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Dáil Éireann debate -
Wednesday, 27 Nov 2002

Vol. 558 No. 2

National Development Finance Agency Bill, 2002: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Deputy O'Dowd to resume his contribution.

One of the big issues is how we fund the national development plan and how the national spatial strategy, which I understand will be announced shortly, will impact on the whole country. When speaking about this plan last week, my party's spokesman, Deputy Richard Bruton, raised the question of tolling roads, particularly bypasses.

In principle, I welcome and support public private partnerships. However, there is a conflict in my constituency of Louth as a result of the decision taken by the previous Minister for the Environment and Local Government, Deputy Noel Dempsey. It was agreed by the National Roads Authority that a toll road would be put in place around Drogheda. When completed, this road will have a significant impact on the town. When I asked the National Roads Authority why it was tolling a bypass without allowing "LH" or "MH" registered cars free access to one of the tollbooths that were planned for my town, I was informed that it would conflict with the aims of the public private partnership – which is to obtain as much money as possible from the users of the Drogheda bypass. That is in total conflict with the needs of the local community and the whole principle of bypassing a town.

If we are going to spend millions of euro on developing our road network, whether it be through the spatial strategy or the national development plan, we should not be tolling town bypasses. I regret this decision, which is a retrograde and negative step. The problem is compounded by the fact that the only proposed toll road between Belfast and Dublin is in the town of Drogheda. This is an absolute disgrace and it is unacceptable. The issue of local traffic crossing a toll or a town bypass – I refer, in particular, to locally registered cars driven by people travelling from one part of a community to another and using bypasses for their intended purpose of removing traffic from towns – should be reconsidered.

The other issue which arises is revolves around the national development plan, the spatial strategy and the purpose for which the national development agency will actually be raising funding. I accept that the agency will be raising funding for very important regional and national strategic tasks. The result of Government policy over the past five years is that if one is travelling by car from the Meath or Louth area to Dublin city, one will, as many people discovered this morning, enter a very congested traffic area. Many Members have encountered that problem. The difficulty is that the Government has not encouraged the construction of park and ride facilities.

There should be designated park and ride facilities at the entrance to major cities and urban areas where cars and other vehicles could be supervised throughout the day. I am sure there would be no problems because people would pay for this privilege. This would relieve congestion, particular that in Dublin, to a significant degree. I cannot understand why the traffic problem is getting worse and why the Dublin Transportation Office has failed to consider this singular issue, which would remove thousands of cars from city roads. It would relieve traffic pressure and make a significant difference in terms of allowing people to commute to work on time and be able to do their jobs properly.

When projects are being picked by the national development finance agency or by the Government, one of their major priorities on the approach roads to cities – particularly on those from the north of Dublin or counties Louth or Meath – should be to put in place park and ride facilities. It is a silly that traffic is backing up almost from Dublin Airport, through the Swords and other roundabouts. I know that there are new lanes on that road, but there is still a bottleneck. No matter where one goes, one comes into that bottleneck and that shows short-sightedness on the part of those responsible for the road.

There is another issue which arises with regard to the use the money collected by the national development finance agency could be put. People living on the east coast who travel on the rail network between counties Louth and Dublin are aware that, due to line capacity and signalling system constraints, only 13 trains per hour can pass through Connolly Station. That is the maximum number of trains that can be dealt with and it has already been achieved. There is no provision, under current policy, the national development plan or any other measure, which would allow for an increase in the rail capacity on the northern line. That is unbelievable and it makes no sense.

Government policy has facilitated the development of the urban sprawl on the east coast. Many thousands of new houses are being built adjacent to the northern line in counties Dublin and Louth and also in County Kildare. Why does the Government not increase rail capacity on the northern line by adding a new set of tracks? I presume such a development would have to be run underground, but we need a major improvement in our rail capacity in order to carry the thousands of people who need to commute. We want these commuters to use our rail rather than road transport. It will cost millions of euro, but delays mean that millions have already been wasted.

The length of people's working day is being extended because of delays. In my home town people get up as early as 6 a.m. to catch the 7 a.m. train into the city for work. They arrive home on the train late in the evening, squashed and fed up. There has been a development in the quality of transport. It has improved significantly, but capacity is being constantly reduced because more and more people are crowding in to smaller and smaller spaces. If one is at Pearse Street station at 5.13 p.m. on a weekday, one will see an unbelievable rush for the Drogheda train as thousands of people struggle, or fight in some instances, to get on it.

Some years ago, Iarnród Éireann and the Ministers who were Iarnród Éireann's masters at the time decided to increase the height of the railway bridges on the northern line. One could not travel over the bridges for some months as they were being altered. The bridges were not raised high enough to make a significant difference, however. The carrying capacity of trains could have been increased by 40% if bridges were raised by a slightly greater height, as we could have acquired double decker trains, similar to those seen in France and elsewhere in Europe. Passengers can sit comfortably on two levels of transport in such trains. Those who plan these massive investments must have their eyes closed in many respects. We need to examine the possibility of raising the height of bridges over railway lines so the capacity of trains can be increased by 40%. There are many positive aspects to the national development finance agency, but there are also some questions about what it is going to do. I do not know if lateral thinking is practised in Departments, but we have to think imaginatively about finance problems. Traditional views should be re-examined.

As our finances become scarcer, the important question of regional development should not be ignored. The national spatial strategy is due to be published tomorrow, so my remarks may be premature. The allocation of resources to regions that do not already have them is a matter that the NDFA will have to address. It is good and healthy that regions should be identified for growth and massive investment. The weakness of the spatial strategy, if what I hear is true, is that towns like Drogheda will be ignored. While I welcome the suggestion that Dundalk is to be given city status, the fact that Drogheda will not be mentioned in the report is disgraceful and unacceptable. The leaked copies of the strategy in The Irish Times and The Sunday Times suggest that certain towns, like Mullingar, Athlone and Tullamore, will be grouped. Such towns are valid centres of development and are worthy of increased infrastructural development.

Drogheda had a population of over 30,000 people at the last census and is the largest town in Ireland, so it is shameful that it should be ignored. A great deal of thinking needs to be done in relation to this Bill. Further significant and worthwhile projects will be undertaken in the context of the national spatial strategy, but I do not want places like Drogheda to be ignored. As it is so near Dublin, it is seen by some Ministers as a commuter town where people sleep but do not work. It is not being given priority status by the Government and is suffering due to the fact that it is included in neither the spatial strategy nor the plans for the greater Dublin region. Those who completed the Dublin plan have acknowledged that Drogheda needs to be included in future plans, but it is not part of any current plan.

I welcome the Bill. It is important that we consider the Bill against the background of the recent publication of the Estimates and the prevailing global economic situation. It is a fact that the international economy is in decline. The Japanese economy has suffered from deflation in the last ten years and the serious problems in the United States directly affect this country. Within the European Union, one need only examine the stagnation that has taken place in Germany's finances to understand that Ireland cannot emerge unscathed from the economic downturn. The international difficulties I have mentioned have clear effects on how we do our business. One of the national newspapers reported last week that New York is in debt to the tune of almost $6 billion, having spent huge amounts of money in previous years.

We need to concern ourselves with how we manage our affairs and with the economic strategies to be pursued. Our actions now, needless to say, will have an impact on future events. I said publicly some time ago that the Minister for Finance should be prudent when he compiles the budget. I still believe that he should be his own man and not bow the knee to vested interest groups. The Book of Estimates was presented in light of the negative impact of the global economy on Ireland, as I have outlined. Our economy is tightening considerably as a result of developments elsewhere. I ask that the funds given to each Department be spent in a manner that protects the less well-off in society. Expenditure should acknowledge the infrastructure deficits that exist throughout the regions. It is not too big a request to make to the Minister, Deputy McCreevy, and his ministerial colleagues who will spend the money.

When looking at how we can save money and deliver services in a more efficient manner in the future, there is a need to reflect on how the funds allocated to each Department are being spent. The Revenue Commissioners collect public money by way of taxation in an efficient manner. Revenue is the only sector of the public service that seems to be totally interested in information technology and it is improving its take from the taxpayer by virtue of its increased efficiency. The Revenue Commissioners offer incentives, in the form of an extended term of payment, to those who take advantage of on-line services when making payments.

Although taxes are collected efficiently, I wonder how efficient we are when we spend the funds that are collected. I urge that we seek greater efficiency in our expenditure. The value for money flag should be raised over Leinster House and every other Department and State agency. We should scrutinise how services are delivered in each Department with the aim of determining whether we are receiving value for money. If we realise that money is being wasted we should do something about it, as there is little point in spending it in an inefficient way. We must address the problems in the public service to ensure that services are properly delivered to customers and clients.

There are many examples of inefficiencies in areas like local government and health. We have spent too much time debating these issues in the House without making any changes. The day has come to tackle the big issue of public service structures to see if we are getting value for money. The National Treasury Management Agency is one of the better examples of an efficient public body. It was set up by the Minister to manage our national debt and has proved to be successful. I do not understand why we cannot achieve the same change in our public service, get value for money and bring about a better production line in the public services in the interest of the public.

The National Treasury Management Agency is a good example. It is recognised not just here but outside this country as being an efficient agency and has brought about significant change in our national debt. I would hate to be paying back the same amount we were six years ago in the current set of economic circumstances. The NTMA has done great things for the country. I am delighted that, because of this Bill it will be used, independently and within a legal framework, to help establish the national development finance agency which will draw on the expertise of the national debt management team and others. Far too often we set up agency after agency outside the House, not recognising that sometimes the work overlaps. When that happens, consultants from one field or another are brought in and paid a fortune. That will not be the case here. This team is established and we can make use of their expertise and years of experience.

The role of the national development finance agency is critical for our economy. We are asking it to bring together the best brains for managing finance on the various national projects we undertake. I hope that when it is established we will not see the overspend we have seen in other projects over the last few years. Over-spending of €14 million has been reported. It would not be tolerated in the private sector. Late delivery of services would not be tolerated either. A set time for the delivery of services and penalties for failing to comply with this is the norm in the private sector. That is the kind of commercial attitude we should be adopting in terms of the public sector – how the NTMA and the national development finance agency do their business.

The delivery of infrastructure will not move away from the various Departments – the responsibility for delivery of infrastructure is part and parcel of what each Department will do. The Departments will prioritise the lists and the national development finance agency will decide how best to finance any project or piece of infrastructure. Its remit should cover the kind of contract necessary, on behalf of the State, to deliver the project on time and within budget. Looking up various pieces of information on this Bill, I noticed that the public private partnerships – of which there are now more than 40 – have delivered their projects on time and within budget. This shows that the steps being taken by the Minister, Deputy McCreevy, are correct and helpful to the delivery of infrastructure in the State. They have been of assistance in terms of costings and cost effectiveness of those schemes. This is important in terms of supporting the flag and gaining value for money on behalf of the general public who pay taxes and to whom we are responsible. One of the big issues in the last Dáil and in this Dáil has been the number of agencies we put together outside the House, where their activities cannot be scrutinised. This was wrong. I am glad to see that we will be able to bring this agency before the Committee of Public Accounts, of which I am Vice-Chairman, and find out whether we are getting value for money.

An announcement is being made tomorrow about the spatial strategy. In setting up this agency we should not forget the importance of the regions. It is absolutely essential that they be developed. There is a need in my constituency for the completion of the ring road around Kilkenny. I ask that this agency set about prioritising projects, in conjunction with the Departments and look beyond. To obtain value for money we must look at what the project will deliver. The completion of the ring road in my own county would enable significant economic development. We have been lagging behind the rest of the country because the last Government and this one have not delivered. The reason for this was that another State agency, CIE, would not allow the land to be released so that the road could be developed. Now it is insisting on carrying out its own plans and doing a railway audit on one section, although the same audit will take place during the planning process.

There is a need to remove bottlenecks such as this from the system. The likes of CIE must be told that there are real people out there to whom we are responsible and that it must stop dragging its heels on that project. The railway works order of which it speaks, as it has done for the last two years, already forms part of the planning process. It is not necessarily the duty of this agency to deal with that problem. It deals with value for money. There is one kind of value for money which depends on how a loan or lease is organised but another kind of value for money would be achieved by telling CIE to get off the track and allow that development to go ahead. If money were made available by this Government tomorrow it could still not go ahead because of the planning procedures relating to railway infrastructure.

Another project which could alleviate traffic problems and would be helpful to the regions is the delivery of proper information technology infrastructure. Cabling is already in place underground in the south-east. Fibre optic cables have been laid by Eircom and Esat. I cannot understand why, when people are demanding faster access to the Internet, providers should not be made deliver on the cable that is already there. As I said last year, the Minister, Deputy McCreevy, should consider the possibility of introducing a tax on unlit cable. This already applies to derelict sites, so that the person who owns the site must either develop it or release it to the open market. The cables in question are not being lit because the companies are waiting for changes in the market. Meanwhile, the country suffers. It is not just about my constituency. It suffers because people travel in cars to Dublin every day who would be able to work at home if a proper service was delivered to them. If that service were available a huge number of people would gain access to the Internet, thereby reducing the cost of doing so. Until we play hardball with these companies we will simply not get any response from them.

Communities are a huge resource. Perhaps the best possible partnership is local authorities working with their local communities. Governments should recognise that work by investing in communities, and the last Government and the current Government, through its budgets, did that. It invested in family resource centres, after school programmes and the provision of infrastructure for the necessary support for local communities.

I was reading about Robert Putnam's book, "Bowling Alone", which gives a clear analysis of what is happening in large communities world-wide. They are losing their centres. Ireland had a centre, a sense of community and place, but because of the up-turn in the economy, it is being lost in terms of people's interaction with their community. We must revisit that structure and ensure that whatever finance is required by local communities is made available through existing structures and the unique partnership between national and local government and the community.

There are many lessons to be learned from the larger economies. Many of them are grappling with the fact that everyone is looking after number one and no one is looking out for the community. The only group for which I have lobbied consists of the marginalised, the elderly and the community. I have never sought tax breaks or tax shelters for anyone else. That group sometimes has no voice at local government level and it looks to this House to lead and to voice its concerns. That is what I do here and at local level and I see nothing wrong with that. It is a reflection on the dual mandate.

The Minister for Finance, the Minister for Transport and this new agency should examine the provisions for the rail network in the regions. It is a scandal that there is no commuter service from a city the size of Kilkenny. Years ago when I was in the transport business, Dublin was an hour and a half from Kilkenny. It now takes two and a half hours to get here and that is ridiculous. If this agency can change that it will be welcomed.

The attitude of CIE is that it conducted market research and concluded such a service was not required, even though two years previously, it told a committee of the House that it would deliver a service to Kilkenny once the logistics in Dublin were sorted out. They have not been sorted out. What kind of business is run like that? What business ignores the fact that bus after bus goes up and down the road to Dublin every day and it would be financially viable for there to be a rail service? What kind of company is the State running in CIE when we allow it to ignore that?

I welcome this Bill. It is an excellent initiative.

I wish to share my time with Deputy Allen.

I thought the Technical Group was next. The last Opposition speaker was also from the Fine Gael party.

The order I received indicated that Deputy Crawford was next.

I was told the Opposition speakers spoke according to a certain rota. I have a meeting soon and I was told we would speak now. It would be frustrating if we were to lose our slot.

Acting Chairman:

The order I have indicates that Deputy Crawford follows Deputy McGuinness.

A Fine Gael speaker is following a Fine Gael speaker. Can this be clarified with the Clerk of the Dáil?

Acting Chairman:

The order I have is the order that must stand.

This should be sorted out by the Whips in the normal way rather than in the House.

Acting Chairman:

I must run according to the list I have been given by the Whips.

Rather than keeping us here all day, could the Chair tell us when we are due to speak?

Where is the precedent for this in the rota?

Acting Chairman:

The choice of speaker rests with the Chair and I have the list ordering business. Deputy Crawford, who is sharing time with Deputy Allen, is to speak now. Deputy O'Connor will follow for the Government and then the Technical Group is next.

The Technical Group should be next in order on the roster of speakers. The previous speaker on the Opposition side was from Fine Gael.

Fine Gael has 31 Deputies.

Acting Chairman:

I must follow the order in front of me. I call Deputy Crawford.

In the explanatory memoranda, the Minister states that the purpose of the national development finance agency is to assist in the provision of cost effective finance. Will it do that or will it simply find a way round EU regulations? I welcome any means that will allow infrastructural projects to go ahead but we are play acting here because no group can borrow money more cheaply than the Government. We are using this as a means to get round the regulations.

The Minister stated that this Bill will help to maximise value for money and to assess the optimum means for financing projects. There are some great ideas in it but it would be more relevant if someone was brought in to ensure Departments were run more efficiently. Deputy McGuinness raised the issue of value for money and that is the main problem we face. The agency should help to raise extra finance, the legislation will be passed and we must view it positively. We hear every day, however, that although the Minister for Health and Children increased his budget by 130% in the five years of the last Government, the Minister for Finance says the whole sector is inefficient. We must examine the structures and ensure the taxpayer is getting value for money. I received a phone call at the weekend advising that an old age pensioner living in a country cottage must find €60 to finance her husband in a nursing home because the health board will no longer make finance available out of a budget of £7 billion. The people who suffer are the disabled, the aged and the poor.

The Government needs to look very carefully at other areas because many consultants and friends of the Government receive all sorts of funds. I was interested in the health Estimates which indicated that consultancies will be one of the areas to be cut back. I will believe that when we receive the results at the end of the year. The whole issue of overruns in the roads area is also clear. Many Members referred to the roads infrastructure where there is a 66% overrun in costs. Have we checked out if there is the same overrun in the UK, Germany or anywhere else, because we all work within the EU? Are we checking to ensure we are receiving real value for money? In Monaghan consultants will be paid €12 million just to get three bypasses ready for tender. Most of the money is already paid, yet not a sod has been turned. There has been no benefit to the roads infrastructure nor has there been any land purchase.

How the money is spent is just as important as how it is raised. Pension funds are being set up and funded for the long term. The money is being invested in foreign countries to allow them to use our money to build their infrastructure and so on. Perhaps this agency will be able to find ways and means of recycling that money to ensure we get the full benefits and that pensioners, together with others, will have the infrastructure they require.

Toll roads have been mentioned, which is another means of raising funds. Motorists and others must pay these tolls to private companies, which will raise money at a much higher cost than Government could. This is a way of getting round the fact that we have got ourselves into a situation whereby we must use massive borrowings, perhaps not directly by Government but indirectly.

What control will the House have over this new body? We are told it will have to come before the Committee of Public Accounts. If I, or any other elected representative, wish to raise an issue in regard to the workings of that body, can we ask a question directly of a Minister here or will we go back to the situation which pertained in regard to the NRA whereby we are told the question is not relevant to this House. It is relevant to the people I represent but is this another quango which will allow questions to go unanswered in this House? I appreciate the agency must appear before the Committee of Public Accounts, but that may be just once a year or once every two years. There may be queries that I or others might need answered in the meantime and I do not see anything in the legislation that will allow for this.

The health board legislation states that the Minister has overall responsibility. Going back to County Monaghan, because all politics is local, we were told that the health board is making the decisions regarding the winding down of Monaghan General Hospital and the possible winding down of Dundalk General Hospital. This seems to be the responsibility of consultants or anyone other than this House. I warn that we must be very careful when setting up this new agency that it will be accountable to this House, not just to the Committee of Public Accounts or the Minister. Members must have a right to come in here and ask questions.

I want to speak for a few minutes on the whole issue of the spatial strategy and the BMW region. If there is money to be got through this agency, I want to ensure the rural regions get their fair share. Despite the fact that so much money is being spent on the port tunnel, the M50 and the Southern Cross, we are still trying to drag people into Dublin city. There are answers to some of these problems which could be funded by public private partnerships. I have advocated on numerous occasions the building of park and ride facilities along the M50. I come to Dublin city on a regular basis and when I come on to the M50 bridge immediately there is a 40 mile speed limit and that continues into the centre of the city. Usually there is an empty bus lane beside me. Surely if there were major parking facilities at each of the M50 junctions, of which there are eight or nine, much of the money now being spent on Dublin city could be saved. People could get to work on time because they could use the Luas, the bus or other transport.

I understand the spatial strategy will be announced tomorrow, but will it be fair? It appears that towns like Dundalk on the east coast, which has a Minister, right along the Border to Sligo on the west coast will be lucky if they get a mention. This is extremely serious for an area which suffered so much during 35 years of conflict and was supposed to benefit much from the peace strategy. The peace strategy allowed for a cross-Border body to be set up in Cork. The BMW region must mean something to the people in that area and I urge that that be done.

The swimming pool in Monaghan town needs to be improved if the whole funding of the nation, the BMW region or the peace strategy is to mean anything. That project has been funded locally for 35 years and we cannot now get a commitment from Government for improvements. Monaghan was promised an Outreach college by the then Minister two years ago and nothing has happened. There is a lack of sewerage infrastructure in Monaghan town. INTERREG funding was provided for a brand new sewerage plant but the pipes for it are not in place, that is how ridiculous things are. There will be no funding available for the next couple of years, therefore I hope this agency can raise the necessary funding.

Government planning must be realistic. Because of the height of the tunnel major lorries will not be able to enter it. We must have forward planning. I hope the money which will be available through the agency, which I know will be voted through this House, will be used in a reasonable, practical and fair manner.

As has been said already, the national spatial plan will be published tomorrow in Dublin Castle with much fanfare but, unfortunately, it is approximately three years too late. The national development plan is in a shambles. The physical delivery of projects is way behind schedule. Costs have escalated substantially. Work under the roads programme, for example, will cost about 66% more than estimated. There have been delays because of poor planning and land bottlenecks and there has been runaway inflation, which is eating into the money taxpayers have provided. This Bill does not tackle the problem. A durable plan is required but this plan is off the rails at the halfway stage. The leader of Fine Gael, Deputy Kenny, this morning asked the Taoiseach if the Government would use some of the resources in the National Pension Reserve Fund to finance capital projects.

A bad idea.

This has significant attractions because it eliminates the present lunacy where €1 billion of borrowed money is channelled into foreign stock markets at a time when infrastructure projects are groaning for want of funding. It would ensure that any premium earned from tolling or charges for use of these assets would ultimately go to benefit the people in building up a reserve for their pensions. This Bill is poorly thought out and should be put on ice until the national development plan and the implications of the national spatial strategy are appraised, and there is an effective, deliverable and value for money plan.

It is important that the Minister for Finance give the House an explanation of what is happening with public private partnership projects. The House was told that there were more than 40 projects in the pipeline but only a small number have so far got off the ground. Answers are required to basic questions before anything is undertaken with regard to this Bill.

Public private partnerships cover all forms of innovative commercial partnerships between the public and private sectors, and cover what are known as design, build, finance and operate schemes. In such schemes, a private sector contractor provides the facility and takes on its long-term operation, as well as the risk in line with a specification set by relevant Departments. The purpose, we were told, was to provide better and more cost-effective public services and to improve value for money through effective partnerships with the private sector. We were told the Government was committed to raising educational standards through the partnerships, that a range of approaches to schools and health care facilities would be promoted through this programme and that there was a wide range of benefits to the Departments and the taxpayer. We were told that PPPs would be very attractive to Government because it would save substantial outlay on capital projects. If that is the case, why is there to be an embargo on PPPs by the Department of Finance. Why are we told through the grapevine that powerful people in the Department of Finance have such reservations about PPPs that they are doing everything they can to delay them and put them off the rails? Of the 40 partnerships, how many will be sanctioned this year?

An example of the negative attitude of the Government to these projects is the school of music in Cork city. The school is a dilapidated product of the 1930s or 1940s and needs to be replaced. The Minister for Education and Science in June 1999 said that a new school of music would be built in Cork. I understand that, under PPP, three companies were invited to bid and, in April 2001, the preferred bidder was announced. To date no decision to proceed with the project has been taken even though the Department of Finance was on the vetting group. To proceed with the project, the students and academic and administrative staff moved out of the school. They now occupy a hotel in the centre of the city and 16 other locations throughout the city. The mayhem and disorganisation caused can be easily understood, as can the upset to students and staff.

Why is this public private partnership on ice? Why has the Department of Finance not given it the go-ahead? Cork is to be the European City of Culture in 2005.

It is a very cultural city.

The Minister can smile if he likes but Cork will be without a school of music and a centre for the performing arts in dance, spoken arts and music. I accept that there is a department of music in the university but there will not be a college of music by 2005 when Cork is the European City of Culture. Will this project get the go-ahead? Will the embargo be lifted so that the school of music is ready for 2005? The deadline is 1 January 2003 if the project is to be finished by 2005. A nod from the Minister for Finance and the Department of Education is awaited.

This example shows the ambiguous attitude of Government to public private partnerships. Is the Government convinced that there will be value for money from the contracts entered into under these partnerships? If so, they should be progressed and the private sector should be involved.

I have listened to Deputy Allen make a contribution on behalf of the second largest population centre in the State and I will now contribute on behalf of the third largest. I am happy to follow Deputy Allen and also take this opportunity to compliment the Minister of State at the Department of the Taoiseach, Deputy Roche, on his work. I am sure he will not mind me revealing the secret that he once lived in Tallaght. I have always taken the view that his move to Wicklow was great for him but good for me also because it opened up a political opportunity I might not otherwise have had.

They might not agree with the Deputy in Wicklow.

I am happy to contribute to the debate on this Bill and appreciate the courtesy of my colleagues in allowing me time. The National Development Finance Agency which the Minister for Finance proposes to create was listed in An Agreed Programme for Government between Fianna Fáil and the Progressive Democrats. The Minister told us that the function of the agency will be to finance major public projects to address Ireland's infrastructure deficit. It is also the prime focus of the National Development Plan 2000-2006, which finishes one year before the next general election.

The plan has been allotted in excess of €51 billion over that period. In effect, the agency will borrow money on behalf of the State in a manner different to the current system of Exchequer borrowing. The agency will also be tasked with evaluating financial options for public private partnerships projects, which I strongly support.

The question arises whether the agency's borrowings will be part of the process through which the national development plan will be delivered, or whether they will be in addition to that expenditure. The Irish market is not very big and the concern must be that the proposed agency will compete with private sector finance for the same projects. We know what happens when too much money chases too few goods – there is inflation. The delivery of the national development plan has led in some areas to capacity constraints in the construction industry, which in turn has led to the inflation of delivery costs.

We must be careful to mark the line where the State competes with the private sector for the same money. In other words, we must be careful that investment funds raised by the agency are complementary to, not a substitute for, private sector investment. I am sure the Minister's Department has already considered these matters but I would like to have greater assurance.

I understand that it is envisaged that approximately €2 billion a year will be borrowed through the agency. As this borrowing will not be considered part of the Government's Exchequer borrowing figure, I understand that the European Commission may be concerned about this as it may constitute a breach of the EU regulations whereby all 15 members states have agreed to keep Exchequer borrowing below 3% of gross domestic product. As NDFA funds will be raised by the State, and presumably, therefore, State guaranteed, the EU may feel that not including them in the Exchequer borrowing returns will distort the true Government borrowing figure. We have already read in the media references to "off-balance sheet accounting" and "funny money". I am sure the Minister is well aware of this and has given this area his full consideration. It is, however, an area that needs to be addressed in this debate.

The National Treasury Management Agency, formed in 1990, borrows money on behalf of the Exchequer and manages the national debt. I presume that the functions of the NTMA and the proposed NDFA will be quite different, and perhaps it would help non-experts like me if the Minister could outline the fundamental differences between the two agencies. I have heard one way of defining the difference. I believe that within financial circles the NTMA, because of the onomatopoeic sound of its initials, is known as "Auntie May". I suppose the new agency will also have to have a name but unlike the NTMA the sound of its initial letters do not suggest one. In view of its proposer in this House, and also in view of its proposed bountiful nature, it will become known as "Uncle Charlie". I would like to assure Deputies that I am not referring to myself.

Whatever its name, it appears that we are to have a second Government agency concerned with borrowing. My reservations about the NTDA, such as they are, are not based on any fundamental objection to Exchequer borrowing. Some people when they hear the word "borrowing" have an Orwellian reaction of "No borrowing good – all borrowing bad." Certainly there are cases where Exchequer borrowing can be bad, and in this context I think it is important to make a distinction between borrowing to finance current expenditure and borrowing for capital investment. Borrowing to finance current expenditure is difficult to defend. We have support for this view from no less an authority than William Shakespeare, when in "Hamlet" the wise counsellor Polonious advises the young prince to be neither a borrower nor a lender, as "borrowing dulls the edge of husbandry."

Borrowing for current expenditure represents bad household management and means that we are transferring to future generations the day-to-day living costs of the present one. This is a policy that cannot be defended. However, this is different to short-term borrowing to overcome short-term problems. There will always be times where estimated tax income is less than expected and in such times some short-term borrowing is understandable. This is equitable, as in the short-term the people who get the benefit pick up the tab.

We know that the Government cannot invent money. There are only two ways in which it can get it; either by borrowing or by taxation. I do not think many Members of this House advocate increased taxation – if any do, they have kept a low profile to date. Everyone in this House knows we have an infrastructural deficit. Therefore, we must borrow if we are to develop a 21st century infrastructure. Borrowing to finance capital development not only makes a great deal of sense, it is also equitable. In this case, it is the future generations who will benefit most from the investment in our infrastructure, and as borrowing is generally repaid over a period of 25 to 30 years, those who reap the benefit will also pay for it.

There is no way in which annual budget resources can meet the demands of investment in infrastructure and we should not be afraid to borrow to finance this. The country needs more improved hospitals, schools, housing, water and waste management facilities, road and rail networks, airports, ports, etc., and in order to provide them we are going to have to spend a great deal of money. We have been fortunate that our infrastructural development has been aided considerably as a consequence of our membership of the European Union. The Minister of State, Deputy Roche, has always highlighted that in a positive way. EU Structural Funds have played a considerable part in our national development plans up to and including the current plan. Given our increased prosperity, largely as a result of such investment, we are moving towards being a net contributor rather than a net beneficiary of the EU. Therefore we must be prepared to finance our infrastructural development primarily through our own resources, and the Minister assures us the NDFA can play a significant part in this.

This is not an area in which we should impale ourselves on fixed attitudes. The current national development plan stresses the need to mobilise all available funding sources. I have already expressed some reservations about the proposed agency that I am sure the Minister will address. However, notwithstanding any reservations, I acknowledge that the scale of future development will call for a flexibility of approach, and I think that the Minister for Finance, in bringing forward his proposal for a national development finance agency, is taking such an approach and is playing his part in ensuring that this country can continue to develop its infrastructure.

I represent Dublin South-West which includes the areas of Greenhills, Templeogue, Firhouse and the major population centre of Tallaght. I moved to Tallaght as an employee in 1969. As Tallaght developed following the Myles Wright report of 1967, it was often said that it had the population of a city but the status of a village. That was true of Tallaght and many urban areas in that period. Tallaght changed with the opening of the Square shopping centre on 23 October 1990. I would be glad to bring any Member around Tallaght. It is a good place and a good example of how good policies on the provision of infrastructure from successive Governments can save the day. Until 1990 there were too many houses, too few facilities and insufficient infrastructure. Tallaght is now a huge city. It has a huge shopping centre which caters for leisure and shopping. It has the county hall, a major hospital, the national basketball arena and the facilities one would expect to find in a major town.

While I elucidated some reservations I am not opposed to this Bill. It is a good idea and I hope the Minister presses ahead with it. I hope we will reap the benefits in the future.

I wish to share my time with Deputy Howlin. The Labour Party will raise objections to this Bill as it sees it as a further layer of bureaucracy between the services that are needed and the Government. There is great need for the provision of funding for basic educational needs. The most obvious is the provision of primary and second level schools. There is a particular focus, and rightly so, on the appalling state of our primary school buildings. The Government's decision to cut 4% from the budget for the primary schools building programme is appalling. The education budget has been cut at all levels. Children are attending schools that do not have adequate toilet facilities, have vermin and take classes in substandard buildings without warm running water. There are schools where pupils spend their days in conditions that no one should have to endure. Many schools were visited by their local Fianna Fáil candidate before the last election and were told that money would be provided for whatever projects were in the pipeline. They are coming to us as Members of the House and telling us they were told one thing, but they do not know what is happening.

I have tabled a raft of parliamentary questions about schools in different parts of the country. However, we are being fobbed off. We are being told that such schools are being considered in terms of the stages they are at, whether it is the architectural stage, the planning stage, the permission to go to tender stage or the permission to accept the tender stage. We are being told that answers will be given in January or whenever the provisions for 2003 are known. We are being told to look up the website of the Department of Education and Science to see where the school is on the list. However, such answers are not good enough for the people, particularly our young people who have been led to believe their problems will be addressed. However, those problems have not been addressed.

Some 34 schools throughout the country have been inspected by the Health and Safety Authority which will publish a report. It was called in by the school, the parents, the staff or the INTO. It is not good enough that the business of the Government and the Department of Education and Science has now become the business of the Health and Safety Authority because conditions are so bad. I appeal to the Government to reconsider that decision. There is something wrong in a society which does not provide a proper school for the youngest members of its population, given that that is where they spend most of their day. There is a school in Deputy O'Connor's constituency which may have asbestos, but it has not received answers to its questions. Basic facilities should be available to all our children. The Health and Safety Authority is concerned because these are health and safety issues as well as educational ones.

We are creating a layer of bureaucracy instead of directly addressing the issues. I was concerned about the Taoiseach's answers earlier today about private public partnerships and how they might work. It seems they will not save money in the long-term, but they will make things work more quickly. If adequate capital resources were allocated for such projects, they would start more quickly. The Taoiseach's argument that PPPs will make things work more quickly does not stand up. It is sometimes difficult to hear what he is saying about such issues, but I understand PPPs will not save much money.

Deputy O'Connor wanted to know where we would get the money. He wanted to know if we were talking about increasing taxes. Fintan O'Toole wrote a couple of interesting articles in The Irish Times recently. He wrote about the people in the upper income brackets and the taxes they pay. Despite his comment that he was not good at mathematics, he raised good mathematical questions about the number of people in the upper tax paying brackets and the amount of money being sloshed around the country on expensive items. Those questions are pertinent, particularly in the run-up to the budget. In another article he asked who the Revenue Commissioners follow for unpaid taxes. People's taxes are written off because it is considered that it is not worth the Revenue Commissioners' while following them. We must examine company law and the ability to transfer money from one company to another in an effort to avoid tax.

We must also examine the property development sector which I suspect does not pay its fair share of tax. Money is often diverted into property and breaks are given for rental income etc. I am not an expert in this area, but I would like research to be done on it. There are people in the higher income bracket – I am not talking about PAYE workers – who have ways and means of putting their money into such developments and paying little tax. While there is merit in some of these projects which have led to inner city developments and improvements in other parts of the country, we must seriously examine them. People who ask their accountants where they can put their money so they do not have to pay much tax are getting positive answers. It behoves the Minister for Finance and his officials to follow money which should be in the tax net. I suspect that a wealthy section of our society is paying little tax. We should adopt a proactive approach and close the loopholes which allow tax liabilities to be transferred from one company to another instead of depriving young children of a proper school environment.

I know I have focused on schools today, but other areas, such as the first-time buyer's grant and expenditure on health infrastructure, would be improved if everyone paid their fair share of tax. We have relied on the PAYE sector to finance public expenditure. That was all right when things were good, when the so-called Celtic tiger was roaring and money was coming into the Exchequer. The last Government was able to spend money because the economy had been built up during the lifetime of previous Governments. It was handed a healthy economy by the outgoing rainbow Government. However, the economy was mismanaged over the past five years. Money was wrongly spent and we are now in trouble. The simple thing to do is to cut basic items, such as primary school building funds.

It is the duty of the Government, particularly the Minister for Finance, to be more imaginative. The Minister for Finance, Deputy McCreevy, often prides himself on his imagination and inventiveness. However, he must be more imaginative in bad times. It is easy to be Minister for Finance when money is available, but he now faces difficulties of his own making. The Minister must consider ways to bring more money into the Exchequer from people who do not pay their fair share. That money must go into areas such as those I mentioned, particularly sub-standard schools.

I object to the fact that clear information is not given to school boards of management and parents. There are lists on the website of the Department of Education and Science. However, people are fobbed off by being told they will get information in the future. However, there is no clear information about what schools will be allowed to proceed with in 2002 on the basis of the Estimates. Schools have not been given the information they require. I urge that a more transparent system be put in place so that schools know whether promises will be broken or fulfilled. Schools do not know what is happening and they need to know because they need to plan for next year. I urge the Government to ensure clarity. If the Government is going to break the promises it made before the election, it must be honest with the schools sooner rather than later. It must tell them what is happening, when the money will be forthcoming and when the children will be able to carry out their studies in appropriate surroundings.

This is an affluent country compared to many other countries, yet despite our relative affluence, we are low in the league table of EU countries in terms of expenditure on public services.

Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.