I move:
That a sum not exceeding £86,000,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st December, 1992, for Increases in Remuneration and Pensions.
I have moved the Finance group of Estimates excluding that for the Office of Public Works which will be dealt with by the Minister of State on a separate occasion. The group that I am dealing with here consists of 14 votes and the total net provision sought for 1992 is almost £357 million.
On the public finance front generally we have come a very long way since 1986. Central to the recovery in the public finances has been the continued strict control of public expenditure. Back in 1986 total Government spending stood at 52.5 per cent of GNP. This year it is expected to be closer to 42.5 per cent — a full ten percentage points lower.
The importance of past progress and of maintaining tight discipline cannot be over emphasised. As a Government we have consistently demonstrated our resolve to ensure that public expenditure is controlled and used productively. That determination was clearly shown last year when resolute action was taken to contain the expenditure overruns then emerging. In settling the spending allocations for the current year, difficult decisions were also required in relation, inter alia, to aspects of the Programme for Economic and Social Progress, on which I will say more later. Government had to accept that full implementation of all of those developments would run counter to the requirement to achieve budgetary targets in 1992 consistent with the programme. That partial implementation of the pay aspects of the programme accounts almost entirely for the increase in the Finance group of Votes now under discussion.
As is usual, the pay element of the various Votes in the group accounts for a major proportion of the total expenditure of the Finance group — about three quarters. This is because most of the offices in the group are very labour intensive. For example, the great bulk of the Revenue Commissioners estimate is spent on pay. Whereas that office has very little of what we call programme expenditure, it is the work they do in collecting revenue which enables most expenditure programmes to proceed.
The allocation in respect of the cost in 1992 of implementing the package on public service pay, which I put forward on behalf of the Government on 17 January this year, is included in the Remuneration and Pensions Vote for 1992. It amounts to £86 million. This package was designed to ease the considerable budgetary difficulties which we were facing coming into 1992. It was also designed to take account of the concerns of the public service unions to the maximum extent possible, having regard to our budgetary difficulties. The main features of the package are; the imposition of ceilings of £5 and £6.50 per week on the 3 per cent and 3.75 per cent general round increases due to be paid in 1992 and 1993 under the Programme for Economic and Social Progress in the public service, the ceilings being lifted on 1 December of each year; and deferral of payment of outstanding special pay increases due to be paid under phasing arrangements agreed under the elaboration of clause 3 of the 1987 public service pay agreement, until 1 December 1992. Full retrospection to due dates will be made on 1 January 1993.
No provision was made in the 1992 departmental Estimates for these measures. Were it not for this package the Government would have had to find an extra £100 million in 1992.
Notwithstanding the benefits of the package, however, the Exchequer pay and pensions bill in 1992 at £3,722 million accounts for a significant proportion of all current public spending. The bill for 1992 represents an increase of over 9 per cent on the outturn for 1991, while the implementation of the measures contained in the January package, in 1993 will lead to a further increase in excess of 9 per cent. Such increases in public service pay costs cannot continue indefinitely. Vigorous efforts will have to be made to ensure that costs are reduced by active pursuit of means to achieve greater efficiency. In future, movement in pay rates will have to be matched by offsetting improvements in efficiency and effectiveness.
As part of this process, it is essential that a fundamental review of the whole pay determination system be undertaken with a view to ensuring that there is greater transparency in the system. Such a review would need to address a variety of complex and difficult issues, such as the problems with third-party adjudication when the ability of the Government to pay and the budgetary situation are not easily addressed and the basis for special relativity claims.
An approach to future pay bargaining with these aims in mind has recently been presented to public service unions. I have no doubt that with the assistance and co-operation of the public service unions, we can devise a system which will be in the overall public interest while also acknowledging the needs of individual public service workers for fair pay and satisfying careers. As the consensus based approach has worked so well for us all in the past, I am confident that the negotiations on pay bargaining will be no exception.
Under the provisions of the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1992 additional expenditure arises this year in relation to reimbursing Members of the Oireachtas in respect of telephone calls made from constituencies and in respect of expenses generally. There will, however, be an offset on foot of the latter item on the income tax side in that Members will no longer be eligible for tax free allowances in respect of expenses.
These revised arrangements, which are taken account of in the Oireachtas Vote, will result in a much more satisfactory and equitable way of dealing with the remuneration and expenses of Members of the Oireachtas. They should remove any mistaken impressions among the general public that TDs and Senators receive special tax concessions.
Apart from the remuneration Votes the main expenditure in the finance group is incurred on my Department's Vote and on those of Revenue, and the Office of Public Works. In the case of my Department's Vote the provision mainly covers expenditure of an administrative nature. In general, I have tried to contain overall administrative costs in line with the Government's policy of reducing public expenditure.
The greatest variation in expenditure in 1992 occurs in Subhead A.7. — Consultancy Services. This arises because costs associated with the formation and operation of the Sub-Regional Review Committee set up to monitor the Structural Funds did not fall due for payment in 1991 as expected. They are now falling due in 1992. I have also included an amount of £120,000 in this subhead to provide third-party technical support for my Departments' computer bureau. Consequent on advances in computing and on declining demand, the closure of the bureau is planned for end-1993. Given the remaining short life span of the bureau, it is not practicable to recruit and train new staff when vacancies arises. Third-party support is therefore the most cost-effective option.
Consultancy Services, flotation, includes an amount of £500,000 to cover the costs of consultancy services which will be required for the possible sale of the State's shareholding in ICC. Stokes Kennedy Crowley Corporate Finance Ltd have been retained to advise on the options available in relation to ICC's future development and capital requirements and to assess the possibility of a sale of the State's shareholding in the company. While a purchaser has been sought for the company, no suitable proposal has so far emerged. I am keeping the matter under review.
With regard to the Information Technology and Training Initiatives Fund, I recently launched a training and staff development package for the Civil Service which will be provided for under this Subhead. The successful management of the Civil Service is central to both the efficient running of the State's business and the development of national policy.
To this end, and in order to cope with changes in the commercial environment and other demands, the civil servant of the 1990s and beyond must be highly trained. A major objective of the training initiatives approach is the development of a pro-active approach by management and staff to their training needs. Top management commitment and work-centred programmes are the cornerstones of the approach. Under this package, I have set up a fund to help Departments undertake training and staff developments which could not be met from their existing training budgets. The fund will also support a post-graduate programme for senior civil servants in strategic management.
I have allocated some £224,000 to the fund for 1992 — a generous allocation in light of the budgetary constraints we are faced with but indicative of my concern for the better training of civil servants. The balance of the provision under this subhead, £223,000, will be used to give financial support to Departments who wish to undertake advanced information technology related projects.
A new subhead, subhead M will provide for the expenses which will arise in the management of the assets and liabilities of Fóir Teoranta. Following the dissolution of that company in 1991 under the Fóir Teoranta (Dissolution) Act, 1990, the Industrial Credit Corporation plc took over the written down value of the Fóir Teoranta portfolio, some £10 million. This new subhead provides for recoupment to ICC of the management expenses associated with administering the portfolio, payment to be made in respect of costs incurred in the previous year. The precise amount to be paid to ICC in respect of their administration costs will be the actual audited costs incurred, plus a profit element to be agreed with this Department.
The Industrial Credit Corporation will pay over to the Exchequer all funds collected by them in respect of the portfolio. An amount of £900,000 was paid by ICC to the Exchequer in 1991.
It has not been necessary this year to provide for any expenditure under the Former Repayment of Advances subhead. This subhead funded the special loans scheme. Under the scheme, the Exchequer bore the risk on funds which it advanced to ICC to be lent on to high risk business ventures. The scheme helped provide finance to developing firms which would not have obtained loans on commercial grounds. In the case of write-offs, the subhead provided for repayment of the amount involved to the Central Fund in the following year. The total amount written off to end 1991 under the scheme was £6.881 million.
As I have already remarked, expenditure under the Revenue Vote is largely on pay which accounts for £102 million of the net Vote of £123 million. I do not propose to deal in any detail with taxation issues which are not appropriate to an Estimates debate. Suffice it to say that the Government are continuing to put resources into the improvement of the taxation system in 1992, particularly in the areas of self-assessment and measures to tackle anti-evasion and avoidance.
An essential element of the self-assessment system is a comprehensive programme of auditing to ensure the maximum degree of compliance from taxpayers. Such auditing must be done on a multi tax basis and requires training of staff on a very significant scale involving, in the cases of officers not based in Dublin, considerable expenditure on travelling and subsistence. An additional £1.8 million has been provided in 1992 for the programme of self-assessment audits, including training. This expansion will put a further 150 staff in the field and require the training of 300 officers. I have also asked the Revenue Commissioners to put together a new initiative for 1992, designed to release experienced staff for an increase in audits and, at the same time, to increase staff numbers engaged in collection of arrears, I have provided an additional £750,000 to finance new initiatives in tax collection and enforcement.
Deputies will also notice that there is an increase in the revenue provision for law charges and rewards. The main increase is accounted for by the inclusion of a sum of £600,000 in respect of the expected increase in the cost of lodgement fees for sheriff certificates. At present the lodgement fee is 35p per certificate but it has been proposed that this be increased to £5 as part of a package to change the arrangements for remunerating sheriffs. The present system, which in practice allows for the limited retention by sheriffs of revenue collected in interest bearing accounts, has given rise to criticism in recent years. I hope to change that.
On the decentralisation front the Deputies may be interested to know that decentralisation of the Accountant General's office to Ennis has now been completed. A total of 122 staff was involved. Decentralisation of 203 staff to Nenagh has commenced and is scheduled to be completed on 15 June. Phase 1 of the decentralisation of the staff of the Collector General to Limerick is at present planned for April 1993 when 117 staff will be transferred. This will shortly be followed by the transfer of a further 132 in Phase 2.
With these comments I commend the Finance group of Estimates to the House.