Dáil Éireann debate -
Tuesday, 10 Dec 2002

Vol. 559 No. 1

Leaders' Questions.

Mr. Kenny

Today's newspaper reports carry a statement from the Minister for Health and Children admitting that there will be cutbacks in jobs in health this year. He is refusing to speculate about whether this will amount to 5,000 jobs. This might be funny if it were not so serious, because the battle of Ballymascanlon still continues and apparently rages without cessation inside the Cabinet. It appears as though the Government, particularly the Minister for Finance, has taken the view that we live in an economy, not a society. Has the Taoiseach intervened in this row? Are we to have a Department of Health and Children and a health budget or a health service? Having dealt with these warring factions, will the Taoiseach indicate whether the proposed heart-lung transplant unit in the Mater Hospital is to be scrapped on foot of the Minister for Finance's comment about the dictating of medical treatments? Over €8 million has been spent on this unit, which was promised by Fianna Fáil in the 1997 election. Has the Minister for Finance proved that he is capable of hard decisions, if not wise ones?

The Minister has also questioned the use of artificially manufactured blood products in the treatment of haemophiliacs. This has been denied by the Minister for Health and Children. What is the truth? Will the Taoiseach clarify the number of job losses foreseen for the health area? Was the Minister speaking only of unapproved jobs, or are these to go as well as a segment of the 5,000 pertaining to the Department of Health and Children? Will those jobs include speech therapists, physiotherapists and occupational therapists? Will there be more unfortunate incidents like that in Kilkenny last week where local facilities were not made available by a Department?

The Taoiseach

The Minister for Health and Children will continue to implement the health strategy. The 5,000 jobs mentioned in the budget were part of the overall figure for all public services. There is no question of one area taking up any substantial number – they will come from across the entire service. There has been an enormous increase in staffing levels in the last few years. The increase in health service employment reflects a variety of factors – demographic pressures, record levels of funding activity, provision for additional replacement staff due to changing work practices, changes in the composition and structure of employment growth and reductions in vacancy levels resulting in reduced dependency on agency staff.

Following the announcement on budget day of the planned reduction in public service numbers, discussions will commence between the relevant Departments regarding the practical steps required to implement the measure over the coming years. As the Minister for Health and Children stated, the Department's priority will be the maintenance of front line staff to provide a service to the public and protect essential services. The reductions in numbers can be achieved through natural wastage across most Departments over the next three years. With costs increasing by 88% because of the rise in the number of staff in the last few years, it should be possible to achieve that.

Bed capacity services, the treatment purchase fund and acute hospital activity will continue. The Minister will continue to develop primary care and the lung transplant programme, for which €4.5 million is being provided for 2003. Provision for the treatments of disabilities, cancer and cardiovascular disease are all contained in the Minister's Estimate for next year. In his last report, he stated that more than 70 of the 121 strategy actions are being worked on.

The Minister for Health and Children and the Minister for Finance have always been the best of friends, that is how the Minister for Health and Children manages to get the billions of euro needed to run the health service.

Mr. Kenny

The Minister for Finance stated that the health strategy will not be implemented next year or the year after. Is that a fact? How many of the unapproved staff in the health service will be let go and how many will be approved? How many jobs will be lost to the health service as a result of the cut of 5,000 in public service numbers and the embargo on recruitment? Will those jobs include physiotherapists, speech therapists and occupational therapists? Why is one Dublin hospital paying more to lawyers than doctors while in another major Dublin hospital a psychiatric patient has occupied an orthopaedic bed for the past three months? Are we to have a health service or a Department of Health and Children with a health budget? Will the Taoiseach intervene to prevent the warring factions from making a shambles of a health service where hundreds of thousands of people are ill at ease because of inadequate service? The Taoiseach's own consultants reported that the Department of Health and Children is unable to absorb money because of the way it is being flung at it and that it is an obscene waste of taxpayers' money. In a perversion of logic, people are being flown out of the country while hospital wards here are being closed.

The Taoiseach

Work is continuing in 70 of the 121 strategy actions. The Estimates for next year show the Government has provided for 74% of the net total increase in public expenditure to be set aside for health expenditure. Staffing levels in the health service have reached 96,000. The tightening up of numbers should be achieved by natural wastage and the Departments will work that out between themselves. Front line services will be maintained. By the end of the year, 520 beds will be funded, 70 more than in the strategy target. More than 1,800 patients are in the treatment purchase fund and 960 treatments are expected this year. I reject the allegation that the health service is not well funded and staffed at both day to day and infrastructural levels. As the Minister continues to implement the health strategy, it will improve.

Mr. Rabbitte

Since the Taoiseach entered office in 1997, the price of housing has doubled, rents have doubled, the number of homeless has doubled to 5,500 and the number on local authority housing lists has risen from 26,000 to 48,000. In the most bitter cut of all, retrospectively applying the 1% VAT increase will add a further €2,000 to the average house being purchased by young people. That increase follows the abolition of the first-time buyer's grant of almost €4,000. A total of €6,000 is being added to the agony of young people who are trying to buy their own homes in the last three weeks. Will the Taoiseach agree to follow previous practice where the implementation of increased VAT charges follows a transitional arrangement that will protect those who have signed contracts? How can the Taoiseach justify 8,000 people, having signed contracts to purchase their own homes, finding that at the stroke of a pen they will now be charged an additional €6,000 on average as a result of the deliberate actions of this Government?

The first-time buyer's grant was abolished at the stroke of a pen and now VAT is being applied retrospectively. Will the Taoiseach agree that the transitional arrangements put in place the last time VAT was increased will be applied now and that 8,000 people will not have that additional element imposed on the contract price of houses they thought they had purchased for €6,000 less three weeks ago?

The Taoiseach

The Minister for Finance made provisions last week for tax issues and VAT. The Deputy should table a question to the Minister to inquire about these issues. The last time such a change was made was in 1993, when I restructured the five VAT rates to two rates of 12.5% and 21%. VAT on houses at that time was 10%, having doubled in a few years, and I increased it by 2.5%. It was for that reason the changes were made in 1993.

I do not accept the other points made by the Deputy. We are building record numbers of houses as the demand for them continues. We completed over 5,000 local authority houses in the last year.

Mr. Allen

For investors only.

The Taoiseach

I do not think investors live in local authority houses. A further 7,000 houses are under construction. Between 1997 and 2001, 18,400 local authority housing units were provided. I am aware of the numbers on the waiting list. We have also been supporting the voluntary housing sector by providing 4,000 units. A further 1,500 units will be provided this year and we have also implemented a number of other measures for next year. There is more than €1 billion in the housing budget for next year to continue the rapid increase in the housing sector. Deputy Rabbitte spoke about people who have signed contracts. These people will receive the new housing grant, therefore, they will not be disenfranchised because they will have the new housing grant and they will be able to avail of the tax relief introduced last week.

Mr. Rabbitte

Does the Taoiseach think it is any comfort to people who have had charge after charge piled on them as a result of the Government's earlier mismanagement of the public finances to say that I can put down a question? I am asking the Taoiseach what he will do about it? I am asking him if it is not standard Revenue practice to permit transitional arrangements such as I have suggested? Given the miserly €10 million he purports to claw back from people enjoying tax shelters and loopholes of various kinds, why is he allowing these people two years to accommodate to those changes while applying retrospectively the VAT increase for young people trying to buy a home of their own? How can he justify capping the rental allowance so that tenants are now exposed to the full savage rent increases happening in the marketplace, which will lead to additional homelessness, an additional €5 per week on average to a poor person on supplementary welfare allowance, while giving back 16,000 sites over the next three years to builders because he cannot enforce the agreement the Minister, Deputy Dempsey, made with them and which he is now backing out of? Surely he can agree that the transitional arrangement, which is normal Revenue practice, will be applied in this instance.

The Taoiseach

The question the Deputy asked is one for the Minister for Finance who made the position clear last week. VAT on housing will increase to 13.5% from 1 January. The only transition arrangement of which I am aware was when I introduced a 25% increase, from 10% to 12.5%, which was not a normal Revenue arrangement. This took place when a restructuring of five rates of VAT was taking place.

Mr. S. Ryan

Why not do it again?

The Taoiseach

Because we are not restructuring five rates of VAT. We are not increasing it by 25%.

(Interruptions).

An Ceann Comhairle

The Taoiseach without interruption.

The Taoiseach

The Government will continue to build a record number of houses in both the voluntary housing sector, where 4,000 additional units have been built, and the local authority housing sector, where there are substantial numbers. We will continue to have a proper policy and comprehensive programme to tackle homelessness, which is being resourced very successfully. We will continue to implement these policies.

Mr. S. Ryan

That is pathetic.

Mr. Sargent

Perhaps a record number of unaffordable houses? Is the Taoiseach comfortable with the speed at which top civil servants can move from highly influential posts and being custodians of sensitive information to being privately employed and very powerful individuals with extraordinary advantages over their competitors in the private sector? Is it not a scandal and grossly irresponsible for the Government to have no regulations in this area, which is unique in European terms?

Is it not deeply disturbing to see, for example, a former manager of South Dublin County Council within four weeks of resigning his post in December last year being employed as a lobbyist and consultant for a major developer facing High Court action over unauthorised developments in the same local authority area? How can the Taoiseach remain silent on this issue when his former adviser is now a director of Treasury Holdings, vying for the contract to build the national stadium, having been the head of the Campus and Stadium Ireland development and privy to all the original bidders and plans? How at this point is it still possible for the Taoiseach to say there is no particular need for regulations? Will he give some thought to this matter and introduce regulations, as are available in other jurisdictions, to ensure there is a healthy period of time between public servants occupying influential positions as custodians of sensitive information and being able to use that information in the private sector to essentially subvert the normal private tendering procedures?

The Taoiseach

I do not have many facts about the individual concerned.

Mr. Sargent

The Sunday Business Post.

The Taoiseach

Nor do I wish to personalise the circumstances of the contractual arrangements. This issue was raised previously and there is no statutorily based rule that prohibits an individual leaving public service – Departments, agencies or local authorities – to take up these positions. If there was such an arrangement it would have to have statutory effect. There was an unwritten rule in the Civil Service that one should not leave and take up a position on files with which one was dealing previously. I am aware of one country which has a three or six month regulation, which is not very satisfactory. When the instance of another individual was raised some years ago it was found difficult to introduce such a rule or regulation. This is not something to which the Government will be immune because more people are leaving the public sector in the last decade. As a result of the seven year contract, people now leave at much younger ages than was the case previously. While this issue may not have been so prevalent some years ago, it is now. I cannot recall what the legal difficulties were previously. However, I will look into the matter and send a note to the Deputy.

Mr. Sargent

I would remind the Taoiseach that in other jurisdictions, particularly in the UK, there is a two year cooling-off period, so to speak, as part of the Civil Service regulations. Will the Taoiseach agree that we need such a regulation? I am not impugning or saying there is an issue to be answered, other than to say that tribunals are ongoing. There is the situation of a former Government press officer who now faces one of the tribunals, which is not very flattering for him or the Government he served. Will the Taoiseach learn the lessons of the past and put in place the essential statutory regulations whereby top civil servants, or anyone who is a custodian of sensitive information, will have to observe a certain period before becoming employees of the private sector? Will the Taoiseach take on board the lessons in this country and other countries where there is a cooling-off period which is much longer—

An Ceann Comhairle

The Deputy has become repetitive.

The Taoiseach

I have no difficulty checking out this matter. While an employer can introduce rules and regulations about what employees can or cannot do, if they leave that employment, particularly if they are in their forties or fifties, it would not be contractually easy to try to decide where or for whom they can or cannot work.

Mr. Sargent

It has been done.

The Taoiseach

I accept it is not a good idea to have someone working on one side of the table today and on the other side tomorrow. I will have the issue considered to see if it is possible to deal with it, and I will send a letter to the Deputy.