Dáil Éireann díospóireacht -
Wednesday, 15 Jun 1994

Vol. 443 No. 8

Adjournment Debate. - National Development Plan.

Mr. Yates

I thank the Chair for affording me this opportunity to make some preliminary points in relation to today's events. On the publication of the Community Support Framework I hope the House will be given an opportunity to debate this matter in greater detail.

The first point I want to make is in relation to the cynicism displayed by the Government in attempting to mislead the public on the financial shortfall for the national plan was published. Last Thursday was polling day. My understanding is that an agreement was reached with the European Commission as far back as April on the broad thrust of the Community Support Framework. Yet on 1 June the Minister for Finance had the neck to say that since then officials had been working through the detailed text and statistical material — referring to validation of statistics — whereas we have now confirmed from Brussels that this was deliberately held over to save the blushes of the Government before the electorate could pass their verdict on Thursday last. It was deliberately concealing which projects were to face the axe, which way the taxpayer was to pay more and which projects would be slowed down.

The Minister of State at the Department of Finance, Deputy Fitzgerald, author of the Ethics in Public Office Bill, has lectured us on proper behaviour and it is remarkable that she should attempt such a cynical stroke of the worst Fianna Fáil kind to try to have this done after the election.

We had a debate in Private Members' Time on this matter on 31 May and 1 June. The Minister of State, Deputy Fitzgerald, said that in this House on 8 March 1994 Deputy Yates said the revised proposals presented to the European Commission last Thursday morning — an across-the-board cut of 8.5 per cent in the National Development Plan — will be rejected. Her prepared script, a copy of which I have states:

I can assure the Dáil now that when the Community Support Framework is published, Deputy Yates will have been proved comprehensively wrong in his predictions. The eventual outcome is fully consistent with the Government's approach.

In the morning newspapers today I read that the European Union officials have rejected a pro rata, across-the-board cut, and have insisted on selective cuts. That is what happened and Government spokesmen are now saying that the only pro rata element is that the taxpayer will make up the difference.

On Tallaght Hospital alone the taxpayer will be asked to pay the difference in the shortfall, £40 million. Let me put that in context: in this year's budget, tax on the old reliables, sixpence on a gallon of petrol, threepence on a pint of beer and tenpence on a packet of cigarettes amounted to £48 million. This represents another lash for our hard-pressed tax-payers who will have to pay for this Government's incompetence for the Tallaght Hospital. The total incompetence amounts to £130 million a year.

Let us not have any more lectures on how well we are doing because the fact is we received more money in 1993 than we will receive in any single year between 1994 and the date of completion of this plan; the money has peaked. Therefore, we have had insult added to injury for the taxpayer. To make up for the Government's vanity and incompetence, poor Paddy, the taxpayer, will be asked to rattle his pocket one more time, for the equivalent of the 1 per cent income levy, to keep these spending programmes on target.

The one slight optimistic note is that I think the public is copping on to this Government. Despite the plethora of programme managers, spin doctors and special advisers massaging the message, the people see that this is a Government lacking substance, engaging in politics of the sound bite, just to get through the day on the basis of a fog of confusion. We have had a consistent pattern of false claims. How many times has the Taoiseach in this House said there will be no alteration in the plan, there will be no cuts? Today the Minister for Finance muttered into a microphone saying some projects will be drawn out and the Government will look at some projects again, while others remain to be approved, such as the peat-fired station. We have a sorry mess, entirely of the Government's making, because it did not come clean with the public.

We shall have an opportunity to debate this later. The cynical stroke to defer this announcement until after polling day is one of the most outrageous attempts to deny the public an opportunity of transparency. It was done by a party that promised to put trust back into politics. It should be ashamed.

Minister of State at the Department of Finance (Ms E. Fitzgerald)

I reject the accusation of cynicism and postponement for electoral reasons. I would have been delighted to have been able to publish the Community Support Framework earlier because it represents excellent news. Today we received approval in principle from the European Union Commission, at its meeting today, of the Community Support Framework for Ireland for the period 1994 to 1999. Following submission to the relevant consultative committees we expect formal approval and publication of the Community Support Framework in a couple of weeks. The Operational Programmes are being finalised and, within a few short weeks, we expect to begin drawing down on this very substantial transfer of funds to increase the jobs capacity of our economy. I am delighted the European Union Commission has formally approved the Community Support Framework and that there remain just a couple of more formal steps before it is fully approved, signed, and we can begin to draw down the moneys. The sooner we do that the better.

I would have been very anxious, as I told this House in the debate a fortnight ago and earlier, that discussions with the European Commission would go well. Indeed, I was anxious to have them concluded earlier because that would have been excellent news for us all embarking on the European election campaign.

I am delighted that, after all the debate and discussion, we are about to see this real, very substantial investment in the Irish economy. Our task is to ensure that this money is spent wisely and that we get the maximum long term benefit from every ECU spent. We were disappointed last October when the Commission announced that the Community Support Framework would be £4.54 billion, the same figure which was announced, or leaked last evening. Contrary to media reports, there has been no change in the Community Support Framework figures announced last October. Disappointing as is the shortfall it must be pointed out that it represents the highest amount per capita in the European Union, so that we have done very well. Deputy Yates has attempted to turn the same bad news, to run it three, four of five times as though it was something new——

Mr. Yates

The money peaked in 1993.

Ms E. Fitzgerald

——whereas the figure announced last evening in the leaks to the media is the same figure we had in October last. We have all known about it and we debated it at length in this House. We were disappointed but we have recognised it.

The Government's contribution to the National Development Plan of approximately £4 billion has been fully maintained. The Government recognised the reality of the shortfall in European Union receipts. As we informed this House on several occasions, we put to the Commission a pro-rata package which would keep the basic shape and order of priorities we had spelled out in the planned document with all the flagship projects in place. I spelled this out again a fortnight ago in this House.

The plan, as endorsed by the Commission today, fully reflects our approach. The combined totals of European Union and Exchequer spending on each element of the Community Support Framework reflect almost exactly to the last ECU the proposition we put to the Commission. We are delighted with the successful conclusion of our negotiations. I wish to spell out clearly that the total contribution from the European Union is as announced by the European Commission on 21 October last——

Mr. Yates

That is not what was in the plan.

Ms E. Fitzgerald

The total contribution from the Exchequer has been maintained and the combined expenditure on each element, taking European Union and Exchequer spending Combined, reflects the plan's priorities adjusted on a pro-rata basis to reflect the shortfall. As previously announced to the House there is no deceit or breach of ethics involved. Deputy Yates confuses the difference between how EU aid is juggled and the total. People are generally interested in the total cost of any project, not in how it is made up technically. We have not lost any additional money.

Mr. Yates

You cannot miss £1 million and pretend it was not there.

Ms E. Fitzgerald

Our CSF proposal, based on a total spending from Exchequer and EU sources, has been accepted. I will quote from the Commission's statement of today from Bruce Millan:

The Commission's appraisal of the objectives and strategy concluded that the central objectives of the Plan and the proposed strategy were appropriate to the needs and opportunities for development which have been identified in the plan itself and in various preparatory studies.

The mix of Exchequer and EU funding for individual projects has been changed in the CSF, as agreed, but without affecting the totals in any significant way. In the debate a fortnight ago in the House I signalled to the Opposition that the mix had been changed. It does not matter if we are getting £80 million on one side and we are putting in £20 million and vice versa.

Mr. Yates

Will the Minister tell us which part of the NRT will not go ahead?

An Ceann Comhairle

There is a time limit.

Ms E. Fitzgerald

If the totals are the same it does not matter. While the EU is giving us less money for Tallaght hospital they are giving us more for national primary roads. What we lose on the swings we gain on the roundabouts.

Mr. Yates

We will be left with the potholes.

Ms E. Fitzgerald

The areas where we are spending more of our own money are counterbalanced by the areas where we are spending less because the EU is picking up more of the tab. The totals, which are what matter, remain unchanged from what we knew last October.

Mr. Yates

The Minister of State has a brass neck.

Ms E. Fitzgerald

I wish to quote from the text of the CSF approved by the Commission today:

The proposals of the Commission in these areas were acceptable to the Irish authorities on the basis that they were consistent with their development strategy and that they were able to make offsetting shifts in the allocations of domestic Exchequer resources so as to essentially maintain the relative shares in overall expenditure in the areas concerned.

The Government will look each year at the budget possibilities. If circumstances are favourable it may well prove possible for the Exchequer to inject additional resources in later years——

Mr. Yates

More tax.

Ms E. Fitzgerald

——while maintaining budgetary discipline. If the Deputy listens he might hear something. This was the case in 1994 where the Government put an additional £40 million over what it had originally committed into the plan. To the extent that this is not possible, some of the investments originally proposed may take longer to complete, as stated during the past number of months.

Mr. Yates

The year 2002.

Ms E. Fitzgerald

As pointed out in the independent evaluation commissioned by the EU — published in the ESRI medium-term review — investments which make economic sense for the Commission make equal economic sense as investments by the Irish Government. However, the Government recognises that fiscal discipline is essential to creating growth in employment and investment and in no circumstances will there be any increase in borrowing or in taxation. As the budgetary strategy allows from year to year, if we have a few bob in the kitty and there are worthwhile investments in the plan that we can bring forward we will continue to do so.

I welcome the Commission's emphasis on proper investment appraisal and cost benefit analysis. None of us wants to see funds spent on white elephants or over-designed projects, or to see money frittered away with poor expenditure controls. The shortfall in funding makes good investment appraisal even more urgent and, as Deputies may be aware, any project which costs over £20 million requires a full economic appraisal before it can go ahead. There is nothing new in such a requirement for any of our large road, rail or electricity projects. Indeed the Department of Finance, at my request, is updating its guidelines on project evaluation and project management to ensure that we learn from the mistakes of the past and put in place sound systems which avoid mistakes for the future.

The negotiations of the CSF with the Commission have gone very well and I pay tribute to the Commission officials and to the officials in my Department for the hard work and the constructive spirit in which these negotiations were conducted. I look forward to spending this money and to spending it wisely——

Mr. Yates

I would say you do.

Ms E. Fitzgerald

——to ensure an increase in Ireland's output and to create a long term benefit.

Mr. Yates

That is the most cynical stroke in 20 years.

Ms E. Fitzgerald

It is a very constructive injection into the Irish economy whatever Ivan the Terrible may say.

Mr. Yates

The Minister denied the electorate.

Ms E. Fitzgerald

This is an excellent plan. Unfortunately, it will have to be implemented more slowly than originally planned but we will implement it with rigour and ensure a lasting benefit to the economy.

Mr. Yates

The public are copping on.