I wish to share my time with Deputy Naughten.
Financial Resolution No. 6: General (Resumed).
Debate resumed on the following motion:
THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.
–(Minister for the Marine and
Natural Resources, Deputy Fahey).
Notice taken that 20 Members were not present; House counted and 20 Members being present,
Is that agreed? Agreed.
The budget brought forward this year by the Minister for Finance is an attempt to buy the next general election in 2002 by extracting money from various sources like the social insurance fund and the Central Bank and by asking the businesses to pay their tax in the current year and still expect people to be in business at the end of it.
The background to the budget was clearly indicated in the White Paper on expenditure and receipts, which showed there would be a deficit. Following the rapid fall off in income tax receipts, particularly in the second half of 2001, it was inevitable there would be financial difficulties in the years ahead and the Minister has predicted deficits of £2.3 billion in 2003 and £3 billion in 2004. We must add a rider to the credibility of the Minister for Finance in relation to the figures because, in his Budget Statement of last year, he also predicted he would have £4 billion more in 2001 in income tax receipts following the measures he took then and this would help to pay for the public services so that there would be a surplus at the end of this year. Receipts in income tax for 2001 are £3.5 billion worse than the Minister estimated.
Even though there were signs and warnings there would be a fall-off in economic activity in 2001, he proceeded relentlessly to ignore the advice he got from his Department officials, the ERSI and many other commentators. In a manner typical of the Minister for Finance, he just ploughed on regardless and made his own decision, which has resulted in the country being £3.5 billion worse off than it was a year ago. It is a remarkable record.
There has been a 23% increase in public expenditure and many people want to know where the money has gone. How has the boom been squandered? Why is a blueprint for a health service required after four and a half years in Government with huge financial resources available to the Minister?
The Minister for the Environment and Local Government has done more U-turns than any Minister in the history of the State. The Minister for Finance had to bail him out again yesterday by reintroducing mortgage interest relief and changing stamp duty rates. These actions are completely at variance with the provisions of the Finance (No. 2) Act, 2000, and recommended in the Bacon report, which contributed significantly to the rapid fall-off in house construction in 2001. The public capital programme for local authority house building was so badly managed by the Minister of State, Deputy Molloy, and the Minister, Deputy Dempsey, that fewer new local authority houses were started in 2001 than ever before. This has resulted in the Minister for Finance again having to bail out the Minister for the Environment and Local Government with an additional £146 million.
When it comes to better local government, the Minister for the Environment and Local Government lauds the importance of implementing this strategy by appointing directors and promoting senior executive officers throughout the country. He then refuses to give local authorities the money to implement the budgetary and financial position of ensuring those people are paid what he intended them to be paid in his publication Better Local Government. The result is that local authorities throughout the country are grappling with their Estimates for 2002 to make ends meet.
To add insult to injury the Minister was unable to implement waste management plans with the co-operation of local and regional authorities throughout the country and then he took the power away from local authority members and gave it to the county managers. As a local authority member when he came to office, the Minister claimed he would devolve more power from the centre to the local authorities, but what has he done? He has taken more of it away.
U-turn Noel, the Minister for the Environment and Local Government, Deputy Dempsey, will be known as a man who kicked every balloon up in the air with great hope but, unfortunately, each came down in a ball of smoke. This is best exemplified in his housing policy. Although it is laudable to ensure the less well off who cannot afford to buy homes on the open market are looked after, the construction industry and people involved in local authorities know how impractical this measure is.
The Minister for Finance has been praised for the 30% increase in expenditure in the second half of 2001, which has not happened before. There has been an attempt to massage the figures just like the Haughey style economics we had in the 1980s. I did not think the Minister for Finance would resort to that school of thought in drawing up this budget, but regrettably that seems to be the case. The Government will not get away with the three-card trick that has been played on the people and after the election we will have to pay for it in 2003 and beyond. The style of Fianna Fáil-Progressive Democrats accountancy, which has been pulled like a rabbit out of a hat to get us over the election, will be seen for what it is by the people at the polls in 2002.
Expenditure on many local projects in my constituency was promised, including the Kilkenny hospital plan, a ring road extension and the major motorway through Carlow-Kilkenny that is badly needed. All these have now been put back because the capital programme has been raided by the Minister to make up for the splurge of finance without the necessary rewards for the people.
The Minister was unable to tell me when the national spatial strategy would be implemented to ensure we have a desired devolution of private and public enterprise in all the regions. The per capita income in the south-east region has been reducing over the past five years and the opportunity, which was presented to us by decentralisation and the national spatial strategy, has again been put on the long finger until after the election because the Minister for Finance is unable to make a decision.
The opportunity presented to the Minister for Finance has been manipulated and massaged for the purposes of political expediency and I regret he has resorted to those tactics.
Debate adjourned.