Dáil Éireann Debate, Wednesday - 13 June 2012
2Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide an update on his Department’s Budget 2013 preparations; and if he will confirm the budgetary process for the remainder of the year in advance of the Government’s December Budget 2013 expenditure announcements. [28671/12]
View answerThe medium-term fiscal statement, published in November last year, set out the Government's economic and budgetary assessment for the four year period 2012-15, including the estimated level of fiscal consolidation that is required to bring the general Government deficit below 3% of GDP by 2015, as the Government is committed to doing. The comprehensive expenditure report, published in December 2011, set out the Government's position as to how the aggregate expenditure would be split across individual Departments for each of the years 2012, 2013 and 2014.
Officials from all Departments are currently working to identify the appropriate policy measures to give effect to the medium-term budgetary adjustment while minimising the impact on public services. In this regard, I remind the Deputy that as part of the whole of year budgetary approach in the comprehensive expenditure report published, I wrote to all Oireachtas select committees in January of this year inviting them to engage actively with the relevant Departments during this year's Estimates process. Committees now have an opportunity to engage with the relevant Ministers with regard to next year's allocations. I am happy to report that a number of committees have informally indicated that they intend to do that. I also encourage all select committees to give serious consideration to this approach, as it will ensure a much wider engagement by Members of the Dáil in the annual Estimates process in advance of the allocations being agreed at Government level and not afterwards as has been traditional.
As to the wider budgetary process, I will consult closely with my colleague, the Minister for Finance, on arrangements for all budgetary and fiscal announcements for the remainder of the year. It is also the case that Ireland's budgetary and Estimates timetable is influenced to an increasing extent by requirements at a European level, which apply to all member states. The introduction of a European semester in 2011 has led to the publication of the annual Stability Programme update in April of each year setting out the parameters for the budgetary process. The European Council is currently finalising an overall package of economic governance reforms, including the so-called "six-pack" and "two-pack", which will have further implications for the budget and Estimates processes.
I thank the Minister for his response. What spurred me to raise this issue was a comment made by the Minister for Finance, Deputy Noonan, with whom the Minister for Public Expenditure and Reform works in close collaboration. He led the public at large to understand that in the event of a "Yes" vote in the recent referendum, there would be an "easier" budget. In light of the Minister's response, could he clarify where the easing will come from? I have here a copy of the report to which he referred. I understand from what the Minister said that he intends to plough ahead, taking, for example, a further €3.7 million from community child care subvention - a sector that, as the Minister well knows, is under siege - in 2013, and taking a further €1.8 million from school completion projects. In the context of the broader budgetary mathematics these cutbacks, which were identified in the report, might seem like small sums, but they will have severe implications on the ground. What on earth was the Minister for Finance, Deputy Noonan, on about when he mentioned an easier budget?
The Minister referred to the European semester and also to the six-pack, and he made reference to its limitations and its implications for our budgetary process. Could he shed more light on that?
There were a number of questions in Deputy McDonald's contribution. The target for next year is to reach a deficit of 7.5% of GDP. The quantum of money required to get to that is not defined. An estimate was published in the last fiscal review, but that needs to be refined because it takes into account inflation and growth, which are constantly under review, as well as external factors. In my earlier reply I invited the Deputy to involve herself in the detail with line Ministers across each Department, who have all the data with regard to the reduction required to meet the fiscal targets we have set and achieve a deficit of less than 3% of GDP by 2015. The Comprehensive Review of Expenditure contains all the measures that might contribute to that, some of which the Deputy may agree with but most of which she will not. We should engage in a democratic debate on these matters so that people's opinions at a political level are understood.
The Minister for Finance, Deputy Noonan, logically made the point during the course of the referendum debate that the freedom we have to spend reserves such as the National Pensions Reserve Fund for stimulus purposes, which is our stated intention, in addition to other stimulus measures - I will deal with that in a separate question - would have been significantly affected had the people chosen to reject the stability treaty, because our chances of returning to the markets would have been damaged and we would have been required to hold on to as much money as we could to pay for day-to-day public expenditure. That is clearly what the Minister was saying.
With regard to the EU semester, there was a proposal in the two-pack to bring forward the budgetary process and align it across the European Union. The most recent discussions within the budgetary committee in Brussels have indicated that it is unlikely, in my judgment, to be agreed this year.
The Minister set out what he sees as the logic of the Minister for Finance's position. I take a contrary view; I think he was being rather deceptive in his clear articulation that there would be an easier budget after a "Yes" vote. Out of curiosity, did the Minister realise that the Minister for Finance was going to make those comments?
The target of 7.5% is contingent on a number of factors, not least growth. While we have figures and targets in the document produced by the Minister, they are a moveable feast. I appreciate that he wants a democratic debate, but for that to happen effectively we must know the precise parameters. Those of us on this side of the House must have confidence that whatever observations we make will be taken seriously and that the Minister is not simply attempting to institute a protracted process to take the heat out of what will be another very difficult budget - not difficult for the Minister, but difficult for the people on the receiving end.
I must disagree with the Deputy's last comment. It is very difficult to introduce a consolidation budget. I would be a much happier Minister if I were in Charlie McCreevy land, the good times were rolling and I could announce spending increases to rapturous applause in the House. That is not the lot that fell to me or to this unfortunate nation. We have to map our way out of a difficult economic situation.
I also disagree with the Deputy about the volume of information she has. She has the targets for each year, including the 8.6% deficit target we must reach this year, the 7.5% target for next year and the target of 2.9% of GDP by 2015. She has the Comprehensive Review of Expenditure documentation, which contains voluminous information from every line Department on all options for reducing expenditure. If there is anything outside of that which the Deputy wishes to put on the table, I would welcome it. The Deputy says she would be happy to do so if her suggestions were paid heed to. If they are constructive, that is fine, but if the approach is one of nihilism - the notion of cutting nothing and opposing all taxes-----
It is the Government that will not raise income tax.
-----there is no great benefit in it. I honestly believe that all Deputies are seriously thinking about the situation this country is facing. We are facing into another difficult budget - I will not gainsay that for a second. Deputies have seen the figures. The adjustments for next year are bigger than the adjustments we have imposed for this year. We need to consider all ideas in addressing this issue so that we can minimise the impact on citizens.
What did the Minister for Finance mean by an easier budget?
We must move on to the next question.
I need the Minister to answer the question, a Leas-Cheann Comhairle.
We are over time. I will come back to the Deputy.
It was a clear question.
