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Dáil Éireann díospóireacht -
Wednesday, 25 Nov 1998

Vol. 497 No. 3

Book of Estimates, 1999: Statements (Resumed).

Is that agreed? Agreed.

Next year will be a very important one in terms of the entire local development programme and the efforts being made, by the private and public sectors alike, in trying to tackle, in a partnership manner through an area-based approach, the many and varied problems that are the legacy of long-term unemployment, and the ever-escalating social problems in particular areas, especially in certain urban areas. It will be the final year for the first EU Structural Funds-supported Operational Programme for Local Urban and Rural Development, responsibility for which rests with my Department. Within this responsibility falls the obligation on my Department to provide the Exchequer co-financing element of sub-programme 2 of the operational programme. The full title of sub-programme 2 is "Integrated Development of Designated Disadvantaged and Other Areas." It is under this sub-programme that area development management, ADM as it is better known, the partnership companies and the ADM community groups are funded. Within the 1999 Estimates a sum of £6.85 million has been provided for sub-programme 2 activities which attract 75 per cent assistance from the Structural Funds, sourced from both the European Regional Development Fund and the European Social Fund in almost equal parts. The Exchequer co-financing rate for sub-programme 2 is 25 per cent.

It has been my pleasure over the past 18 months as Minister of State with special responsibility for local development to have been given the chance to work with so many people who are responding so creatively, imaginatively and energetically to overcome the challenges which these problems present.

Being based in Tallaght, I was very familiar with the work of the Tallaght Partnership, one of the 12 original partnership companies set up in 1991 under the PESP. However, it is broadly accepted that it was not until 1997 that the bulk of the partnership companies and community groups began to make a difference. It was in the same period that we saw the drugs task forces growing in strength and targeting their actions to those with the greatest need.

The partnership and area-based approach to local development is also being used to address the problems stemming from drug misuse. A core element of Government policy on social inclusion is the national drugs initiative. As part of the national drugs strategy, local drugs task forces were established in the 13 areas identified as having the worst levels of drug abuse. Of these, 12 areas are in greater Dublin, where the heroin problem is particularly acute, while the other is in north Cork city. The task forces, which comprised a partnership between the statutory, community and voluntary sectors, were set up to develop an integrated, locally based solution to the drug problem.

Each task force was mandated to prepare an action plan for its area, to include a range of measures in relation to treatment, rehabilitation, education, prevention and curbing supply. The plans, which were submitted to the national drugs strategy for assessment last year, focused on the development of community-based initiatives to link in with and add value to the programmes and services already being delivered or planned by the statutory agencies for the target areas. The Government allocated £10 million to support the implementation of these plans and over 220 separate projects are now being supported under that initiative. A further allocation of £10 million is included in the 1999 Estimates.

In addition, the national drugs strategy team, which was set up to ensure the effective co-ordination of the national drugs strategy and to oversee the implementation of the strategy, mirrored the partnership approach adopted in the task forces, comprising representatives of relevant Government Departments and agencies along with representatives from the voluntary and community sectors.

A recent external evaluation of the initiative has found that the strategy has succeeded in harnessing the commitment of local communities and focusing the resources of the State in a more co-ordinated and strategic way and that this will ultimately result in a more effective and sustainable response to the problem of drug misuse. The Cabinet Committee on Social Inclusion, chaired by the Taoiseach, has approved the continuation of the drugs task forces, as recommended in the evaluation, subject to an evaluation framework for the process being put in place which would include clear statements of the overall aim of the initiative, the specific objectives arising from this aim and the specific targets arising from these objectives, quantifiable where possible and with appropriate macro level monitoring arrangements to allow performance against stated objectives and targets to be measured. The findings of the external evaluation will inform an overall review of the national drugs strategy, which will be undertaken early in the new year.

In addition to the provision of treatment and rehabilitation services, the Government is committed to focusing on the development of preventive measures as part of its overall drugs strategy. A long-term solution to the drug problem must have at its core a strategy of prevention. The purpose of the young people's facilities and services fund, established by the Government earlier this year, is to assist in the development of preventative strategies in a targeted manner through the development of youth facilities, including sport and recreational facilities, and services in disadvantaged areas where a significant drug problem exists or has the potential to develop. The aim of the fund is to attract "at risk" young people in disadvantaged areas into these facilities and activities and divert them from the dangers of substance abuse.

An Exchequer contribution of £30 million has been set aside over the next three years for this purpose, with £20 million of this amount being targeted at the local drugs task force areas, where development groups were set up in each of the 13 areas to develop locally integrated facility and service plans. These plans have recently been submitted for evaluation by an assessment committee, chaired by the Department of Tourism, Sport and Recreation. It is anticipated that the Government will take decisions in relation to funding for their implementation, on the basis of recommendations from the assessment committee, at a very early date.

The remaining £10 million of the fund has been allocated to support strategies and projects aimed at young people and children at risk, including those at risk of drug misuse, in areas outside the task force areas. Up to £7.2 million has been allocated to the Minister of State, Deputy Fahey's, programme for children at risk, to support a range of pilot projects for children and young people at risk in disadvantaged areas in Dublin and around the country. Most of the remaining funding is being targeted initially at the major urban areas of Galway, Limerick, south Cork city and Waterford. The relevant vocational education committees are taking the lead in preparing strategies, that meet the objectives of the fund in consultation with voluntary and community groups and other State initiatives in the areas. In addition, voluntary organisations with a national or regional remit, which have the capacity to deliver targeted education and prevention initiatives on a global basis, were asked to submit proposed initiatives to the assessment committee by the end of October last. Some £0.5 million has been allocated for such initiatives and a Government decision in relation to their funding is imminent.

Regarding the progress of partnerships and community groups, it is appropriate to highlight some of their achievements to date. Already most of the numerical targets set out in the operational programme have been achieved and, while the revised targets for the last year of the programme are being finalised at present, the number of people being assisted by partnerships etc. continues to increase. For example, in the first six months of 1998 3,800 unemployed people have set up their own business with partnership and community group assistance. Some 90 per cent of these were people who were unemployed for more than one year. The cumulative figure to the end of 1997 was 7,800. In the same period, some 2,280 unemployed people have been placed directly in employment. The figure for all 1997 was 4,389, which was double the previous year's figure. Two thirds of these people were unemployed for more than one year. In the period from September 1997 to June 1998 over 9,500 children and over 1,800 adults were involved in preventive education activities. The figure for 1997 was 11,000 schoolchildren over 12 months — almost three times the 1996 figure. In the first six months of 1998, 2,401 adults on low incomes have participated in partnership funded education and training courses. A further 4,287 were referred to training courses funded by other agencies such as FÁS and CERT. Over the full 12 months of 1997, some 4,812 adults benefited from complementary education projects — more than double the 1996 figure.

In terms of actual expenditure, by the end of June 1998 partnerships had drawn down £49.6 million, or 59 per cent, of the total of £83.7 million that has been committed to them by ADM over the life of the programme. Community groups have drawn down £7.8 million, or 46 per cent, of the £16.8 million which has been allocated to them.

Between 1994 and 1996, the total sub-programme two expenditure amounted to £18.2 million, £10 million of it in 1996. In 1997 alone, it was £23.8 million. This year's expenditure by ADM is in line with the forecast of £29 million and the projection for 1999 is £36 million, which brings to £107 million the total estimated expenditure under sub-programme two of the Operational Programme for Local Urban and Rural Development.

As we face into the final year of the programme, I have no doubt that the work of the partnerships and community groups will continue to make a significant difference to the lives of the people who have already been in touch with them. However, I know they are not content to work just with existing clients — they continue to reach out to include more and more people, for whom there were few lifelines in the past.

At central Government level, our task is to ensure that there is an agreed strategy and appropriate structures in place to continue the partnership and area based approach to addressing the needs of people living in the most disadvantaged areas.

I wish to mention the integrated services project. The State, under successive Administrations, has devoted significant time and resources to tackling the problems associated with pockets of acute deprivation in urban areas. A great deal of good work has been done, and is being done, in those areas by organisations from the State funded sector. Their front line staff work with great dedication.

Each of the organisations operating in these areas pursues its own brief, and that is part of the problem. There is often no overarching vision. Sustained, structured dialogue between the different organisations is lacking. To be honest, there has not been a great tradition of consultation and co-ordination between organisations in the State-funded sector. The Government feels this has been a factor inhibiting the effectiveness of the State's collective endeavour in deprived urban areas over the years. The Government also feels it is time for this to change.

To that end, the Government launched, under the auspices of the interdepartmental policy committee on local development, a pilot project, known as the integrated services project. The first phase of that project was a research phase which involved a close look at the situation on the ground in four areas — Dublin's north-east inner city; the canal communities of Fatima Mansions, St. Teresa's Gardens, St. Michael's House and Dolphin House; Jobstown in Tallaght; and Togher in Cork.

Following that work, the Cabinet committee on social inclusion has decided to proceed with the implementation phase of the project. This will be launched at a special meeting of Secretaries General of relevant Departments and chief executive officers of relevant agencies which will be convened by the Taoiseach in December.

From an Estimates perspective, it is important to bear in mind that the integrated services project is a pilot project focused on the process of delivery of State funded services in these four target areas. The ultimate aim of the project is develop models to secure more effective use of the State's resources in deprived urban areas and, thereby, improve the overall quality of life of the communities in those areas.

The literary award for confusion and, to borrow from Deputy Rabbitte, obfuscation should go to the Book of Estimates. It costs £9 but without detailed explanatory notes it is more confusing than entertaining or informative. The Department of Finance should follow the example of some of the smaller local authorities which include with their books of estimates a full explanatory memorandum of the various items detailed in the accounts.

It is very difficult to get to grips with debating the Estimates without an explanatory note. It is only press releases — and those of some Ministers are more detailed than others — which allow us to get any grip on the matter. This happens every year — all Governments have been consistently wrong in this regard. Future Books of Estimates should include very detailed explanatory notes so that they can be properly debated.

The fact that there is a 26.6 per cent increase in capital spending to £2.2 billion makes it easy for Members on this side of the House to speak about it. Our strong economic growth has put pressure on our infrastructure and has shown up the need to dramatically improve our ability to continue that growth, not only in 1999 and 2000 but for ten and 20 years into the future. There is a particular need for investment in roads, transport and communications.

Many of the decisions on infrastructural development require approval from Europe. I am concerned by the slowness with which Europe acts in these matters. I am particularly concerned about the delay in getting a decision from Europe on whether double rent allowances will continue under the new integrated area plans. In Dublin South-Central, Dublin Corporation has submitted a detailed plan for the area from the quays through Thomas Street and James's Street up to the Coombe in Cork Street and taking into account the flat complexes at Fatima Mansions, Dolphin House and St. Teresa's Gardens. European delay in the decision making process is not acceptable to the residents and other interested persons in this south-west inner city area. It is not easy to hold a protest in Brussels against the tardiness of the Commission. If these types of delays are set to continue in the future, then the commitment of people in Dublin South-Central to the future integration of Europe will be difficult to maintain. Europe must respond in a timely manner to the needs and requirements of the ordinary people of areas such as Dublin South-Central if Europe, as an entity, is to succeed. Many people in groups such as SWICN — the south-west inner city network — task forces of flat complexes and community partnerships have invested a great deal of time and effort in developing the integrated area plan in partnership with Dublin Corporation. Delays in reaching a decision are not appreciated. I would urge all Ministers to articulate the general dissatisfaction with the slowness of European bureaucracy in their dealings with their European counterparts.

I wonder whether by limiting net current spending growth to 4 per cent we are being fair to the large number of people who are not sharing in the benefits of our booming economy to the same extent as those who are in well-paid employment. The principal reason advanced for keeping the increase in current expenditure to this level is the retention of competitiveness in the global economy. A recent report in a Sunday newspaper stated that in Ireland less than 4 per cent of exported manufactured goods come from labour intensive industry, as against 30 per cent in Portugal and 24 per cent in Greece. More than half of our exports come from research and development-based manufacture. Both of these statistics point to the fact that the competitiveness of our products is less affected by wage rates and more by technological developments, efficiencies and brain power. There are exceptions of course, such as Packard Electric in Tallaght and Fruit of the Loom in Donegal. The well educated, high earning baby boomers of the early 1970s are evidence of the correctness of the path we are taking. Surely we can afford not to allow the gap between rich and poor to widen. We should look after our senior citizens, carers, widows, low paid workers and those who are socially and educationally disadvantaged to the maximum possible extent. In this context, I believe we should look closely at the sacredness of the 4 per cent cap on net current spending increase. These are times of rapid change and what was right in 1987 and even two years ago when the programme for Government was in gestation may not be appropriate for 1999.

The most important change in the funding of the social insurance fund is that there will be a surplus of income from contributions over expenditure, estimated at £38 million, in 1999. This is an improvement of £96 million over last year and is mainly due to the improvement in economic circumstances which has resulted in a lower number of persons drawing unemployment payments than in previous years. The Estimate includes an increase of 26 per cent in FIS from £30.1 million in 1998 to £37.8 million in 1999. I welcome that increase which has occurred as a result of the increase of the income limit from gross to net of tax and PRSI. The carer's allowance is increasing by 14 per cent from £45 million to £52 million in 1999.

I want to make a particular case for families, married women and married mothers. I hope that when increases are being decided, the rate for the additional adult or adult dependant will be at least 60 per cent this year. Many wives and mothers were unhappy with last year's increase which was only 40 per cent of full rate. I would also urge that the child allowance be increased to the same amount for married and unmarried mothers. I urge the Minister to ensure that the position of wife and mother in a family setting is protected in the forthcoming budget. It is time there were positive incentives for couples to marry and raise children in a secure family environment. There are currently definite incentives for young people to have children outside of a family situation. For society's sake, some changes must be made in favour of the family.

I am delighted the Taoiseach stated at the Árd Fheis on Saturday night last that he intends to throw a big party at the end of 1999 as part of the millennium celebrations. A sum of £14.9 million has been set aside for such celebrations in the Estimate for the Department of the Taoiseach. It is appropriate that the entire country shares in and celebrates our current success. I know many groups in Crumlin, Drimnagh, Walkinstown and the south-west inner city will apply for some of these funds. I hope we will be able to maintain our current pace to reach the year 2000.

There is scarcely a Deputy in the House who would not like to change places with the Minister for Finance given the embarrassment of riches which forms the background to this year's Book of Estimates. His performance must be assessed in terms of the choices he has made given the unprecedented bounty he has inherited as a result of prudent management by the previous Government. For example, his performance must be measured in terms of what inputs he has made to improve the quality of essential services such as health, education and transport. His performance must also be measured against the postures he adopted as the Scrooge of the Opposition, never missing an opportunity to engage in flowery rhetoric about the supposed profligacy of the rainbow Government. In fairness to the Minister, these postures are consistent with the stance he adopted during the wilderness years when, as a backbencher, he saw himself as a fiscally rectitudinous John the Baptist. The truth is that the Minister fares badly under both these assessments.

First, let us examine the record in the context of the Minister's own view of himself as the keeper of the nation's fiscal conscience. Last year in his first Book of Estimates, he contrived to artificially boost the outturn for 1997 in order to allow him to feign adherence to his own spending ceiling of 4 per cent for 1998. The more the Minister added back to 1997, the more leeway he gave himself for 1998. He added back in excess of £400 million spending into 1997 which, if it had conformed to standard accountancy procedures, would have properly been included in 1998. This was the first sign that, instead of a chartered accountant, we had a consummate conjurer as Minister for Finance. He artificially inflated the 1997 spending outturn for his predecessor, Deputy Quinn, and constructed the foundation which forms the baseline for the current Book of Estimates. The Minister's manipulations had converted an estimated outturn for 1997 of 6.3 per cent to a notional outcome of 9.2 per cent.

I pointed out last year that one casualty of the Minister's manipulation was the omission of the detailed medium-term financial strategy, MTFS, planned by the rainbow Government. In the event, the Minister responded on budget day by appending his MTFS to his budget statement. It is salutary to compare the figures published in that medium term financial strategy on 3 December 1997 with the Book of Estimates published 11 months later. I refer in particular to table 4(a) in respect of the non-capital supply services projected for 1999 and 2000.

The Minister forecast a figure of £11.502 billion for 1999. In fact, in this year's Book of Estimates, the Minister provides an NCSS figure for 1999 of £11.940 billion. This is a whopping difference of £438 million. In his MTFS forecasts for the year 2000, the Minister projected a figure of £11.921 billion — a figure which has already been exceeded in 1999. What does this mean in practice? Are there more nurses on hospital wards or more teachers in classrooms?

This Minister, with his reputation for tough talking, fares no better when we consider the capital side. In his medium-term financial strategy, the Minister projected a public capital programme of £1,908 million for 1999. The figure in the Book of Estimates is £2,216 million. Indeed his MTFS statement was somewhat odd as it forecast a public capital programme of £1,946 million for 1998, falling to £1,908 million in 1999 and to £1,845 in 2000. So much for the decade of investment. I welcome the change in direction and would like to know if a revised medium-term financial strategy will be appended to this year's Budget Statement.

The Minister's excellent advisers may draw his attention to the fact that the public capital programme figure in the Book of Estimates is not £2,260 million but £2,175 million which is still a long way from the projected £1,908 million. The difference is made up by the £41 million provided for non-programme outlays or NPOs. I enthusiastically agree with Deputy Ardagh's comments about the absence of annotation in the Book of Estimates. It is interesting to hear Deputy Ardagh, an accountant, explain to the House how difficult he finds it to get a grip on the Book of Estimates. It is extremely difficult — this is not a politically partisan point. It is necessary to go through quite an amount of turgid undergrowth to find what NPOs in this case refers to and what NPOs are in the first place. NPOs are described in the note as "capital expenditures, either voted or non-voted, which do not create a physical asset". This is interesting for two reasons, first because of the astounding figure of £41 million provided for merchant bankers, stockbrokers and lawyers in privatising Telecom Éireann. Over £40 million is being provided for consultants and others to bring Telecom Éireann to the market. The figure is almost beyond belief.

The figure is interesting for a second reason. Although NPOs, according to the Book of Estimates, "do not create a physical asset" and do not create a single job, the Minister has no compunction in adding back in the £41 million in the page entitled "summary public capital programme" to bring the figure back up to £2,216 million, thereby permitting Deputy Ardagh and other backbenchers to proclaim that the increase in capital spending is 26.6 per cent. Using large capitals, the Minister did the same in his press release which was headed "Government increase capital spending by 26.6 per cent". According to the Minister's press release "the total allocation for voted capital is to increase by 26.6 per cent over 1998, bringing total spending to £2, 216 million". Of course the Minister is aware that it does not quite do this at all. It is, however, the kind of smoke and mirrors presentation for which the Minister for Finance has a weakness.

I wish to refer to the Environment Vote to underpin the point. I refer Members to the following paragraph from the Minister's official press release of 11 November on publication of the Book of Estimates. Deputy Ardagh found the statement helpful, which it is in comparison to the Book of Estimates, but on reading it I wonder if even the Chair, despite his long years of experience in the House, knows what it means. The statement said:

With effect from January 1999, a Local Government Fund will be established to fund both the non-national roads programme and to make a contribution to the general costs of running local authorities. The Fund will have two sources of income, receipts from motor taxation and a contribution from the Environment and Local Government Vote. £270 million is provided in the Estimates for the Fund.

So far so good, but the following is the tester for the Chair:

Current spending on non-national roads is now provided for in the 1998 Environment Vote. Adjusting for this, the net increase in current spending in 1999 is £224 million. In order then to compare 1999 and 1998 properly, the funds must be removed from the 1999 figures for the voted current expenditure. £178 million capital is included in the 1998 Environment Vote which the Local Government Fund will finance in 1999. For a proper comparison of 1998 and 1999, that amount must be removed from the 1998 figures.

This is what the statement said — I am not making it up. One can talk about obfuscation, but this is the most incredible gobbledegook, which of course has a purpose. It is high quality smoke and mirrors, with the Minister conjuring a number of different balls in the air at the same time, the purpose of which is to simultaneously enable the Minister for the Environment and Local Government to claim a big increase in the Department's spend while the Minister for Finance proclaims he is living within the 4 per cent limit. This is a nonsense.

The Minister is adroitly presenting a number of deliberately confusing different factors. First, the proposed new local government fund will be funded from two distinctly different sources, partly through voted public expenditure in the Vote for the Department of the Environment and Local Government and partly through taxation levied in the form of motor tax. In all, £270 million will go into the new fund. The £46 million going towards potholes is regarded as current expenditure. This leaves £224 million, of which £178 million is capital spending. Therefore, for one purpose the Minister, in order not to make the 1998 outturn look bad, subtracts £224 million and for another purpose, namely, presentation of this year's Book of Estimates, subtracts £178 million as it is capital spending. One wonders whether this is the way to do business. Deputy Ardagh is kind in describing it as obfuscation.

In this fungible pot the Government is in a win-win presentational scam. The Minister for the Environment and Local Government, Deputy Dempsey, is portrayed as a big spender while the Minister for Finance, Deputy McCreevy, is seen as living within his self-imposed limits. It is quite extraordinary that the excellent high quality civil servants in the Department of Finance permit the Minister to put out statements saying he is living within the 4 per cent. They, I and the House know that is not even remotely near the actual truth. I know that by manipulating figures one can produce any result. It is a nonsense which is merely designed to produce window dressing in order to convey a particular political expedient. No Minister for Finance has done this so blatantly.

The man who threatened on taking office to pay back part of the national debt has ended up spending the significant savings which have accrued from servicing the national debt due to falling interest rates and other matters. The Minister has now revived his threat to devote a considerable amount of his surplus to paying back some of the principal of the national debt. It is a silly threat coming from a Minister who increasingly resembles a drunken man looking for somebody to hold his jacket while he prepares to fight. I think and hope he does not mean it. This is not only my view. The chief executive of the National Treasury Management Agency, Dr. Michael Somers, told the Committee of Public Accounts on 16 July in response to a question I put to him that:

some people would say it should pay off a portion of the National Debt. This is certainly a laudable thing to do. Others might suggest it go into the small savings reserve, while others would claim a national pensions fund should be set up. My own hobby horse would be to put more money into infrastructure because I feel the infrastructure in this country has fallen way behind in recent years.

This comment was made by the head of the agency charged with managing the national debt and whose record in discharging these responsibilities is praised on all sides of the House. Given customary diplomatic speak it is a firm conclusion. The Department of Finance agrees with it. The Minister's housekeeping homilies are inappropriate. It may make sense in an over-indebted family context to retire some of the debt if the bread earner or another member of the family wins the lottery but running a household is an inappropriate metaphor for running a country. This is all the more blatantly obvious given the reduction of the Government debt as a percentage of GDP to 63 per cent in 1997, from 103 per cent in 1989. It is projected to fall to 56 per cent by the end of this year.

Our poor infrastructure in so many areas is now a barrier to maintaining healthy economic growth rates. This ought to be the Minister's focus, not feigning a reversion to his old Thatcherite postures. Highly skilled emigrants are not returning to keep the Celtic tiger on course because they cannot afford to buy houses here. The lengthening queues for access to health care are reminiscent of what happened when Mr. Haughey admitted he had grown out of touch. Primary education and, in particular, programmes such as Breaking The Cycle and pre-school supports in disadvantaged communities are crying out for resources. The Government cannot get its act together after a political battle to spend the small amount of money allocated to combating demand for drugs. The gap between the beneficiaries of his halving of capital gains tax and the long-term unemployed is widening. There is an urgent, moral, imperative for a massive transfer of resources to the huge urban blackspots where unemployment and deprivation are clustered. This should include provision for investment in training to enable people caught in the no-skills trap to get their feet on the first rung of the employment ladder. Instead, the Minister has reduced the allocation for training by 3 per cent. Meanwhile he has increased the allocation for the local employment service from just under £11 million to £14 million. To date the local employment service has primarily functioned as a placement service. How can the long-term unemployed be placed in employment while cutting investment in training and essential counselling? In addition, the Minister has cut the allocation to the jobstart programme by 4 per cent.

There are two other items in the Book of Estimates to which I wish to refer. The latest configuration of State agencies, as manifest in the new Enterprise Ireland, is planned to need £55.4 million to administer £52.5 million in aids to industry. I appreciate there may be excellent arguments for every penny spent by the old Córas Tráchtála but it is difficult to understand how any agency needs £55 million in administration costs to administer £52 million in aids to industry.

I draw attention to the slashing of funding for the registration and tagging of cattle from £4 million to £1.9 million in the context of the worsening brucellosis crisis. On housing, the Government has taken issue with a leading economist who has asserted that the Minister's Estimate will allow 200 extra houses. The Minister of State, Deputy Molloy, has countered to say that 600 will be provided. Whatever the truth the allocation will make no appreciable impact on the ever lengthening housing list which now totals 45,000.

Far from living within the 4 per cent ceiling, when taken together with budget day spend the outturn will be more than twice that figure. Meanwhile the taxpayer is paying more for what are, in critical areas, inferior services. There is no planned approach to badly needed investment in infrastructure. There is no assault on the worsening housing crisis. The Minister's approach to public pay rests entirely on aspiration and, most seriously of all, at a time of unprecedented economic boom there is no overall planned assault on poverty.

I wish to share my time with Deputy Michael Moynihan.

Is that agreed? Agreed.

Listening to Deputy Rabbitte has been very amusing. He had to look very carefully at the Estimates to find any fault. On training funds for the unemployed, he neglected to say that the allocation for FÁS training for the unemployed has increased by 53 per cent in the Estimates. He also said running a household is not a suitable analogy when talking about running a country. I disagree with that. Every man and woman running a household knows exactly how careful one has to be with money. If Deputy Rabbitte looked more closely at how everyone has to live, particularly farmers in the west, it would be far better. I am delighted he commented on the farming community, even if it was in relation to tagging cattle to try to eradicate brucellosis. I have no doubt that will be good news for the farmers throughout the country.

I compliment the Minister for Finance on the job he has done in preparing the Estimates and on living within the limits he set himself last year of 4 per cent for current spending and also the 1999 average increase of 3.9 per cent, which the Minister has set himself for this year. It is good news for the country that he has managed to succeed with his objective and I have no doubt 1999 will be equally successful.

I am pleased an increase in capital spending of 27 per cent is forecast for 1999. The proof of any good policy is in the evidence and certainly it is in employment which has increased in the past two years by 4 per cent. We have had an extra 100,000 jobs in the past two years and we have reduced out unemployment figures to below the European average. The most important thing a person can have for self esteem and economic and social benefit is a job. This Government has proved successful in the way in which it has managed our economy and in the prudent budget strategy adopted by the Minister for Finance, Deputy McCreevy. This is particularly important given that we will join the EMU in the next six weeks. For that reason it is important to maintain our price stability so that we can maintain our competitiveness.

Economic success does not happen by accident and it certainly has not happened by accident here. I further compliment the Minister, Deputy McCreevy, on the sound budgetary policy he has adopted during the past two years. It is a prudent fiscal policy that has allowed a reduction in taxation and an increase in spending on many important social programmes such as health and education which we currently enjoy.

In 1999, the main aims in the Estimates are to limit current spending to 4 per cent. Capital expenditure will increase by 27 per cent. When speaking here a few days ago the Minister said that to maintain our economic growth we must improve our infrastructure. This is important, particularly in the west, where infrastructure needs to be improved if we are to remain competitive. I am glad the Minister made specific reference to this.

How will the money be spent in 1999? An additional £121 million has been allocated to health. We all know the importance of a good health service. No matter how much money we spend in the health area, we will never spend sufficient. However, this Government is going a long way to address the problems in our health service on a continuous basis.

The Minister for Health and Children, Deputy Cowen, has adopted a caring and sensitive approach on how the money is to be spent in the health area. In County Mayo we are fortunate that last week phase II of Mayo General Hospital had a tender approved for £22 million. This will provide state of the art services in the health area for the people of County Mayo. It will deal with areas of women's health, which is of great concern to me. A number of years ago phase I dealt with the male wing of the hospital. I am pleased the balance will be redressed. I thank the Minister for Health and Children for taking the initiative and giving £22 million to that much needed project. Also, the £121 million provides a substantial increase for initiatives in child care and mental and physical handicap.

The Social Welfare Vote will receive an extra £80 million in 1999 to cover the full year costs of improvements made by the Government in the 1998 budget and other technical factors such as demographic changes. An extra £69 million is being provided in the area of education, which will increase the capitation grant from £50 to £60 in primary schools. We would all like to see a higher increase, and all Members will have received deputations of national school teachers on this issue. We sympathise with those teachers, who have a very difficult job in trying to manage their schools on low budgets, and we would like that capitation grant to be increased. However, we must recognise that in the past two years there has been a 40 per cent increase in the grant under this Minister for Education and Science.

There is also a constant need for remedial teachers. When the budget is published on 2 December more attention will have to be paid to this area and to school transport, particularly transport for special needs schools. I ask the Minister to look at that area in particular. I put down a parliamentary question on this matter recently, and I know the Minister is concerned about it.

I compliment the Minister on allocating money for educational facilities for children with autism. For many years the parents of autistic children had to take High Court cases because no Government action was taken on the matter before this Administration acted. I know many families with autistic children in Mayo and the Minister's action in this area has been very warmly received. He is a caring Minister and providing £4 million for adequate training and educational facilities for autistic children has been a significant and welcome improvement.

The Minister for Education and Science should also look at the issue of school secretaries and caretakers. They are currently provided through FÁS, which is totally unsuitable. He should also try to reduce the pupil-teacher ratio and provide more substitute teachers. Under capital expenditure, the Department of Education and Science is to receive an extra £18 million.

The Defence Vote will receive an additional £32 million in the 1999 Estimates, and the Agriculture Vote is to receive an extra £26 million. The latter is important nationally but particularly in Mayo. I am delighted to welcome the reintroduction of the control of farm pollution scheme as well as installation aid for young farmers and the dairy hygiene scheme. It is very unfair that 80 per cent of all agriculture subsidies coming into the country go to 20 per cent of farmers. Farm incomes have dropped significantly in Mayo to the point where families cannot survive on farm incomes any more. Unless something is done about it, families will have to leave the land in areas like Mayo, which has already suffered a significant reduction in population in recent years.

Capital spending on the Public Enterprise Vote is to rise by £90 million in 1999, which I welcome, and an additional £212 million is to be provided for the Environment and Local Government Vote. We had a debate recently on rail safety. I draw the Minister for Public Enterprise's attention to the rail line to the west, which is in need of investment in the region of £60 million just to make it safe. It is unacceptable that in 1998 people must use a train travelling at 20 miles per hour. That is prehistoric. Major investment is needed, but the extra funding given to the Minister in the 1999 Estimates will go some way towards improving this.

I compliment the Minister for the Environment and Local Government on the significant increase in his Estimates. I thank him for his good work for Mayo in approving many water and sewerage schemes. It is vitally important that every home has running water. While those in the cities take this for granted, there are people in Mayo who must rely on roof tanks for their water supply. That is not acceptable. Every home should have an adequate supply of water; this should be a number one priority. The Minister should note that fact when allocating money after the budget and I hope Mayo benefits.

There has been much debate about hospital waiting lists. People with mental handicap have been on waiting lists for 20 to 30 years and we require 1,400 residential places and 1,000 day places. Families with mentally handicapped children are experiencing severe hardship, particularly when those children get older.

I welcome the Minister for Finance's Book of Estimates and congratulate him on the prudent job he is doing with the economy. We are on the crest of a wave and everything seems to be going well, but it is vital that we plan for the future and do not let that success blow us away or pump prime the economy. It is vital we keep a prudent line on public finances, though major increases have been given to the Departments, especially on capital funding.

As Deputy Cooper-Flynn said, there has been much debate on hospital waiting lists. However, we have seen an increase of over £120 million given to the Department of Health and Children. Every person visits hospitals occasionally, either as a visitor or patient, and we see the dedication of doctors and nurses on the State's behalf.

Long-stay institutions were built by the State in the 1940s and 1950s to cure tuberculosis. Those have now become long-term institutions and some patients have been in those hospitals for over 40 years. Very little maintenance has been done in those hospitals, and I urge the Minister to look at this issue. Some of the institutions are very run down.

The carer's allowance is being examined, as are ways of directing more resources from long-stay institutions to community involvement. This is very worthwhile. It is easier on everyone, and particularly the State, if elderly people are kept at home in their communities. The proper financial incentives must be given to the families caring for these people.

I am delighted to welcome the increase in the IT 2000 programme. The spending on this programme in 1999 is to increase by 100 per cent from this year, when it was first introduced. Information technology will be a vital part of our future. We have seen different watersheds in Irish history over the past 50 years. People will be classified according to their expertise in information technology. National school pupils of eight or nine years are better able to adapt to information technology than many adults or older schoolchildren. That is welcome. I commend the Government and the Minister for the ongoing spending in this regard.

I also welcome the increase in capitation grants for national schools. I am sure there is not a public representative in this House who would not agree that primary schools have been neglected for some time. While a good deal of money has been invested in education in recent years, primary schools have been neglected. There are many dilapidated primary schools and there has been a lack of resources invested in them, particularly in educational aids to assist teachers.

The commitment by the Minister for Finance, the Minister for Agriculture and Food and the Government in regard to the installation aid scheme, the dairy hygiene scheme and the control of farm pollution scheme is particularly welcome from a rural viewpoint. Since the control of farm pollution scheme was suspended in April 1995 the fisheries boards and others have regularly impressed on farmers the need to invest large amounts of money in small holdings to comply with regulations governing the control of pollution. Many were leaving farming because there was no capital incentive or State grant aid to alleviate the financial burden of such investment. I welcome that commitment which is encouraging.

I also welcome the reintroduction of the installation aid scheme which will be funded by the Exchequer. It will encourage young people to seek employment in the agricultural sector which has faced great difficulties this year. The Government should give whatever incentives it can to ensure young people find employment in that sector. If young blood is not attracted into an industry, that industry will die.

Incentives to encourage people to stay in rural Ireland and maintain a viable rural community have been a hobby horse of mine since I was elected. In recent years many people have moved from rural communities to large urban areas. This has created infrastructural problems with an increased demand for housing land and the provision of roads while vast areas of the countryside have been depopulated. A Government cannot wave a magic wand to reverse that trend, but a White Paper on rural development is in the pipeline. That is welcome and I await, with interest, its publication. I encourage the Minister for Finance and the Government to examine more practical ways to ensure that people are attracted back to rural communities. There has been an escalation in the price of land in the areas surrounding Dublin city and, to a lesser extent, Cork city. If an appropriate tax incentive was introduced, it would encourage people to return to rural Ireland. A major incentive to achieve that objective would be the provision of jobs in rural communities. It has been part of the Government's objective since taking office to provide jobs in the regions rather than provide all jobs in central locations, but even more jobs should be provided in the regions.

I wish to share my time with Deputy Gormley.

Acting Chairman:

That is agreed.

Despite our economic boom, for which all parties can take credit because they had a hand in bringing it about, there are dangers lurking on the horizon. As the previous speaker mentioned, our rural economy is collapsing. Farmers are not deciding whether they will continue in farming, but when is the most opportune time to leave it. I am pleased the Minister of State is present. There does not seem to be any understanding of what is happening in the rural economy. That was epitomised in the fodder scheme which was inadequate, unfair and did not target those farmers who were in crisis. It allocated fodder vouchers to farmers who will have plenty of fodder for the winter.

Problems in the health services will not be addressed by what is contained in the Book of Estimates. There has been an increase in the number on the waiting list for geriatric care, ENT procedures and orthodontic treatment. Hospital waiting lists are increasing rather than decreasing. The health services are inadequate.

I wish to mention some of the dangers lurking on the horizon. The Government must take account of them and not be complacent. The strain on our infrastructure has become increasingly obvious. It is epitomised daily by the traffic gridlock which results in a loss of man-hours and delays in moving goods from A to B. Traffic congestion is costing the country a good deal of money, which is evident on the ground. Such congestion problems may influence an industrialist's decision on whether to locate an industry in this country. An investor who considered investing in my part of the country some months ago decided against doing so because of the time it takes to travel from Kerry to Dublin. I welcome the extra funding, though not substantial, that will be provided to address that problem.

It is important to address the apparent labour shortages and skills deficit. The problem of upward wage pressures is also raising its head. Having regard to the various demands being made at present, that problem is gathering momentum. These factors will serve to make our economy less competitive.

EMU, which will come onstream in six weeks' time, will expose our economy to the harsh winds of competition on all fronts. Nobody can predict what will happen, but it will further expose our economy. The Government must address this problem. It is addressed to an extent in the Book of Estimates, but it must be further addressed in the budget.

It is important that the Minister for Finance should address the needs of the lower paid in the budget. It is necessary to target tax breaks at the lower paid to maintain our competitiveness. Small companies which would like to give their employees an increase in their wages cannot afford to do so. The only way those people can be rewarded is through the taxation system. There is flexibility in the system to do that. The Minister will probably give another £0.5 billion in tax breaks this year and I appeal to him to ensure they are targeted at the lower and middle income groups, which was the policy of the former rainbow coalition Government. That would increase our competitiveness and strengthen local economies. In most cases small businesses are located in the rural economy and they are the businesses that are finding it most difficult to survive.

Yesterday the Minister stated:

In particular it is important that there is a full and open account on the record of how the Government has succeeded in meeting its commitment to limit the growth in current spending to 4 per cent.

While this target has been broadly met, it disguises some worrying underlying factors, which I will outline. Public service pay costs rose by 10 per cent in 1997, by 9 per cent in 1998 and are projected to rise by 5 per cent in 1999. Also, increases in PRSI receipts together with lower debt service costs disguise a sharper increase in the cost of providing Government services and separate figures are not given for PRSI receipts. However, day to day spending, less debt service costs, is budgeted to rise by more than 6.5 per cent before budget day announcements are added to this total. This is more than double the rate of inflation. There are areas where increased expenditure is needed but I would be wary that the discipline in the economy which has been evident over the past ten years will be lost.

I am particularly interested in primary education. Second level and third level education are mentioned a great deal in the House but not enough attention is paid to primary education. The capitation grant for operational costs of national schools has been increased by 15 per cent in the Estimates, which I welcome. Building equipment and refurbishment grants have been increased by 40 per cent and that must be acknowledged, but when one looks at the problems addressed by these increases, they are minuscule, especially at a time when there is so much money at the disposal of the Minister. There are still 200,000 pupils in classes of 30 or more and almost 80 per cent of principal teachers must combine their full-time teaching responsibilities with their administrative duties while more than 500 schools are still without access to a remedial teachers. Shared remedial teachers generally have so many schools to cater for that the service provided is often minimal and is just not effective.

Pupil-teacher ratios for special schools and classes set out in the special education review committee report have not yet been fully implemented and, indeed, there is a long way to go. Due to a major shortage of substitute teachers thousands of pupils are in the care of unqualified and untrained personnel daily, people who are doing their best but are simply not qualified or trained to do the job. A total of 42 per cent of substitution hours was provided by untrained personnel in 1997, which is a startling statistic. More than 8,000 children with special needs attend mainstream schools on an integrated basis without minimal support services.

Despite the 15 per cent increase in the capitation grant, it is totally inadequate. I raised this matter on the Adjournment a number of weeks ago and also addressed it during Private Members' business last week. Half of the State's full-time students are at primary level, but only one quarter of funding is provided to that sector. Primary schools' authorities are required by regulation to pay a local contribution before they receive their annual grants. This is not a requirement for post primary or third level schools, despite the fact that the Constitution guarantees free primary education for every child. Every child must go through the primary education system. Therefore, it makes sense if all our children are to be treated equally and given a fair opportunity for the future that more resources should be targetted at this area. It should be given equal treatment at least.

The capitation grant at primary level prior to the Minister's announcement following the publication of the Estimates was £50 per pupil per year and it was completely inadequate even to pay for the essentials, such as heating, lighting, cleaning and insurance. This does not include other services such as cable connection and provision of computers and software, which are being demanded. The 1998 increase in the grant amounted to £5 or less than 10 pence per pupil per week while the 1999 increase will amount to 20 pence per pupil per week, and that is not enough. For example, the grant for second level education is £177 per pupil per year. There is still a wide gap and people in second level believe that grant is inadequate.

Grants for caretaking and secretarial facilities are only available to schools with 195 pupils or more and that breaches the commitments given in the PESP and PCW agreements. A commitment was made to extend these grants to all schools with an enrolment of more than 100 pupils. The dependence on fund raising and voluntary contributions to provide primary schools with the equipment necessary for the implementation of the curriculum is totally unfair and teachers are becoming very frustrated. They are semi-professional fund-raisers as they must keep accounts of the funds they collect and spend most of their time collecting money in classrooms when they should be teaching. The Minister should again review funding for primary schools and address it in next year's Estimate if he is still around. However, he should also do something in the budget.

I agree with the Minister regarding the increase of 45 per cent for water and sewerage services and facilities. It is critically important for rural areas. and I have discussed this with the Minister for the Environment and Local Government. As a rural Deputy I see great potential for housing development if sewage and water mains are provided. The population of my village would double in two or three years if sewage services were provided. I appeal to the Government to put major emphasis in future on the provision of these services to ensure that rural areas can compete with urban areas in terms of attracting people to live in small villages and so forth. There was a reference to the White Paper which I initiated when I was in office in the Department of Agriculture, Food and Forestry. The previous Government approved it and I am glad the Government has taken it on and is working on it.

There is a major crisis regarding local authority and social housing. Waiting lists are spiralling and one of yesterday's national newspapers reported the increases in and distribution of waiting lists. It reported a major increase because people on low incomes and social welfare just cannot afford to take out a loan to buy a house built by a private contractor. As a result they must join the waiting lists. There is a 20 per cent increase in funding in the Estimates but this is inadequate.

There is an increase in the number of unmarried mothers having more than one child and more should be provided for them. We should not just look at the provision of single bedroom houses but also two bedroom houses for that sector. They are not being catered for sufficiently.

In agriculture, I welcome the restoration of the scheme for the installation of young farmers but it is inadequate. The number applying for agricultural colleges decreased considerably this year and the number entering dropped by 7 per cent, because there is no attraction in farming. The grant under the scheme should be doubled at least, to about £12,000, as is our policy.

The annual Estimates provide the opportunity to see whether the Government's budgetary management matches its political rhetoric. At last weekend's Fianna Fáil Ard-Fheis a banner proclaimed: "Partnership with People", but we must ask ourselves what matters to people — is it GDP, standard of living or quality of life? I suggest it is quality of life but, ironically, as our standard of living and GDP increase, our quality of life is deteriorating.

That is why we need quality of life or sustainability indicators, which I have spoken about previously. These include moneys specifically earmarked for social investment, and in this regard it must be noted that the Government does not provide figures for the proportion of GDP which is invested in social infrastructure and in poverty proofing the public administrative process. Most European countries make this kind of analysis available. The absence of defined targets raises questions about the commitment to poverty proofing, since no measurable benchmarks have been defined in terms of the annual Estimates process. A breakdown is required of the targets and trends, in which context the Book of Estimates is to be read in relation to such quality of life indicators as economic opportunity, employment and self-employment, health, etc. The British Labour Party has spoken of these matters and is now introducing such indicators.

We have no long-term health planning and there is no provision in the Estimates for preventive or complementary medicine. We need to invest in that area rather than in gigantic, hugely capital intensive hospitals. We increasingly find that the budget for such hospitals increases but the rate of return is not great.

I thank my colleague, Deputy Deenihan, for sharing his time, and agree with him that the primary schools have been shamefully ignored. At the rate of increase in the Estimates, it will take 30 years for them to catch up with secondary schools. In my constituency schools cannot get remedial teachers. The position is terrible in the blackspots of my constituency and it will not be improved by the Government's approach to the problem.

In considering the supply and quality of housing we must compare the scale of the problem with the investment. There is a crisis on our hands but if one judged by what the Government is doing one would think there was none. Waiting lists are rising even as the Celtic tiger moves on and growth increases. We must face up to this fact; if we had quality of life indicators, perhaps instead of talking about GDP we could discuss housing waiting lists.

Climate change is another important indicator now provided by the British Labour Party. We have failed miserably to examine this and as a consequence the Exchequer is facing a huge bill. We will be forced into trading CO 2 permits, which will cost the state in the region of £500 million, yet if one listened to the Minister, Deputy Dempsey, one would think there was no problem. In my constituency, from Pearse Street to Irishtown, about one in four children is suffering from asthma exacerbated by air pollution. There is interconnectedness here because we know this costs a fortune under the health budget. It also costs in the region of 20 million ecu to deal with one pollutant, nitrogen dioxide.

Transport is a significant problem. We witness gridlock daily and the increase in the Estimate is not enough when we consider the scale of the problem. We need huge investment in public transport because the city is grinding to a halt and becoming uncompetitive. On current calculations gridlock is costing us £1.2 billion per year. We are looking at the wrong indicators. We cannot simply see the Estimates in terms of GDP because many people are missing out. More of us will become aware that quality of life indicators are required.

I wish to share my time with Deputy Ó Caoláin.

(Carlow-Kilkenny): Is that agreed? Agreed.

Having studied all the pages in the Book of Estimates I have discovered that it is a page short, and this page has been missing for the past 15 years. The Minister has given a general direction to the economy and indicated how the increased spend for 1999 will impact on the various Departments in a positive way, but the question remains as to what has happened to the missing page, the one which should have been written for Carlow-Kilkenny.

When I was first elected to the House, I said my constituency seemed to be the Brigadoon of Irish politics. A great fuss was made of it at election time but it vanished soon after, and I pledged that I would try to change that. Unfortunately, the recent restructuring for Objective One status has changed the perception of matters in the south-east, particularly in my constituency. This was underlined at a recent meeting of the Carlow County Enterprise Board, which stands as an example of how money should be spent in the region. The chief executive officer of the board spelt out that Carlow was a neglected and deprived area, and the local newspaper carried the banner headline: "Carlow Banjaxed". That is an unusual comment by a local paper on its community, and I would be unhappy with the expression, but it encouraged me to look behind it. I found the statistics presented by the county enterprise board were valid. They clearly indicate that Carlow, an important part of my constituency, is falling far behind the national average.

Something radical must be done to support the self-help ethos of the people and to restore pride in their attempts to develop their county. I am anxious to help the Minister to write the new page into the Book of Estimates and to look at the county in a constructive way. Areas in Carlow are dying on their feet, and I ask the Minister to turn this around. He should look at organisations such as CANDO, a community-based body which is driven to influence and strengthen community development within the county. He should examine the many worthwhile projects on his Department's books and help to kick-start local communities.

He should invest in the county's roads — while there has been an increase in the investment, it should be filtered directly through to the people I represent. The Carlow by-pass should be finished because the town should not be choked with traffic every day. I do not want to see business in Carlow town and county grinding to a halt for lack of infrastructure. I want the Minister to correct ten years of neglect, and to look seriously at how he intends to do that.

There are almost 1,000 people on the social housing list in Carlow, a staggering number for a small county. If there had been investment over the past few years, that list would have been whittled away. Today the list is growing. That is not good enough, and I ask the Government to invest heavily in the provision of social housing in the south-east and in Carlow in particular. The Minister should understand the plight of the thousands of people who are on the housing lists because of neglect by successive Governments over the past ten years.

In the context of tourism, the Minister should take on board the suggestions made about Carlow Castle and the dolmen sites. It is not good enough that local voluntary groups put their shoulder to the wheel to find that the only thing stopping them is lack of representation at this level. I ask the Minister to look seriously at the question of funding for those projects.

Regarding the Carlow marina project, which is encountering a problem at the moment, I ask the Department officials to take note of the problem and try to resolve it. One company's efforts to address the neglect of tourism in Carlow are thwarted by bureaucracy. A simple intervention by the Department would help to get the show on the road.

Recently the Minister invested in the Carlow Institute of Technology. That institute could be a centre for the creation of high-tech, high-spec IDA jobs. We need a properly serviced land bank in Carlow available to investors who wish to come in. The IDA should set up a task force to focus attention on investment in that area. Outside investment is urgently needed to fill the places available and the ones that could be created by the Government if it took the problems in Carlow seriously. Indigenous industry needs to be supported and expanded, and we can do that only by having jobs available. A task force made up of the IDA, the local enterprise group and others would ensure a kick-start for Carlow, restoring pride and helping the county to move on.

Carlow plays an important role in a regional context in that it adjoins Kilkenny. Kilkenny has suffered because it does not have a ring road. Major Government investment is needed here. In passing from Carlow to Kilkenny one needs to take the Waterford road, which accesses Waterford port at Belview. A proper road infrastructure would help the region as a whole to develop. Kilkenny has worked quite well with Carlow. There is an outreach centre from Carlow Institute of Technology. There is also an outreach centre from NUI, Maynooth, driven by a local voluntary group of which I am a member. About £0.75 million is to be spent on the expansion programme with Carlow Institute of Technology. Surely it would make good sense if the infrastructure in Carlow could be used to make third level education accessible to other people in that constituency. I have asked the Government to invest in a pilot project between NUI Maynooth, Carlow Institute of Technology and St. Kieran's College in Kilkenny. I hope my request does not fall on deaf ears. Local spending with NUI Maynooth amounts to £0.75 million. I am asking the Government to match that and show its intent to develop services between Carlow and Kilkenny. It could be encouraged and driven as a pilot project from which the Government could learn much. There is an application from Kilkenny Corporation in relation to an inner relief road. Because Kilkenny was neglected over a period, I ask that this application be given priority.

I ask the Minister to encourage the local group expanding health services by way of the sale of property, to give them the necessary encouragement to move that project ahead. Let us stop the Celtic tiger turning a blind eye to Carlow and Kilkenny.

This Estimates debate is unique in that the Government has a current budget surplus unprecedented in the history of the State. It is an indicator of the robust health of the economy and gives this Government a latitude in public spending not enjoyed by any previous Government. The question to be answered is how the Government will use the health of this economy to maximum benefit. What will be the ethos of the Minister for Finance's budget next week?

The 1999 budget is the Minister for Finance's second chance to get it right. The 1998 budget was a deep disappointment in that it failed to spread the benefits of economic prosperity across the dividing lines of Irish society. The effect of across-the-board tax cuts was to benefit disproportionately the better off and to widen the gap between rich and poor.

In urging the Government and the Minister to seize this second chance, Sinn Féin rejects the culture of "mé féinism" which pervades the Celtic tiger economy and which the last budget fostered. Reducing the contribution to the public purse of those who can most afford to contribute is entirely the wrong approach. Emphasis should be placed not on tax cuts but on increased public spending and on enhancing the quality of services provided by the State in health, education, housing, social welfare, infrastructure and job creation.

The figures in these Estimates and all the feel-good rhetoric about the Celtic tiger economy are undermined when one examines those other figures, each one of which represents an individual or family being denied the benefits of economic prosperity. It is almost forgotten, and has certainly slipped from the media agenda, that there are still over 200,000 people unemployed in the Twenty-six Counties. There are nearly 50,000 people on local authority housing waiting lists and 43,000 people on hospital waiting lists.

We still have to ask when there will be a fair taxation system. This question has been left unanswered by successive Ministers for Finance. Over the past five years, the Irish public have witnessed one taxation scandal after another. There have been politicians who have evaded tax, banks who have deliberately allowed their customers to defraud the State, high earners who pay little or no tax because their income and status allow them to exploit loopholes in the tax code, companies who siphon funds out of the economy, leaving ordinary citizens with a disproportionate share of the tax burden and a taxation system where PAYE workers pay over 80 per cent of total income tax.

There has been some simplification of the tax code, but the much needed root and branch reform of the system has been avoided by successive Ministers. Last year the Minister ignored advice to use the considerable funds available for income tax cuts to help the low paid. We proposed using all the funds for income tax cuts to raise the tax-free allowance enjoyed by all workers. This would help all workers, but the low paid would be the prime beneficiaries. The Minister not only cut the higher rate of income tax but also slashed the rate of capital gains tax by half. The result is a tax code characterised by abuse and structural inequity. This coalition has already promised to deliver further cuts in corporation tax without making any firm commitment to the low paid. The taxation measures in the 1998 budget thus widened the gap between rich and poor. Tax cuts once again disproportionately benefited the higher paid. This must not happen again. The tax priorities must be to improve the income of the low paid, using extra revenue not to boost the incomes of the highest paid, but to improve services in health, education, social welfare and job creation. I urge the Minister to increase the tax free allowances of single people by at least £1,000 and of co-habiting couples by at least £2,000 annually and not to make more cuts in corporation tax or capital gains tax.

Up to 1.5 million people in the Twenty-six Counties are dependant on social welfare payments. They are not only the unemployed, but pensioners, people with disabilities, widows and widowers, lone parents, farmers with small holdings, the self-employed on low incomes and, most importantly, the children of these groups. The aim of Government should be to create an economic environment where everyone can play a valuable part. However, successive Governments have been unwilling to produce policies to make the goal of full employment and maximum inclusion a reality.

The recent ESRI conference on budget perspectives highlighted these inequalities. It found that the incomes of the top earners in the Twenty-six Counties have increased over the past four years more rapidly than those at the bottom. It also found that social welfare payments increased by 16 per cent over the past four years compared to a 22 per cent growth in average income. The Minister should immediately increase social welfare payments to levels which will allow an individual to live with dignity in truly adequate living conditions that will create the possibilities for greater economic participation in society.

This year's budget must address the immediate crisis faced by farmers as well as taking the first steps towards ensuring the long-term economic future of rural communities. In 1996, there were 301,000 people working full and part-time on farms. Securing their future must be a priority and I urge the extension of the family income supplement to low income farmers.

The current housing crisis will not be addressed by the paltry measures arising from the Bacon report or the few thousand local authority new house starts sanctioned for 1999. Housing must be a priority in public spending and there needs to be major investment in a new and comprehensive social housing programme.

The Government has a special responsibility to the most vulnerable in our society. An allocation of £60 million for the mentally handicapped and their carers should be made and I urge the adoption of a new carers' payment for the 50,000 full-time carers in the home.

There has been massive development in our roads infrastructure in recent years and new national roads, motorways and bypasses have been developed. However, a new emphasis on non-national roads throughout the Twenty-six Counties is needed. Last week I published a report, "Time to End Cavan's Ordeal", which outlines the grim reality for the people of that county which has the worst non-national road network in the country. I urge Government action and funding to end Cavan's ordeal.

The unique opportunities provided by the Estimates should not be missed this time. It would be obscene if the already very prosperous and thriving sections of society were awarded yet again. If the Minister's budget includes these vital elements, I will have no hesitation in supporting its introduction.

I wish to share my time with Deputy Ulick Burke.

I welcome the opportunity to contribute to the debate on this year's Estimates and to comment on what I hope the budget will contain on 2 December. The issue of pay structures and how they affect those who wish to work must be examined. On the day the budget was announced last year, the Department of Finance issued figures which showed that a person with no dependants who earned £55,000 a year would receive a tax benefit of £1,250. However, a person who earned approximately £20,000 would only receive a tax break of £250 to £300. This demonstrates that there was an imbalance in last year's budget to the detriment of middle to lower income groups.

If we are to ensure that the benefits of the Celtic tiger are shared equally, the Government must consider the proposals put forward by the previous Rainbow Government. These would allow people on low incomes to receive a better share of the tax reliefs provided, including increased allowances and benefits. This would make it more beneficial for a person to work than to be on social welfare. On social welfare, one receives extra benefits, including a medical card, free transport for children in a rural area to primary and second level schools and other fringe benefits. We must ensure that opportunities are provided in that regard.

The issue of pensions must be considered. Many people welcomed the £5 increase in last year's budget. However, it was only after the increase came into effect that people realised partners and individuals on disability benefit did not also receive it. This was unbelievable. If one was under 65 years of age and on disability benefit, one only received £3. I urge the Minister to ensure that all those in need get proper allowances. This must include people on disability benefit.

Health matters have been mentioned many times in the House in recent weeks. It is vital that the Minister for Health and Children and the Government realise that people on waiting lists suffer. While there is a major increase in the health Estimate, I worry that some of this money will be used for salary increases or other matters and that patients will not benefit. I outlined a number of examples during the recent debate on health, but I received a telephone call from a mother this morning whose child is waiting for orthodontic treatment. My secretary was told by the relevant department that it is only working on 1995-6 cases at this time and the child must wait at least another year. This is very annoying for a young girl who is eligible for treatment.

Regarding education, I repeat the problem facing a school in Clones. The junior primary school has not been declared disadvantaged although the senior primary school has been declared disadvantaged and the Gaelscoil in the town is receiving more beneficial grants. The Government guaranteed that it would increase the allowance to primary schools to £177. However, the Estimate only provides for an increase of £10 to £50 so the Government has a long way to go in this area.

I have dwelt on the issue of roads since I became a Member of the House. I am proud of the record of the Fine Gael Party in Government on this matter. I am also proud that the current Estimate shows a continued increase in this area. In my county, Monaghan, there was no increase in funds over ten years and the roads were in a desperate state. The position in County Cavan was not any better. The local authorities had to fund the demolition of courthouses and bridges and other matters and this cost the rural economy much money. During my party's short period in Government, the amount of money available for roads was doubled. The problem now is ensuring that the money is spent before Christmas. I hope the money for this area is allocated early next year to allow the best use to be made of it during better weather conditions.

Agriwaste is another major problem. I hope the Government will try to find some means of generating electricity from the enormous amount of such waste in County Monaghan. This is not covered in the Estimates. There are EU funds available.

On agriculture, the Estimates are a disaster. A sum of £10,000 will be made available to farmers in certain areas to resolve a crisis that affected the entire country. The Minister has failed to secure the necessary funds to put a proper marketing structure in place for our beef and pigmeat products. Additional funds should be made available to provide family income supplement for farmers in dire trouble and for agriculture in general to get farmers out of the rut in which they find themselves.

I thank my colleague for sharing his time with me. A report has been lying on the Minister's desk since early spring and there has been no indication that the Government is seriously considering following through on it. It deals with the issue of drainage in south Galway, where the report was launched by officials of the various Departments involved. Based on rainfall patterns we are on the verge of another catastrophe. Is it the Government's intention to undertake remedial works so that the people of south Galway need not live in fear of serious flooding? We are aware from headlines in the world press of what happened in Central America. The same could happen here if action is not taken.

I can find no reference to additional funds in the Estimates for school transport, on which a report was presented to the Minister of State, Deputy O'Dea, some time ago. He has promised on various occasions to undertake a root and branch review. There is overcrowding on buses which date from the late 1970s and early 1980s. Buses have been withdrawn from service in Dublin and refurbished to provide a service in rural areas. Finance should be made available as a matter of urgency to modernise the fleet.

The Minister of State should reconsider the involvement of CIE in the scheme as it is inflexible and unapproachable in making even the most minor of changes. It will split hairs on yards rather than miles leaving young children to walk in the wind and the rain, in some cases at 7 a.m. It should be more considerate.

Under the previous Government the integrated rural development groups operated under the auspices of the Department of the Taoiseach. They have since been transferred to the Department of Agriculture and Food, while there is an overlapping of functions with the Western Development Commission, which has a separate budget. They will find it an impossible task to extract the necessary funds to continue their work to revitalise rural communities and should be transferred back to the Department of the Taoiseach.

I thank the Deputies who contributed to this important debate on the 1999 Abridged Estimates and summary public capital programme. The debate has been useful and interesting. I will cover as many of the points raised as possible.

The debate is important because it provides an opportunity for the Government to make clear how its spending plans will meet many of the pressing social and economic challenges facing us. The 1999 Abridged Estimates and summary public capital programme show that substantial additional resources are being allocated next year to a wide range of public expenditure programmes, including health, education, agriculture, public transport and roads. The Government has taken full account of the need to improve public services and has allocated the resources required to make significant progress on a number of fronts in 1999.

The House has heard Ministers give some of the details of how spending programmes will be developed next year. Significant improvements in public services are being provided for by the Government while, at the same time, maintaining the prudent budgetary policies which have done so much to create the economic success of recent years.

The Abridged Estimates and summary public capital programme set out part of the budgetary equation. The Government's proposals for the remainder of the budget, including taxation, will be presented to the House next week. The Estimates show that the Government is meeting its programme commitment to limit the annual average increase in net current spending to 4 per cent. The Government's planning for the 1999 budget is based on adherence to its spending target.

Listening to some of the statements from the benches opposite it is clear that the Government's approach to the Estimates has not been fully appreciated. There have been the usual criticisms. The key point appears to be that the Government is massaging the figures to keep within the 4 per cent current spending limit. The implication is that if adjustments are not made the Government will be seen to have broken its commitment.

There is no mystery about the increase in current spending. It could not be more clear. The Government's programme explained how the limit on current spending was to be calculated. Net current spending is net voted current spending on goods and services plus expenditure on Central Fund services, which mainly covers interest payments on Government debt. The Government programme gave a commitment that the increase in net current spending would be limited to an annual average of 4 per cent over its lifetime, that is, using the 1997 spending outturn as a base. This yardstick was chosen because it is clear and straightforward. It avoids any dispute about the evolution of spending between years.

Whether the Government is meeting its commitment to control spending can be checked simply by looking at the average annual increase over the 1997 base. For 1999 this year's spending outturn does not affect the calculation. What matters is that the Government's spending plans for 1999 show that current spending is rising by an average of 3.9 per cent over the 1997 outturn. None of the criticism made of the Government affects this central point. The Government is meeting its commitment on spending.

It is important to see the wider policy background behind the approach taken by the Government. The Government's policy on expenditure is not something that has been adopted for its own sake. Prudent budgetary policies have been a key element in Ireland's economic growth and the Government is determined that will be maintained. The success of these policies is clear. Ireland's economic growth continues to outstrip that of our EU partners. Most importantly, this strong growth has led to a substantial increase in employment. As the Minister for Finance pointed out yesterday, employment has risen by approximately 4 per cent for the second year running and unemployment has fallen to below the EU average.

By setting a 4 per cent target for current spending, the Government is ensuring that significant additional resources are available for the development of public services, the details of which are set out in the 1999 abridged Estimates and public capital programme. At the same time the growth in spending is being controlled. There is sufficient scope within the budgetary arithmetic to provide further reductions in taxation, which have played a major role in securing the recent national agreement.

Deputy Noonan asked the Minister for Finance for information on a number of points, including details of the increases in public service numbers underlying the 1999 Estimates. On the basis of the provisional information available to us, the Estimates involve an increase of 5,600 in public service numbers next year. Of these additional posts, 4,000 are in the health sector, reflecting the substantial improvement in services decided by the Government in the contest of the Estimates.

Deputy Crawford asked how the moneys might be spent. The moneys provided in the Health Estimate are for important service improvements. These cannot be undertaken without extra pay for the staff required and for the increasing numbers of staff. Health is a service based industry in that a hands-on approach is needed to the delivery of the type of services the people of the country are entitled to. The Government is aware that while improving the capital and resourcing side, human resources are equally provided in the front line delivery of health services. That is an approach which the House should and does support. The House will be aware that, especially in the health sector, it is impossible to have significant improvements in services without an increase in staff to provide them.

The remaining 1,600 posts I have referred to are evenly spread throughout the public service. Deputy Noonan asked for information on the assumptions underlying the 1999 public capital programme. The programme has been drawn up by the Government on the basis of specific projects to improve our economic and social infrastructure and to support the development of the economy in the longer term. The expenditure allocations provide for the 1999 cost of projects which are already under way and for the cost of those projects which are due to start next year.

My second question was not about underlying assumptions about the public capital programme. I asked if the Department has an Estimate of the scale of increases in public sector tenders in the construction industry. Inflation in the industry is considerably greater than the consumer price index. With regard to the projects to commence in 1999, has the Department or the Government information to allow for this inflation?

As Minister of State responsible for the Office of Public Works I am aware of what is happening in the marketplace. The Deputy makes some valid points. I do not have figures to hand to respond, however, in the context of my Department, which would be the main source of many of the capital projects on behalf of most Departments, I am aware of projected increases in the Estimates and of soaring rates on the rental side. I will have a note made available to the Deputy. I will shortly refer to increases in the capital programme for the Office of Public Works, which will reflect some of the questions he has raised.

Deputy McDowell asked for information on a number of points, including the position on multi-annual budgeting. The 1999 budget next Wednesday will present a multi-annual view of the main budgetary aggregates. The Deputy asked what progress has been made with the development of accrual accounting. He is aware that enhancement of accounting techniques in Departments has been under continuous review for several years. Substantial accruals-based information is already included in the Appropriation Accounts.

On the basis of recommendation in Delivering better Government, a financial management working group was established with representatives from both the public and, more importantly, the private sectors. The group's report addressed a wide range of management and financial accounting issues, including accrual accounting and was presented to the implementation group on the SMI in June for its consideration. When that group completes its consideration of the report, which I hope is not too far away, it will then be submitted to the Government.

Deputy McDowell also asked if the Minister for Finance was satisfied with progress being made on the introduction of expenditure reviews. I assure him the Minister is satisfied with these. The Government decided the first round of spending reviews last year. I understand that, to date, 12 reviews have been completed and it is expected that a significant number of other reviews will be completed shortly. The Deputy will be aware that this is the first year of the new system and the main aim has been to ensure that the expenditure review process is properly established within Departments.

Deputy Ardagh and Deputy Rabbitte made the valid point that the recently published Book of Estimates was impossible to understand due to the lack of explanatory notes and annotations. The Minister for Finance announced in the 1998 budget that he would be appointing a small expert group to look at the presentation of public financial statements with the aim of making them more easily understood. The expert group on improving public financial statements was established and it has reported to the Minister. Improvements in presentation documents are being made in the Department at present and these will include the Book of Estimates.

As the Minister of State responsible for the Office of Public Works I am pleased to draw the attention of the House to the increase in the provision for new works projects, from £39 million in 1998 to £60.65 million in 1999, which is contained in Vote 10. The House is aware of the Leinster House 2000 project, which is well under way and ahead of schedule. Other projects include the extension to Dublin Zoo, including land acquisition and the provision of a new African plains exhibition area; the National Museum, which has been allocated another £8 million for the development of Collins Barracks; the sighting of the new national folk museum at Turlough Park House; and the National Library will see a further extension and substantial improved accommodation. In addition, the Garda building programme will be increased by £5 million to oversee the completion of the divisional headquarters in Thurles, the commencement of a new station at Mayorstone in County Limerick and at Clondalkin, both much needed, and the commencement of the new residential block and three lecture theatres at Templemore Garda college. I commend the Minister for Justice, Equality and Law Reform on this.

Deputy Ulick Burke raised the issue of the south County Galway flood report, which was presented this year. The information contained in the report, which runs to vast volumes, is extensive and is extremely valuable in the context of the planning of the whole south County Galway area, especially from the point of view of the local authorities involved. On the assessments that were done, it is clear that some of the projects, including some of those anticipated at local level, were not viable for a range of good and well founded reasons. However, it is possible that some remedial works may be undertaken. We would like to assist if these can be done without cutting across environmental issues and protected areas.

I hope I have addressed most of the points raised by Deputies. I will try to get information on the point raised by Deputy Noonan.

I thank the Minister of State for indicating that 5,600 additional public servants will be employed in the course of 1999 and that provision has been made in the Estimate for that many extra staff. Is the assumption in the Estimates based on full or half year or last quarter payroll costs?

It is based on the full year cost.

That is unusual.

It is the correct position, rather than trying to pretend that information will be given on a quarter or half year. We like to be open and transparent.

An Estimate is an estimate of what the Government intends to spend.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.
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