Vol. 645 No. 1
77 Deputy Richard Bruton asked the Tánaiste and Minister for Finance the policy changes he plans to strengthen the resistance of the economy here to a downturn, in view of the loss of its competitive edge and the tougher global environment. [2569/08]
Last month in my budget, I indicated that the outlook is for a moderation in the rate of economic expansion this year. At the time, my Department forecast GDP and GNP to rise by 3% and 2.8%, respectively. These forecasts reflected the transition to a more sustainable level of output in the new housing sector and a more moderate rate of growth in some of our major trading partners was assumed.
In my budget, I indicated risks to this outlook, including a less benign international economic climate. However, the general consensus is that once these adverse influences begin to fade, the pace of economic growth in Ireland will return to our potential growth rate of between 4% and 4.5% because our medium-term prospects remain favourable and the economy's underlying fundamentals are strong.
For example, we have a dynamic and well-educated labour force, we have flexible markets that allow us to respond efficiently to adverse developments, we have a pro-business, outward-looking society, our public finances are sound, as indicated by the low level of public indebtedness, our unemployment rate is among the lowest in the euro area and our tax rates on capital and labour are low. Therefore, while there are risks to the economic outlook and overall sentiment has deteriorated in recent weeks, we are meeting these challenges from a position of relative strength.
Notwithstanding this assessment, policies are in place to help to improve our competitive position and enable us to absorb the impact of any deterioration in the global environment in a more efficient manner. In this context, my recent budget provided a significant stimulus, with current spending rising by 8% while revenues are projected to rise by approximately 3.5% this year. I announced an increase of approximately 12% in capital spending, confirming again that the implementation of the national development plan would be a key priority of the Government. The consensus approach to policy formulation through social partnership will help us to address any short-term economic slowdown by ensuring that all stakeholders in our economy have a shared sense of the emerging issues.
Where is the strategy to protect Ireland from the worst threats posed by global difficulties? It is commonly accepted that, under this Government and the Tánaiste as Minister for Finance, we became too reliant on the property boom, which the Government fuelled. The rankings provided by the National Competitiveness Council show that we have slid 17 places and, in the past five years, lost export market share, which is the key to growth for a small, open economy. Does the Tánaiste agree with the council that, to restore cost competitiveness, a national programme driven by the Government with specific targets for utilities, where the Government is the key regulator, and other areas of public service pricing is necessary? Government-generated price increases have undermined our competitiveness. Does the Minister agree we need this sort of approach, which would confront matters like the excessive growth of quangos, excessive bureaucracy in many public services and better cost structures, and that we need a concerted drive to reinvent Ireland so we can be competitive in a tougher environment?
In general terms, as we face into more moderate growth rates in the immediate years ahead, the level of resources that will become available means that we must use the existing level of resources as efficiently as possible. The role of Government is to ensure that this happens. In respect of competitiveness, inflation and price stability, we will continue to have a budgetary stance that best guarantees that outcome.
While the international situation and sentiment have deteriorated, we are in a position of relative strength because the policies of the Government have halved our indebtedness during good times and have put in place a national development plan which seeks to deal with infrastructure bottlenecks. This would enhance our competitiveness through that kind of investment and the type of planned investment we have in science, technology and innovation. All these are real building blocks to maintain and enhance growth prospects in the years ahead.
Will the Tánaiste agree to some specific initiatives? For example, in the electricity sector, we are clearly 50% dearer than many of our competitors. It appears that we have decided to pay the chief executive much more. Will the Tánaiste demand that there be benchmarks for competitiveness in this utility set?
Will he agree to audit the number of quangos that have been established and which now run to 500, an increase of 200 under this Administration? Does he agree that we must look at these in order to squeeze better value from public money? Will he agree to take some definite time-limited initiatives to drive some of the change that he appears to accept in principle but where little is happening in practice?
I do not accept that little is happening in practice. An efficiency review has been put in place to see how we can look at issues there. In respect of the overall point made by Deputy Bruton, be it in respect of utility prices or electricity, and the Minister concerned with the advent of the all-island electricity market, which brings its own competitive pressures, we are moving from the old-style State monopoly of the past into a far more competitive environment. The investments envisaged and the question of moving to renewables and trying to reduce our dependence on foreign sources of energy and build up a competitive domestic energy industry are part of the policy framework to which the Minister for Communications, Energy and Natural Resources is working.
78 Deputy Joan Burton asked the Tánaiste and Minister for Finance if he is satisfied that the budgetary framework of revenues and expenditures set out by him in budget 2008 remains viable in view of the changed international financial environment and the revised downward projection of housing construction here and output for 2008; and if he will make a statement on the matter. [2387/08]
On budget day, my Department projected a GDP growth rate of 3% for this year and a GNP growth rate of 2.8%. While lower than that experienced in recent years, this is still a robust rate of growth, given the prevailing international conditions. At budget time, my Department estimated that house completions in 2008 would be around 55,000 units.
I believe that, in aggregate terms, the budget day forecasts, which were presented to the House last month, are still appropriate. Of course, as was noted at budget time, there are risks, both internal and external, to these economic forecasts and my Department will, as always, continue to monitor the situation closely.
As regards the budgetary projections for tax and expenditure, it is still very early in the year and there is no reason to alter the budgetary forecasts at this time. Overall, current spending is budgeted to increase by approximately €4 billion or about 8%, capital spending by approximately €1 billion or around 12% and tax revenues by just over €1.6 billion or 3.5% in 2008. The general Government debt level is projected to be around 26% of GDP at the end of this year, one of the lowest levels in the euro area.
As with economic developments, my Department monitors tax receipts and expenditure on an ongoing basis and as more data becomes available during the year, any significant changes to the expected Exchequer position in 2008 will be signalled and presented at the end of each quarter.
It is important to remember that the fundamentals of the Irish economy remain strong and that the economy has responded quickly and effectively to changing economic conditions in the past. Short-term movements in financial markets have limited effects on wider economic trends. Of course, any deterioration in financial market conditions sustained over a prolonged period of time could spill over into economic developments.
I thank the Minister for that reply. Does the Minister agree that last week was a bit of a train wreck for the Irish economy in terms of billions knocked off the value of Irish shares, particularly Irish pension funds? We have had a string of job loss announcements, including the most recent one in Wicklow, of several hundred jobs over the next year and a half. Every financial forecast since the general election and on through the budget is slightly worse than the previous one. Does the Tánaiste have figures for his expectation of housing output, including starts and completed houses, this year? Does he expect it to fall as low as 30,000 units? What will be the impact of this on tax receipts and revenue? What plans does the Tánaiste have, if we achieve the growth of 3% he suggests, to assist those who face court in respect of mortgage repayments and those who, having worked in the construction industry for ten years, now find it difficult to find employment? Does the Tánaiste have plans to give a fresh start at work to people whose experience is in the construction industry?
There is evidence that there will be some reduction in the residential housing output and, therefore, less employment in the construction sector. However, as far as construction industry forecasts are concerned, there is still activity in commercial property, house renovation and the increased impact of extra investment in the Government's capital investment programme. There are some compensating factors. The construction industry is not made up solely of the new house residential market, important as that is.
Over the past decade, the number of people employed in the construction industry has doubled. With slower growth rates this year, the level of activity will be lower than the high base of 70,000 last year. We have made an assumption of a reduction of 25%, down to 55,000 units. We must wait and see how it pans out. This also assumes no change in interest rates. I cannot speculate on what will happen in respect of interest rates in the euro area. It would improper of me to do so, since it is a matter for the European Central Bank. Given the reduction in interest rates in the US, there is a possibility of an interest rate cut here. It is speculative and I do not suggest whether it will happen. The ECB has always emphasised price stability as the main mandate under the Stability and Growth Pact.
Any major turbulence in equity markets is unwanted and unwelcome, but these markets often exhibit short-term volatility. The impact should not be over-exaggerated. It is important to bear in mind that share prices go up and down all the time but the underlying real economy remains the same and we must focus on this aspect.
As a small, globally integrated economy with considerable exposure to the US economy, Ireland cannot be immune to external economic developments. The greater than normal level of uncertainty that characterised the global economy was identified as a key risk in my recent Budget Statement. While we can exert no influence over external developments, we can ensure our economy can absorb external shocks in an efficient manner. It is important to stress that the fundamentals of the economy remain strong. Therefore, we must address it from a position of relative strength.
Is the Tánaiste trying to have it both ways? In the run-up to the election, he was happy to portray himself as the person responsible for Irish economic growth. Now that we are facing into difficulties, another set of bodies and factors is to blame such as the international financial situation, the European Central Bank and the Council of Ministers. The Minister has no hands-on approach, yet he has some responsibility to bear for the downturn in the economy and the impact it is having on families, particularly those losing their jobs in the construction industry.
Does the Minister have a response for the changed circumstances in which we find ourselves? The Government presides over a continuing set of service price increases which are part of the reason we have one of the highest inflation rates in the EU. The Minister is responsible for the good times but is not responsible when times get bad. Does the Minister have a response ready for what is happening in the economy?
We have a responsibility whether times are good or bad. The consistent policy framework we have adopted over the past ten years has served the country well. During that period there was extraordinary economic growth and employment creation with a reduction of our indebtedness by half. We are in a position to withstand some of these external shocks far more capably than would otherwise have been the case.
I made a response in my budget to emerging economic downside risks. These had begun in August 2007 with the fall-out from the US sub-prime market problems that led to an international credit crunch. My budgetary stance represented a 1.5% of GDP stimulus to the economy at a time when the downturn was emerging. That was the right choice to make. I felt the right course was to borrow modestly to invest ambitiously.
An extra €1.7 billion will go into the economy on social expenditure, half of which will go to social welfare recipients to protect those on the lowest incomes. A €500 million tax package will put more money back into workers' pockets ensuring they benefit from their productivity. A further €1 billion extra over what was planned will go into the national development plan capital investment programme. That is a measured and responsible response to the downside risks that were beginning to emerge.
79 Deputy Kieran O’Donnell asked the Tánaiste and Minister for Finance if he has assessed the emerging strains in public pay policy; and if he will make a statement on the matter. [2571/08]
Public service pay must develop in a manner consistent with competitiveness, price stability and budgetary policy. Government policy on public service pay is that the public service should be in a position to attract and retain its fair share of good quality staff at all levels. It should neither lead the market nor trail it.
The current public service pay agreement under Towards 2016 expires in September 2008 and talks on a new agreement are due to commence soon. Towards 2016 provides that implementation of the public service benchmarking report will be discussed by the parties in the context of discussions on whatever arrangements on pay and conditions are to be put in place on the expiry of the current public service pay agreement.
Benchmarking has been accepted by employers and unions as a significant improvement on the old pay determination system. That was based on relativities whereby if one grade or group of public sector workers received an increase, it led to leap-frogging and catch-up claims across the public service. Experience, particularly during the 1990s, showed the demands for pay increases by reference to relativities were not sustainable.
The benchmarking body produced a report in accordance with its terms of reference. It is agreed between the Government and the trade unions that the best approach to ensuring that individual public service grades are paid appropriately is to compare all aspects of public sector jobs with their private sector equivalents.
While the current benchmarking exercise may yield little for most public servants, they have benefited significantly in recent years from the first benchmarking exercise and the general round increases under successive national agreements. The framework in place of assurances of regular benchmarking reviews of public service pay against the market, conditionality of pay increases on the basis of co-operation with change and industrial relations stability and verification mechanisms is a balanced and sensible approach to the management of public service pay.
In more difficult international economic conditions, maintaining and enhancing the competitiveness of our economy is critical, particularly for a small open economy.
The level of annual pay increases has increased from approximately 3% under the earlier national partnership deals to just over 6% in the Programme for Prosperity and Fairness and still over 4% under Sustaining Progress and Towards 2016. This is well ahead of pay developments in our main trading partners. This is not sustainable in the long term and particularly not in more adverse economic conditions.
Pay settlements must reflect the economic fundamentals. With strong economic growth and productivity increasing strongly, as we experienced over the past decade, there was scope for greater flexibility in the level of pay increases. Pay developments in the period immediately ahead must reflect the more challenging economic and competitiveness scenario that we now face and be more directly linked to changes in productivity. In recent years, Ireland's competitiveness has disimproved. We need to halt and reverse this trend. Containing costs and improving productivity is critical for the private sector, particularly in more difficult economic circumstances. The same is true of the public service. Public service pay levels can only increase at a rate that is consistent with budgetary discipline and national competitiveness. In addition, the productivity and efficiency of the public service needs to be improved on an ongoing basis.
The Tánaiste and Minister for Finance said: "Pay settlements must reflect the economic fundamentals". However, under the report of the Review Body on Higher Remuneration in the Public Sector, the Tánaiste is getting an increase of €36,500, which is higher than the average industrial wage. The Taoiseach, who now gets €310,000, has the highest salary of any leader in the democratic world. He got an increase in excess of €38,000, making his salary almost ten times the average industrial wage. Does the Tánaiste believe it is correct for him and the Taoiseach to tell workers to accept pay restraints while they take exorbitant increases that are not performance related?
The terms of reference of the Review Body on Higher Remuneration in the Public Sector state that it should take account of the state of the public finances. It also refers to performance-related increases. The Government discounted the performance-related increases but took them. The increases were merely recommended and the Government did not need to take them on board. Governments are elected by the people to represent the people. In a recent opinion poll, 81% of people stated Ministers were wrong to accept pay increases. Does the Tánaiste believe it was correct to take the increases when the Government is asking others to exercise pay restraint?
The pay of public servants is set by reference to rates in the private sector. The review body, like the benchmarking body, the Labour Court and the arbitration boards, is part of the established pay determination machinery. Both the review body and the benchmarking body compared public sector jobs to jobs of equal value in the private sector. The review body found that the salaries of many senior public service posts were below private sector levels even when allowance was made for the value of pensions.
The benchmarking body found the majority of public service grades had not fallen behind private sector rates at equivalent levels. The benchmarking body's comparisons were with the weighted average of private sector rates. The review body comparisons were made with the lower quartile of the private sector rates. Furthermore, they did not attach significant weight to published information on the remuneration packages of the chief executives of the top Irish plcs. As the review pointed out, the overall effect of the review is that the salaries recommended are below the average levels of salaries of comparable posts in the private sector. Pay determination mechanisms are in place. They represent the established procedures by which these matters are addressed. What has not been suggested to me in terms of an alternative is what anomalies are created by not accepting recommendations coming from such bodies. Doing so would create more anomalies than those we seek to eliminate.
The Government has been selective in accepting recommendations. It accepted a recommendation on the pay but did not accept the recommendation for increases to be performance related. The Tánaiste did not answer my question. The ordinary benchmarking report gave few increases to workers on relatively low to middle salaries. However, Ministers are taking increases of well above the average industrial wage. At a time when it is seeking pay restraint in future negotiations with little given to the ordinary workers under benchmarking, does the Tánaiste believe it is correct to accept such exorbitant increases, which are more than the average industrial wage?
What is correct is that we have pay determination systems in order to have an orderly——
Does the Tánaiste believe it is correct?
Let me explain to the Deputy why it is correct.
The Tánaiste accepts it is correct then.
I am anxious to answer the Deputy's question but I cannot answer it while he is talking. He is not helping me and is creating confusion.
Allow the Tánaiste to reply.
With regard to the pay-related matters it is true we did not accept that recommendation because this would have provided for higher remuneration again. It is true we accepted the recommendation on basic rates which allowed for a 7.3% increase on average for those recommended by the review body. The benchmarking exercise which seeks to relate public service provision for pay and remuneration with equivalent jobs in the private sector took the lower quartile of the private sector equivalents——
The Tánaiste is not answering my question.
I am answering the Deputy's question.
Allow the Tánaiste without interruption.
That is the pay determination system which is in place and it works well. It makes for an orderly public service pay round. Now that the Towards 2016 pay provisions will end in September we must see whether we can negotiate a further pay round.
80 Deputy Joan Burton asked the Tánaiste and Minister for Finance the action he will take to meet the budgetary cost of the proposed revision of the EU emissions trading scheme as set out by the European Commission; and if he will make a statement on the matter. [2388/08]
The proposals published by the Commission begin the process which will lead to an agreement on the contributions of individual member states towards meeting the EU targets agreed at the 2007 EU Spring Council. The Commission's proposals require Ireland to reduce its greenhouse gas emissions by 20% by 2020, based on 2005 emissions figures and achieve an overall target of 16% of final energy consumption from renewable energy by 2020.
The proposals set out by the Commission are complex and far reaching and go beyond changes to the emission trading scheme. They require detailed analysis and discussion at EU and domestic level and my Department will be central to this process. The cost in budgetary terms and the economic impact will depend on the methods used to achieve whatever target is finally set. We will try to be as fiscally neutral as possible.
The Government fully supports the objectives agreed at the EU Spring Council last year and the leadership shown by the EU's ambitions in this area of climate change. It is important that national circumstances and competitiveness impacts are considered. In this regard it is essential to ensure that the Commission's proposals adequately take into account the Irish situation with regard to the large difference between our gross domestic product and gross national income, our infrastructural deficit, our recent and projected levels of population growth and the relatively large size of the Irish agriculture sector and its global competitiveness.
It is important, however, to look positively on the challenge and not just dwell on the negatives. To the extent, for example, that extra capital spending generates fuel and other efficiencies in using natural resources this will be to our overall economic and fiscal benefit. The proposals for the emissions trading scheme also involves new revenue streams for national governments which will also form part of the policy mix.
As I outlined in my Budget Statement this is a challenge for all citizens and not just the Government and will involve choices being made and changes in behaviour to realise the ambition of reducing greenhouse gas emissions. The Government has been acting over recent years to begin to address the challenge of climate change and we will continue to work towards reducing emissions.
Does the Tánaiste accept the widely-held view that the EU proposals will probably result in costing Ireland €1 billion per annum? How will this be done without very significant increases in the price of electricity and fuel? Is he proposing to contribute to the emissions trading scheme in order to buy our way out of this and that consumers and business will pay those costs? Where is the evidence that we will meet our renewables target of generating 16% through renewables in any serious way? It is all small pilot schemes. What is the Tánaiste's approach to this matter? It seems the Government and, in particular, the Tánaiste, took their eyes off the ball and did not make the point to Brussels that our calculation of GDP is heavily influenced by the fact that Ireland has so much American investment and profit repatriation and that our very welcome growth in GNP and in wealth is relatively recent. We will be clobbered because it will be based on wealth and on ability to pay. On the other hand, eastern European countries in the EU which have heavily polluting industries left over from the old Soviet era will be dealt with much more favourably than Ireland. Will the Tánaiste be wearing the Irish jersey when he goes to Brussels to look for a better deal for Irish consumers and businesses? We are all in favour of reducing our carbon footprint and not being "Bigfoots", but we need to do it in a way that takes into account the realities of this island and what has not happened on climate change measures here.
It is important to point out that we are at the start of a process here rather than at the end of one. We have proposals from the Commission and we are anxious to ensure it is a fair and transparent system that provides a fair measure of burden-sharing consistent with the criteria that have been outlined. These targets are part of a number of proposals that were released last week but they represent the start of a process that may take some time. We are analysing the impact of those proposals from an Irish perspective and this process is being mirrored in all other member states as well.
As with other finance Ministers, I have concerns about any initiatives that increase costs. However, this must be balanced by the findings of the reports produced by Stern and the IPCC that long-term costs of inaction may be substantial and hence the need to act. However, we have to be still mindful that there are also substantial economic and fiscal implications for the implementation of policies to tackle and adapt to climate change. Our challenge is to ensure that the transition to a low carbon economy is handled in a way that is consistent with competitiveness, supports sound and sustainable management of public finances and contributes to broader growth objectives.
At this stage we have not completed our assessment of the domestic impact of the Commission's proposals. While the Commission has modelled some scenarios on the basis of their proposals, we do not have the detail behind those calculations. In any event, much depends on what measures we as a country take in the future and what will be the policy mix. Long-term economic forecasting, of its nature, is imprecise and projections have to be treated with caution. The Commission indicated that there would be costs in terms of investment but that these would vary with the measures chosen and would fall on a wide variety of players in the economy. In addition, the forecast for any possible reduction of GDP by 2020 is indicative only. To bring about the reductions will mean choices being made and it will be a matter for all citizens to play a part.
We will robustly test the proposals coming from the Commission to see whether they represent a fair and transparent process in so far as Ireland is concerned. We will bring particular Irish considerations and circumstances to the Commission's attention.
As regards the emissions trading scheme, it is part of the process. It is often suggested that in some way it is an illegitimate part of the process but it is a legitimate means by which burden-sharing can be efficiently handled by way of buying carbon credits from countries where there is not the same problem. It is a question of finding a mix in terms of all the mechanisms that are available to us and this represents a serious challenge.
Now that the Tánaiste has received this report, does he regret that in the budget in December he put so little emphasis on public transport investment in the here and now, not in 2016 and 2020? Almost all the emphasis in the budget on transport investment was in regard to roads, with public transport in the here and now getting very little. We do not have enough buses, trains or carriages. That is how we will reduce our emissions. Our transport emissions are among the ones that have risen at the greatest level. If the Minister had the chance to rewrite the budget, would he give a little more to public transport?
I find it ironic coming from a Deputy who was a member of the Government in the mid-1990s whose public transport budget in 1996 was zero. Not a bob was given to public transport.
Mr. Todd Andrews closed most of the railways, if the Tánaiste wants to go into——
We are not talking about Mr. Todd Andrews and Harcourt St. That was long before my time and Deputy Burton's time.
——political archaeology.
Does Deputy Burton want a political history lesson or to talk about the here and now?
It is time for the next reply.
We are making unprecedented investment in public transport in the here and now. When the Deputy speaks of carriages, one must consider the number of new carriages that are now being provided on our trains, the number of Luas projects that are going ahead, and the detailed discussions I am having with the Minister for Transport on metro, metro north etc.
Where is it?
There are detailed plans in place.
What about the promises regarding public transport to Swords?
Interrupting does not take away from the point. The fact is that we are making——
I thought the holidays would have made the Tánaiste better humoured.
——an unprecedented investment in public transport. There is no comparison with our record and that of Deputy Burton when she was in Government.
81 Deputy Richard Bruton asked the Tánaiste and Minister for Finance if he has satisfied himself with the role his Department has played in driving an effective e-Government strategy. [2570/08]
My Department provides assistance to e-Government projects in terms of funding and advice, in the context of providing similar funding and advice to ICT projects generally.
Under e-Government policy this Department specifically committed to developing an e-procurement strategy that included a service for on-line tendering, a shared system for human resource management, an e-Estimates system, and shared voice and data communications infrastructure for the public service. All of these projects have been successfully completed and have resulted in significant savings and improved processes and efficiencies. For example, it has been conservatively estimated that the shared communications approach has resulted in the region of €25 million in savings per annum. Consequently, I am satisfied with my Department's successful contribution to the e-Government strategy.
However, I also want to take this opportunity to comment on the broader aspects of e-Government. e-Government is not just about technology — it is also about making public services more responsive and efficient by a process of analysis and reform of underlying schemes and processes. It is an ongoing programme as technology develops and as our society increasingly embraces technology. Government services must be in a position to meet the evolving needs of our citizens, both those who have access to advanced technology and those who do not.
In addition to the service improvement delivered by my Department that I have listed, I want to mention, in particular, the Citizens Information, formerly OASIS, website providing comprehensive on-line information on all public services; Revenue on-line services, which are used by both businesses and PAYE taxpayers to interact on-line with the State on their tax matters; new services to allow vehicle owners to renew their motor tax on-line; on-line property registration services which have improved service and greatly reduced the process time; streamlined birth notification services, which mean that most new mothers are now paid child benefit automatically; a range of on-line services and systems for farmers including single payments, area aid, animal tagging etc.; a range of on-line systems supporting the marine and natural resources industries including licence applications, scientific information etc.; exam results and school inspection reports on-line; electronic payment systems for public officials, trade suppliers and ordinary citizens; and e-Cabinet supporting the business of Government.
Additional information not given on the floor of the House
These services, and many others, have resulted in significant improvements in public administration and in far more being done with less. For example, the numbers of people in employment and thus with tax records has grown dramatically with no increases in Revenue staff, while the changes in child benefit have allowed staff to be redeployed to other areas requiring attention.
Looking forward, the provision and integration of full on-line services is extremely complex and care needs to be taken that we do this as cost effectively as possible. We are making reasonable progress and the recent 2008 e-Government Readiness Index produced by the United Nations shows that Ireland is now part of a cluster of countries including countries generally considered progressive in e-Government such as Austria, Finland, Germany and Singapore.
The Deputy will be aware of the recent report of the Comptroller and Auditor General on e-Government which will now be considered by the PAC. It is popular in the media, and indeed in parts of this House, to suggest that this report demonstrates that e-Government in Ireland has been a failure. Of course the report does no such thing. No objective observer could describe the story of e-Government in Ireland as one of failure. To do so would be to denigrate the valuable work of those who have delivered the excellent projects I have mentioned, and many others. It would be to set a standard for the public service that in Government ICT projects anything less than unequivocal and total success is failure, a standard that in reality no one seeking to deliver any ICT project in the public or the private sector could accept.
This is not to say that there have not been some difficulties and challenges. Some things did take longer than would have been hoped at the outset and some things did cost more than originally expected. We are dealing here with the novel, in terms of technology and organisational change. There is no easy set of solutions. It is clear that the larger Departments and offices which have already made excellent progress will continue to do that as they have the necessary resources, experience and skills. It is also clear that there must now be a greater focus on the small and medium sized public bodies to help them achieve more in terms of delivering on-line services. The public service has already done considerable work in analysing how best to proceed from here. Last year, the Government set up a review of Reach and the Public Services Broker. That review is due in the near future. Additionally, our colleagues in the OECD have been reviewing e-Government in general as part of their review of the public service. I am satisfied that the combination of recommendations from these reviews coupled with the internal analysis that is being done will help us to determine the most appropriate structures, governance and priorities to ensure the continuing success of our e-Government programme.
I am amazed that the Tánaiste is happily deluding himself that the Government is making progress on e-Government. I wonder has he read the Comptroller and Auditor General's report on e-Government. It shows that €420 million was spent and half of the delivery promised was achieved. It is a programme that shows little evidence of substantial savings from the application of information technology, and numerous initiatives started and then abandoned, including ones on housing grants, driving licences and passports.
One may ask the role of the Tánaiste and Minister for Finance in all of this. The Tánaiste was a member of the high level Cabinet committee that was supposed to be driving this. His Secretary General was on the high level committee of Secretaries General that was supposed to be driving this. Once again, the Tánaiste is high on rhetoric but when it comes to delivering results, he is just marked absent. I want the Tánaiste to address what his role was in the failure to deliver this programme and in the continuing failure to have any programme to replace it since it expired at the end of 2005.
I do not agree with the representation that Deputy Bruton puts on these matters. It is popular to suggest, for example, that the report to which he refers demonstrates that e-Government has been a failure. Of course the report does no such thing. No objective observer could describe the story of e-Government in Ireland as one of failure. To do so is to denigrate the valuable work of those who have delivered the excellent projects I have mentioned, and many others. It would be to set a standard for the public service that in Government ICT projects anything less than unequivocal and total success is failure, a standard that in reality no one seeking to deliver any ICT project in the public or the private sector could accept.
This is not to say there have not been some difficulties and challenges. Some things did take longer than would have been hoped at the outset and some things did cost more than originally expected. We are dealing here with the fact that there is no easy set of solutions.
The report highlights a number of what it describes as cost overruns. In interpreting those, I sound a note of caution for Deputies. Many of the budgets and estimated outturns as quoted in the report relate to different matters. For example, in some cases the budget relates to pilot developments whereas the expected outturns relate to full development, implementation and operation. In others, the budget relates to single year estimates, whereas the estimated outturns relate to multi-year expenditure. In numerous projects the scope was changed from that originally envisaged because the analysts found opportunities to do more or to implement additional process efficiencies or had to deal with changes in legislation or the international environment that resulted in increases in costs over those for which they had originally budgeted. Such is the nature of e-government. This is something that is common across all countries attempting to improve public services in this way.
When the Minister is asked a difficult question, he responds by reading blather from his file, which is a bit wearing. He was asked what was his role in this regard. This was a programme that, for example in the public service broker, was approved without a budget. There was no matching budget for it and no evaluation of what was going on with it. It cost two and a half times over budget. The programme shows that no substantial savings were achieved as a result of the ICT initiative. Where was the Minister when this was happening?
Programmes were initiated and money spent on them, then they were abandoned. What was the Minister's role, as part of the Cabinet sub-committee, in monitoring these programmes that, having been initiated, wasted significant amounts of public moneys? His role is to ride shotgun on such programmes and ensure that ambitious visions are delivered on time and on budget. This fell asunder while the Minister was at the helm. The Minister was asked what was his role at the helm and why this happened on his watch.
I do not accept the interpretation the Deputy is putting on events. The purpose of Question Time is for me to provide accurate information. The Deputy may get involved in rhetoric as much as he likes. He talks about——
I talked about the public sector broker. What happened with the public sector broker?
Allow me to answer the question. The problem is the Deputy is getting an answer he does not like.
The Minister gave no answer, just waffle.
It is not waffle, it is related to what is in the report. The report highlights some projects that it describes as "abandoned". It is the case that some projects were either halted early in their life cycle or never commenced because it was decided that they were either unlikely to succeed or the situation had changed so significantly that it would be folly to proceed. Had they proceeded and had there been cost overruns, the Deputy would be criticising us for going ahead with them.
Was that the driving licences?
Now the Deputy is criticising us for not going ahead with something, when it was shown in the appraisal that it was not fit to go ahead.
The public service broker was two and a half times over budget. How does the Minister explain that?
The Minister, without interruption.
It is worth remembering that the public service broker was an innovative concept that was adopted by Government in 2000 as an approach worth trying. Nothing of its kind existed anywhere at the time. Consequently, the project to build it was also, of necessity, a project with significant research elements and because there were no comparators, it was virtually impossible to estimate its possible cost with a reasonable degree of accuracy.
It is not functioning.
I mentioned earlier——
The first independent evaluation showed all the planning was deficient.
Shouting now when the Deputy has the information will not solve the problem. The Deputy does not want to hear the accurate information.
The Minister should read the report of the Comptroller and Auditor General, not just his brief.
I have read it and the Deputy is misrepresenting it in public.
I am not misrepresenting it.
The Deputy is misrepresenting it.
