Vol. 961 No. 3
1. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the status of the capital review; if the ten-year plan will outline funding beyond the timeline of 2021; the way in which it will co-ordinate with the national development plan; if it will incorporate findings from the IMF's PIMA report; and if he will make a statement on the matter. [47437/17]
Will the Minister update the House on the progress of the review of the capital plan? Tomorrow is the closing date for the receipt of submissions on the review of the national planning framework. What alignment will there be between the two documents when the review is published?
As previously outlined to the Deputy in the response to his parliamentary question on this matter at the end of September, the capital review was published on 14 September. I understand all Members of the Oireachtas received a hard copy on that date.
To recap, the review of the capital plan highlighted some key themes which will closely inform and be incorporated into the analysis leading to the finalisation of the new ten-year plan for public capital investment 2018 to 2027. The themes include confirmation of the central role of public capital investment in underpinning the economy; the need to align public capital investment priorities with a changing demographic profile; the critical importance of public capital infrastructure in meeting the requirement for balanced regional growth and promoting the change needed to achieve our climate action objectives; responding to Brexit; supporting value for money; and ensuring we have a strong business case in place in spending the public's money.
The review of the current capital plan identified a number of key sectors as priorities for investment, including transport, education, housing and health. The findings of the review assisted the Government in selecting priorities for the allocation of the additional €4.3 billion capital expenditure allocated in budget 2018 in the period to 2021. Consequently, between 2014 and 2021, public capital expenditure in Ireland will have more than doubled which, as set out by the Irish Fiscal Advisory Council, will see public investment in Ireland moving to be among the highest in the European Union.
The ten-year capital plan is in the process of being finalised. It will set out the public capital investment objectives beyond 2021. Across that period a key factor will be aligning this expenditure with the new national planning framework detailed in the Ireland 2040 plan. The previous lack of integration of expenditure with such plans contributed to the difficulties from which we are emerging. On foot of my request, this work will include the work carried out by the IMF on the public investment management assessment, PIMA, for Ireland.
When will the Minister announce the projects being aligned with the extra allocations? Second, I realise the national planning framework is the responsibility of a different Department, but its alignment with transport plans, for example, is weak. There are vague references to matters such as climate change which was mentioned by the Minister. Will we be given the list of projects before Christmas and will it be aligned with the planning framework, or will it be 2018 before the list of projects is prioritised? Transport infrastructure is creaking and under enormous pressure. What priority will be given to public transport projects, in particular, and what deadlines does the Minister anticipate for building the projects, as opposed to their announcement? Does he have plans to review the planning process with the capital plan?
With regard to transport infrastructure, it is my objective to place a higher value on investment in public transport in the coming period. That is because it is a key way by which we will respond to the climate change challenges we face.
On the number of projects and the timing of their announcement, we will strike a balance. Given that Ministers are in the process of announcing various projects between now and 2021 or 2022, I anticipate that we will be making a number of commitments beyond that period to add weight to the ten-year plan. At the same time, however, it will not be feasible to make commitments that will use every resource allocated for all projects because there will be planning processes to be gone through and business cases to be put in place.
On the timing, it is my objective that in the first quarter of 2018 we will publish a tracker that will identify each project to which we have committed, where it stands and the progress being made towards its delivery or opening. That will be done in the first quarter of next year.
Question No. 2 is in the name of Deputy Pearse Doherty. Deputy Jonathan O'Brien has been authorised to put it to the Minister.
2. Deputy Pearse Doherty asked the Minister for Public Expenditure and Reform the date on which the data sharing and governance Bill will be introduced; the number of staff in his Department tasked with its drafting; and if he will make a statement on the matter. [47609/17]
This question asks when the ##data sharing and governance Bill will be published and the Minister to indicate the number of the staff in the Department tasked with drafting it. I accept that this is a busy time in the Department in terms of finance and the drafting of other legislative measures.
The draft general scheme of the data sharing and governance Bill was approved by the Government and published in August 2015. The purpose of the Bill is to promote and encourage data sharing between public bodies by providing a statutory framework for data sharing for legitimate and clearly specified purposes that are compliant with data protection law and to improve the protection of individual privacy rights by setting new governance standards for data sharing by public bodies.
Pre-legislative scrutiny hearings on the Bill were held in April and May by the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. Officials of the Department of Public Expenditure and Reform, the Department of Justice and Equality, the Office of the Data Protection Commissioner and representatives of civil society groups with an interest in the area of digital rights and data protection attended the hearings. The committee published its report in July. Work is well under way on the drafting of the Bill which will be informed by the findings and recommendations contained in the committee's report. The Bill must also take into account the provisions of the EU general data protection regulation which was published in April 2016 and will come into effect on 25 May 2018.
The Government reform unit in the Department is responsible for progressing the Bill. In conjunction with other duties, three members of staff of the unit, in consultation with colleagues in the Office of the Government Chief Information Officer, are working with the Office of the Parliamentary Counsel on the drafting of the Bill. The Minister intends to submit the text of the Bill to the Government for approval to publish and commence passage through the Oireachtas by the end of the year or shortly thereafter.
A number of concerns were raised during the pre-legislative scrutiny stage. In particular, some concerns were raised by Digital Rights Ireland, which is expert in the area. One of the concerns was related to how the public service shared e-infrastructure should operate and whether it would be incorporated into the Bill. Another concern was related to how the issue of access to underlying data would be addressed and that access should only be supplied to respond with answers to a predefined and pre-approved set of queries. These were just a few of the concerns raised. Are they being taken on board? Will the Minister of State give us an indication of the exact changes or the scope of the changes that will be made in the final Bill as opposed to the heads of the Bill?
The Deputy is correct. There were many recommendations made, of which the Department is cognisant, as is the Data Protection Commissioner, and they were taken into account in many of the discussions which took place following the committee's report. Yesterday, on behalf of the Department, I started consultations with the Opposition spokespersons, Deputy Dara Calleary, Deputy Pearse Doherty this morning and Deputy Joan Burton, to ensure the matters raised by the Opposition would be considered. That process will take time, but work to have revised heads of the Bill placed before the Government is at an advanced stage. As soon as they have been approved by the Government, the Bill will be able to proceed through the House. What we all want, including the Minister, Deputy Paschal Donohoe, is to ensure the maximum support from all parties. It is common-sense legislation which will allow the Government to offer a more streamlined set of services in a manner that will not in any way undermine people's rights or the complexity and overarching rules of data governance, of which we are very cognisant. The recommendations made have been taken into account and further engagement will take place.
The Minister of State will be aware that there are 15 or possibly 17 sitting days before Christmas. It would be beneficial to have Second Stage completed before then. If we could have the Bill published, it would allow Members the Christmas break to formulate amendments for Committee Stage. We all want to see the Bill pass through the House as quickly as possible as it is important legislation. It is unfortunate that we are in a time of the year when the number of days left is getting smaller with each passing week. If it would be possible to have the Bill published and passed on Second Stage before Christmas, it would be helpful.
We welcome the Deputy's support. He is correct. The regulations from the European Union are time sensitive and we want to make sure we progress the Bill. Because so many concerns were raised at the committee, we want to make sure we will bring people with us and address their concerns as best we can and in as inclusive and holistic way as possible. It is on the Government's agenda as a priority matter and the revised heads of the Bill will be brought to the Cabinet as soon as they have been completed. We hope to see the Bill being put before the House as soon as possible afterwards. The Opposition's support, especially in making time available in this and the other House, would be very welcome. We are as anxious as the Deputy to ensure the Bill is passed as quickly as possible.
3. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform his plans to deal with pension restoration for retired public servants; and if he will make a statement on the matter. [47438/17]
While there has been an understandable focus on public service pay and I acknowledge the publication this week of the FEMPI legislation, this question focuses on public service pensioners, particularly those on lower pensions, and the timeline for recovery of their incomes in the course of the agreement and the legislation that we will discuss in the coming weeks.
This question refers to the position on pensions and the status of the public service pension reduction, PSPR, which was introduced on 1 January 2011 under the terms set out in the Financial Emergency Measures in the Public Interest Act 2011. The PSPR reduces the value of those public service pensions which have pre-PSPR values above specified thresholds. It does so in a progressively structured way which has a proportionately greater effect on higher value pensions.
A very significant part-unwinding of the PSPR in three stages is taking place under the Financial Emergency Measures in the Public Interest Act 2015, with PSPR-affected pensioners getting pension increases via substantial reversal of the PSPR cuts on 1 January 2016, 1 January 2017 and 1 January 2018. On 1 January 2016 all pensions up to at least €18,700 became exempt from the PSPR. From 1 January 2017 all pensions up to at least €26,000 have been exempt from the PSPR. From 1 January 2018 all pensions up to at least €34,132 per year will be exempt from the PSPR. Those pensioners not fully removed from the reach of the PSPR by dint of these changes will, in the majority of cases, benefit by €1,680 per year from 2018. The cost of these changes is estimated at about €90 million on a full-year basis from 2018.
The Government published the Public Service Pay and Pensions Bill 2017. If the legislation is enacted, it will put in place further changes in 2019 and 2020, with the objective being that, by the beginning of 2020, anyone with a pension value of at least €54,000 will be entirely free of the PSPR. That will include the vast majority of pensioners.
While coverage of the issue of public service pensions tends to focus on the minority of high pensions, the majority of public service pensioners do not have alternative means to earn income. They are on relatively low incomes, considering the service they have given to the State. I welcome the proposed changes in the legislation. Will the Minister outline how many pensioners will be affected by his proposals within the legislation and the cost of those proposals? Will there be flexibility to bring forward dates if extra revenue becomes available, for instance during 2018?
I will return to the Deputy by the end of the week with the figure for how many pensioners will be affected, but the vast majority will have their pensions restored. On the costs that will be incurred in the period, I have announced that, on a full year basis from 2018 onwards, the figure will be €90 million. That will be the figure until the end of 2018. I will provide the Deputy with the figures after that date, if the legislation is enacted, as I hope it will be. I agree with him that when the issue of public service pensions is discussed much of the focus is on the few who have pensions with a particular value. In fact, the vast majority of pensioners are on pensions well below the values that are well known.
I acknowledge the work done by the Alliance of Retired Public Servants. Public service pensioners endured substantial cuts to their incomes. As I noted, they have no other means to make up for the cuts, yet they have no negotiating rights. In the future we will need to examine how the alliance may become involved in some way. Rather than being merely an add-on in public service pay talks, we should ensure the alliance will have a role to play in representing public service pensioners, including on the matter of pensions policy. The management of pensions policy generally, not only public service pensions, is one of the biggest problems facing the State. It is important that the voice of public service pensioners be heard and some standing in future negotiations.
I met the Alliance of Retired Public Servants on a number of occasions, including immediately after the conclusion of the negotiations which led to ratification of the public service stability agreement. I do not believe it would be appropriate for it to be given union or formal status. As I said, I have met it and my Department has done its utmost to meet its representatives to hear their views and accommodate them, where possible. I always have to navigate a trade-off. The State has a clear obligation to restore pensions up to a certain point. We have done this by providing for a faster pace of pension restoration than wage restoration in recognition of the fact that their pension is their only source income for the people concerned after their working lives.
They therefore have little opportunity to work more or to earn more. I will continue to meet them where important. I know that this is an issue which the Deputy has focused on and has raised with me a number of times.
4. Deputy Michael Collins asked the Minister for Public Expenditure and Reform his plans to reinstate the pension bands to their pre 2012 levels; his further plans to correct the pension anomalies that affected approximately 35,000 women; and if he will make a statement on the matter. [47440/17]
This is a matter for which I have no statutory function. Responsibility for this area sits with my colleague, the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty. In this context, I understand the Minister comprehensively addressed the substance of the question the Deputy has raised in the House on Tuesday, 7 November. In her reply to Deputy Willie O'Dea, she outlined her intention to introduce a total contributions approach to calculating the contributory State pension from 2020 onwards. In the meantime she has asked her officials to examine this matter, but she wants to ensure that any changes or measures which might be taken will not cause any further anomalies or disadvantages. This is matter for which the Minister, Deputy Doherty, has responsibility. I will, of course, work with her on the matter in the House, but I know that she is currently focused on the social welfare Bill for next year.
I have examined this matter and it has been going on for a number of years. It is shockingly unfair that the Minister will only seek to address it in the year 2020. It is totally unfair. These women are being penalised by these anomalies. Deputy Joan Burton and the then Government made serious changes which disadvantaged many of these workers who stayed at home caring for children, for their mothers and fathers and, in some cases, for their in-laws, thereby saving the State thousands of millions of euros. They are now being penalised every week in their pension payments. They are hurt by this. I would appreciate it if the Minister could look at this more urgently.
I acknowledge the Deputy's point. When dealing with this matter in the Dáil last week, the Minister, Deputy Doherty, made the point that while she also acknowledges the issue, it estimated that the annual cost of reverting to the pre-2012 bands would be well over €70 million for next year and that the annual cost of giving this extra money to people would increase by between €10 million and €12 million per year. In putting together the budget for 2018, we put in place a number of measures to raise revenue to allow us to pay for a social welfare package which would make a difference in a number of areas, but we did have to make choices about where to put that money. In the run-up to the budget I was never in a position to indicate that it would be possible to resolve this issue in a single budget or in budget 2018. As I have said, the Minister for Employment Affairs and Social Protection is looking at the matter very carefully. If there are any developments, she will update the House. I will obviously work with her in that regard.
As I have pointed out, this is a violation of thousands of women's rights. We fight for women's rights every day. This is a complete violation of the rights of the women who worked hard in their homes. Many Deputies took extra money for themselves in pay reform and €5 million has been made available for a PR budget, so money can be found if there is a need, and there is a desperate need to address this issue and to address it properly. We cannot put it out to 2020. It must be addressed in the next budget. I plead with the Minister and the Minister for Employment Affairs and Social Protection. There is no point in telling me that they are looking into this matter. It has been going on for several years and is well known to Government and to all parties in the House. I ask for this issue to be dealt with immediately and for the Minister to set a date today as to when this issue will be resolved. That date should be very soon as people are suffering.
I am not in a position to do that here today. Of course, I am well aware of the very strong and understandable feelings which citizens have in respect of this matter. I have met a number of them on this issue and I can understand why they feel as strongly as they do. It is an area which the Minister, the Taoiseach and I are well aware of. We want to see if we can make progress on it, but it is a challenge to make progress in the way some would want for next year. The cost of reinstatement for next year alone would be €70 million. The cost of the overall social welfare package for budget 2018 was well below €300 million. This illustrates the challenge we have in terms of making progress on this matter. I know that the Deputy wants to see us making progress on this matter. As I have said, it is a matter which Government is well aware of, but at this point I need to outline the challenges which prevent us making quick progress on it.
5. Deputy Eamon Ryan asked the Minister for Public Expenditure and Reform the carbon price that applies to the cost benefit analysis assessments for capital projects; and the reforms he is considering in regard to this price and mechanism. [47497/17]
At the meeting of the Citizens' Assembly at the weekend there was a real sense of dismay at the lack of political leadership in tackling climate change in this country. Among the various criticisms which Professor John FitzGerald, the head of the Climate Change Advisory Council, made was that the Minister's Department does not have an appropriate mechanism for measuring, valuing and pricing carbon in respect of investment decisions. What price are we using? What reforms does the Minister intend to introduce in order that we can start leading on climate change rather than being a laggard, as we are currently recognised universally?
As set out in public spending code, robust and rigorous project appraisal is central to securing value for money from public capital investment. Value for money, VFM, relates not just to the efficiency of investment but to its effectiveness. The public spending code maintained by my Department therefore contains detailed technical guidance on the methodology for carrying out cost-benefit analysis.
Section E-05 of the public spending code, which can be found at www.publicspendingcode.per.gov.ie, sets out parameter values for monetising carbon currently used in cost-benefit analysis. This guidance is based on work carried out by an interdepartmental working group which completed its work in 2014. The group recommended that the price of carbon on the EU emission trading system, ETS, on the European Climate Exchange should be used where possible and set out an approach for using futures pricing on the EU ETS to use for future time periods. Where futures prices are not available, the group recommended the use, up to 2050, of the price projections for the ETS set out in the reference scenario in the EU 2030 framework for climate and energy policy.
To give an illustrative example, which is presented in table 2 of the relevant section of the public spending code, it is estimated that the shadow price of carbon for 2018 to 2019 will be €7.29 per tonne, based on average futures prices on the EU ETS over the period from 22 January to 25 March 2014. As set out in that section, for the period from 2020, the projected price rises from €10 per tonne in 2020, in 2010 prices, to €100 per tonne in 2050.
Additional information not given on the floor of the House
As the impacts of climate change are expected to be pervasive in Ireland’s environment, society, economy and natural resources, it is, of course, essential that the Government’s expenditure choices are informed by an assessment of the full range of such impacts at the appraisal stage. This means being able to capture the broadest possible range of potential costs as well as the range of benefits that might also accrue.
Consequently, in line with the advice of the Climate Change Advisory Council, the national mitigation plan contains a specific action for “a review of guidance on public expenditure appraisal and evaluation to ensure their suitability to capturing key costs and benefits of climate measures” for completion in 2018. This will include consideration to ensure that an appropriate range of shadow prices of carbon are available to public bodies undertaking expenditure appraisal. The review will seek to determine if the existing appraisal framework provides the best available advice on measuring and reporting on the costs and benefits, including those measures with climate change effects. It is expected that an updated public spending code will also be able to better inform investment decisions.
It is, of course, also important to be aware that the public spending code clearly acknowledges that the economic costs and benefits are not the only factors influencing policy decisions regarding public expenditure. There may also be social or other public policy considerations which inform the decision-making process.
At the recent meeting of the Citizens’ Assembly on how the State can make Ireland a leader in tackling climate change, there was unanimity that the State should take a leadership role in addressing climate change. This will be a core objective of the forthcoming ten-year capital plan. This leadership role will need to be underpinned by key actions such as ensuring that there is an effective price signal for investment project appraisal achieved through an appropriate price of carbon in the public spending code.
The code the Minister is using and the price he is setting are not working. I will take a number of measures as evidence. The European Commissioner for Transport was over recently. She said that 90% of her budget goes on public transport in recognition of the fact that we have to decarbonise our entire transport system in record time. What do we have in this country? The national planning framework brings us back, by about two or three decades, to the same old model of roads, roads, roads. We do not have a single public rail project ready to go to tender. At the heart of that problem is the Minister's Department's lack of belief in public transport and renewable energy and its lack of belief that it has a role in taking action on climate change. I am sorry but something has to change. If the national capital plan, which the Minister will publish in coming weeks, is anything like the model of the national planning framework, we will be heading on a path to growing emissions and we will not be delivering the other social benefits which come with building a new, clean system of public transport. We are going badly wrong on climate and it is up to the Minister, as one of the key people involved, to turn it around. Will he change that code? Will he change the pricing mechanism? Something is badly wrong in his Department if it cannot see that a high-carbon future for transport, energy and agriculture is not the right thing for this country.
If the Deputy has any suggestions on the price we are using for carbon that he wants me to take on board, I will be very happy to hear it. I assure him that my views and those of my Department are reflected in the increased funding being made available to the Department of Transport, Tourism and Sport and in the Government's commitment to the metro project. That is because of my commitment to investing in public transport. Despite what the Deputy said, I believe that when we outline the ten-year capital plan later in the year, he will see that commitment maintained.
In every area I look, I see a lack of commitment. With regard to transport, the metro is arriving 20 years late. We should have built it 20 years ago, as set out in the transport plan at that time. Instead, we just built the roads. We are not building the DART interconnector. Where is that as another significant and important transport project in this city? Where is the light rail project for Cork? I was in Cork at the weekend. We are talking about Cork having 500,000 people. There are no public transport projects of any scale ready to go in the city. The same applies in Waterford, Limerick and Galway. All our cities are grinding to a halt because of the lack of commitment.
With regard to renewable energy, we are making a submission tomorrow on where we should go. The Government states there should be no increase in renewables integration although we believe the figure could increase to 75% if we were serious.
The Minister asked me what pricing system I would have. First, I would move away from the emissions trading scheme, which is universally recognised as a brokering system in setting the price of carbon. I would include immediately in the current national capital plan a proper price, not €7 per tonne, for needed investments. It is nothing like the real cost of the pollution the carbon is causing and the damage to our reputation, which is declining by the day because we are climate laggards.
In other considerations, particularly regarding the development of roads, I must also take into account road safety and the maintenance of the local and regional road network, for example. I cannot take responsibility for decisions made 20 years ago. What I can do is take responsibility for decisions I have to make now, and that is what I am doing. In engaging with the Department of Transport, Tourism and Sport, I have tried to provide for doing more about the metro and supporting our rail network, notwithstanding the current difficulties. There is also provision for the supply of more buses. That is a response to the commitment the Minister for Transport, Tourism and Sport, Deputy Shane Ross, and his Department have made in this area.
