I move:
That Dáil Éireann commends the 2006 Estimates for Public Services (Abridged) published by the Minister for Finance on 17 November 2005.
The 2006 pre-budget Estimates provide for gross expenditure of approximately €48.5 billion. Of this approximately €42.2 billion is current and approximately €6.3 billion is capital. It represents an increase of almost €3 billion over 2005 or an increase 6.6%. It is important to stress that the Estimates provision for 2006 is a reflection of the cumulative investment in improving public services which this Government has undertaken since assuming office in 1997. We have been able to create the resources to finance this investment by sound management of the economy and the public finances. This investment has delivered real improvements in the quality of the public services and is making a real difference in so many areas as the following examples show: a reduction in the pupil-teacher ratio at primary level from 22.3 to 1 to 17 to 1; the creation of 30,000 child care places from a base of zero which we inherited; approximately 30,000 additional frontline staff in the health services; significant real increases in all social welfare payments; one in three income earners out of the tax net this year compared to the one in four figure which we inherited. I could list many more such examples. These are real outputs which are improving the quality of our public services and the quality of life for our citizens.
Clearly we need to continue to invest and ensure that we get outputs commensurate with that investment. This investment must continue to be underpinned by sustainable economic and budgetary policies. The Estimates which I commend to the House today are based on this approach.
Our public finances are extremely sound. We will comfortably achieve our budget targets for 2005. I expect the economy to grow close to its potential rate of 4.5% to 5% over the medium term. While these rates of growth will be lower than in the previous decade they are strong by international standards. We have, by any standards, made remarkable economic and social progress since 1997. We have achieved an average economic growth rate of 7%, more than twice the EU average. Our debt GDP ratio will be approximately 29% at year end, compared with 65% when we took office. With a record high of nearly 2 million in work, approximately 500,000 more are employed compared to when we took office.
The risks ahead include oil prices, interest rates, increased international competition for investment and in product markets. We will continue with prudent fiscal policies to ensure we have the flexibility required to deal with economic shocks, to promote sustainable economic and employment growth and competitiveness and to tackle social inequalities.
This year gross public expenditure is expected to be approximately €45.5 billion. A small underspend on current expenditure of approximately €75 million is expected. Capital spending in 2005 in cash terms will be approximately €6 billion capital, including carryover of approximately €137 million from 2004. This represents 15% more than the equivalent spend in 2004. The multi-annual system for managing capital, which we now operate, with its 10% carryover arrangement facilitates better management of capital programmes and projects. It ensures that significant amounts of money are not lost to the capital budget, and as a result €286 million of capital not spent this year will be available to Departments for spending next year.
Turning now to the 2006 Estimates, approximately €2.7 billion of the overall additional spending provision of €3 billion is allocated to day-to-day public services bringing the total gross provision to €42.2 billion for the year. This is a 6.9% increase on the 2005 forecast outturn. The approach of the Government in framing the 2006 Estimates has been to target the additional resources of approximately €3 billion to improve services in key priority areas, particularly health, education and welfare services. Approximately €1.9 billion or 70% of the additional €2.7 billion is provided for these three priority areas. The Department of Health and Children allocation for current expenditure is more than €12 billion, an increase of €750 million or about 9% on an underlying basis when account is taken of a number of exceptional one-off expenses this year in respect of the establishment of the HSE.
In addition to this €750 million increase, a provisional allocation of €400 million is being made in 2006 towards the cost of repaying charges for long-stay care in former health board funded institutions. Some €250 million is provided for service improvements including: some €100 million for disability and mental health services; €60 million for commissioning of new units; €16 million for primary care services; €13 million for the national treatment purchase fund; €10 million for emergency planning, and €9 million for medical education and training.
The Government is strongly committed to investment in education and the general area of training and upskilling. Reflecting this the Department of Education and Science allocation in 2006 will increase by €530 million or approximately 8% to €7.2 billion. This will help fund the cost of service improvements in a number of key areas, including: a one point reduction in the staffing schedule for primary schools with effect from September 2006 and a further one point reduction in 2007, creating about 200 additional posts in primary schools in 2006 and 2007; the full year cost of some 590 additional resource teachers for pupils with special needs appointed in September 2005; the cost of some 270 new posts under the delivering equality of opportunity programme; measures to ensure that the three for two seating arrangement on school buses is phased out by December 2006 and that all public and private sector buses are equipped with seat belts by September 2007 and an increase of 10.8% in funding for capitation grants, for the maintenance and upkeep of our schools. This allows increased payments significantly above the rate of inflation for all primary and secondary schools.
Within the productive sector, the Government is giving priority to spending on the key area of research and development. The combined allocation for this purpose in enterprise and third level education in 2006 will be €358.6 million, an increase of 12% on 2005.
The increase in the provision for current spending on the Garda Síochána Vote is €105 million or 9% to €1.3 billion. This will facilitate the implementation of the Government's commitment to expand the force by 2000 to a new complement of 14,000. At the end of 2005 the number of gardaí employed will be 12,250. The 2006 provision will allow for the employment of some 12,920 gardaí in 2006, an increase of 2,000 on 1997 levels.
Expenditure on child care has increased from about €500 million in 1997 to about €2.3 billion this year. In 2006, I will provide more than €100 million for the equal opportunities child care programme — €55 million in current spending for staffing grants to community child care facilities and supports to city and county child care committees and €47 million in capital spending. The capital allocation will bring the number of extra child care places funded under the programme from a nil base in 1997 to approximately 30,000 at the end of 2006. I will make further provision for child care on budget day.
The allocation for social welfare is €12.4 billion on a pre-budget basis. I will make separate provision for increases in social welfare payment rates on budget day. Since 1997 the Government has increased spending on: pensioner incomes from €1.3 billion to almost €3 billion; child benefit from €0.5 billion to almost €2 billion; widows and lone parents from €1 billion to €2 billion; and illness disability and carers schemes from €0.8 billion to more than €2.1 billion.
Expenditure on the provision of services for people with disability will be some €3 billion this year, an increase of more than €400 million on 2004. The 2006 Estimates provide for spending of almost €3.3 billion for disability specific services. This is an increase of more than €300 million or 10% and includes €135 million under the special disability package announced in my last budget.
In September, the Government committed to reaching the target for overseas development aid of 0.7% of GNP by 2012 and an interim target of 0.5% of GNP in 2007. The 2006 Estimates provide for a total commitment of €675 million or 0.47% of GNP for overseas development aid in 2006. This represents an increase of €129 million or 24% on the 2005 allocation of €546 million. Ireland's contribution rate at 0.47% of GNP compares with current indicative figures of 0.19% in the United States, 0.3% average in the OECD and 0.43% average in the EU for 2006.
The pre-budget 2006 Exchequer capital provisions reflect the figures set out in my last budget. Total cash spend on investment on a pre-budget basis will be almost €6.6 billion, inclusive of the £286 million carryover from 2005. This is an increase of almost €600 million or 10% more than 2005. I will announce a new five year capital envelope on budget day. This will be consistent with the Government's overall priority commitment to capital investment and it will incorporate the increased investment on transport under the Transport 21 framework.
I am absolutely determined that the principle that every euro of the taxpayers money must be well spent should apply. We must in particular ensure that best practice is employed in the appraisal and management of ICT and capital programmes and projects. We must also be prepared to learn lessons and address shortcomings which may come to light.
Building on reforms such as the five year multi-annual capital envelopes, revised capital appraisal guidelines and planned improvements in construction and construction related contracts, we recently announced two initiatives to further improve the approach to securing value for money. These were an initiative on management of ICT projects and consultancies and additional measures on value for money that I announced on 20 October 2005. Departments have been asked to give effect to the measures that can be implemented immediately and work is under way on updating the necessary guidelines and other necessary steps to implement all these measures.
The gross provision for 2006 to fund public service pay and pensions is €16.4 billion, an increase of €1.l billion or 7%. It makes full provision for the final phase of Sustaining Progress and includes some €430 million for service improvements and extra numbers. The extra numbers are primarily employed in a frontline capacity in areas of health, education and the Garda Síochána. Despite the contrary perception created in some quarters there has not been an increase in the share of overall current expenditure attributable to pay and pensions. In 1997, this was around 40% of gross current spending and in 2006 on a pre-budget basis it is nearly 39%.
The total numbers employed in the public service in 2005 is just over 290,000. The Government remains committed to controlling public sector numbers as part of its approach to managing public expenditure and securing better value for money, but the policy is not being implemented indiscriminately. We have consistently taken the line that priority must be given to frontline and essential services.
Where necessary the Government has been prepared to increase numbers to meet priority needs. We have held numbers in the civil service, the local authority, defence and non-commercial semi-State sectors at below their 2002 levels but we have allowed increases in staff in the key areas of health, education and gardaí to improve the delivery of important services to the public.
Health and education are labour intensive areas. If we are to have lower pupil-teacher ratios and better treatment in all areas of health the additional frontline staff in these areas are inevitable. In no sense is there a blank cheque approach to sanctioning extra posts in these areas but we will continue to agree targeted enhancements where such is consistent with implementing Government policy.
The Government has continued to successfully manage the public finances and the economy. Our fiscal policies have generated increased prosperity and the necessary resources to fund real improvements in public services and to address social needs. We are providing an extra €3 billion on a pre-budget basis bringing the total 2006 provision for the public service spending to €48.5 billion. We will make additional provision for spending on budget day for social welfare, child care, care of the elderly and investment.
I commend the motion to the House.