Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Wednesday, 9 Oct 2002

Vol. 554 No. 5

Private Members' Business. - Public Finances: Motion.

I move:

That Dáil Éireann condemns the Taoiseach and his Ministers for gross misrepresentation of the budgetary position in the run-up to the general election, and for abandoning all prudence in the management of public finances which has resulted in the general Government balance being €5 billion off the target set by the Government itself.

I wish to share my time with Deputies O. Mitchell, Ring, Connaughton and McCormack. Tonight we are in a very grave situation in that in a short number of months after the general election what I believe is the united voice of the Opposition parties is setting a case of the People versus Deputy B. Ahern and Companies. I lay eight serious charges before the Dáil tonight of gross mismanagement of the public finances. The charges are that on 13 May 2002 the Minister for Finance, with the collusion of the Taoiseach and other Ministers, deliberately and knowingly misled the public about the true state of the public finances; the Minister for Finance recklessly undermined the tax base by indulging in ill-considered tax giveaways that were only partially costed; the Taoiseach and his Ministers in 2001 and again in 2002 engaged in public spending far beyond the limit sanctioned by the Dáil; the Taoiseach and his Ministers abandoned the minimum standards of prudent management of public finances by repeatedly entering into binding commitments without assessing the true costs or benefits of those commitments; the Taoiseach and his Ministers have failed to deliver improvements in public services to warrant the massive spending they have undertaken; the Minister for Finance profligately tapped once-off sources of revenue to paper over the deficit spending in a way which is not in accord with the sound principles of financial management; in implementing cutbacks the Taoiseach and his Ministers have crudely targeted spending that benefits weak and voiceless sections of the community and have increased charges to the public at a time when runaway inflation is already undermining living standards and competitiveness; and the Taoiseach and his Ministers conspired to squander a surplus created by Irish workers of €4.8 billion and in its place will run up a deficit this year of at best €750 million by the end of the year.

If a person buys a second-hand car and finds on returning home that the clock had been tampered with and turned back, what really rankles with him or her is that he or she has been conned. One has no comeback when one's proud choice begins to guzzle gas, burn oil and break its timing belt because the people who have made these commitments are safely on their way and gone out of reach. That is what happened with the Irish public when the Government and Minister sold them a pup as to the true nature and state of the public finances in the run-up to the general election. Gradually, over the summer months, the public began to see the reality under the bonnet of that "much done, more to do" model they had just bought. A sad state of affairs was revealed. The sick were asked to pay 21% more in drugs refund, 26% more at casualty, 10% more in their hospital beds, parents had to pay 70% more to register their children at college, staff in hospitals were laid off, promised recruitment was cancelled, local authority rents were increased by 18%, the VHI increased by 18% and the ESB increased by 13% in order to fuel Government coffers. Support for disadvantaged pupils and adults trying to return to education was cut. This is what the "much done, more to do" model produced over the summer months. Yet the Taoiseach and his Ministers repeat the mantra "no cutbacks". Even Fianna Fáil backbench TDs – sadly none of them are here this evening – began to blush as they were kept in the dark, knee deep in manure, while these cutbacks were loaded on people's backs.

Three days before the election the Minister gave a solemn assurance that the budget was fully on target, no cutbacks were planned secretly or otherwise and taxes would come in on target. However, within three weeks of the election he produced a detailed memorandum calling for a detailed menu of cutbacks and new charges to be implemented. He asks us to believe none of this was in preparation prior to the election when he made his solemn commitment. I do not accept that because the figures speak for themselves. The Taoiseach said earlier that the figures were showing a very healthy state of affairs up to 13 May when the Minister made these pronouncements. This could not be further from the truth. Tax revenue in January was minus 6%, plus 9% in February, minus 7% in March and static in April and May. There was clear evidence tax was going off the rails at that stage. Spending was even worse. In January and February, it was up 22%, in March it was up 36% and in May it was up 50%. The Minister let go of the reins on the public finances. Ministers were spending and recruiting left, right and centre in the run-up to the election. The Minister made commitments in the budget, including on tax, which he had not properly costed and the people were taken in.

The Taoiseach will not call them cutbacks because if he did, he would be admitting he lied to the people. Senior Ministers and the Taoiseach knew exactly the medicine that was in preparation for the public at the time these commitments were made. It was deception on a massive scale. From the very beginning the budget figures were treated with contempt. They were no more than a spin to give a veneer of respectability to the reckless political project that was under way. We are told that the Department of Finance was issuing warnings but the Taoiseach and his Minister partied on. Recruitment to the public service accelerated and spending was brought forward for maximum electoral impact. I recall that child benefit was brought forward. There was so much money they could not get it out the door fast enough. This was the great new partying the Minister pronounced. The monthly evidence that spending was out of control and that revenue was collapsing was simply ignored. This was an inconvenient truth that would wait until after the election.

The Minister for Finance recently let the mask slip in Killarney when he said, "What was I to do? I was there to win Fianna Fáil the election." That is the sort of cynical thinking that underpinned the pronouncements made during the course of the general election. The people now realise it and this is why their anger is so deep. The public is now to suffer the hangover for the Government's binge. In the scramble for cutbacks the Government has left untouched the big bureaucracies, army of advisers and spindoctors. Instead the axe is falling on the crumbs that come across the table to ordinary punters, those dependent on the State for health and education services and on local authority housing lists for housing. The cuts have fallen on the weak and voiceless because the Government knows it will get away with it. They are the soft touch. When Ministers were asked to tighten up, they did not turn first to the bureaucracies that are producing so little. The Minister repeatedly expresses his anguish at how little these bureaucracies are producing, yet he presided over a situation whereby instead of trying to reform public spending to get better value the Government, in its stumbling for cutbacks, imposed extra charges on ordinary people.

It is difficult to believe the Government has squandered the hard-earned surplus of €4.8 billion built up by the workers of this country in just two years. It took just two years for the Government to let that surplus go out the window. The sad tale is there for anyone to read. I know the Minister does not like to be reminded of the harsh facts. In 2001, the Dáil approved extra spending of €2.9 billion at budget time. The Taoiseach allowed his Minister to spend €3.6 billion and he overran by 24%. In 2002, on current performance the Minister, having received sanction for the budget for €2.8 billion, is now heading for an increase in spending of €4 billion. This is a 45% overrun in the spending commitments sanctioned by the Dáil at budget time. If that is not massive loss of control of public spending, I do not know what is.

The story is the same on the tax side of the budget. In budget 2001, the Minister said he would raise an extra €3.2 billion but he raised just €649,000. He was 80% short of the target he set himself. In 2002, his target was €2.4 billion in extra tax revenue. He is saying optimistically he will raise €1 billion extra but one does not believe him. On his own estimate he will be 54% short of target. Was that not a case of public finances being shot through by reckless Ministers? They made tax commitments that they clearly could not live up to. They have cost the taxpayer a fortune. They just ignored the spending restrictions the Dáil agreed to when they were imposed and they ploughed on. We have had so many examples of this. Deputy Olivia Mitchell could tell one of the example of medical cards for those aged over 70. The Government had no clue what it would cost when it made that commitment.

When Stadium Ireland was introduced it was heralded as a marvellous idea. Where are we now? We have spent €400 million and we have nothing. The Taoiseach is now traipsing the country with an offer of land probably worth another €500 million looking for people to come and take on this project. The Minister knows in his heart there was no proper costing of that project and no proper assessment of its benefits. This was a political whim, like so many other spending projects that the Minister allowed his colleagues to embark upon. That was the sad truth of what happened. The public will suffer the hangover for this binge, not the Taoiseach. He will not make room in his Estimates to rectify this matter.

The Minister came into the House week after week telling us he would meet his budget target. He said he would do so after the election and would work miracles. Then, gradually, he admit ted that maybe €300 million on the spending side has to be made good, but that he would battle on. Then, in respect of tax, he said we might lose €300 million, but would battle on. Then the figure became €500 million, then €1.3 billion. Week after week the story, which was so rosy before the election, became grimmer. He tells us spending will still come in at 14.4%. I had a look at what that would mean for Departments and what they would have left to spend in the last quarter of 2002 if each Minister was to come in on target. In nominal terms, not real terms, and not making any allowance for inflation, the Department of Justice, Equality and Law Reform will have to spend 2.2% less than it spent in the last quarter of 2001; the Department of the Environment and Local Government will have to spend 14% less; the Department of Education and Science will have to spend 1% less; the Department of Agriculture and Food, 52% less; and the Department of Health and Children, 3% less. The real binge was in the Department of Arts, Sport and Tourism, which will have to spend 33% less. The Department of Community, Rural and Gaeltacht Affairs will have to spend 6% less.

We have burned out the spending in the first half of the year trying to coax votes to come the way of the Government. If the Minister is serious about bringing the budget in on target, will he tell us how the Department of Health and Children will make another 3% nominal cut, a 10% real cut, in its last quarter? How will the Department of Justice, Equality and Law Reform make a 6% real cut and how will the Department of Agriculture and Food make a 60% real cut? The list goes on. I would like the Minister to tell us how these cuts will be achieved because we have not yet heard about the nature of the cutbacks. It will be one hell of an autumn if those cutbacks are delivered.

No doubt the Minister will stand up in the House and reply that the growth we all thought would occur did not materialise. I took the trouble, and maybe some do not do so, to read back on the Budget Statements of 2001 and 2002. The Minister said what he believed would happen if growth did not reach the targets. Growth was two points short of what he expected. The impact that he predicted and stood over was that the general Government balance would be one point higher than he predicted. However, it was three points higher. It was obvious that the Government had lost control of spending and taxation at that point. The Department of Finance's model was collapsing. Again, in 2002, the Minister's prediction of growth at the time of the budget was 3.9%. His latest estimate suggests 3.6%, a difference of 0.3%. That would have been accompanied by a tiny deviation in the GGB, but the Minister has admitted it will be €1,600 million off target.

Growth does not explain the way in which the public finances have deteriorated in recent years. As I set out in the charges earlier, one of the fictions on which the budget of 2002 was built was the notion that one could dip into the deep pockets of the Minister who had little funds everywhere. He had the Central Bank reserve and the PRSI fund, which he raided quite happily. Like the highway robber, he was going to grab the benefit of notes that people did not cash. From the new coins that he issued, he was going to grab €370 million. There was great creative accounting, amounting in total to €3 billion. He brought forward the payment dates for corporation tax and self-employed tax. Every conceivable fund and trick was used to try to paper over the fact that he had an enormous underlying Exchequer deficit.

However, he did not bank on the reaction of his friends in the EU. Barely was the ink on the budget dry when they told him in the run up to March that he could not use the euro changeover to gloss over his deficit. They ruled that out, and they ruled out more in June. The Minister did not let on that his carefully constructed edifice to conceal the deficit was crumbling away. The public was not told this, but it was quietly admitted in memos sent to the EU, acknowledging that he recognised that the edifice was collapsing. We are only now beginning to see what is happening.

The Minister for Finance keeps telling us we are facing a tough year. I would like to know his opening statement. Since I have taken on this brief, I cannot believe the shambolic way in which he lays figures before the Dáil for approval: it is unbelievable. We do not get access to his projected profiles of public expenditure or tax. Therefore, we cannot track them from week to week. I have heard learned media commentators blaming the Opposition parties for not being able to track the fact tax and spending were going off line. The Minister refuses to publish the profiles of spending for the year ahead. If he did we could have proper transparency and accountability.

I had great faith in the Minister that he would transform the way in which we framed our budgets, that he would have Estimates before the House three months before the start of the tax year and that he would have a whole new opus, but that has just not happened. On behalf of Fine Gael, I will move during this session a Private Member's Bill based very considerably on the New Zealand experience. They have brought in a fiscal responsibility Act. This is not the crude sort of thing that happens in California saying one must keep one's budget in balance. It recognises that there are cyclical ups and downs, but it sets out firm principles of sound public management. As I said earlier, the Government has abandoned the sound principles of public management of the finances, and it is necessary that we reinstate them.

The House needs to assert itself. It is about time that the backbenchers on the Government side and the elected Members of the Opposition took back some responsibility. The Minister has doubled the spending on the health services is the past five years – that was his boast – but I do not see any improvement in the quality of the health services in my constituency. Waiting lists are longer and it is harder to get speech therapists, occupational therapists and physiotherapists. The Minister has spent the money, squandered the boom that was created by Irish workers and we have nothing to show for it. It is about time the Dáil took back some responsibility and demanded accountability from Ministers, and I hope this will happen.

Will the Minister state what will be the opening position next year? In last year's budget he forecasted an opening Exchequer deficit of nearly €3 billion for 2003. That did not take account of the fact that taxes crumbled by €1.3 billion, on the Minister's own admission. The figure pertaining to benchmarking is €1.1 billion. If there is a growth in spending, which the Minister predicts, an extra €1 billion will be required. Those figures show there will be a huge opening position. I would like to hear the Minister's estimate because it seems we cannot fund this easily without getting quite close to breaching EU restrictions. I heard the Minister proudly tell his colleagues yesterday that he would come in again with a balance this year and that he would have a small surplus. I do not see how he will do that against the background I have depicted. Perhaps it would be good if we had a little honesty from the Minister tonight.

The public rightly feels conned by the scale of the misrepresentations of the past few months. It is time there was honesty rather than the guff about the state of the public finances we have heard from the Taoiseach and the Minister. We are being treated like fools and people will not accept that. I hope that from tonight there will be more honesty in the way proposals are framed and presented and that a true picture of where we stand is given.

I have a list of four speakers sharing time. They can speak until 7.40 p.m. I call Deputy Olivia Mitchell.

Two years ago there was a budget surplus of £4.6 billion, or £4,600 million of hard earned taxpayers' money handed over to the Government in the belief it would be prudently spent investing in the future of the country and in building up the infrastructure. The Minister told us to open the champagne and many did so. The story was out that the good times were here, there was money for everyone and there would be no tomorrow. It was a story rigidly adhered to up to the date of the general election on 17 May.

However, no sooner were the votes of the election counted then the story changed. Suddenly, the billions of euro had disappeared, filtered away buying an election. In what can only be described as a breathtaking U-turn, the new topic of conversation was the need for fiscal prudence. The money had mysteriously disappeared and the Government blamed everyone, including the trade unions, the hapless health boards, the county councils and the construction industry, except those who had created the belief of endless resources and willingly solved every problem by throwing money at it.

The present situation is like a return to the Charlie Haughey era when he told us to tighten our belts in the national interest. The people fell for that once but they will not accept it a second time. The Government bought the election with money it did not have and now the people will have to pay the price.

Those who need a health service will pay the biggest price. The first act by the reappointed Minister for Health and Children was an attempt to claw back overspending by introducing charges. That was bad enough, but it was unforgivable of him to demand the return of money he had allocated to health boards on which they had based their budgets and much of which they had spent. What kind of way is this to run any business, much less a health service?

The irony is that while the health boards were blamed for over-running their budgets, the Minister for Health and Children over-ran his Department budget by a massive €44 million, more than the amount of cut backs he was seeking from the health boards. They could have been avoided if the Minister had his act together.

The medical card scheme for those aged over 70 years cost €32 million more than budgeted for because the Minister did not know how many people were in that age group. He then over-paid pharmacies and doctors by more than €12 million because he also lacked adequate records about them. How could a Minister conceive of spending €8,000 million annually and not have the most basic information about who and on what he needed to spend it? How can the same Minister, having made such gross errors, decide that the IT investment necessary to give him that basic information is no longer a priority? What private company would dream of spending that kind of a budget without the benefit of the most sophisticated and modern information systems? What executive of a private company, who by accident over-spent €44 million, would survive the next board meeting? Perhaps the Minister for Finance should have called the Minister to account, except that he was not in a position to do so, having himself lost €4.5 billion.

It is time Ministers got off the fence and started to take control of their Departments. The Minister for Health and Children had hard decisions to make about the reform of the health service. He failed to take them when he had the funding at his disposal to make them less painful. He must now make them with less money at his disposal. He must establish priorities and tackle the fundamental structural defects in the health service that should have been addressed five years ago. Primarily, he should turn to the acute hospital service and start giving it some direction. It is soaking up countless millions every year and most of the health budget, yet the Minister appears to have washed his hands of the service.

The Minister for Health and Children can no longer sit on the fence and watch the whole system go down the Suwannee. He cannot ignore situations such as that at Monaghan General Hospital, which is costing more to keep closed than when it was fully operational. Yet, no decisions have been made and money is being spent without any accountability. By failing to tackle reforms when the funding was available, we now have a health service that is on the brink of collapse. Sick people are paying and queuing for services. Of all the sections of society they are the people who will pay most for the Government's mismanagement of the healthy economy we handed over to it in 1997.

The Government has secured a second term of office due to a gross and costly deception it perpetrated on the public, which it will not forget. It is not only the Minister for Justice, Equality and Law Reform, Deputy McDowell, who does not trust the Taoiseach and the Minister for Finance. The public is of the same opinion.

It gives me no pleasure to speak tonight because there is great anger among the public. The Minister visited a number of colleges this week but the anger he encountered there is nothing compared to the anger on the ground. Decent people who have never complained before have expressed anger at what has happened. They are upset that the Government told them lies.

These are not budgetary adjustments but cut backs. The Government knew what would happen but it did not have the courage to tell the people. Many Governments have fought general elections by telling people the truth. Deputy John Bruton did so in the early 1980s when his budget fell. People respect those who tell them the truth.

In his Budget Statement last year, the Minister quoted from the television comedy "Yes Minister". I asked him about the programme "Bull Island". The Minister depicted on that programme is better than the Minister. At least we can laugh at him but the present situation is too serious for laughter. The people are angry and they are waiting to catch this Government. I hope they do not use the Nice referendum to express their anger.

The people did not realise what would happen after the general election. Deputy Richard Bruton did not mention the Government's raid on the pension fund. Were it not for that we would be facing more problems. When providing free schemes for those aged over 70 years, the Government did not know the numbers in that age group, despite all the spin doctors and special advisers at its disposal. As a result, the schemes went over budget by €32 million, which is outrageous.

The introduction of the euro has led to the people being robbed. There was a time when one would know what could be bought for £1, yet because the Government would not let down its friends in high places or those in the business community everybody jumped on the euro bandwagon. It should have imposed a price freeze for 12 months following the introduction of the euro notes and coins. The poor on social welfare saw their benefit increases swallowed by the price increases in food, insurance and other living expenses. May Day was a bad day because since then, the price of electricity and everything else has gone up. One would think there was no Government and that we were actually watching "Yes Minister" in this House. It would be a joke if it was not such a serious matter and people are now paying the price.

The rich have become richer. The Minister mixes with those people at race meetings in Punchestown and Galway and many other places. I am not a racing man. The Minister knows that was wrong. The Minister was a good guy when he first got into the ministerial car. He was somebody that I admired but power went to his head. As soon as he got into the ministerial car he began to look after the people he met at race meetings and forgot about the poor and the middle class.

I was not always on this side of the House.

The middle class is being squeezed. Third level fees were increased by 70% by the Minister for Education and Science, Deputy Dempsey, who made a mess in the Department of the Environment and Local Government, and now he is talking about reintroducing fees. I challenge him to do it. There will be a riot, people will not put up with it. People are fed up with price increases on a day to day basis and something has to be done.

I say to the Minister for Finance and his Government that the people were deceived. What happened to the budget surplus that was in place two terms ago? It was squandered on the racing industry, the rich and all the Minister's friends in high places. Mr. Justice Flood was not bad and he knew what was going on. The people are waiting in the long grass for the Minister and his colleagues. They do not forget and they will not forget the Government in spite of all the spin doctors. I hope the Nice treaty does not pay the price for this.

Acting Chairman:

I call Deputy Paul Connaughton. Both Deputies who wish to speak have seven minutes between them.

That tightens it up a good deal. I have long been a Member of this House and I have seen Governments come and go, yet the most cunning and deceitful act that I have ever seen perpetrated on the electorate happened last May. The people were conned and there is no other way of putting it.

I smiled on seeing the Minister for Finance returning from the European Finance Ministers meeting in Brussels the other day. Two years ago the Minister appeared there with his chest out and defied the best advice that was available that he was overheating the economy. From that time the Minister started to buy the middle classes. Money was dished out that we did not have. The Minister's return this week was a far cry from the previous occasion. As Deputy Bruton asked, what will the opening balance be like this time? How far down will we start? Who will be hurt next year? Who was hurt this year since the election? I do not have the time to go through everything in detail, but I assure the Minister of one thing, that there is great anger and I hope people do not take it out on the Government in the referendum on the Nice treaty. In Fine Gael we are going out of our way to try and get people to see that to do so would be to vote against the country. They can vote against the Government on another day.

We might as well tear up the National Development Plan 2000-2006. There is no way the targets will be met. There is a 25% increase in the cost of the projects at this moment, which is not factored into the equation at all. The Minister can rest assured that some of the projects around Dublin will be completed, but what about regional development? What about the arterial roads that were to be built all over the country? They will not be built for ten or 15 years because the public private partnerships will only be interested in toll roads where the most cars can be found. We have a terribly depressing scenario in front of us.

The Minister and his party will become known for only one thing after sleaze and the doings of Mr. Ray Burke – to which we will return tomorrow – and that is the belief that every problem could be solved by throwing money at it. There were no managerial skills nor was there a plan in place to control the situation. Now that the money has gone from the economy the Government has no answer for the problems of the day. When the history of this period is being written it will not look well for this Government. People are openly saying that not alone should the Taoiseach be got rid of but something which is unprecedented, they are speaking of getting rid of the Government although it is only a four or five months in office.

The Minister for Finance now admits that there is a €1.3 billion budget deficit. This is the first time we will have a deficit since 1977. Will the Minister explain to the Deputies in this House and to the general public how this happened? How did we get from a position of surplus to having a deficit? Only two or three months ago the Minister was predicting a budget surplus yet now we are in the opposite situation. The Minister has a great deal to answer for.

The current rate of Government spending is 20% higher than it was at this time last year, in spite of the annual target being set at 14.3%. Between now and the end of the year the public must prepare itself for more severe cuts than we have witnessed heretofore in order to achieve the set target. In spite of what the Minister might say these cutbacks will be in the major spending Departments in the areas of health, the environment and education.

Overspending by the Government in the run up to the general election is at the root of the problem. Obviously the Ministers were allowed a free hand in order to buy their way in the election. It was announced in my own Western Health Board area in June that it was €13.5 million above budget. If that was the case in June then surely it was some €12.5 million above budget at the time of the general election yet nobody heard about it. Those facts were concealed from people and that is why they are waiting for an opportunity to vent their anger. As the two previous speakers said, I hope this does not negatively affect the referendum on the Nice treaty. The people will wait their opportunity in the long grass to get the Government.

People fear further cutbacks in health. They fear being admitted to hospital because of the deterioration in the health services. Since the introduction of the new scheme to allow people on waiting lists to have their operations carried out privately, not one person in the Western Health Board area waiting for orthopaedic surgery has been able to avail of that scheme. I do not see how it can work in any case. How can work be hired out to consultants in private hospitals who are already working full time? Will they come in at weekends to carry out the procedures while the orthopaedic units in the Galway hospitals are closed at weekends? It is only another con job of pretending to reduce waiting lists. The largest such list is the one to get on the waiting list. Consultants in public hospitals no longer see patients to put them on waiting lists because it takes an average of five years to obtain an out-patient appointment. Therefore, people are not getting on waiting lists. Orthodontic waiting lists are the same and are five years' long in the Western Health Board area. It is a con job. People are not able to get on the orthodontic waiting list because the qualifications for being put on it are more severe than they were. I could go on if I had enough time, but unfortunately I do not. Will the Minister tell us in his reply how he let us get into this position?

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"commends the Government for its continuing careful management of the public finances which, since 1997, has witnessed a transformation from decades of budget deficits to a succession of budget surpluses; welcomes the Government's commitment as indicated prior to the general election to keep the general Government finances at least close to balance and notes the regular publication of detailed data since December 2001 on the evolving budgetary position in 2002."

I am glad of the opportunity on behalf of the Government to respond to this motion and to ask the House to make clear its support for the Government's policy concerning the prudent and responsible management of the public finances. I also welcome the opportunity to deal with the allegation that the electorate was somehow misled on this issue.

Before I go into more detail, I point out that until 1997 a surplus on the current side of the Exchequer was a rare event. Against this background the House should note that, even with borrowing of €750 million this year, there will once again be a surplus on the current side of several billion euros. Another relevant fact is that governments elsewhere in the European Union and outside it are experiencing more difficult budgetary positions and increasing deficits. According to recent officially reported data, the budget deficit for the euro area as a whole in 2002 will be about 2% of gross domestic product, against a target of 0.9% of GDP.

The Government set out its policy concerning budgetary and economic policy in the programme for Government. In that, we stated clearly that we are committed to sustaining economic growth and maintaining full employment in the economy and that we see low inflation, responsible fiscal policies and effective investment policies as central to this; that we will keep the public finances in a healthy condition and we will keep personal and business taxes low to strengthen and maintain the competitive position of the economy; and that the EU Stability and Growth Pact provides the overriding framework for our budgetary policy. The pact requires that we keep the finances of general Government close to balance or in surplus and take corrective action when there is an actual or expected divergence from this objective. This is a sound policy to which we should adhere even if the pact did not exist.

I want to reflect briefly on the performance of the previous Fianna Fáil-Progressive Democrat Government. During our five years in Government we reduced the general Government debt as a percentage of GDP from 74.2% in 1996 to 34% this year and, as a result, are paying €1 billion less in interest payments every year. This is money available for sustainable improvements in public services. Net spending by Departments almost doubled to €29 billion and the evidence is clear for all to see. We have the lowest ever class sizes, more than 4,000 additional doctors, nurses and other medical professionals delivering care, as well as dramatic increases in child benefit, pensions and a wide range of other badly needed improvements.

These increases in public expenditure, substantial as they were, were consistently described as inadequate by the parties opposite. Every year I was condemned for appearing like Scrooge and yet today they propose to condemn me for spending too much. It is amazing, or is it? As always, the Opposition wants to have it every way at once. After five years I have yet to hear a single proposal from the Opposition to reduce one spending programme.

What about Stadium Ireland?

The motion raises issues regarding the previous Government's management and presentation of the public finances. I remind those opposite of the successes of that Government in the management both of the economy and of the public finances to which the electorate duly acknowledged and responded by re-electing it.

It did not know the full story.

During our previous term almost 300,000 additional jobs were created, the unemployment rate was reduced by more than half to 4.25%, the economy was successfully managed to achieve annual average GDP growth of 9.5% in the period from 1997 to 2001, general Government debt was reduced from 74% of GDP at the end of 1996 to 36% at the end of 2001, decades of deficits were replaced with large budget surpluses each year, and a radical and extensive programme of tax reform and restructuring was implemented with almost €5 billion in personal income tax and PRSI reductions delivered over the course of the last five budgets. Those opposite may not like to hear this.

They will also not wish to acknowledge the facts on how the budget position evolved during this year. I will set out clearly the information that was available to me since last December, and that was in turn made available to the public, regarding developments in the economy and the state of the public finances. It is important that the record on this be spelled out, and anyone who wishes can go to the Department of Finance and see the record. It shows that, while initial indications were disappointing, it was not unreasonable to believe before the end of May that budget targets were achievable. When the picture became clearer, I acted swiftly to reinforce control of spending.

When presenting the budget for 2002 to the Dáil on 5 December 2001, I referred to the economic slowdown experienced in 2001 and repeatedly stressed the less favourable economic outlook and the uncertainty regarding the international economy. The budget day forecasts for the economy were for GDP growth of 3.9% and gross national product growth of 3.5%. It was clearly stated that budgetary policy for the three year period 2002 to 2004 was framed against the background of a weak international economy and uncertainty about the timing and pace of recovery.

What is the change in the Minister's forecast?

I explicitly pointed out on budget day that the estimates made by market commentators for GDP growth in 2002 varied from as low as 1.5% to as high as 7%. The IMF, OECD and European Commission forecasts were in the middle of this range and my estimates were in this range also. I pointed out that these forecasts represented our best estimate but that they were subject to the risk of variation given the uncertain international outlook. The budgetary projections included in the budget tables showed an Exchequer surplus of €170 million in 2002 but deficits of €2.98 billion and €3.682 billion in 2003 and 2004 respectively. I also pointed out that, given the uncertainty of economic forecasts, we would have to take stock of the situation again when it came to the budget for 2003. It is beyond me how anyone can claim that the facts about the budgetary picture for 2003 and 2004 were disguised or misrepresented. I repeat that the budget booklet is a public document and it clearly set out the projected borrowing figures for 2003 and 2004 months before 17 May.

The forecast Exchequer surplus for 2002 of €170 million was based on an increase in tax revenue of 8.6% in 2002 and an increase in spending on services of more than 14%. From the beginning of this year I clearly and frequently stated my determination that the increase in public expenditure would be kept to target. Towards this end, I arranged a special meeting with Secretaries General of all Departments on 9 January 2002 to make it clear that Departments were required to manage within their post-budget allocations and that there would be no overall additional funding by way of Supplementary Estimates at the end of the year. I emphasised that the spending provisions in the Estimates and the budget represented the limit of what was affordable in terms of Government revenue in 2002.

I explained that in the years 1997 to 2000 it had been possible to accommodate some overruns on the spending side because of higher than projected revenue receipts. I had sufficient flexibility within the overall Exchequer finances to sanction some additional investment in public services while continuing to maintain substantial budget surpluses. Even in 2001, when revenue came in well below target, I was ultimately able at the end of the year to sanction certain Supplementary Estimates and still report an overall Exchequer surplus. However, I made it abundantly clear to my audience that 2002 was different. I said the projected surplus was so small that there was no margin for overruns on spending and that revenue buoyancy was unlikely.

I made it clear that new policy proposals must be funded within existing resources. It was also made clear to the Secretaries General that it would be up to them, firstly, to meet the costs of any new policy proposals in 2002 from within their post-budget allocations and the means of achieving this would need to be spelled out in memoranda for Government.

I also instructed my Department to put in place a new system of monthly expenditure management reports to Government on trends in spending and receipts, based on the information available from the end-month Exchequer statements. This was to ensure that as the year progressed the Government would have full and timely information on emerging trends and would be in a position to take decisive action if or when problems were identified to it.

After the election.

Every member of the Government got those reports every month.

The end of March Exchequer returns, published on 3 April 2002, showed an Exchequer surplus of €608 million. Year-on-year tax receipts were 2.8% lower than the first quarter of 2001. However, this performance needed to be put in the context of the budget day changes, which were expected to boost tax receipts later in the year. In a note supplied to me, my Department referred to the increase in the standard rate of VAT and the change in corporation tax payment dates and stated that it was not proposed to reduce the 2002 budget day tax forecasts on this basis. The end of March returns showed an annual increase in spending of 17%. Although this was still above the 14% estimate for the year as a whole, it had moderated from the 22% year-on-year increases at the end of January and February. The end of year position was still projected to be an Exchequer surplus of €170 million – the same as estimated on budget day.

Commenting on these results, I issued a press statement in which I welcomed the outcome in the context of the surplus projected for the year as a whole. I noted that the general expectation was that the economy was on the road to recovery and that this and the impact of several budget day tax measures should be reflected in tax revenues over the remainder of the year.

How did the Minister get it so wrong?

I also stated that spending plans of Departments were being monitored to ensure they came in on target.

Why did the Minister come here to say that?

I confirmed the position to my Government colleagues in the expenditure management report dated 8 April 2002.

On 23 April in response to written parliamentary questions, I stated that the budget day forecast of an Exchequer surplus of €170 million at the end of the year remained unchanged and that nothing had happened to lead me to change my view on this, which I felt was reasonable in the then economic climate. I also stated that the general expectation was that the economy was recovering and that this should be reflected in tax revenues over the remainder of the year. I again stated that spending plans by Departments were being closely monitored to ensure they came in on target.

The Exchequer statement for end of April, published on 2 May 2002, showed an overall Exchequer deficit of €113 million. While on the revenue side tax receipts were 1.8% down on the same period in 2001, there were significant timing factors in the end of April returns. The consensus view was that there was no reason to move away from the budget day target for taxes.

Whose consensus was this?

The Department of Finance and the Revenue Commissioners. I personally invite Deputy Bruton to the Department of Finance to inspect the records.

I will take up the Minister on that. Can I see the projections?

He can see the whole lot.

This assessment was consistent with advice from both my Department and the Revenue Commissioners who estimated, albeit on a very tentative basis, that tax receipts by the end of the year would come in on target.

The expenditure management report dated 8 May 2002 indicated that spending to the end of April on services was up 21% year-on-year. This was affected by timing factors, including the 1% lump sum payments under the PPF and the carryover costs of budget and PPF measures. Even though spending was less than the spending profiles submitted by Departments at the start of the year, I again stressed that Departments had to manage their allocations to ensure that voted spending this year did not increase by more than the 14% provided for in the Estimates. I also asked the Minister for Justice, Equality and Law Reform to report on the action to be taken to address emerging excess expenditure on prison officer overtime.

After the submission to Government of the end of April expenditure management report, my Department initiated meetings with a number of Departments to emphasise once again the need to manage within approved allocations. These meetings were organised because it was sufficiently early in the year to take action on spending if there was a need to do so. It was also late enough in the year to form some reasonable picture of the end of year emerging outturn. This was particularly so, given the timing issues that had impacted on spending up to the end of April.

At meetings with the Departments of Health and Children and Environment and Local Government, held on 9 May and 14 May respect ively, those Departments indicated that they were facing spending pressures on a number of programmes, which could result in overruns on their Votes.

They were very quiet until after May.

Officials of my Department immediately organised a series of further meetings, held between 20 May and 31 May, to examine spending trends on these programmes, to ascertain the full extent of the pressures and to establish whether and to what extent any potential overruns could be avoided.

The end of May Exchequer returns published on 5 June showed an Exchequer surplus of €56 million, with tax receipts 1% lower than the same period in 2001. The Revenue Commissioners in a note transmitted to the Department of Finance dated 5 June very tentatively put forward the view that taxes might come in some €300 million below target and the expenditure management report sent to Government on 10 June stated that a revenue shortfall this year of the order of €300 million needed to be factored in.

At the end of May, the year-on-year increase in expenditure showed a sharp increase to 27% in comparison with a projected annual increase of 14% and this increased concern about the end of year spending outturn. In the first four months of the year, the year-on-year increases in overall voted spending by Departments, as published in the Exchequer statements, were January 22%, February 22%, March 17% and April 21%. In the expenditure management report, I referred to excesses of €300 million across a number of spending areas and I stated my concern that if these trends were not corrected that they would lead to a significant overrun this year. To ensure spending for the year came into line with the original planned increase some action had to be taken. Mid-year adjustments are a frequent occurrence and they happened on three previous occasions in my term of office.

The Government agreed that additional funds would be provided to meet certain liabilities such as demand-led schemes managed by the Department of Health and Children, spending pressures in the Department of Environment and Local Government on roads and the homeless, extra costs of school supervision and substitution arrangements and additional spending on prison officer overtime. The Government agreed that, to ensure additional funds could be provided for these areas and yet stay within the 14% increase target, necessary expenditure adjustments would be implemented in a number of other areas. The Government agreed that Ministers and Departments would take immediate steps to address other emerging expenditure pressures.

In the expenditure management report dated 10 June, I stressed that when funds are not available, they cannot be spent. Slower growth since the record performance of the millennium year had slowed the pace of revenue increases and expenditure on public services had to be managed in a way which recognised this changing reality. Spending developments cannot ignore revenue developments. The essential first step in this direction was to ensure that this year's target of a 14% increase in spending was held. The budgetary prospect for 2003 was already daunting and overruns on this year's target would make it even more difficult.

On 19 June, in a reply to a written parliamentary question, I stated that the forecast Exchequer balance for the end of year was still for a surplus of €170 million which was the budget day target. I made it clear again that I was determined that Departments would manage within their approved spending allocations. The Exchequer returns to end June, published on 2 July 2002, showed an Exchequer surplus of €507 million, with tax revenue down 7.1% on the same period last year. However, when adjusted for very substantial corporation tax payments received in the first couple of days of July, tax revenue was roughly at the same level as in 2001. I issued a press statement which noted the Exchequer surplus and that this was in line with achieving a surplus for the year, with extra non-tax and other revenues compensating for the shortfall in taxes that was then projected. The shortfall in taxes was estimated to be €500 million at that stage and this was clearly stated at the end-quarter press conference held by my Department on 2 July. Deputy Bruton attended the press conference and asked a question.

I have not been asked back since.

In the end June expenditure management report dated 9 July, I pointed out to Government that spending was 22% ahead of the same period in 2001 and that this would restrict spending in the second half of the year to an increase of less than 9% year-on-year, to ensure that the spending targets were met.

The Exchequer returns to end September published on 2 October 2002 showed an Exchequer surplus of €594 million, with tax receipts up 2.6% and voted current spending up 20.3% on the same period last year. My Department in consultation with the Office of the Revenue Commissioners revised the estimated tax shortfall to €1,300 million. The aim and expectation is still that net voted spending will come in on target. On this basis, the net end year position was estimated to be an Exchequer deficit of €750 million, with part of the revenue shortfall being offset by other revenues. Again, these details were clearly stated at the end quarter media briefing held by my Department on 2 October.

Regarding the shortfall in tax revenues we have seen this year, tax revenues slow as economies slow. Our latest assessment is that economic growth this year is slower than expected at budget time and while there is little hard data available yet, indications are that employment growth and earnings growth are below budget time expectations. There is evidence that overtime has been reduced and a general consensus that bonuses have been cut.

The indications are that the international economy has not recovered as strongly as expected. Falls in equity markets and difficulties regarding corporate profits reporting, on top of difficulties in the IT and other sectors, have weighed on confidence in the US especially and hindered a global economic recovery. Similarly, European Union economic growth this year has been much weaker than expected, with practically no growth in the second quarter. This much weaker position was confirmed when ECOFIN met at the beginning of September, based on data available to the European Commission and other international commentators. The Commission confirmed that it would be significantly reducing its spring 2002 forecasts for growth this year and international prospects have not improved in the meantime.

This weaker international economic environment has meant slower growth in Ireland. It was a main reason that, in the economic review and outlook published by my Department in August, our forecasts for 2002 were revised downwards to 3.6% for GDP compared to the 3.9% forecast on budget day and to 3% for GNP compared to the 3.5% forecast on budget day. We will be revising these forecasts again as part of our normal budgetary procedures.

Lower growth leading to lower tax receipts has been a common experience in all the major world economies. For example, I understand that tax receipts in the United States have fallen by 10% year-on-year in the period to end July. Similarly, tax receipts in the United Kingdom are down 4%. The experience is similar in several other European member states where budgetary outcomes for 2002 are now expected to be weaker than originally forecast.

As is usual at this time of year, my Department is reappraising the overall economic and budgetary prospects for 2003 and beyond. This appraisal will reflect the implications of weaker than expected tax receipts in 2002 and the weaker international prospect implicit in ongoing developments. This assessment will set the context for budget 2003.

Regarding comments made about 2003 and beyond, it is normal in June of each year that my Department prepares a memorandum for Government on economic and budgetary strategy. This memorandum always takes into account the most recent macroeconomic and budgetary developments. The 24 June Memorandum on Economic and Budgetary Strategy 2003 to 2005 was no different. The memorandum stressed the high level of uncertainty regarding the performance of the international economy and referred to the prospect of a tax shortfall in 2002. As I indicated earlier, the 2002 budget book showed a projected Exchequer deficit of €2.98 billion in 2003.

The review of the economic and budgetary strategy by my Department of the 2003 position considered, among other things, the implications for spending against a very uncertain economic background. The conclusion reached was that if the potential bills for benchmarking and other spending areas were to be addressed, consideration would have to be given as to how economies in existing services could be secured so as to deliver a sustainable budgetary position. Accordingly, the Government agreed that Ministers should prepare their pre-budget Estimates proposals on the basis of securing economies of €900 million in existing services. It was recognised in that memorandum, which has recently come into the public domain, that this €900 million would be difficult to secure. That is why the Government in July asked three eminent former public servants to review spending proposals from all Departments and offices. They were given the difficult task of identifying all available options to achieve these economies. That exercise is ongoing as part of the 2003 Estimates process and the results will be brought to Government for consideration in due course.

The 24 June memorandum reflected our adherence to the stability and growth pact requirement to keep the finances of general Government close to balance or in surplus and to take corrective action when there is an actual or expected divergence from this objective. This shows prudent management of the public finances at work.

In planning expenditure and budgetary strategy for next year it is entirely appropriate to review all areas of existing spending to see if resources can be freed up to deal with higher priority spending needs. Moreover, despite all the talk of cuts, it should be noted that the 24 June memorandum anticipated that post-budget total departmental spending in 2003 would increase by over €2.8 billion, or nearly 8% over 2002. Clearly, the outlook for 2003 has deteriorated further since then. In particular the outlook for tax revenue has disimproved considerably.

What I have outlined shows the position in relation to alleged misrepresentation. When I received the information in June showing that the public expenditure targets might not be met, I immediately notified this to Government and recommended that action had to be taken. I have always made it clear that I expect the 2002 target of a 14% increase in spending would be met and that I would do what was necessary to achieve this. That is still the position. The records show not only that this Government has managed the public finances prudently but that prompt action was taken when needed and that new monitoring procedures for expenditure were introduced at an early stage. Regarding 2003, the record shows that the budget booklet which was published on budget day projected an Exchequer deficit of almost €3 billion in 2003.

At the end of every month this year, as is usual, an Exchequer statement was published by my Department clearly showing the outturn for receipts and expenditure and the overall Exchequer position. In addition, at the end of every quarter this year there was a media briefing which gave details of the expected end year position on tax receipts, spending and the overall Exchequer position. This represents an open and transparent system of reporting to the public on the Exchequer's finances. Within this context, the allegation of misrepresentation cannot be sustained.

We have seen how financial mismanagement brought this country close to ruin by the mid-1980s. We have seen how corrective action, prudent management and sound fiscal policies since then have been rewarded with unparalleled economic growth, employment levels previously undreamt of and higher real incomes for all our people. My track record is proven. No matter what way you look at it, in terms of general Government balances, debt levels or future liabilities, Ireland now has one of the strongest budgetary situations in Europe.

I said repeatedly during the election campaign that I was determined to try to keep public expenditure to the increases announced earlier in the year. My determination in this regard remains undiminished. I said and I continue to say that I will take sound, sensible and timely action to safeguard and build on the solid financial position established in the public finances in the past few years. The House knows that if you do not have it, you cannot spend it, and I intend to stick to that rule. The Government will deliver as it did the last time but we will do so within realistic and sustainable fiscal parameters as put before and endorsed by the electorate.

I wish to share my time with Deputies O'Sullivan, Moynihan-Cronin, Michael D. Higgins and Lynch. I will speak for ten minutes. Listening to the Minister for Finance it struck me that he is obviously a graduate – or should I say, a post-graduate – of the Enron school of accountancy. The Minister has been a popular Finance Minister who has preferred to pontificate about his own homespun right wing ideology than to manage the economy in line with any coherent set of economic ideas. Never was a Minister's arrogance so misplaced; never was the cost to the Irish people of such self-serving dogma so great.

Deputy Quinn bequeathed this Government an economy with sound public finances, low inflation, growth taking off and rapidly rising employment. All Deputy McCreevy had to do was avoid messing it up but he flunked the test. The crisis in the Irish economy which we see around us is the direct result of his mismanagement, and crucially, his failure to accept the disciplines which monetary union demanded. With interest rates falling, he chose to fuel a consump tion boom through extravagant cuts in the top rate of tax. Rather than heeding warnings about the risks of over-heating the economy, he rubbished his critics and urged the public to "party on".

However, it was not only through misguided fiscal policy that this Government brought us inflation at twice the EU average. Others in the outgoing Cabinet must also accept their share of blame. The Tánaiste talks a great game on competition policy but delivers little by way of results. The report of the Motor Insurance Advisory Board is a clear condemnation of a Minister who talks the talk on competition policy, but does little that would cause the vested interests any real discomfort. We had the sad display of a Government that simply cannot deliver on infrastructure – on roads, rail, airports, public transport in all its forms, energy, housing, child care and health care.

I wish to speak about roads. Government consultants have identified an astonishing €6.8 billion shortfall in the funding budget for the national roads programme. The national development programme allocated €9 billion for this programme for 2000 to 2006. Current budget difficulties were making it difficult for the Government to actually meet its commitments under this programme. In the special review commissioned by the Government, it emerged that the original estimates are hopelessly wrong and that the completion of the programme will require €15.8 billion. In other words, the programme is taking a double hit. There are inevitable cuts due to the present public finance outlook, the NDP's calculations are 75% out and the original allocation will come nowhere near to reaching the announced targets for new roads, bypasses and motorway intercity links.

This is a policy disaster of enormous proportions. The national roads programme is the flagship project of the NDP. If it is 75% underfunded, then the whole NDP is in tatters and has no serious value as a planning tool to local authorities, business and industrial investors or local communities.

This news will be greeted with dismay among investors in every sector of the economy. Our national roads have long been identified as the principal deficit in the country's physical infrastructure. The 2000-06 programme was broadly accepted as ambitious and necessary to achieve tourism and industry objectives. Any significant slippage will add to industrial and commercial costs at a time when there are major worries about Ireland's cost competitiveness and excessive inflation. I shudder to think what the implications are for rail and the much-vaunted metro for Dublin. This revelation is a direct indictment of the Taoiseach and the Minister for Finance. It follows fast on the equivalent miscalculations of the cost of Abbotstown and the SSIA scheme. It all adds up to a picture of a Government incapable of doing its sums and meeting its programme within budget.

There has to be a new approach if there is to be any public or investor confidence in the Government's capacity to deliver essential infrastructure projects. There appears to be an illusion that public private funding will enable these projects to be completed without too much added cost to the Exchequer. However, every additional euro will have to be met by the public, either in future taxes or in road tolls.

I urge the Taoiseach to create an independent national plan commissioner with the direct task of overseeing accurate estimates of the true costs and to regulate the delivery of the works close to these estimates. Like the special savings fiasco, present Government cost overruns are set to saddle future taxpayers with truly oppressive burdens for little return in terms of new infrastructure.

This Government engaged in a conscious and calculated pre-election expenditure splurge. The Minister's speech tonight is an apologia for how he managed the finances this year. He spent in the early part of the year and he is now going to trim back to 14% in order to come in on target for the whole year. For 18 months before the election, the Government threw taxpayers' money around like confetti in an attempt to buy votes. The only mystery is how it managed to spend so much money, with so little return in terms of improved public services. For that it stands indicted.

With expenditure spiralling upwards and the effect of his tax cuts making themselves felt in lower revenues, deficits beckoned. However, this was something Deputy McCreevy could not bring himself to acknowledge. Instead he indulged himself in accountancy tricks and sleights of hand. While President Reagan in his time depended on right wing gurus such as Hayek or Friedman, Deputy McCreevy's inspiration is definitely Lewis Carroll. I do not think he has yet left the economic wonderland.

We now know that the promise to protect the health service was casual deceit because the Minister knew the true state of the public finances as he made that promise. Fianna Fáil had no intention of delivering on its commitment to the electorate. It did not just run away from the truth, it embraced a pack of lies. It promised huge expenditure on health and other areas, with no price tag attached. There would be no new taxation, no deficits and no cutbacks. Fianna Fáil attacked anyone who suggested that deficits or higher taxes would be necessary, and it denied that cutbacks would be required. All the time the Minister knew that cutbacks were on the way and that deficits were inevitable.

Savage cuts in public services are not necessary. There is a need for normal prudent spending control to be re-established, but the current onslaught on public services is not required. There are other options, including Government borrowing for infrastructural needs, or investing the funds already in the national pension reserve fund in capital projects. This is better than the bizarre situation whereby, this year, the Government will invest €1billion, at least three-quarters of it borrowed, in the national pension reserve fund, a fund which, as the Minister is aware, has already lost half a billion euro on plummeting stock markets. This is Alice in Wonderland accounting. Equally bizarre is a Government spending more than €500 million on the SSIA scheme, which is having absolutely no effect on the level of inflation.

There is also a need for an end to the relentless waste on the army of spin-doctors, advisers and consultants employed by this Government and an end to the endless supply of PR launches for every second thought of any Minister or agency. These launches are always accompanied by wine and catering, even in the middle of the day. I ask the Minister to give us all a break.

Of the monuments to Deputy McCreevy's misplaced arrogance, the SSIA scheme is one of the most ridiculous. It typifies his refusal to accept advice, his attachment to tax breaks for the better-off and his recklessness with the public finances. I hope that, perhaps like St. Paul, he may one day be converted.

I listened to Deputy Richard Bruton and the Minister for Finance over the past hour and, like most economists who stand up to speak, unless another economist is listening, they usually lose their audience fairly quickly. That is not the fault of the person speaking; it is just a natural reaction.

I would like to outline for the Minister some of the effects the adjustments, which this Government continues to describe them as rather than cutbacks, are having at local level. Approximately 18 months ago, a good programme called RAPID was launched by the then junior Minister, Deputy Eoin Ryan, in areas of particular disadvantage. At the outset it looked like a complicated process and it turned out to be such but, nevertheless, for the first time communities felt they had a chance to put in place plans which would benefit their area. These plans included simple things such as improving streetscapes, crèches, drop in centres and day care centres for the elderly – the type of things communities need to gel and to continue.

For approximately one year until December 2001 these communities met regularly and put an enormous amount of effort into these projects. They felt very proud at the end of it. The Taoiseach's office then said the plans had to be on 18 December. We all knew there was an election coming. I felt from the outset, and said so at one or two meetings, that these were no more than population calming measures. There was no way a Government, no matter who was in power or how efficient it was, could possibly give an answer to these projects before a June election and not when one considered the amount of work which had gone into them and the number of communities involved.

The plans were submitted, the communities sat back and then the co-ordinators were put in place. The communities had to come together again to readjust the plans because they were told they included too many things, although they had been told to include the kitchen sink and so on in them. Some 18 months later nothing has happened regarding the RAPID programme. That has had a twofold effect. First, the communities which were supposed to benefit have not benefited and what they hoped for has not come to pass. Second, the people in these communities have lost confidence in their abilities and are extremely angry with this Government.

The Minister for Finance came into the House on five occasions to give budget speeches full of self-confidence and self-congratulation. A couple of years ago he said we should all be drinking champagne and celebrating. At that time there were, and there still are, many people in this country who cannot afford champagne.

I did not say that.

I certainly saw the word "champagne".

I did not say that.

There are many people in this country who cannot afford more basic items than champagne.

At the end of the Minister's budget speech last year he said that his five budgets to date were five chapters in his first book and that while some famous authors could write only one book, others could write a second best-seller and that he looked forward, therefore, to beginning his second book after summer 2002.

I am just starting.

The Minister's second book will be a complete and utter flop and will be the most miserable book ever written.

So the Deputy agrees my first one was a best-seller.

What is more, the book the Minister wrote in between was also a complete work of fiction, that is, his party's manifesto. We are now told that we should only have read the first paragraph which said the rest of it was dependent on public finances. Therefore, the Minister should not have bothered publishing it all because it was a complete work of fiction.

The Minister had the best opportunity any Minister for Finance has ever had to improve the lot of the have nots in this country.

The Deputy got her answer last May.

The best economy was handed to the Minister by the previous Minister for Finance but he blew his chance. The Minister, having told us that we would have a profit this year, now tells us we will have a deficit of €750 million at the end of this year. We are now being told people have to tighten their belts. I do not know how the Minister could have got it so wrong and how he could have wasted the opportunity to bring this country up to decent levels of basic income and public services. Unfortunately, it will be the people who should have received a lift in the good years who will suffer most again in what has now become a downturn. Figures released in the last few days show that the gap between the haves and the have nots has increased dramatically during the tenure of this Minister.

I do not know if the Minister knows that people on disability allowance, for example, got a rise of £8 per week which brought them up to the grand total of £93.56 – we were dealing in pounds at that time – which is €118.80 per week. I do not know how people are expected to live on that kind of income and to cope with the rising inflation we now have on the most basic items.

People with disabilities were promised that they would get rights based legislation more than five years ago in a previous Government manifesto from the Minister's party. That promise remained unfulfilled for five years. Now the Minister has cut what was an allocated budget to health boards at the beginning of this year. I am a member of a health board and we were given a budget which was cut. I do not care if the Minister uses the term "adjustment" or "cut" but the budget was cut and health boards have now had to cut things like aids and appliances for people with disabilities. We were promised rights based legislation, which the Minister's Department strongly resisted saying the country could not afford to give people rights, and now we have been promised that this legislation will be published next year. I am not holding my breath at this stage because we are having cutbacks at a time when we should have been giving rights to people living on basic incomes.

We have reached a stage when, unfortunately, we will probably not be able to afford to fulfil these promises. That is down to the Minister's handling of the economy and to cohorts in the Progressive Democrats whose policies are responsible for this. The consequences of mismanagement are cuts which will hurt the old, the sick and the poor and that is the harsh reality of the deliberate decision to prioritise in favour of the haves. There have been special tax deals and the better-off have been looked after. In the meantime, there has been this myth that one could do that while, at the same time, spending on public services and bringing them up to the level my colleague Deputy Burton spoke about.

Unfortunately, this miserable second book will be written by the Minister. He has wasted the opportunity to bring about the kind of changes people in this country expected. We live in a society as well as an economy but, unfortunately, because of the mismanagement of the economy, our society is left in a situation where we have, in some ways, the worst public services in Europe. We have nearly the lowest public spending in areas like health, education and social services. The opportunities, however, were there. We had budgets and coffers which were bulging but, unfortunately, that money was not spent in the areas in which it should have been spent. We now have figures which indicate that we will borrow more money than is being put aside for the pension fund and the special savings scheme next year and at a time when the money being put away on the stock market is losing. It seems a crazy decision to put money away for the year 2025 while having to borrow to pay for it. At the same time we are cutting back on badly needed public services. There is no doubt that people cannot afford a house today who could have afforded one before this Government came to power.

There are people whose health services are worse now than before this Minister came into office. It is a scandal that an economy that was working well, in surplus, balancing and within the parameters set by the EU, has been squandered and is in trouble again. It is scandalous in terms of the kind of society that has been developed over the last five years.

Debate adjourned.