Noel Coonan
Ceist:6 Deputy Noel J. Coonan asked the Minister for Finance the selection process which he plans to put in place for prioritising projects for approval within the national development plan. [31468/08]
Other Questions.
National Development Plan.
Damien English
Ceist:35 Deputy Damien English asked the Minister for Finance if he plans to review the national development plan to identify priority elements. [31485/08]
Ciaran Lynch
Ceist:67 Deputy Ciarán Lynch asked the Minister for Finance if he proposes to publish a revised statement of the capital expenditure programme for the next five years; the proposals under consideration by his Department to cut, postpone or cancel elements of the national development plan; if so, the elements of same; and if he will make a statement on the matter. [31322/08]
I propose to take Questions Nos. 6, 35 and 67 together.
The questions relate to the publication of a revised statement on the capital expenditure programme. I am currently considering the issues relating to capital investment under the national development plan, NDP, in the context of the forthcoming budget. The question of publishing revised multi-annual capital envelopes will also be considered in that context.
Will the Minister publish cost-benefit analyses on the projects selected to proceed so that we can have confidence that robust projects are being selected? Will the cost-benefit analysis include some form of independent auditing to ensure we do not end up with the type of rose-tinted analysis often produced by parent Departments and will we have an opportunity to debate these in the House?
Is the national development plan dead in terms of the capital projections committed to when it was published? Are the projections which represented approximately €184 billion overall now gone?
The national development plan stands. The Government has made clear that implementation of the plan must be phased over a longer period. It will not be possible to implement the plan within the original envisaged timescale. Therefore, it will be necessary to extend the period during which it will be implemented.
It is important in that context to identify which elements of the plan should be prioritised. In regard to the request from Deputy Bruton for a debate in the House on that matter, such debate can take place in the context of the budgetary debate.
That is not what I asked the Minister. I want protection from the Chair to ensure the questions I ask are answered.
The Chair has no control over the answers given.
I asked if a cost-benefit analysis will be undertaken and if it will be published. It is only then that I will be interested in a debate. I do not want a free rolling debate with backbenchers being rolled in to read out speeches off a word processor.
Deputy Bruton is being rather unfair to the Fianna Fáil backbenchers.
The Minister should answer the question.
We have backbenchers from all parties who work off word processors and, happily, many who do not.
On the specific question, the Government will examine the capital priorities for next year and ensuing years and will determine priorities in relation to them. There has been considerable analyses and cost-benefit exercises in respect of many of these projects. As regards projects which are off balance in strict capital expenditure terms and are subject to the public private partnership system——
The Minister stated on radio that he is open to publishing them, yet he will not say so in the House.
Please allow the Minister to continue.
Deputy Bruton is well aware those particular projects are subject to rigorous economic analysis——
I am not aware of that at all, although I would like to believe it.
——whatever the merits or demerits of the particular financing mechanism involved. On projects which come strictly within the public capital programme, my predecessor introduced many cost-benefit measures to ensure greater value for money in relation to these projects.
The Minister is reneging on what he said on radio, namely, that he is open to publishing these reports. He is foot stepping the issue.
I am not.
I call Deputy Joan Burton.
I would like an opportunity to reply to Deputy Bruton.
The Minister will have plenty of time later to reply. I call Deputy Joan Burton.
Has the Minister decided what will be the total spend on the national development plan? Does he, unlike former Fianna Fáil Governments which, in the late 1970s, borrowed for consumption and led us on the road of economic ruin, propose to borrow to invest in the national development plan?
Will public transport and education issues be prioritised in the national development plan if revised? Is the Minister proposing to axe metro west and to downsize metro north? Will he agree that both decisions would be incredibly foolish and short term if the objective is to return us to competitiveness and economic growth?
I must confess that like former Deputy Charlie McCreevy, I am only a bean counter; I am not an economist or senior counsel. Multinational companies around the world carry out a rating score in regard to investment. What does that type of score do for Ireland's competitiveness and employment? Also, what is the cost of the project and the borrowing requirements in that regard?
The Minister spoke earlier about public private partnerships. The problem with PPPs, as the Minister should know from his earlier reply about banks, is that the cost to private investors of raising finance, owing to the absence of liquidity, has risen significantly. The Minister's comments leave me, a mere bean counter, with some degree of fear and trepidation. The Minister should forget about fancy words like "cost-benefit analysis" and set out, in language that those of us who are not economists or senior counsel can understand, how he is rating the proposed investments in the national development plan.
As I understand it, the Deputy is far from being a humble bean counter; she is a qualified accountant, which is a qualification of some repute.
On the national development plan, the Government must make decisions as part of the budgetary process. Deputy Burton will appreciate such decisions are confidential. The Government will be informed by the considerations available to it in that regard. I have stated, prior to any consideration of these matters by Government, that the question of stimulating productive investment in the economy must be fundamental in assessing the priorities for this year.
Could the Minister answer my question?
I will come back to Deputy Burton. I call Deputy Kieran O'Donnell.
The Minister has not answered the questions asked. He is dealing with taxpayers' money, a scarce resource.
Yes.
Will the Minister state in simple layman's terms what type of cost-benefit analysis is provided within the various Departments in regard to NDP projects? There is a lack of transparency on the part of the Government in this regard. The Minister for Finance is guardian of the public purse. People are entitled to know how their money is being spent. We need the Minister to tell us today how that is being done. As stated earlier by Deputy Bruton, the Minister appears to be reneging on the commitment he gave on the national airwaves in respect of the publication of the cost-benefit analysis. What procedures are in place to ensure this information is put into the public domain and will the Minister give a commitment today that this analysis will be brought before the House?
There are extensive procedures in operation throughout the public administration of this State for the cost-benefit——
The Minister is waffling. He should answer the question.
The Deputy has not given me an opportunity to complete my answer.
The Minister is waffling.
Please allow the Minister to continue without interruption.
I made it clear that there are ample procedures within the public administration of this State for the cost-benefit analysis of many different projects. For example, for educational investment at primary or second level, the specifications for buildings of that type have been established by long tradition. With regard to cost-benefit analysis, as Deputies from all sides of the House know, the demand for particular schools becomes visible, and then with regard to the actual cost of the project, tenders are invited and a proper procedure is followed. There may be some projects of a wider character, to which I assume Deputy Bruton was referring in our recent discussion on the subject, on whose cost-benefit analyses he believes he does not have adequate information. I made it clear that if there was such information I would of course make it available. It is important that we have a detailed consideration of the costs and benefits of any project in which taxpayers' money is an issue. However, I emphasise that the projects within the capital development plans of the Government, or of any government, are subject to rigorous cost-benefit analysis within the public administration.
I will repeat my question to the Minister.
I wish to ask a question.
I am sorry, Deputy Burton; I did not call you yet.
I am sorry. I thought you were calling me.
Deputy Bruton had a question.
I looked to see whether Deputy Bruton was indicating and he was not, but he now is, so I will allow him a question after Deputy Burton.
Does the Minister propose to borrow for the national development plan, and what scale of borrowing does he envisage? I refer to borrowing for investment as opposed to borrowing for current consumption.
How does he propose to rate the different proposals in the national development plan? I have likened these before to a big soufflé. Now the oven door is open and soufflé is sinking rapidly. The Minister must decide which are the priority areas. How will he rate them? Will it be on the basis of the employment they create or the increase in competitiveness that results from them? Will he prioritise projects that help the economy to grow, or will it be based on their overall cost and their implications for borrowing? I have said before and I will say again that I am quite concerned about the Minister's comments on PPPs. Due to the lack of liquidity in the banking system, the cost of borrowing for private equity institutions has risen astronomically, while Ireland, as a country, can borrow much more cheaply, even though our rating is going down after today. Can the Minister say what he is planning to do? These are strategically important decisions.
I agree with Deputy Burton that these are very important strategic decisions, and they will be announced in the budget. The overall amount of borrowing that can be engaged in by the State will also be announced in the budget. It will not be announced in the House this afternoon. It is clear from the figures disclosed to date that borrowing will have to take place for investment in capital programme next year.
The Leas-Cheann Comhairle will share my scepticism at the Minister's silky assurances that everything in the Department of Finance is carefully assessed.
The Deputy cannot attribute any attitude to the Chair.
I will not do so. I ask the Minister whether the €900 million for the decentralisation programme was carefully assessed in the Department. Was the €52 million spent on e-voting carefully assessed in the Department, or the €160 million on PPARS? I could go on and list all the projects we see year in, year out in the reports of the Comptroller and Auditor General. Let us be honest with ourselves; the robust assessment that the Minister talks about does not occur. We need to make it happen, and this House is charged with that duty. The sooner these assessments are published and held up to public scrutiny, so that people are held accountable, the better for this country.
With regard to decentralisation, a political decision was announced by a previous Minister for Finance after being arrived at by the Government, which the Deputy's party——
What assessment was done before the politicians took the decision?
The Deputy's party agreed that a certain designated number of personnel and bodies should be decentralised to particular locations.
We expected that a business case would be made or an assessment carried out.
I have never heard that the Deputy's party opposed that particular Government decision unequivocally or opposed the locations selected by the then Government for decentralisation. Value for money then enters the equation, on foot of the political decision, in assessing the buildings at the proposed locations.
That is the sort of answer the Minister would get away with in the Dáil bar, but not here. Unfortunately, we are time-constrained.
Appointments to State Boards.
Jimmy Deenihan
Ceist:7 Deputy Jimmy Deenihan asked the Minister for Finance if he will ensure that all of his appointments to State bodies will be tabled for consideration by the Joint Committee on Finance and the Public Service. [31481/08]
The arrangements for appointments to the boards of State bodies are normally set out in the legislation establishing the bodies in question and are designed to ensure efficient management of the organisation. Appointments to the boards are generally made by the Minister with responsibility for the body in question, subject to the consent of the Minister for Finance.
In making appointments, Ministers seek to ensure that the people appointed bring a diverse range of relevant skills and experience to the body. Ministers also take account of any specific legislative or policy requirements, such as those contained in the Worker Participation (State Enterprises) Acts or the Government's policy on gender balance on the boards of State bodies. Where appropriate, Ministers may also consider representation from different strands of society such as the business community, consumers, trade unions or the other social partners.
I am generally happy that the present arrangements, which follow the practice of previous Governments, work well and that people with the required skills and experience are appointed to State boards. Nevertheless, I recognise that it might be useful to give some thought to involving committees of the House in appointments to some boards. This is an issue some of my colleagues have examined with regard to boards under their remit.
I welcome the fact that the Minister intends to put some thought into this, but I hope it does not suffer the fate of his thoughts about publishing evaluations.
Does the Minister not agree that we would be much more assured of the quality of the people appointed if we had some level of assessment by an Oireachtas committee? I am not talking about a Star Chamber, but an Oireachtas committee which will have accountability in scrutinising these appointments.
We are at a critical time in terms of dealing with the Central Bank and Financial Regulator. Is the Minister confident, looking at the boards of these bodies, that they have the necessary skill, expertise and experience to handle the challenges we face and protect taxpayers' interests? This issue is particularly acute for the Minister, as he appoints board members of the Central Bank and the Financial Regulator. Is the Minister satisfied and confident that we have that expertise in place?
Of course I have full confidence in the authorities referred to by the Deputy, although he will appreciate that I did not appoint the persons in question. However, I have confidence in the operation of these authorities. If it falls to me to make appointments I will of course take great care in doing so, as they are of great importance in the financial administration of the State. However, I have no reason to lack confidence in these boards or authorities as a Minister.
With regard to the more general question of appointments, there is an issue of whether suitable persons would come forward if they were to be subjected to the Star Chamber of committee interrogation in the House. This is something on which we should reflect in deciding whether we want to go down that route. There is also the more general issue that a harmonious relationship between a board and a government is desirable, irrespective of the political colour of that government. The fact that the appointment is made by a government does ensure that the appointee understands the special relationship that necessarily exists.
The Minister spoke about diversity with regard to appointments to political boards. Does the Minister agree that after 11 years of Fianna Fáil in government, what most people think of in terms of diversity in State boards is the diversity of Fianna Fáil cumainn represented by many of the board members? That is, unfortunately, what people have begun to see. Historically, that may be a consequence, as I said, of Fianna Fáil's 11 years in government. However, there has been an extraordinary increase in the number of bodies. Depending on how one counts them, we now have up to 800 boards, quangos and task forces of every kind. Does the Minister agree that it is now very difficult to get competent people to serve on boards? Does he agree that it is necessary to reform the appointment process? The Minister for Education and Science, Deputy Batt O'Keeffe, may have picked someone who is good at maths to be an adviser on education, but does the Minister not think he might have been better advised to have a departmental official indicate the qualifications required to be an adviser on the costs of third level education?
As I indicated, I am open to suggestions as to how we can improve the quality of those appointed to the boards. I do not believe membership of a particular political organisation or party should disqualify persons from appointment to a State board.
It certainly helps to be a member of Fianna Fáil.
Does it not enhance a person's chances?
I would deplore any tendency in that regard. Participation in political parties of every type, description and orientation is an important part of the public life of the State and should be esteemed rather than devalued. That is important in making appointments to boards. I do not accept the proposition that because a person is a member of a political party it somehow necessarily disqualifies him or her from appointment. That persons have shown public spirit to be involved in politics tends to qualify rather than disqualify them for appointment. However, I accept the point that we need to be exceptionally careful about these appointments. I am open to suggestions as to how we might improve the method of appointment.
Although the time allowed for this question has expired, I will allow brief supplementary questions from Deputies Creighton and O'Donnell.
The Minister has pointed to the general criteria that apply to appointments to State bodies and boards. Does he agree that the CSO report on gender representation shows that there is an appalling record, with only 34% of appointees to State boards being female? Does he have proposals to address that problem?
Regarding greater transparency in appointments, I agree with the Minister that membership of a political party should not disqualify a person. However, I certainly do not believe it should be the only criterion by which a person qualifies, which is often the case, as we have seen in the course of the Government and previous ones. I appreciate the Minister's aspiration for a role for Oireachtas committees on that basis. However, for this to happen would we not require some form of legislative initiative to ensure it would be a mandatory requirement for people to appear before an Oireachtas committee in order to be screened thoroughly?
In the light of the current uncertainty in the stock markets etc., has the Minister carried out a review and audit of appointees to current State boards to ensure we have the proper balance of business people and public servants and that the level of expertise available on State boards is sufficient to deal with the difficult times in which we find ourselves in terms of external audit?
A review and audit of the current membership of a board would, in effect, undermine its position.
Let us call it a review.
Members of the relevant boards in the financial authorities have very grave responsibilities. I would not attempt to review their performance other than in the context of fresh appointments being made to those authorities or a public concern being raised about the public performance of their duties. No public concern about their duties has been brought to my attention.
Value for Money Initiative.
Frank Feighan
Ceist:8 Deputy Frank Feighan asked the Minister for Finance his views on giving the Houses of the Oireachtas the power to initiate an evaluation of spending programmes under the value for money initiative. [31490/08]
As I outlined to Deputy Bruton on 4 June, it is important that the Oireachtas should engage with evaluation of spending programmes under the value for money initiative. In this regard, the Deputy will be aware that the orders of reference for the select committees of the 30th Dáil specifically encompass consideration of the reviews completed under this initiative. The Deputy will also be aware that my predecessor wrote to the Chairmen of all Dáil select committees on 1 February this year encouraging them to ensure the committees schedule time to consider value for money and policy reviews in detail and, where appropriate, to discuss the reviews and their conclusions and recommendations with the relevant Department. This approach, combined with the submission of annual output statements to the select committees, facilitates enhanced scrutiny and evaluation of the Estimates by the Dáil and ensures accountability for what is being achieved with the moneys approved.
The Minister evaded the question which was whether he would allow the Oireachtas to initiate the evaluation. We represent the people who use public services and see good and bad. The issue for us is that several other parliaments have very strong evaluation arms available to them. They carry out serious evaluations of performance and are backed in doing that work. The Government has a system, whereby the agencies themselves carry out the evaluations and decide what should be evaluated. It is not open to public scrutiny here, which needs to be reversed. The Houses of the Oireachtas should be in the driving seat in cross-examining the extent to which value is being achieved. That would be a useful change that the Minister should consider.
I am certainly open to considering it, although the public accounts process encompasses some of what the Deputy is referring to regarding the evaluation of value for money. A perusal of the report submitted by the Comptroller and Auditor General makes that very clear. Regarding the specific value for money initiative we are discussing, the practice to date has been that the Government identifies its priorities for review and reports on the findings of these reviews to the Oireachtas to which it is accountable. The review is being conducted within the executive arm of government and it will be submitted to the committee for evaluation. Through the Committee of Public Accounts, in the context of the evaluation of spending, this Parliament has the facility to consider these matters.
Given the development of Government bodies — quangos — does the Minister believe it would be possible in current form for Dáil committees to examine public bodies seriously? I will give an example to which the Minister referred. The Central Bank and Financial Services Authority of Ireland issues regular reports and its representatives appear before the Oireachtas Joint Committee on Finance and the Public Service. On their last visit some months ago they were questioned robustly by me and others.
I read the transcript.
They were also questioned on previous occasions about what they were doing to ensure the stability of the banking system and, in particular, asked to ensure we would not be overexposed to risky practices in lending to developers to purchase land. We received the vaguest answers to very specific questions such as what was the accounting treatment of the interest payments on loans to developers for land banks. We could not get an answer from them. Had they answered the result would have been that they would have exercised more control over the lending policies of banks to developers for inflated land prices. However, nothing happened because essentially the Oireachtas Joint Committee on Finance and the Public Service was spancelled in carrying out an inquiry. There is considerable language about output statements which are meaningless unless they get to the point. Does the Minister not agree?
The Deputy began by raising the question of the 800 agencies. My views on the matter are well known. It is under consideration in the budgetary process. I agree that our public administration has become far too fragmented and divided. The Deputy used the term "quango" in reference to these bodies and agencies, all of which are not quangos in the sense that clearly the Central Bank is an institution that every civilised country must have in its monetary system.
During the summer, since the committee conducted that questioning, I read with interest the transcript of the proceedings to which the Deputy referred. I do not want to comment on the questioning or the answers to the questions. I was not present at the committee and could not fully judge for myself the character of the persons answering them, but comprehensive answers seem to have been given to many of the questions asked.
Deputy Burton raised an important question on the accountability of various bodies to this House. It is a practice that has been extended in recent years in respect of, for example, the Garda Commissioner and the Central Bank which have made themselves available for scrutiny to committees. In regard to the financial system and the bodies charged with ensuring financial stability, there is necessarily an element of confidentiality in respect of the operations of such bodies which is essential to maintain the confidence we all have and want to see continued in the banking system.
Will the Minister explain why the HSE was exempt from the value for money initiative for the past five or six years, given that employment in the HSE during the past ten years increased by 71%, or 47,000 employees? That accounted for almost 50% of all public sector employees taken on in that period. Why was the HSE exempt? Will the Minister indicate a date as to when it will be brought into the value for money initiative?
It was agreed in the circumstances of the health reform programme and the demands associated with its implementation, that further value for money reviews would not be initiated until 2006. Two reviews that were scheduled to take place in 2002 on the accident and emergency departments and on the GMS were effectively overtaken by the extensive reviews undertaken in the context of the health reform strategy. Three large-scale reviews will be completed in the 2006-08 round, covering total estimated expenditure of €1.263 billion. Two of these reviews were scheduled for completion in 2007 and the third review is listed for 2008. An equal opportunities child care programme review was completed and published in 2007 while the review of allocation and utilisation of funds for acute hospitals is at quality assessment stage. The review of the mental health service scheduled for 2008 is at a drafting stage.
Economic Competitiveness.
Bernard J. Durkan
Ceist:9 Deputy Bernard J. Durkan asked the Minister for Finance his proposals to address the downturn in the economy with particular reference to improving the cost base; if an effort has been made to identify the cause or causes which have to date contributed to a deterioration in the competitiveness of this economy; and if he will make a statement on the matter. [31535/08]
The deterioration in the economy's competitiveness relative to that of our main trading partners has been driven by a combination of factors. These include a strong euro, the global rise in commodity prices and wage increases in excess of productivity. The relatively high rate of inflation we have experienced over the last number of years has also played a role. At this stage, price levels here are in excess of 20% above the euro area average.
Improving our competitive position is essential to facilitate a rebalancing of the economy towards more sustainable, export-led growth and to maintain Ireland's attractiveness as a location for inward investment.
While external factors such as the price of oil and exchange rates have an impact on domestic costs, these are beyond our control. As such, we must seek to control those costs which we can influence. We must also take steps to improve productivity.
In support of these objectives, the Government is committed to maintaining an appropriately low burden of taxation on capital and labour, and has implemented a range of policies aimed at improving competition in product markets and flexibility in the labour market. Furthermore, despite the recent weakness in the public finances, this Government will continue to prioritise investment under the national development plan that enhances future productivity. These measures will equip the Irish economy with the skills, infrastructure and operating environment needed so that we can take advantage of the global pick-up when it emerges.
While my Department, along with the Tánaiste's Department and the National Competitiveness Council all take an active role in monitoring competitiveness developments on an ongoing basis, I would point out that national competitiveness is not solely a matter of Government policy. It is a shared responsibility of all the social partners — Government, employers and unions. Regaining our competitive position, which as a small open economy is critical to our economic success, will require each of us to play our part and work together to this end. This means ensuring that externally driven price increases do not become embedded in our system as that only creates a vicious cycle from which no one wins. In this respect, the willingness of the various parties to compromise and adopt a realistic approach to wage developments in the recent pay talks is welcome.
I suppose it is the elephant in the room so far as competitiveness is concerned, but can I ask the Minister about the role of sectors that he manages or regulates? Does he accept that half of the inflation generated since 2000, excluding mortgage interest, has been generated by services directly provided or regulated by the Government? Does he intend to benchmark the competitiveness of services such as waste disposal, electricity and communications? These are all areas where Ireland has had a much more rapid increase in costs than any other country in the EU zone. Has the penny dropped with the Government that it is the Minister who manages many of these services and regulates the price increases? Does he not have a responsibility, therefore, for driving down costs in these key sectors? This was not mentioned in his reply.
The Government collectively has a very important fundamental duty to maintain our cost base under control as much as possible. My Department does not control the cost of electricity in the State, which is one of the cost factors which bears on our inflation. We have established as a State an independent system of regulation to determine energy prices. That independent process is informed by objective characteristics.
We have the highest price for electricity and the highest rate of increase. Riddle me that?
Deputy Bruton made the case that I was personally responsible for the price of electricity.
The Minister does not have personal responsibility. The responsibility lies with the public sector, which he manages.
I wish to point out that neither I nor my Department is responsible but that the Government collectively has to take the decisions that ensure we have the lowest possible price in the Irish market. The Deputy referred to inflation in respect of public sector costs generally. I can assure him that, as Minister for Finance, I keep a very wary eye on any such increases in public expenditure. It is a fact and an international phenomenon that the costs of health care and the health system are subject to what is called "medical inflation". One suggestion made by Deputy Bruton, which was echoed by Deputy Burton, concerned value for money audits in the health service. Deputy O'Donnell also raised that question. That is an important issue which the Oireachtas should examine. I certainly would be interested in discussing that with the Opposition spokespersons.
In the context of preparing for the budget, has the Minister taken the opportunity to look at comparative costs for public services in other countries? For example, one can visit a doctor in France and expect to pay €20 or €30 and proportionate amounts, perhaps, €70 or €80 to visit a consultant, whereas in Ireland the cost of a visit to a doctor, unless one has a medical card, would be at least 100% higher and in the case of a visit to a consultant probably 500% higher. The Government along with the Minister for Health and Children, Deputy Harney, has been encouraging an aggressive introduction of private for-profit medicine into the Irish health sector. We have had a private health sector for a long time but it was largely not-for-profit, religiously-based involving various denominations.
Will the Minister agree that the private for-profit health sector in Ireland is charging what the market will bear? The costs that are being charged for private health services in Ireland are almost at the top end of the range in terms of the European Union, often with dramatically less quality, as is clear from the very sad inquests we have read recently, than the comparative European standard of delivery. This is where the Minister's take on competitiveness and costs comes into play. I wish the Minister well in his job but how does he propose to get his Department to analyse and deal with this type of inflation which happens all the time in regard to costs in Ireland?
As regards the health service, primary responsibility for the formulation of proposals rests with the Minister for Health and Children. The matter is collectively considered by the Government at regular intervals. In regard to the costs of the health service, I do not accept Deputy Burton's assumption that the for-profit sector is necessarily more expensive than the public sector provision.
Has the Minister used it? How many of his consultants use it?
The public sector provision also carries a considerable cost driven by normative salary rates which are well in excess of those of many of our European partners at all levels of the service.
The Minister speaks continually about external factors for which he certainly cannot be held responsible. When we joined the euro we lost control of our exchange rates and interest rates but the one thing we can control is inflation. The Minister is probably aware that international indicators of competitiveness rank us as the worst of the euro countries. In light of what the National Competiveness Council recommended, that Ireland should try to get its inflation rate well below the EU average, when will the Minister have an inflation policy in place? What target inflation rates does he expect to put in place? There is a lack of leadership in this area.
The budget will provide a framework with regard to our costs and competitiveness for the future. I do not accept Deputy O'Donnell's casual reference to the fact that we lost control over our exchange rates when we joined the euro. The reality is that Ireland has been locked into some form of monetary union since the earliest part of the 19th century. For a large part of that history we have had no control over our exchange rates and we had a very limited control over these during the short period when we were in the European exchange mechanism from 1979 onwards. I do not accept this. It is an important point because we have had a very big debate on Europe——
We devalued.
——and the dissemination of inaccurate information played a major part in that debate.
What about the inflation rate?
The Deputy must wait for the budget.
Unemployment Levels.
Mary Upton
Ceist:10 Deputy Mary Upton asked the Minister for Finance his latest projections for average unemployment for each of the years 2009 and 2010; and if he will make a statement on the matter. [31344/08]
In view of the changing global economic environment and the slowing domestic construction sector, the prospects for employment have weakened in 2008. In July of this year my Department forecast that survey-based unemployment would average 5.8% this year. My Department is currently updating its economic and fiscal forecasts in the context of the latest information that is becoming available. Accordingly, updated forecasts for unemployment this year and for 2009 and 2010 will be published on budget day, 14 October.
However, as I indicated to Deputies Burton and Bruton, I am anxious that the Opposition spokespersons be given every possible assistance in respect of economic forecasting and while a definitive forecast will be given in the budget, whatever information is at the disposal of my Department following the completion of the third quarterly review will be made available to the Deputies.
Does the Minister agree, as has been publicly announced, that unemployment is already over 6%? This is the most recent figure. I do not know who wrote the brief for the Minister today but things have got worse since July. We have figures regarding unemployment that relate to the end of August and early September and these show 6.1%. Does the Minister share the analysis of the ESRI that the unemployment rate is likely to hit 7%, a total of 300,000 people, by Christmas? Does he agree that in the first three months of the new year it is likely to go up by a further 1% to approximately 8%? That is what the ESRI has stated.
After his appointment the Minister bounded into this Chamber like the Duracell bunny to glorify the ESRI's medium-term forecast. That was just before the House rose for the summer when the Labour Party called for a debate about the state of the economy. The Minister was delighted by the ESRI's forecast. Mr. Barrett of that organisation attended the think-ins of the Labour Party and Fine Gael and perhaps also that of Fianna Fáil. I believe the ESRI was at all of them. Mr. Barrett indicated that unemployment would rise to 7% by the end of the year. That is 300,000 people and a probable rate of 8% to follow. As the Minister said earlier today, all the indicators keep getting worse as this recession deepens. What is the Minister's real figure? Does he share the ESRI analysis?
The Minister has time for a brief reply only.
My Department will arrive at a full figure when all the data is assembled from the ESRI, whose views are always entitled to the highest respect, and from other relevant organisations.
Written Answers follow Adjournment Debate.