchequer pay and pension costs next year and the balance, £647 million, is for additional non-pay costs.

In 1999 the Exchequer pay and pensions bill will amount to £6,077 million, an increase of £300 million, or 5.2 per cent over the projected outturn for 1998. This includes provision of £130 million for general round increases under the terms of the Partnership 2000 pay agreement and a further £58 million to cover local bargaining increases under Partnership 2000. There will be a reduction of £66 million due to retrospective payments during 1998 in relation to various local bargaining settlements under the terms of the Programme for Competitiveness and Work. Other factors, including the cost of service improvements, will add a further £179 million to the bill. The forecast outturn for 1998 is £5,776 million, an increase of 9 per cent over the 1997 figure.

The Exchequer pay and pensions bill represents 51 per cent of total net voted current expenditure in 1999. The significant increases in the Exchequer pay and pensions bill in recent years and the fact that it represents over half of all net current voted spending demonstrate clearly that containing the growth of the public service pay costs is crucial to the Government's efforts to control public expenditure.

The costly series of PCW local bargaining settlements have been a major contributory factor in the increase in 1997 and 1998. For example, in 1997, the settlements with nurses and paramedic grades in the health services added about £100 million to the bill, and in 1998 the settlements with the craftworkers, Garda and Defence Forces have brought significant costs. The PCW local bargaining process has only now effectively drawn to a close, although the terms of the PCW expired 16 months ago in the public service. Only a small number of claims covering about 5 per cent of Exchequer funded employees, remain to be resolved. I expect that the bulk of these will be finalised by the end of this year.

Each Department and office of State's Estimate in the abridged volume includes provision for the 1999 cost of pay increases due under Partnership 2000, both the cost of living increases and the 2 per cent local bargaining increase. As a consequence, there will be no Vote for increases in remuneration and pensions in 1999, unlike in previous years. This change, which is part of the new pay management and control arrangements I announced in the 1998 budget, means that Civil Service Departments and other public service employing organisations are allocated funding now for the cost of the agreed Partnership 2000 terms and will have to deal with whatever claims arise during 1999 within those allocations. There will be no central contingency fund to fall back on, as has been the case under the PCW.

It is essential that the terms of Partnership 2000, including the explicit limit on the cost of local bargaining increases, is adhered to within the public service if we are to continue to manage the public finances and the economy in a balanced and responsible way.

In the Abridged Estimates, the Government has allocated a net additional £647 million for the improvement of the non-pay element of expenditure programmes in 1999. Some £224 million of this increase is accounted for by the establishment of a new local government fund next year — I will come back to this shortly. Leaving aside this technical item, the increase in non-pay current expenditure in 1999 is £423 million. Some of the key policy areas to which this is allocated are as follows.

An additional £121 million is being allocated to Health. The Government is very much aware of the pressures on the health service. This substantial increase will be used to fund hospital services and to continue to develop the important initiatives launched by the Government in areas such as child care and mental and physical handicap. The Social Welfare Vote includes an extra £80 million to cover the full year costs of the improvements made by the Government in the 1998 budget and other technical factors, for example, demographic changes which will lead to increased numbers on certain schemes next year. The gross increase is higher since savings are expected to come from a fall in the live register, reflecting recent trends.

An extra £69 million is being provided for Education, including provision for a significant increase in capitation grants for primary schools from £50 to £60. This means that capitation based funding for primary schools will have increased by over 40 per cent in two years. Major increases have also been included to provide services for children with special needs, and both second and third level funding will be increased significantly. There will be further significant growth in the number of third level and apprenticeship places. Defence will receive an additional £32 million, mainly for new equipment for the Defence Forces.

As I mentioned, the increase in non-pay current spending in 1999 includes an extra £224 million on the 1999 Estimate of the Department of the Environment and Local Government as a result of the introduction of the local government fund from next year. This change arises from the new arrangements agreed by the Government for the financing of local authorities. Because of its one-off nature, it is necessary to adjust for this item in the calculation of the percentage increase in current spending in 1999. It is important, therefore, that the changes which are being introduced are set out as clearly as possible so that the rationale for making the adjustment is apparent to, and understood by all.

At present, local authorities receive the proceeds from motor tax revenue and their expenditure on non-national roads is paid for from money voted by the Dáil. With effect from next January, a local government fund will be established to fund the non-national roads programme and to make a contribution to the general costs of running the local authorities. The fund will have two sources of income: receipts from motor taxation and a contribution from the Environment and Local Government Vote. Some £270 million is provided in the Estimate for the fund in 1999.

Current spending on non-national roads is now provided for in the 1998 Environment and Local Government Vote. Adjusting for this, the net increase in current spending in 1999 is £224 million. To allow a valid comparison between spending in 1998 and 1999, the £224 million must be taken out of the 1999 figures for net voted current spending. For similar reasons, to allow proper comparison of the 1998 and 1999 capital spending figures, £178 million in capital spending, which is included in the 1998 Environment and Local Government Vote but which will be financed from the local government fund in 1999, must be deducted from 1998 voted capital expenditure figures.

The significant increase of almost 27 per cent in Exchequer capital expenditure next year reflects the Government's determination to provide the social and economic infrastructure which is essential to underpin Ireland's continued development. In 1998, capital expenditure is forecast to be £1,928 million. In 1999, the Government is providing £2,216 million, an increase of £288 million. This additional spending is being allocated to a number of key development programmes

Education and Science will receive an extra £18 million. Of this, £12 million is for the primary building programme, with a further £3 million for special schools. The Government has decided to allocate an extra £26 million to Agriculture. Some £19 million more is being provided for Leader and INTERREG and the Western Development Commission is being allocated an extra £3 million, more than double its 1998 allocation.

Tourism, Sport and Recreation will receive an additional £21 million next year to fund a wide range of developments. Grants for sports and recreational facilities are being increased by £5 million. An additional £6 million is being provided for tourism development grants and £6 million is being allocated for the development of a 50 metre swimming pool.

Capital spending on the Public Enterprise Vote is set to rise by £90 million in 1999, reflecting in large part the Government's decision to make a substantial investment in public transport, with particular emphasis on taking immediate steps to meet Dublin's traffic problems. CIE will receive £36 million to support its investment programme.

An additional £212 million is being provided for Environment and Local Government, taking account of the adjustment for the changed arrangements in local authority funding. Housing will receive £28 million extra. An additional £90 million is being provided for water and sewerage schemes. The Government has decided that significant additional resources are required to meet road transport needs. Accordingly, road projects are being allocated an additional £54 million in 1999.

The allocation for Health capital spending is £155 million, over 5 per cent higher than the 1998 outturn, which is significantly higher than that for 1997.

I am satisfied that the very substantial increase in capital expenditure which the Government has provided in both the 1998 and 1999 Estimates is fully justified. The very strong economic growth in recent years has placed severe pressures on the country's infrastructural capacity. Significant investment is required to ease these pressures. It is also essential to the healthy and balanced development of the country that some of the resources generated by growth should go to improve social facilities and amenities.

I want to explain how the 1999 expenditure plans fit in with the limits on spending to which the Government is committed. The Government is committed to limiting the growth in net current expenditure to 4 per cent a year on average for the lifetime of the Government. As I explained to this House previously, net current expenditure for the purpose of the 4 per cent limit is defined as net voted current expenditure plus spending on central fund services, which is mainly the cost of servicing the national debt.

As I have made clear to this House also, particularly in the context of its consideration of the Estimates for 1998, the base to be used in calculating the average increase in net current spending for the purpose of the Government's 4 per cent limit is the 1997 outturn. Much criticism was directed at the Government when the 1998 Estimates were published. It was said that using the 1997 outturn as the base was misleading in view of the fact that significant additional expenditure was incurred at the end of 1997 which had the effect of increasing the 1997 outturn, thereby reducing the percentage increase in 1998 and the annual average increase in subsequent years. As I indicated in this House when the 1998 Abridged Estimates were being debated, this criticism was totally misplaced. The payments that were made at the end of 1997 were completely legitimate and proper.

I set out the position on these payments clearly and fully when the 1998 Estimates were published and again when they were debated in this House this time last year. The reason I mention this now is that I have heard the same criticism on the use of the 1997 outturn repeated this year in relation to the 1999 Estimates. Having explained the position fully last year, I have no intention of going over the same ground again this year. As far as I am concerned, the matter has been dealt with comprehensively and the criticism shown to be unjustified.

Nobody outside this House believes that.

The winners write the history books.

Central fund expenditure is not included in the Abridged Estimates since Dáil approval for it is not required each year. We therefore have to add the figures in the Estimates volume to those for the central fund. I would emphasise that the figures for the central fund for 1999 are provisional.

On the basis of the 1999 Estimates volume, and the provisional figures for central fund services, total net current spending will rise by an annual average of 3.9 per cent over the 1997 outturn. This is after adjusting for the changes in local authority funding which I mentioned earlier. While additional spending measures, mainly on social welfare, will be announced on budget day, I can assure Deputies that the Government's decision making for the budget is being done in a spirit of determination that the 4 per cent limit will be adhered to. Exchequer capital spending in 1999 is increasing by 26.6 per cent over the forecast 1998 outturn after adjusting for the changes in local authority funding. The cumulative increase in capital spending in 1999 over 1997 is 58 per cent.

We have enjoyed another year of strong growth. The rapid expansion in our economy has created significant strains in our infrastructure and is increasing people's expectations and demands for the delivery of more and better public services. Our continued economic success will depend crucially on the maintenance of prudent budgetary policies, particularly in the context of our participation in the single currency. Control of public expenditure has a very important role to play in this regard. What is required is a disciplined approach which aims to contain the increase in day to day spending to reasonable levels, while at the same time providing sufficient additional resources to meet the legitimate demands of those in genuine need. A significant boost to public capital investment is also required to ensure that the economy can continue to develop efficiently and effectively. This is the approach on which the Government's expenditure plans, as set out in the 1999 Abridged Estimates volume and summary public capital programme, are based. I can assure Deputies that the same policy will be firmly implemented throughout the Government's term of office and will secure Ireland's continued economic progress in the years to come.

I wish to share my time with Deputy Jim Higgins.

Is that agreed? Agreed.

At the outset of my contribution to this debate on the Estimates, I would like to pose a number of questions. Is the Minister for Finance proposing to spend too much money in 1999? Is he proposing to spend more than he promised? Is there any sign he is reordering his spending priorities or, to put it more simply, is his additional spending going on the right programmes? How much will he add to his expenditure plans on budget day? Will he do a better job in controlling the cost of the public sector pay bill than he did in 1998? Is the Minister merely responding to the expenditure demands of other Ministers or has he an overall plan to guide and control public expenditure?

It now appears to be an impossible task for the Minister for Finance to hold the increase in current expenditure to 4 per cent. The Government commitment to do so was a clever political ploy and, for this political purpose, net current spending is defined as the aggregate of net voted current expenditure and expenditure on central fund services. Consequently, savings on debt servicing allow the Minister to spend significant amounts in excess of 4 per cent in net voted spending. The bonus of additional PRSI receipts from the increased number at work also assists the Minister. We can see this clearly in an introductory note on page 2 of the Book of Estimates.

The Minister's annual average increase in total net current spending over the 1997 outturn over the two years 1998-9 is 3.9 per cent but this represents an increase of 6.5 per cent in net voted expenditure or, to use the words from the Book of Estimates, the "underlying expenditure" is 6.5 per cent. The increase in total net current expenditure in 1998 over 1997 was estimated last year at 3.7 per cent. The Minister's average for the two years was 3.9 per cent so, even on the basis of the Government's ambiguous election promise, the increase this year exceeds 4 per cent. That is not the end of the story; the Minister has departed from the practice of recent years and has not made any allowance in the Estimates for increases in social welfare payments on budget day.

In his first budget last year, the Minister committed an additional £200 million of spending on budget day. Last year's social welfare package was meagre and the Minister is expected to do better this year at extra cost. The Minister for Health and Children has already promised additional budget day spending on waiting lists and the needs of the handicapped. The Minister of State at the Department of Foreign Affairs has hung a threat of resignation over the Government if the allocation for overseas development aid is not significantly increased. It seems fairly certain, therefore, that the Minister's increase in expenditure on budget day will be greater than the £200 million he spent last year. If we allow for a very modest increase to £240 million, this will add a further 1.5 per cent in expenditure terms to the Minister's Estimates resulting in a year on year increase of 5.6 per cent according to the Minister's clever political way of calculating the figures or, to quote the Estimates, on the "underlying increase" in net voted expenditure of 8.1 per cent. The real increase is 8.1 per cent when the Minister spends the savings he is making on the central fund and the extra PRSI receipts. Perhaps the Minister has a trick up his sleeve to balance budget day increases in expenditure through further savings but we have not yet received an indication of any planned significant expenditure cuts for budget day.

This is not the end of the expenditure story. The Minister has based his Estimate on a very benign view of the 1999 increase in public service pay which he estimates at 5.2 per cent. The Minister does not make any allowance for additional spending to settle the variety of public service pay disputes on the industrial relations horizon. Last year, the Minister estimated that the 1998 increase in public service pay over 1997 would be 6 per cent. He was appalled at the size of this increase, blamed his predecessors for it, described it as unsustainable and made its reduction an absolute priority. The 1998 outturn was 9 per cent, a figure the Minister has confirmed on a number of occasions, most recently in his speech this evening.

The 1998 increase in public service pay was 9 per cent — the Minister's Estimate was 6 per cent. Doubtless, circumstances outside the Minister's control made it very difficult for him to contain the pay bill but past success is the best predictor of future success in most areas of human endeavour. Failure in the past makes one very uneasy about the future. The Minister for Finance failed to control the public service pay bill in 1998. Is it likely he will be more successful in the industrial relations circumstances which present themselves as we move into 1999? I do not believe he will succeed in keeping the pay bill increase at 5.2 per cent so an additional amount should be added to the 8.1 per cent in net voted spending for 1999 which is already contained in this Book of Estimates in order that a realistic view of the actual expenditure in 1999, as represented by the 1999 outturn, can be arrived at.

The Minister pointed out that the Government's commitment is to contain the annual average increase in total current expenditure using the 1997 outturn as a base. He will probably indicate that he intends doing some wild and wonderful things to contain current expenditure in next year's budget and that of the following year, that is if he is still Minister for Finance.

I wish to remind the Minister that the political calendar moves on, something he knows very well as an experienced politician. Whatever chance a Minister for Finance has of controlling public expenditure at the start of an Administration, he has little hope of doing so once a Government passes its mid point.

The Minister is planning to spend almost £1 billion extra on current programmes next year. The 1999 outturn will show an increase of over 9 per cent on 1998 if the Government's pay strategy succeeds. If the Government gets into serious pay difficulties the increase will exceed 10 per cent. This is an extraordinarily high level of expenditure when a CPI figure of less than 3 per cent is accepted for 1999 and when most commentators are predicting that inflation, having peaked at 3.2 per cent in August and which is now under 3 per cent, will continue to decrease somewhat during 1999. Even if we allow for double digit growth figures in GNP for 1998, it is still an extraordinary amount of money to be spending on the current side. No doubt there are huge demands on the Minister for Finance to spend more. The job of the Minister for Finance in the 1980s was to reduce public expenditure. In the 1990s the emphasis moved to controlling public expenditure and ensuring the economy grew. I believe that now a Minister's actions will be judged in the context of the input to social justice and equity of his spending programme.

The biggest problem in the Minister's approach is that he is showing huge increases in public expenditure but is not improving the services for which the public pay. A very clear illustration of this may be seen in the Minister's introduction of the 1999 Book of Estimates. In reviewing current expenditure for 1998 he pointed out there were some increases over the Estimate which were going to be offset by substantial reductions. The Minister continued by saying what the main increases would be:

On pay it is estimated that expenditure will be £131 million higher than originally estimated. The Garda pay agreement is the largest single factor in this. The pay provision in the Justice Vote is £80 million higher than the original Estimate to cover the Garda pay agreement and additional overtime for both gardaí and prison officers. To offset these increases savings are likely to be made on spending across a number of Votes. Of these the largest savings of £117 million arises from social welfare, mainly as a result of a reduction in the live register below the expected levels and increased PRSI receipts. Health non-pay expenditure is also estimated to be £42 million lower than the original estimate, largely because of increased health contributions. Health programme spending will not be down.

Here we have the nub of the problem. It is as good an example as we are likely to get of the Minister's failure. Expenditure on pay will be £131 million higher than estimated in 1998 and this will be offset by savings in social welfare and health. The savings will not be used to give better social welfare payments to the elderly, the poor or families with children. Neither will they be used to reduce the national debt. Rather they will be used to balance the pay bill which the Minister for Finance and the Minister for Justice, Equality and Law Reform failed to control.

In current economic circumstances the Government should spend more to improve the health services, eliminate poverty and help the disadvantaged. However, even when the Estimates plan huge additional expenditure the bulk of it is used to reinforce existing spending programmes and to cover overruns in pay. This is the principal failure of the Government and the Minister. He is spending more, with plans to spend an extra £1 billion on the current side this year. In the medium term he is probably spending far too much. However, the problem is that the Minister and the taxpayer is getting very little return for the extra expenditure. The taxpayer continues to pay more for unsatisfactory social services. The waiting lists in hospitals are returning to 40,000 persons, the level they were last at when the previous Fianna Fáil-Progressive Democrats Government left office in 1992. If the Minister for Health and Children did the honest thing and released the figures from his Department we would probably find they have reached 40,000. However, we were told that releasing the figures was not in the national interest.

The poor are sinking deeper into poverty and increasingly there is an underprivileged, disadvantaged underclass which the decisions of the Government are institutionalising. Against this background there has been no attempt by the Minister to examine, re-evaluate or prioritise spending programmes. The Estimates campaign proceeds along traditional lines. The Department of Finance seeks to impose spending limits on the line Departments and the line Departments at official and ministerial level fight for increases on every spending programme as if they were all equally important. A bad compromise is reached, the no policy change increases are factored in and some development funds for expanding services are included. In the Department of Health and Children and the Department of Education and Science, for example, the development funds are in the pay Votes because these services are principally improved through the employment of additional staff. The Minister then fails to control the pay bill and much of the expenditure intended to improve the services is hovered up by the rising pay bill.

The Minister for Finance must re-evaluate all spending programmes. To do so effectively he must change the manner in which the Estimates are agreed between the Department of Finance and other Departments. The people best positioned to re-evaluate spending programmes are those at departmental level who run them. Currently, they have no incentive to do so. I propose that in preparing next year's Estimates the Government should allocate an envelope of money to each Department to cover the no policy change position of the Department. Departments should be asked to prioritise their spending programmes within this envelope of funds and those which show savings by prioritising spending programmes should be rewarded with additional funds for the delivery of additional and improved services within their remit.

Many of the difficulties arise from the Minister's inability to control the pay bill, something for which the Minister can thank many of his Government colleagues who were totally irresponsible in Opposition. The Minister for Justice, Equality and Law Reform led the charge of the gardaí towards industrial action while the Minister for Health and Children actively fanned the anger of the nursing unions. The Government is now reaping the whirlwind. Special pay claims by public service unions must be processed in a new way. It seems the policy of the Department of Finance since the early 1990s is to break the relativities between different groups of public servants. This was a legitimate policy but it has not worked.

Leapfrogging and attempts at leapfrogging have continued and the attempts under the PCW to ring-fence pay increases to particular categories of workers through the use of productivity and flexibility deals has been an abject failure. The lever of productivity has been used to get quite high special wage increases but little or no productivity is then conceded by the public service unions. The Garda deal which allowed one group of workers to negotiate a new claim under a phase of an agreement for which they had already completed negotiations has proven the last straw. Unless the Minister quickly deals with the small number of outstanding claims under PCW and succeeds in keeping within the pay parameters of Partnership 2000 in 1999, his estimate of a 5.2 per cent increase in the pay bill in 1999 will be well off target. I see no proposal from the Minister which gives grounds for optimism, while the Taoiseach's proposals have all the appearances of PCW mark II.

The Minister has again reaffirmed his intention of abolishing Vote 4 and distributing the special pay residual fund among Departments. Departments are supposed to deal with claims under Partnership 2000 and the local bargaining phase of 2 per cent with that money at their disposal. Most of the development fund provided for the Departments of Health and Children and Education and Science are going to the pay Vote. Better education requires more teachers. Better health services require more doctors and nurses. At the same time the Minister is saying that if the Minister for Health and Children has to pay more to the nurses in 1999 he is on his own as there is no contingency from the Department of Finance. He will have to pay it out of own resources. The bottom line on that arrangement is that there will not be money to pay for the extra staff. The claim that the health services will improve by employing extra staff is spurious because out of the same Vote, the Minister for Health and Children will have to settle his outstanding problems with nurses, ambulance drivers and various other people while the Minister has given an absolute commitment he will not get an extra penny.

I welcome the increase in capital expenditure. At present this country has the vital statistics of a modern economy. Under almost every heading, we are at the top of the international league table but this modern economy is running on the infrastructure of an under-developed country. Our roads and particularly our city streets are choked with traffic. Local authorities, particularly in Dublin, have insufficient serviced land to allow the building industry to provide affordable housing to young people. Untreated sewage flows freely into our lakes and rivers and our public transport grinds to a halt. Dublin Airport cannot accommodate its throughput of passengers.

At a time of unprecedented wealth creation, there was never a higher level of stress, frustration and anger among ordinary people going about their ordinary day to day business. It is high time a capital programme, designed to increase the capacity of our infrastructure, to meet today's needs and allow for the inevitable expansion of the future was put in place. The Government's response in addressing the infrastructural needs has been slow. Individual Cabinet Ministers seem to be afraid to make a decision. Many Ministers seem to think their function is to act as public relations officers for themselves and their Departments. The Civil Service is a fine body of men and women. However, they need policy decisions from Ministers and the Government before they can act. So far as I can establish, about half the Cabinet have yet to make a decision, even a bad one, since they entered Cabinet 18 months ago. This is the reason so many problems are not addressed and a significant amount of the additional capital being provided by the Minister for Finance will remain unspent at the end of 1999 or will be rushed at the end of the year into bad spending projects.

Everybody is aware that the inability of the Minister for the Environment and Local Government to provide additional serviced building land has weakened the impact of Dr. Bacon's proposals. The Minister grasped the nettle, brought proposals into the House and enacted the Finance (No. 2) Bill, 1998, which it was hoped would work. The failure has been on the supply side because the money which this House voted to the Department of the Environment and Local Government has not resulted in extra serviced building land in 1998. The bottleneck continues, demand is still out-stripping supply while the Minister for the Environment and Local Government wrings his hands and lectures us through the frequent press releases from the pinnacle of the Department which he occasionally inhabits.

Another example of this can be seen in the current expenditure outturn of the Department of Health and Children for 1998. The Minister for Health and Children did not plan the spending of the extra £65 million which came to him by way of additional health levies, which he was made aware of in mid-year. Some £32 million is shown as a saving on the Health Vote, a saving which the Minister for Finance, when he last addressed his press conference, said he would use to fund overruns in Garda and prison officer overtime.

I always appreciate the wonders of modern technology. It is helpful to Ministers that they do not have to continue rewriting scripts because with the word processor one can do a scissors and paste job which brings the salient part of one's speech forward for repetition in one's next speech. When this part of the Minister's statement at his press conference was brought forward into today's speech, the savings of £42 million in Health had disappeared from the word processor. It disappeared because the Minister for Health and Children was so embarrassed in this House that he went back to Government and said: "please let me spend it, I will be embarrassed if they say I have money left over". Everybody knows that six weeks from Christmas one cannot spend on patient care in hospitals because one needs to plan in advance. Instead the Minister gave the money to the health boards to enhance their pension funds which he considered to be light. What a way to behave? Bad Ministers who do not make decisions and who do not plan their budgets will end up in crisis. That is happening right across Departments.

The Government is fortunate that it lives in such good economic times. Half of the Cabinet would be threadbare if they were playing against bad economic circumstances. The Minister came into office 18 months ago with much goodwill from all sides of the House. For many years he had stressed the importance of controlling public expenditure and he sounded impressive. He talked a very good game. His record does not match his rhetoric and the political clock is ticking away. We will still wonder on budget day, even though the Minister can talk the talk, whether he can walk the walk.

That is a terrible one.

That is the key question. I wish to ask two questions arising from the Minister's contribution which I think were omissions. What is the Minister's estimate of additional numbers in the public service in 1999 over 1998? I presume he has made an allocation to the main Departments and has informed the Department of Health and Children, for example, that out of that extra money he has put into the pay Vote it can employ so many extra head of staff. If so, has he broken it down on the health care side — nurses, doctors, registrars, consultants?

There will be many consultants.

There will be many consultants in the Department because those Votes are very heavy, but not in the hospitals. There will have to be consultants for pension funds to see how they spend the Minister's Christmas eve largesse. Pensions are very important to people but are not a priority spend coming up to Christmas. The lead-in time for maturing pensions is long. The lead-in time while waiting for a bed to have one's heart fixed up is not as long as the lead-in time to a pension fund. In respect of the Justice and Education Votes will the Minister of State, Deputy Cullen, when replying, do a similar exercise on the number of extra gardaí, prison officers and teachers? Most of the development fund is in the pay Votes and I would like to have those figures on the record.

Another figure which would be of interest is the Department's estimate of inflation in the building industry, as measured by public service tenders. The Minister mentioned all the extra money which would be spent on capital to provide hospitals next year. He saved plus 5 per cent. I am of the view that year on year tenders for the provision of, or extensions to hospitals would have gone up by at least 15 per cent. A nominal increase of 5 per cent, on a capital vote in any sector, is falling well short of inflation as measured by successful tenders coming in on a square metre by square metre comparative basis. I would be surprised if that is not the case. While I welcome the capital expenditure increases he has made — they more than compensate for inflation and will enable Departments to carry out excellent work — he chose a bad example when he highlighted the Health Vote because 5 per cent extra on health does not give the additionality.

May I clarify that point for the Deputy?

I will give way.

The Deputy will remember from his time in the Department of Health that the Tallaght Hospital was being built and the underlying increase for spending in Health in 1997 was about £130 million, of which a large amount was for Tallaght Hospital. The underlying amount of capital spending was about £100 million. In the three year programme the Minister for Health put in £150-£165 million. The programme was agreed. It was a very significant increase in 1998 over the underlying increase in 1997 and previous years. The allocation for 1999 over 1998 should be looked at in relation to the 1997 figure.

I will let Deputy Rabbitte deal with the 1997 base argument as he is an expert on that matter. I agree that there was a significant decrease in capital spending on health in 1998 over 1997, however, the Government is not continuing that into 1999. The Government is showing a 5 per cent increase, and that is far off the inflation on tenders going to all Departments as I understand it.

If someone set out to deliberately devise a bad value for money exercise, one could not construct a worse failure than the Irish prison system. It fails under all headings. If the purpose of prison is to rehabilitate and to deter, the figures speak for themselves. Deputy Noonan has rightly laid emphasis on the public pay bill. Last June we debated the Estimates for the Department of Justice, Equality and Law Reform in committee, when the Minister assured us that there would be no problem with the blue flu and that there would no need for a Supplementary Estimate, funding would come from the marvellous contingency fund. Yet two weeks ago there was no money in the contingency fund, and we had to move a substantial Supplementary Estimate.

It is the same for the prison pay bill. The Estimate for prison pay in 1999 is £109,548,000, which is an increase of 16 per cent over the current year. That works out at an average of £41,000 per prison officer. The Minister confirmed to me last week by way of question that the overtime bill for the first ten months of this year for the prison service is £28 million, and £33 million over the full year. That is £12,378 in overtime per prison officer. Where is the rationale for that, let alone the fiscal restraint?

We have the ridiculous situation of having the same number of prison officers as prisoners, which is unique in the world. Overcrowded schools and hospitals must look with envy at the generosity of the staffing regime of our prisons, which is more like a babysitting service than a prison service. It costs £46,000 per annum, or £125 per day, to keep someone in prison, as opposed to £79 to keep someone in the relative luxury of the Burlington Hotel. The costs and staffing levels are bad enough, but we have very little return to show. The prison service gives an entirely negative dividend.

One is at a loss as to why the Minister for Justice, Equality and Law Reform has constantly refused to accept the promptings of Dr. T. K. Whitaker's report or his own Department's report on tackling crime, or the lessons learnt from international experience to move towards a more enlightened, more effective and more cost-efficient policy of penal reform. Negative penal policy seems to be an immovable cornerstone of the Minister's zero tolerance philosophy. In reality there is no rehabilitation or deterrent value. Even if the will existed, almost half of those sent to prison receive sentences of less than three months, while three quarters of all sentences are for less than one year. Where is the rehabilitation or deterrent here?

Of the 10,000 people who pass through the prison service each year, approximately 2,500 are jailed for non-payment of fines or civil debts, which is a waste of resources and prison space. In addition, seven out of ten people who go to prison reoffend on release. This underlines the theory that prison is an expensive way of making damaged people worse. Dr. Paul O'Mahony's study of Mountjoy Prison, published in June 1997, showed that 77 per cent of those surveyed had spent time in St. Patrick's Institution. Those surveyed had an average of 14.3 convictions or an average of 10.3 separate sentences.

At present there are 200 people in jail convicted of sex offences, but only ten are receiving treatment or therapy. Apart from the daily swelling of the ranks of convicted sex offenders, how can any Government allow 190 people with a proven propensity to reoffend to be released back into the community without rehabilitation, therapy or treatment? Treatment should be mandatory and intensive. The release of untreated paedophiles leaves the Minister open to the real possibility of substantial claims from the victims of such untreated offenders.

The Minister presides over a system in which Mountjoy, with an official capacity of 600 prisoners, is not only drug infested but has more than 800 inmates on any one day. They are sleeping in corridors and recreation areas. Yet 80 miles away, in Loughan House in Cavan, there is a prison with an official capacity of 90 prisoners but it has only 40 prisoners in residence. There are 50 empty prison spaces there.

In any commercial or social sphere of activity, the managing director presiding over such a farce would be fired for failing to take corrective action. The former Minister, Deputy Owen, commissioned 400 prison spaces in Wheatfield, a further 440 in Portlaoise, Limerick, the Curragh, Castlerea, St. Patrick's Institution and the new women's prison. The present Minister inherited a detailed report from Deputy Owen issued by a study group set up to examine the prison system in detail. That group recommended an overarching prison service board and suggested the draft heads of a Bill to give legislative effect to its recommendations. Such a Bill has not appeared, and it does not even appear on the Government's list of legislative priorities.

In the meantime, the present shambles continues. The Minister continues with his incarceration binge and now proposes building a further 1,000 prison spaces, presumably with a further 1,000 prison officers, at a cost of £110,000 per prison space and an operational cost of £46,000 per space, as well as a huge overtime bill. I am very surprised that the cold, clammy logic of the Department of Finance has not intervened here to bring some sense, order or economy to bear on penal policy.

The probation and welfare service has a mere 150 officers and deals with 5,000 offenders per annum at a cost of £2,000 per offender. The Minister's expert group recommended the appointment of 70 more officers three weeks ago, but he has ignored that recommendation in his Estimates. There has been a minimum inflation increase across the range of headings and a 23 per cent cut in services. There is no scope for developing drug treatment in prison or for treatment of sex offenders and there is no family law report. Not one family law report is produced by the probation and welfare service.

Offenders have completed 80 per cent of community service orders. This is a viable alternative that works, yet it is under-utilised. The Minister has refused to introduce attachment orders to end the wasteful jailing of fine defaulters. He has refused to introduce instalment payment of fines and to examine prison officer training to equip prison officers to deal with therapy and rehabilitation. The Minister refuses to embark on any imaginative alternative, and the result is that the taxpayer and society continues to carry the cost.

This debate is unique in some ways. It is the first opportunity to debate spending Estimates in the context of a significant budget surplus. For many years, until 1972, Governments of all hues operated according to a very simple dictum: one funded current services out of current moneys and one borrowed for capital purposes only. George Colley changed all that, and each Government until a few years ago borrowed for current purposes also. After the 1977-81 Fianna Fáil Government, the current budget deficit reached 10 per cent of GNP. This year we have an overall Government surplus of close to £1 billion and a current budget surplus of more than twice that amount.

These figures, and the measure of success we have experienced, would have been unthinkable only a few years ago. That success is not without its challenges or difficulties. The choices presented by success are no less important or daunting than those presented when the IMF was at the door.

We now have a real opportunity to create a fairer, more equal and more civilised society. We can bring our public services up to a standard we can all be proud of. We can tackle disadvantage and poverty in a way that can affect the standard of living of hundreds of thousands of our people. We can make provision for the future by building the physical and social infrastructure on which the community and we, as individuals, depend. The choice is real and stark. We can make this a country in which some rich people live, or we can make it a rich country. We can invest in the future or we can give ourselves a few pounds more in our pay packets now. We can build up our infrastructure in terms of our roads, railways and sewerage facilities or we can prematurely redeem the national debt. We can transform our schools and hospitals or we can put away the money for a rainy day. We can channel the benefit of economic growth into public services or we can channel it into private consumption.

The choice is between creating the basis for sustained economic growth and improved social provisions or giving a short-term benefit to a large minority of our people. We can do what is right for some of us, maybe even many of us, or we can do what is right for all of us in ten or 15 years' time. If we get it wrong and miss this opportunity — the Government is missing the opportunity — we will rightly deserve the condemnation of this and future generations.

Before we can assess the performance of the Government, the Minister and this Book of Estimates we need to know something about how the choices were made and what choices were made. On 3 November last I asked nearly every Department of State to let me have certain documentation relating to the Estimates process pursuant to the provisions of the Freedom of Information Act. I specifically stated in my letter that I required the information for the purpose of this debate. I made at least ten requests to ten Departments of State. In theory each Department has up to four weeks in which to send a reply, but as of today not one Department has sent me anything other than an acknowledgement of my original letter. Not one Department sent me a substantive reply, good, bad or indifferent. I am entitled, as is the House and the public, to that information. The House is entitled to know how the Minister decided to spend our money and the way he did so. I may be wrong, and I hope I am, but my guess is that some way will be found to deny us that information, at least in the short-term.

It has been suggested that the Estimates process is not a normal decision-making process with a beginning, middle and end, but an ongoing war, a battle that never finishes. If a Minister or a Department do not get a project through this year, they will seek to do so next year, the year after or the year after that. Because the deliberative process is ongoing it is not possible to tell the public what is happening, but the public is entitled to know what is happening. If the Minister for Health and Children were to decide to use his allocation to activate one project and thereby postpone another, the public is entitled to know that. The spending Estimates, the process of which this is only a very small part, are by far the most important part of the budgetary process. They are far more important than the minor changes that will be revealed tomorrow week.

For too long the so-called Estimates campaign has been carried on almost entirely in private, usually on a bilateral basis, between the line Ministers and the Minister for Finance. At the end of this private process the House is presented with aggregate spending figures which do not make sense to anyone. We are told that in this year's Book of Estimates the total block grant for the health boards is £1.7 billion. A breakdown of that figure is not given and we must rely on press statements from the Department to tell us what this means. That is not good enough. It is not acceptable that we should have to tune into the Fianna Fáil Árd Fheis, however entertaining that may be, to find out how public moneys are being spent. It is not good enough that we should have to put together a series of self-serving and self-congratulatory press statements from Ministers to find out what the budget or spending Estimates mean in terms of the level of services to be provided.

This problem is not new and it is not the peculiar choice of the Minister, though he is peculiarly complacent and self-satisfied about a system which serves only those who work it. I have spoken about this issue before and no doubt I will do so again. We all know what needs to be done to make the decision-making process more open, accountable and democratic, but the Minister has no intention of doing so. I do not intend to take up the time of House labouring this point.

In the Government's programme, the two parties committed themselves to a limit of 4 per cent on net supply services over the course of the lifetime of the Government. That limit and target does not make sense. I want to indulge the Minister, as did Deputy Noonan, by judging him on the basis of the standard he set for himself. A target of 5 per cent as a limit on capital spending also appears in the Fianna Fáil manifesto and the Government's programme. The Minister did not make any effort to adhere to that target which is good and, therefore, we need not detain ourselves further in dealing with it.

In last year's budget the Minister effectively also jettisoned the 4 per cent target for current spending by bringing forward nearly £0.5 billion of future liabilities into 1997. He effectively rigged the figures to make it look as if the 1998 increase was a good deal lower than it seemed. The Minister knows better than most that the real increase for 1998 was nearly 50 per cent higher than the 4 per cent he claimed at the time. Given the rather obvious nature of the doctoring he carried out last year, I am flabbergasted he tried the same trick this year of averaging out the net growth over the two years. We heard yet another bravura from the Minister this afternoon when he repeated that line. He seems to believe that the more often he repeats it the more likely people will believe it and he seems to believe his own line.

He went on to tell us that the Government is determined to stay within the 4 per cent average figure come budget day next week. Has he thought this through? Is he saying he will limit the increase in spending next week to £21 million or £22 million to keep it below the average figure of 4 per cent for the two years since he came into power, accepting the inflated 1997 base as the base of the calculation? I do not believe he intends to restrict increased spending next week to £21 million or £22 million unless he has some curious way of doctoring the books yet again or he has savings or cuts up his sleeve about which we do not know at this stage.

He said it was in the spirit of the promises he was making.

He will also take in a few bob.

That is different. That would be on the receipt side. That will not help him.

I do not want to labour this point but, given that the Minister has gone on about this at length, it is important to say that the figures are bogus and the promise is bogus, but it is also wrong and misguided. We need to have a limit on spending and to ensure we get value for money. There is a value in targets, but those figures need to be something more than figures that were picked out of the air in the context of a Fianna Fáil election manifesto with no obvious justification in terms of the economy, public finances or the need for investment. Target spending figures should be related to all those factors, but most crucially to our ability to pay. I and my party believe that spending targets should be related to the trend in the GNP growth rate with provision this year and for the foreseeable future for a small surplus. That would give us the flexibility and necessary resources while ensuring that we live within our means.

If we take it at its face value, the 4 per cent target tells us more about the Minister, Deputy McCreevy, than it tells us about our economy. It confirms and demonstrates his antipathy to public services and his hostility to public spending. I was struck by a formulation of words he used during his speech this afternoon when he spoke about the inevitable pressure and demand for improving public services, as if there was a band of Indians coming over the mountain. People are entitled to expect there will be improved public services and more money will be spent improving the services of which they avail when we can afford it. Why should they not expect that? I support their entitlement to expect that.

As politicians, we have a duty to respond to those demands because many of them are legitimate. Services, be it health services or services in education, are not up to the standards in the rest of Europe or to the standards people are entitled to expect at a time when we can afford to spend more money on them. The Minister spoke about this in fearful terms and that tells us a great deal about his priorities, his psychic and the way he approaches public spending. If we can afford to spend more money on improving the health services and ensuring the person, to whom Deputy Noonan referred, has a heart operation earlier, we should spend that money. We should be happy to spend it because it is a useful way of spending taxpayers' money.

It is interesting that public spending as a percentage of GNP is still one of the lowest in the European Union. Indeed, the money spent on public services has reduced substantially over the past two years, for example, on health services. This has not happened by accident. The Minister made it clear on more than one occasion that he wanted to reduce the role of the State and the relative importance of public spending. I challenge him to repeat that and spell out the consequences in terms of health, education and social welfare. Does he want to continue to reduce the public spending-GNP ratio and the tax take as a percentage of GNP?

The Minister had made the traditional arguments of the conservative right and he said he was proud of that. If so, I want him to spell them out again. One of the great fallacies which his attitude promotes is the notion that all spending is bad, has the same effect and is inflationary. This is complete nonsense. We could spend hundreds of millions on capital investment tomorrow morning with little or no inflationary risk even as defined by the traditional paradigm. Spending which is channelled into personal consumption is likely to have a different effect than money invested in infrastructure. Is anybody seriously suggesting that increasing the capitation grant for primary schools has the same potential inflationary effect as reducing the higher rate of tax? Does anybody believe that providing decent residential or day care for people with special needs will threaten future economic growth?

I will refer to individual Estimates. When I sought to question the Minister's officials a number of weeks ago before the most recent row about health spending, I was told the projections for next year were based on the assumption of the same level of procedures and service as this year. That is astonishing when hospital beds lie idle and temporary nurses have been laid off and are signing on. It is amazing that the Minister is satisfied to introduce an Estimate for next year based on the same level of service. How can he claim that is adequate?

He was very up front last week in putting the blame on the previous Government for introducing legislation which provided for a certain measure of budgetary discipline in the health boards. I supported that legislation and still do, but what has surely been shown is that the budgets are inadequate. The budgets need to be examined and a decision made on whether the provision to health boards should be increased so that they can increase the number of procedures. I expect the Minister to come into the House next week and tell us that an additional £5 million, £10 million or even £15 million will be provided to deal with waiting lists. That is not the way it should be done. The provision of additional moneys to deal with waiting lists as a "smartie" on budget day is not the way to deal with an obviously serious crisis in the health service.

In addition to the normal provision in the health service, significant moneys are also needed in a number of specific areas. This is one of the challenges which we, in this economic boom, are well placed to deal with. We can deal with drug rehabilitation, special needs and mental handicap. The plans were laid by the previous two Governments. The cost is known and we have a good idea where the requirement is in terms of the number of places. It can be afforded and should be done. The Minister should make a commitment to do it. Deputy Noonan, were he still Minister for Health and had those resources available to him, would be only too happy to put in place these plans and process to deliver the services needed.

Overseas development aid was debated in the House in recent weeks. It is an absolute disgrace that the Book of Estimates shows a 1 per cent or 2 per cent increase in overseas development aid. People, in times much worse than now made it clear that they expected us to live up our responsibilities to those who are less well off. It is nauseating even if it is easily explained. Perhaps, somebody took his eye off the ball or is playing political games but this is simply unacceptable. Ireland has international responsibilities to those who are less well off and it is not good enough that we must wait again for something to be pulled out of the bag on budget day in order to fulfil them.

Everybody accepts there are problems in Dublin in terms of public transport, yet what is the Government's response? A couple of weeks ago it allowed CIE to start borrowing money to deal with rail safety. Several months ago it announced that it would redistribute some of the Luas moneys to allow Dublin Bus to buy 100 extra buses and there is provision in the Estimates for 50 more. Dublin Bus is allowed to replace one fifth of its total fleet, a fleet which everybody believes is geriatric. It will improve public transport in Dublin, but not to the standard required. People still talk about two Luas lines when every Dubliner knows a comprehensive package is needed in ten or 15 years which will comprise much more than two lines. There is still only one quality bus corridor in place and others are at the planning stage.

I get no sense that the Government has any serious appreciation of the current crisis and how to deal with it. I recall the Committee Stage debate on the Finance Bill this year when the Minister in his own inimitable way threw his hands up and said that he gets caught in the traffic on his way from Kildare to Dublin every day but had been for 20 years and we just have to live with it. We must deal with it and the Minister has the resources to do so.

He gave commitments earlier this year and in last year's Budget Statement to move to multi-annual budgeting to provide desegregated financial envelopes for the next three years for each Department. Has that still to be done and why has it not been done with the Book of Estimates? It would have helped us a great deal to assess policy, if the Government set out those envelopes in the Book of Estimates where they would make most sense. We have difficulty in assessing the Government's choice when we do not know what is the overall budgetary position. I presume the White Paper will be published later this week and we will know whether the Government intends a huge surplus next year. I find it very difficult to debate spending when it is not known what the Government intends to do in terms of taxation reduction and surplus. While in Opposition the Minister made comments which he repeated to some extent last year about moving to an accrual method of accounting in terms of the Estimates. What is the current position?

I spoke at great length about the need to invest further in services and my colleagues who mark various spending Ministers will do likewise. I do not want to give the impression that we are in favour of a splurge of spending — anything but. I believe very strongly in value for money and that we need to look at each programme and decide whether we are getting value because I am sure there are many cases where we are not. Deputy Noonan described the process that remains and how it writes wastage into itself.

Last year Deputy Quinn, the Minister for Finance in the previous Government, set in train a programme of review of public spending by Department, programme and Vote. It was intended that this would be completed within three years. When I last asked about this one month ago I was told that eight out of several hundred programmes had been reviewed and reports had been received. It is crystal clear that despite all his rhetoric, the Minister is not committed to value for money or evaluating how we spend the public's money and we might as well be talking to the wall as looking to him to make choices that will make a difference.

These Estimates tell us a great deal about the Minister, Deputy McCreevy, the accountant, but they do not tell us a great deal about Deputy McCreevy, the politician. I get no sense of someone with a vision of how Ireland might look in ten or 20 years' time. He has no sense of purpose, no sense of planning, no sense of a politician who wants to do something. I certainly get no sense of a politician who has an appreciation of what is needed to tackle the inequality and disadvantage which are still endemic in our society.

Debate adjourned.
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