I apologise on behalf of the Minister for Finance. As Members probably know, he is at a Government meeting and will be here as soon as the meeting concludes. I have been asked to attend on his behalf.
The purpose of my appearance before you today is to introduce the 2002 Estimates for the Department of Finance group of Votes, excluding Vote 10, the Office of Public Works, which was taken by me earlier. The group of Votes which we are considering today comprises 12 Votes amounting to almost €713 million in 2002. Some of the larger Votes included are the Vote for the Office of the Revenue Commissioners, at €287 million; the Vote for superannuation and retired allowances, at €189 million; the Vote for the Department of Finance, at € 118 million; and the Vote for the Houses of the Oireachtas and the European Parliament, at €77 million. The Department of Finance has already provided members of the committee with a background briefing on the Estimates which are before you for approval today. I look forward to having a constructive discussion with the committee and I will be glad to provide any additional information members require.
Before dealing with the Estimates for the individual Votes, I will make a few brief comments on the economy and the public finances. One of the major achievements of the Government has been to create an economic climate that has helped all aspects of our economy to flourish. We have achieved one of the best economic performances in the world in the past four years. The following figures demonstrate this. Taking the years 1998 to 2001 as a whole, the economy has grown, in GDP terms, at an annual average of 9.5%. Our debt-GDP ratio stood at 74% in 1996, before we came into office. At the end of 2001, it stood at about 36%, the second lowest in the EU. With regard to income tax, over the past five years we have made major changes to the benefit of income earners and the economy generally.
We have increased the incentive to work and the reward for work by reducing the overall burden of personal taxation. More than 300,000 jobs have been created and as a result unemployment has fallen from 10.3% to an estimated average of 4% for last year, the lowest yearly unemployment rate since comparable records began. Our economic policies will ensure that today's prosperity will continue to benefit everyone now and in the future. The national development plan provides for an unprecedented public investment of €57 billion while the programme for prosperity and fairness provides increases in net take-home pay of up to 25%, improving real living standards to the maximum extent.
There is no doubt that we are currently living in very uncertain economic times. Budget 2002 was based on a reasonable forecast for GDP growth this year of just under 4%. Obviously, this is much lower than in recent years. However, I am confident that Ireland is well placed to benefit from the upturn in the international economy which is anticipated through this year.
I am proud to say that we have provided the State with good and effective government and our time in office has seen the creation of an economic climate which has helped all areas of our economy to flourish. It is clear there cannot be progress in other areas without the benefit of a strong economy.
The 2002 Revised Estimates for Public Services, published on 28 February 2002, reflect changes in voted expenditure announced by the Minister for Finance in the budget as well as certain other adjustments to voted expenditure that arose thereafter.
On the basis of the Revised Estimates and a provision of €150 million for benchmarking, total net voted expenditure in 2002 will be €28,995 million - €23,379 million current and €5.615 million capital. This represents an increase of 14.4% over the projected outturn for 2001. Since coming into office in June 1997, the Government has provided significant additional resources for key economic and social priorities and for physical infrastructure. It has also provided for long-term sustainability through the creation of the national pensions reserve fund.
I should mention one last topic before I turn to the detail of my Department's Estimate for 2002, the changeover to the euro. The Euro Changeover Board of Ireland, which is under the aegis of my Department, carried out very extensive public information and advertising activities in preparation for the changeover. These activities included a range of materials and supports to meet the needs of low-awareness and special needs groups. The board also made extensive practical preparations in conjunction with a wide range of other organisations.
The changeover itself was implemented smoothly and efficiently. By the end of the first weekend, the bulk of cash transactions were taking place in euro and the changeover was virtually complete within a week. I offer my thanks and congratulations to all those involved, including the public at large, for making it so successful.
I now turn to two of the principal Votes in the Finance group of Estimates, starting with the Vote for my Department. The Estimate for my Department for 2002 amounts to €118 million, a net increase of €24 million over the 2001 outturn. The following are the major programme expenditures in my Department's Estimate for 2002. A provision of €8 million is made in subhead N - the change management fund. This is a central resource to assist all Departments to carry through the strategic management initiative, which is the basis for the reform of the public service.
A total of €19.4 million is provided to meet expenditure on EU co-funded programmes, including O1 - peace programme, O2 - Northern Ireland INTERREG, P - other community initiatives, J1 - Structural Funds technical assistance and other costs, and J2 - technical assistance costs of regional assemblies. In addition to the co-funded programmes, €1.5 million is provided in subhead O3 - Special EU Programmes Body.
A sum of €15.4 million is provided to support the transition of the Irish public service to an information society. This includes €10.4 million under subhead Q in respect of information society expenditure. The information society fund was introduced in 2000 as a central fund supporting projects identified under the Government's action plan for the information society. For 2002, a total of €55.9 million has been distributed across a number of Departments to support major projects in the areas of e-government, e-commerce, telecommunications infrastructure and Internet access and awareness initiatives. The €10.4 million allocated to my Department's Vote is a central fund focusing primarily on e-government projects. A further €5 million is provided under subhead S - e-procurement initiative - towards the first stage of the implementation of e-procurement in the Irish public sector.
An amount of €3.3 million for child care is included in subhead R - Civil Service child care initiative - which will fund the building of crèches for the children of people who work in Departments.
A sum of € 9.9 million is being provided under subhead E - Ordnance Survey Ireland, grant-in-aid. OSI was established as a body corporate under the Ordnance Survey Ireland Act, 2001, with effect from March 2002. An Exchequer contribution will continue to be paid to OSI, based on a service level agreement, as provided for under the 2001 legislation.
The net Estimate for the Office of the Revenue Commissioners is €286.8 million. This figure represents an increase of €28 million, or 11% on the 2001 outturn. The bulk of the Estimate, over €230 million, is for pay and allowances for more than 6,500 staff. Deputies may recall that the Minister for Finance approved substantial increases in the number of staff in the Revenue Commissioners, the cost of which is fully reflected in the Estimate.
The Revenue Commissioners have continued to make significant progress in putting their new organisational structure in place. The need for structural change was endorsed by the Department of Finance review of revenue which followed the Public Accounts Committee inquiry into DIRT and is a central component of Revenue's statement of strategy for 2001-03, which was approved by the Minister for Finance last year. The most recent advance has been the establishment of a new prosecutions division with a clear mandate to secure an increase in the number of convictions for serious cases of revenue fraud and tax evasion.
The programme of organisational change is designed to further strengthen Revenue's ability to collect taxes and duties in a fair and efficient manner. It will serve to consolidate the improvements that we have seen in recent years to the organisation's capacity for high quality client-oriented service, as well as enhancing the effectiveness of response to areas of non-compliance.
Also included in the 2002 Estimate is a provision for the Revenue on-line service - ROS. Since its inception in September 2002, ROS has provided Revenue's customers with a safe, secure and confidential electronic medium through which they can interact with the Revenue Commissioners. This Internet facility enables business users, including the self-employed and third party agents, to conduct business with the Revenue on-line. This includes the filing of tax returns, calculation and payment of liabilities and accessing their tax details 24 hours a day, seven days a week. The facility is free of charge, user friendly and compatible with all the major platforms that exist today.
The objective of ROS is to enable all Revenue customers to conduct their business electronically at a time and location that suits them best. The benefits of ROS include a speedier, more accurate and secure method of processing tax returns, a reduction in compliance costs and paper handling and an altogether more efficient service.
I commend the Estimates to the committee and thank members for their attention. I will of course endeavour to supply any further information members may require.