Skip to main content
Normal View

Dáil Éireann debate -
Tuesday, 16 Oct 2007

Vol. 639 No. 4

Other Questions.

Decentralisation Programme.

Dinny McGinley

Question:

88 Deputy Dinny McGinley asked the Tánaiste and Minister for Finance if he has initiated consultation with ICTU regarding transferability between State bodies and between State bodies and the wider public service as an element in the implementation of decentralisation. [23604/07]

My Department has been in contact with ICTU seeking to get discussions under way on the range of industrial relations issues impacting on relocating State agency posts to locations outside of Dublin. I understand that ICTU is considering this proposal and I remain hopeful that meaningful discussions can take place on the full range of issues impacting on the relocation of the State agencies. I will not repeat what I said earlier.

It is 12 months since the decentralisation commission specifically asked the Minister to activate discussions with the Irish Congress of Trade Unions. From what I understand of the Minister's reply, however, all that has happened is that a letter was sent to congress and there has been no reply yet. That hardly represents alacrity on the part of the Government in trying to implement this programme, or am I missing something?

The Deputy is missing the fact that to have a discussion people need to engage. The industrial relations problem in FÁS was used as a reason engagement could not take place until clarification was brought to certain issues, which I would regard as self-evident.

The Minister said that 1,000 employees in State agencies have indicated that they may want to move. However, is it not the case that resistance to the move in State agencies is so great that there could be considerable damage to the corporate memory and business efficiency of such agencies if enforced moves continue? Is the Minister's failure to have meaningful interaction with congress due to the fact that he has thrown in the towel as regards the State agencies?

On the contrary, no enforced moves are envisaged. The Government has always recognised that this aspect of the programme presents different challenges from that of the Civil Service. As the Deputy said, more than 1,000 employees of State agencies have expressed a preference on the central applications facility to relocate with either another public service or Civil Service organisation. It is not unreasonable for these applicants to expect their applications to have been advanced by this stage. The Labour Court recommendation concerning the dispute between FÁS and SIPTU provides a renewed opportunity for unions and management to address the relevant issues. I would have thought the policy of non-co-operation could now be dispensed with on the basis of the Labour Court's recommendation. In the interests of fairness to everybody, those who do not wish to relocate received assurances on foot of that recommendation. As regards those who wish to relocate — there are 1,000 of them, although it is not as simple as relocating them willy-nilly — there is a need to engage on how best to address the issues raised by the Deputy. The Labour Court suggested the best way to achieve that is to examine State agencies generally to see how an accommodation might be reached for those agencies and the people who wish to relocate.

In the event that the decentralisation of State agencies is to proceed, how does the Minister envisage the practical outworking of the recommendation that workers not relocating would be provided with realistic alternative career options? Is it not unrealistic to consider people with specific, specialised roles and responsibilities as part of a multi-transferable workers' template between the various State agencies? Many such agencies have completely different focus points and purposes. It is most unlikely that people who have spent many years training and carrying out their specific functions in a State agency will find themselves comfortably fitted within another entity. What is the Minister's response to SIPTU, which represents 1,600 workers in State agencies, when, in light of all the information we have and the difficulties clearly signalled, it calls on him to abandon the proposal to relocate State agencies?

My response is that that is not the recommendation of the Labour Court, which we need to implement in full. The membership has once again received an assurance from the Labour Court that no involuntary transfers are envisaged and that those who do not wish to be transferred should be offered some alternative career options. The same Labour Court recommendation also states that there is a need to engage generally to see how we can move this issue forward.

As regards the Deputy's second point concerning the specialised nature of work, I understand there are specific challenges in this area, which is why we should have an engagement. Non-engagement achieves nothing, particularly for the 1,000 employees of those agencies who wish to relocate, not simply to other State agencies or the same State agencies but who are available to Civil Service organisations as well. The idea that there is a homogenous group of people who cannot be transferred is incorrect. I agree that there has never before been a culture of inter-transferability within State agencies, and there was not before there was decentralisation in the Civil Service either. That is the challenge. The experience of those who have relocated and transferred to other organisations is that it has been a good move to the benefit of everyone concerned. I have not heard anybody suggest otherwise. Rather than take the approach of non-co-operation, given that we have a recommendation, best industrial practice now dictates that we should proceed to an engagement on the issues.

If someone wants to move from the Ordinance Survey to Fáilte Ireland, for example, will that not require a Government decision to facilitate such a transfer? It would involve a transfer across Departments and would require the Minister for Finance's approval so is the onus not on him to bring forward some framework as to how these issues might be resolved?

My staff, the group and everyone involved in this process are available to discuss all those issues. What has been absent has been engagement.

The Minister has made no proposal as to how it will be resolved.

Proposals cannot be made in the absence of co-operation from all concerned and a commitment to resolve the problems. Up to now, we have had a stand-off. Indeed, the policy of non-co-operation has been stated on the SIPTU website, even in the aftermath of the Labour Court recommendation. Having got their clarification, it is time for us to get down to discussing the issues to see what can be resolved.

Tax Receipts.

Lucinda Creighton

Question:

89 Deputy Lucinda Creighton asked the Tánaiste and Minister for Finance the basis for his projection that tax revenue will be less than projected in budget 2007 and borrowing will be greater; and the implication of these trends for budget 2008. [23569/07]

At €31,462 million, Exchequer tax receipts to end-September were €490 million or 1.5% below profile. They were up 6.1% on the same period last year. Corporation tax and income tax both performed well, coming in at €296 million and €56 million above profile respectively, reflecting the health of the economy generally. Receipts from each of the other main tax heads were below profile. Stamp duties were €401 million below profile, excise duties were €225 million below, VAT was €132 million below and capital gains tax was €107 million below. A significant amount of tax revenue is due for collection in the last quarter of the year, especially in November when a particularly large share of tax is collected annually from corporation tax, capital gains tax and income tax of the self-employed.

The performance of tax revenue in the coming months, particularly in November, will inform the position for the year as a whole. As of now, a shortfall of up to €1 billion in taxes this year is the current estimate. However, this shortfall will be offset to some extent by positive developments on other elements of the Exchequer account and an overall Exchequer deficit of up to €1 billion now seems likely at year-end. The budget day estimate was for a deficit of €546 million this year.

As is customary, I will outline to the House in early December my budget for 2008. As an important first step I will publish my pre-budget outlook later this week.

What are the other revenue sources that will mean that an apparent deficit of €1 billion will only be off by €500 million at the end of the year? Has the Minister had cause to revise what his economists call elasticities concerning various taxes, in other words the relationship between growth in income tax and growth in incomes? Has he had cause to revise that in any way as a result of the experience to date?

Some of the offsetting issues relate to the cost of debt repayments. As of now, however, the deficit is estimated to be €1 billion over a projected estimate of €546 million at budget time.

The Minister is €1 billion off on tax and €500 million off on borrowing.

Yes, but we estimate that there will be some offsets in terms of debt repayment issues and NTMA issues. What was the Deputy's second point?

This year, together with the Central Bank, the ESRI and others, my Department examined the question of how to improve forecasting in order to be as accurate as possible, not that we were very inaccurate. Obviously, it is always difficult to project or predict improvement in property markets, depending on the extent of activity that occurs. I will receive that report shortly.

What are the implications for budget 2008 of the trends the Minister has outlined? In last year's budget he promised that he would reduce the top rate from 41% to 40% and strongly indicated that he would ensure tax credits and allowances were kept in line with inflation. Does he now have room to effect those changes and will he make them?

Last year's points were made on the basis of maintaining current economic strength. In the first six months of this year the economy improved by 6.4% but there has been a different story in the second half. We will have to make decisions closer to budget time, when we know the outcome of revenue trends, where we stand on future expenditure levels, and how we will try to maintain a capital investment programme. There will be a moderation in day-to-day current expenditure next year compared to recent years.

The Exchequer returns to the end of September show a deficit in excess of €3.1 billion. The Minister hopes the shortfall in the expected returns at year end will amount to approximately €1 billion. Does he have any information that gives him confidence that there will be a windfall over and above the usual upturn in receipts in the last quarter of the year? In the light of the lower than expected tax revenue what options is he considering? For example, will he borrow in order to fund some of the capital projects under the national development plan, rather than cut funding for essential public services?

We have had a strong budgetary position recently, bringing in surpluses in ten of the past 11 years, while also having an unprecedentedly large capital programme, enhanced by the national development plan, as well as increases in current expenditure. A significant amount of revenue comes in at the end of the year, in October and November, from the self-employed and in corporation taxes. We do not have a profile of receipts and expenditures month on month of the varying figures, taking into account that more than one quarter of our revenue arrives in the last six weeks of the year. That explains why one expects a significant reduction in the figure of €3.1 billion.

We had projected that tax receipts in 2007 would increase by 7.8% over last year's record levels. They were at a figure of 6.1% in the first six months but there will be a further drag going into the final three months. Even allowing for significant tax income in the last couple of months, on tax heads which are still holding up, we expect the total increase in tax revenue this year over last year to culminate at a figure of approximately 5.5% based on the information we have available to us after nine months. We will have a more accurate assessment as we get close to the budget.

Having left a surplus position moving into a year such as this in which receipts, for example, from the residential property market have reduced, we expect to come in with a surplus this year. We can still provide for maintaining the existing level of services this year, already at a record high, and look to the unified budget proposal on 5 December, where we will take taxes and expenditures together, to see how we can maintain the level of output and keep unemployment levels as low as possible.

Written Answers follow Adjournment Debate.

Top
Share