Paul Connaughton
Question:28 Mr. Connaughton asked the Minister for Finance his views on the current trend in exports and its relevance for macroeconomic policy. [9660/03]
Written Answers - Fiscal Policy.
During the period 1995 to 2001, exports of goods and services rose by 15.4% per annum in real terms. In 2002, there was some slowing down in the rate of growth, predominantly due to the deterioration in international economic conditions. On budget day last year, my Department estimated that, for last year as a whole, exports of goods and services would rise by 4.6%. The most recent data for goods and services published by the Central Statistics Office shows that in the first three quarters of 2002 exports of goods and services were 6.7% higher than in the same period a year earlier. At budget time last year, the forecast for 2003 as a whole was for real export growth of 5%. Provisional figures for the month of January 2003 published by the CSO show that the value of merchandise exports fell by 8.6% in month-on-month terms; this is a fall of 24.4% when compared with the figure in the same month last year.
As the House knows, Ireland has a very open economy which is more affected than many others by world economic conditions. The success of our economy relies significantly on continued inward investment and on the performance of the export sector in selling goods and services to other countries. In the context of the slowdown in the global economy and the recent appreciation of the euro, it is therefore increasingly important that the competitiveness of the economy improves in order to be ready to take advantage of the upturn in the global economy when it emerges.
Joan Burton
Question:29 Ms Burton asked the Minister for Finance if his attention has been drawn to the recent figures from EUROSTAT showing that, despite strong economic growth over the past decade, living standards here are the fifth lowest in the EU; his views on the reason for this; the steps planned to improve living standards; and if he will make a statement on the matter. [9712/03]
In terms of comparing living standards between countries, the cost common method is to consider gross domestic product, GDP, per capita, measured in purchasing power standards. On this measure, which corrects for differences in price levels between countries, Irish income per capita was 19% higher than the EU-15 average last year according to EUROSTAT. On this basis, only Luxembourg had a higher per capita income than Ireland in 2002.
In Ireland, the gross national product, GNP, measure of national income provides a more accurate measure of the income levels accruing to Irish residents. The latest full year national income and expenditure data show that Irish GNP was 85% of Irish GDP in 2001. Adjusting the foregoing EUROSTAT figure accordingly, Irish income per capita measured in purchasing power standards was just above the EU-15 average last year. On this basis, per capita income here would appear to be well ahead of that in three still converging countries, similar to a middle group of six member states, and behind those in five wealthier EU countries. Income levels of Irish residents have improved from around 83% of the EU-15 average in the mid-1990s to reach the average last year according to the same EUROSTAT data, demonstrating the soundness of policy in recent years.
Michael D. Higgins
Question:30 Mr. M. Higgins asked the Minister for Finance the matters discussed and conclusions reached at the meeting of EU Finance Ministers on 7 March 2003, particularly in regard to the Stability and Growth Pact; and if he will make a statement on the matter. [9718/03]
The ECOFIN Council of 7 March last examined stability and growth programmes relating to Luxembourg and Portugal. This exercise took place in accordance with the Stability and Growth Pact, which requires member states to present annually updated stability and convergence programmes to the Council and the Commission. The aim of these programmes is to provide information on how member states intend to meet the objectives of the pact, in particular the medium term goal of a budget being close to balance or in surplus. They also provide an indication of how the member states have complied with the relevant recommendations of the broad economic policy guidelines.
As regards Luxembourg and Portugal, the Council examined the recommendations issued by the Commission on 19 February 2003 and approved opinions for them, on the basis of work carried out by the economic and financial committee. The opinions broadly stated that Luxembourg conforms to the requirements of the Stab ility and Growth Pact and that Portugal has reduced the general government deficit below 3% of GDP in 2002, the maximum level set out in the pact.
The other main item at the ECOFIN Council was preparation for the spring European Council which took place in Brussels on 20-21 March last. The main purpose of the spring European Council is to push forward the Lisbon Process, a ten year programme to make the EU the most competitive economy in the world. A number of reports were examined and endorsed in this context, including a key issues paper on the broad economic policy guidelines; a report on strengthening the co-ordination of budgetary policies; a report on adequate and sustainable pensions; and a report on supporting national strategies for the future of health care and care for the elderly. As regards the report on the co-ordination of budgetary policies, the ECOFIN Council agreed with the Commission recommendation in the report that there was no need to change either the Treaty or the Stability and Growth Pact or to introduce new budgetary objectives or rules.
The ECOFIN Council also discussed proposed new voting modalities in the governing council of the European Central Bank. Subsequently, an amendment of the voting modalities of the ECB governing council was agreed at the heads of state and government council meeting of 21 March. Finally, progress was made on the tax package and on EU budget issues, including guidelines for the EU budget for 2004. Overall, the ECOFIN Council meeting made good progress on the agenda items, in particular making an important contribution to the European Council later in March on the Lisbon process.
Enda Kenny
Question:31 Mr. Kenny asked the Minister for Finance the guidelines from his Department which are in place governing the planning, costing, execution and management of overruns of public capital projects; and if he is satisfied that these guidelines are being faithfully observed. [9673/03]
In accordance with the principles underlying the strategic management initiative, my Department has been for some time pursuing an active policy of maximum delegation to Departments. In relation to large capital programmes therefore, responsibility for individual projects is generally delegated to the relevant Department. The role of my Department is to set out a clear framework in relation to the management of capital investment. In managing capital projects, Departments and implementing agencies are required to comply with my Department's guidelines for the appraisal and management of capital expenditure proposals in the public sector.
These guidelines, which are currently under review by my Department, set out four main stages of project appraisal and management. (1) The appraisal stage aims to provide a basis for a decision on whether to approve a project in prin ciple. This stage includes an assessment of uncertainty and risk. (2) The planning stage involves the establishment of a project management structure, preparation of a design brief, detailed planning and design of the project and a review of costings. If changes are proposed to the project in the course of the planning stage, the guidelines make it clear that the cost implications should be fully appraised and the approval of the sanctioning authority should be sought before proceeding. On receipt of a tender price and other relevant information, the case for proceeding with the proposal is again subject to review. Where it is proposed, following such reappraisal, to go ahead with a project at a price higher than that originally proposed, a decision will again be required by the sanctioning authority to proceed. (3) The implementation stage begins once the final approval for the award of a contract has been secured. If adverse developments occur, including unforeseen costs increases, which call into question the desirability or viability of the project, the sponsoring agency should consider necessary measures to rectify the situation. Where, despite these measures, increased costs are likely to arise, the approval of the sanctioning authority for the extra expenditure should be obtained before any commitment is made to accept cost increases. The viability of the project, given the changed circumstances, should also be reported. (4) The final stage following the completion of a project, is post project review. Such a review is recommended to evaluate both the outturn and the effectiveness of appraisal and management procedures.
I am confident that the steps outlined in the guidelines provide sufficient guidance to Departments and agencies for the re-evaluation of projects at key points in the decision making process. I would stress that the onus is on Departments and implementing agencies to comply with these guidelines. My Department will be reinforcing this requirement in the context of the revised guidelines, which are expected to issue this year, and in the context of the five year multi-annual capital investment framework, which it is intended to agree with Departments also later this year.
Question No. 32 answered with Question No. 14.