Appropriation Bill 2018: Second and Subsequent Stages

Question proposed: "That the Bill be now read a Second Time."

I welcome the Minister of State at the Department of Finance, Deputy O'Donovan, to the House.

The Bill is an essential element of financial housekeeping that must be concluded by both Houses of the Oireachtas before the end of the year.

The Bill serves two primary purposes. First, it is necessary to authorise in law all of the expenditure that has been undertaken in 2018 on the basis of the Estimates that have been voted on by the Dáil during the year. Section 1 and Schedule 1 set out the amounts to be appropriated for supply services. These relate to the amounts included in the Revised Estimates for 2018 voted by the Dáil earlier this year and the Supplementary Estimates voted by the Dáil on 12 December. These Estimates amount to €50.9 billion. The comparable amount in the Appropriation Act 2017 was €46.7 billion. The amount to be appropriated this year, therefore, represents an increase of €4.2 billion on last year’s net voted expenditure.

The second key purpose of the Bill is to provide a legal basis for spending to continue into 2019. The passage of the Bill allows continued funding, in the period before the 2019 Estimates are approved, in the areas of social welfare payments from the social protection Vote, Exchequer pay and pensions, and other voted expenditure. If the Bill were not enacted before the end of December, there would be no authority to spend any voted moneys in 2019 from the start of January until approval of the 2019 Estimates, since this authority for 2019, as contained in the Central Fund (Permanent Provisions) Act 1965, is based on the amounts provided for in the Appropriation Act 2018.

Under the rolling multi-annual capital envelopes introduced in budget 2004 Departments may carry over, from the current year to the following year, unspent capital up to a maximum of 10% of voted capital. The multi-annual system is designed to improve the efficiency and effectiveness of the management by Departments and agencies of capital programmes and projects. It recognises the difficulties inherent in the planning and profiling of capital expenditure and acknowledges that capital projects may be subject to delays. The carryover facility allows for a portion of unspent moneys, which would have been lost to the capital programmes and projects concerned under the annual system of allocating capital, to be made available for spending on programme priorities in the subsequent year.

The Appropriation Act determines definitively the capital amounts that may be carried over to the following year. The aggregate amount of proposed capital carryover from 2018 into 2019 is €93 million, which represents 1.6% of the total Exchequer capital programme of almost €6 billion for 2018. The amount carried over from 2017 into 2018 was €70.3 million.

The proposed amounts to be carried over by Vote are set out in Schedule 2. The 2019 Revised Estimates Volume sets out detailed financial and key performance information for Departments and offices. In Part II of the Estimates, for each Vote availing of the capital carryover facility, a table is included listing the amounts to be deferred by subhead.

Certain Exchequer liabilities and social welfare payments are due for payment by electronic funds transfer on 1 and 2 January 2019. With the banking system closed on 1 January 2019, funding will need to be in place in departmental bank accounts before the end of this year to meet those liabilities on a timely basis. That is the most fundamental part of the Bill and on that basis, I will ask the House to give its approval.

In addition, An Post needs to be prefunded before the end of the 2018 in respect of certain benefit payments due in the first week of January 2019, in order to physically transfer cash to their network of post offices throughout the country.

These Exchequer pay and pension and social welfare payments will form part of the supply services for 2019, and, consequently, the funds to cover these costs will be included in amounts disbursed from the Central Fund to the Paymaster General’s account as part of the 2019 supply issues. These costs will come under moneys voted in 2019 in respect of which the usual processes and mechanisms for voted moneys in 2019 will apply.

In line with last year, section 3 includes a specific provision to allow for an advance, not exceeding €250 million, from the Central Fund to the Paymaster General’s supply account, with this advance then being repaid to the Central Fund in January.

The signed Act is required by the Comptroller and Auditor General for clearance of the end-year issues from the Exchequer. Under Article 25.2.1° of the Constitution the President may not sign a Bill earlier than the fifth day after the date on which the Bill is presented to him.

However, there is provision in Article 25.2.2° whereby, at the request of the Government, with the prior concurrence of Seanad Éireann, the President may sign a Bill on an earlier date than the fifth day mentioned. In view of the urgency of this Bill, the provision in Article 25.2.2° is sought and a motion to this effect is placed before the Seanad. Such an earlier signature motion has also been sought for the Appropriation Bill in previous years.

I remarked at the outset that the legislation is an essential element of housekeeping which those of us in both Houses of the Oireachtas are required to undertake. Its passage will authorise in law all of the expenditure that has been undertaken in 2018 on the basis of the Estimates voted by the Dáil during the year. Of fundamental importance to those who depend on our essential public services, the passage of the Bill will also ensure that payments funded from voted expenditure in 2018, such as housing assistance payments, jobseeker’s allowance, disability allowance, pay across the public sector, and all other pay and pensions funded from voted money, can continue to be funded in 2019 in the period before the Dáil approves the 2019 Estimates.

I commend the Bill to the House.

I thank the Minister of State and I call Senator Ned O'Sullivan.

I welcome the Minister of State to the House in a week where we heard very good news for the Shannon Foynes Port Company, which is in his constituency, and of which I was a commissioner and director for 16 years. I am sure the Minister of State and myself are on the one word there.

Fianna Fáil supports this technical legislation. The Bill gives statutory authority for the amounts Voted by the Dáil during the year. These amounts include the original Estimates, Further Revised Estimates and Supplementary Estimates. It also provides for sums deferred into the year ended 31 December 2019. The term "capital supply service and purpose" means a supply service Voted by the Dáil, the purpose of which is to create an asset intended for the use on a continuing basis within an expected life of more than one year. These are sums for which surrender is deferred into 2019. These are mostly salaries and expenses for 14 offices and Departments of Government to allow for the continuing supply of services. Fianna Fáil supports the Bill because if it was not approved by the House, there would be nothing to spend in January of next year and that would be a poor look out.

I welcome the Minister of State to the House.

Sinn Féin supports this Bill. While it is essentially an exercise in legislative housekeeping, it provides an important focus on where the expenditure of the State is directed for the coming year. We tend to forget the huge sums of money involved when passing Estimates and the budget itself. I am pleased that in the past few years, there have been debates in the Oireachtas on this. While no one wishes to hold up the passage of the Bill, this debate gives us a chance to focus on where these sums are spent. I will make a couple of brief remarks on health expenditure before I finish.

So far this year, the HSE has spent more than €114 million on costly agency and locum doctors, nurses and other staff in order to fill posts left vacant due to the recruitment and retention crisis. This paints a picture of a health service that is running on empty. Indeed, this will be no surprise to the Minister of State as he will know that our local hospital in Limerick had the dubious celebration at the beginning of last month of having its 10,000th patient on a trolley. The situation has gone from bad to worse and, regrettably, has continued to do so over the past seven or eight years. The statistics speak for themselves. This paints a picture of a health service that is running on empty. In an alternative budget, which was costed by the Minister of State's Department, Sinn Féin has shown that one could pay off the health overspend and fund the health service to address the myriad of crises and deliver additional new services, all the while making sure it was done in a sustainable and fair way.

Using short-term volatile increases in corporation tax smacks of desperation and shows a lack of vision to fund vital services for the future. Let us consider the Supplementary Estimates for health. One can see that an increase of €655 million is needed to fill the ever-increasing funding black hole. Even though we want to see this money spent, it is important that the public are not misled. The reason this extra money is needed at the end of the year is due to the chronic under-investment in the health service. It does not represent actual investment in the future of the health service. A lot of this money is spent on expensive short-term measures that are designed to simply keep the show on the road. Having said that, Sinn Féin is happy to support the Bill.

I call the former Cathaoirleach, Senator Paddy Burke.

I welcome the Minister of State back to the House to discuss the Appropriation Bill. It does not seem that long since we discussed the last one. The years are passing quickly.

I welcome the Bill and the way we can now spend money. I compliment the Government on the way it has looked after the finances of the State so that we have money to spend. I welcome the healthy state of finances and congratulate the Minister on same.

As previous speakers said, this is a housekeeping exercise. It brings things together at the end of the season and makes financial provision for certain budgets going forward over the Christmas period and into early next year. There would be an outcry if nobody received their pension, salary, social welfare or whatever until the middle of next January. The legislation enables all the necessary provisions to take place in an orderly fashion over the next couple of weeks. I welcome the Bill and the good state of finances. I welcome the fact the economy has grown so well that we have more money to spend this year than last year.

I mention a number of issues to the Minister of State. First, I congratulate a local company in my home patch called Wills Brothers. The company undertook a big road scheme from Tuam to Gort in County Galway. The road was brought in on time and on budget. Companies like the Wills Brothers should be held up as a role model for businesses in terms of how business is done and can be done.

The Government should consider overspends, in particular the overspend that has been forecast for the national children's hospital. Everything that was needed could not be gauged for in the original provision. However, when there is an overspend of such magnitude, the Government should consider the issues, particularly overspends on Government contracts and proposals because it is the taxpayers and the Exchequer that must pay.

I thank the Members who expressed their support for the Bill. I will respond to a few points that have been made. Senator Ned O'Sullivan is dead right that the Shannon Foynes Port Company is a great example for everyone in our area of north Kerry and mid-west region. It is a semi-State company that has the power, capability and drive to deliver to a region, and in this case it has delivered for the country in terms of the amount of cargo that the roads project can handle.

In response to the comments made by the Sinn Féin spokesperson, his party opposed everything that we did for the previous seven years. At least he and his party are consistent with their opposition in terms of what we are trying to do today. However, the legislation has been supported because the Estimates have gone through committee and been accepted by all the committees.

Senator Gavan commented on the mid-west region and the University Hospital Limerick. I agree with him that the situation at the hospital is far from acceptable. In fact, it is completely unacceptable. Recently, I had to avail of the hospital's services. There is a new accident and emergency unit but, unfortunately, there is a chronic shortage of beds. We are only catching up with the 2009 level now because we were unable to invest. The accident and emergency units in Nenagh, Ennis and St. John's were taken out. We now have a situation where the Minister for Health has committed to providing a modular unit that will increase bed capacity. There is further investment planned under Project Ireland 2040.

I am concerned about the comments Senator Gavan made about corporation tax. Given that the mid west has been the largest beneficiary of inward investment over the past number of years in terms of job creation, any signal that would go from this House, particularly anything other than consistency and an determination to retain the corporation tax would be something that many of the companies that have invested in Limerick and created jobs in Limerick, both in my constituency and his, would be very nervous of. I know that Senator Ned O'Sullivan's party and Senator Paddy Burke, from my own party, would be at one with me in saying that there should be no deviation from the corporation tax policy that has been pursued by all Governments up to now.

On a point of order, I never suggested a deviation from the policy.

In terms of Senator Paddy Burke's proposal for the overspend, he is absolutely right. The Minister for Public Expenditure and Reform and I are very conscious of the fact that as we embark on Project Ireland 2040, and so are about to spend €116 billion, we do not want to have the situation that we had in previous national development plans where projects came in over cost and, in many cases, did not deliver what they set out to deliver. It is on that basis that a specific project delivery team has been established in the Department of Public Expenditure and Reform to make sure that real-time data is provided to the Minister on a regular basis. We have done that because when projects overspend across line Departments, it is back to the Minister that they come with a begging bowl in order to fix the problem. The Senator is right. We are conscious of the matter and we are determined that there will be no overspend this time. An overspend of 1% or more on a project that costs in excess of €2 billion is a lot of money and we know what we could do with that money.

I welcome Senators' support for the Bill, which is important because it allows Government to pay people from 1 January onwards. I thank the Acting Chairman, Senator Wilson, for his indulgence.

Question put and agreed to.
Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.