Amendments Nos. 1 to 13, inclusive, are related and may be discussed together by agreement.
Ministers and Secretaries (Amendment) Bill 2012: Report and Final Stages
I move amendment No. 1:
In page 3, line 23, after "approval" to insert "and includes service of the national debt".
I welcome the opportunity to move amendment No. 1. We are discussing amendments Nos. 1 to 13, inclusive, as part of this overall topic. We discussed it at length on Committee Stage. It is the same amendment, by and large. Some of my other amendments might be slightly different. This amendment is a repeat so I will go through it to the same extent.
There is merit in a number of these amendments. I can understand how the Minister might have a technical issue with one or two issues. The essential issue is that each year when we come to discuss our voted Estimates in the Dáil, we only discuss the Estimates that come before the line Minister for voting. This can equate to somewhere in the order of €40 billion per annum whereas there is approximately another €10 billion per annum which does not come before the Dáil as part of the annual Estimates process. The fact that the national Parliament does not discuss the full range of Government expenditure each year is a flaw. In a way, some of the money is kept away from the full level of public scrutiny one would have during the normal Estimates debate. We could discuss the Estimates debate and I must be critical of my colleagues in the House because they do not give sufficient time to the Estimates debate in respect of line Departments. I know some of them must still go through the House for this year. We all know that most of the money is already spent and committed and we are still only voting on the Estimates.
That said, many Members of the House will give scant regard to the actual Estimates debate. I want all these items to be brought into the Estimates process and voted expenditure. We can have many Departments with budgets of €8 billion, €9 billion and up to €12 billion and €13 billion going through each year and the Estimates debate can take an hour or two. When one takes out the set pieces - the opening statements - very little real detailed scrutiny takes place and I would welcome greater scrutiny for the Estimates across the House.
That said, the purpose of these 13 amendments is to take out items from the Central Fund that should be brought into the Estimates debate. I understand there is an issue with the question of the servicing of the national debt. The Minister's official spoke nicely to me after Committee Stage to say that many countries might not want to lend to a country if they felt it could be caught up in a political wrangle over whether it pays the interest each year. I accept that point. Essentially, the next Government is bound by whatever is agreed now and it cannot be changed by way of an Estimates debate or a Government having a slim majority or no majority on some occasions. There is merit in that point but a halfway house can be found and a proper debate on that issue held in this House in parallel with the Estimates debate. As part of the Estimates debate, there might be an addendum, appendix or complementary note added to it involving items relevant to that Minister's Department, for example, the Department of Finance for payment of the national debt, which will not be voted on but the process of having the debate should happen each year. There is a case to be made for doing that.
My real concern related to when I went down through the list of items. The second item, which is amendment No. 2, relates to a contribution to the EU budget. I know somebody will give me a reason that the Oireachtas should not be allowed to discuss that each year but I am sure-----
It is a treaty obligation.
I am sure the same treaty obligation put an obligation on EU institutions, yet consider the discussion we had in recent months about agreeing its budget. The European Parliament gets to discuss the EU budget - what it takes in and receives from us - but we do not have an equivalent and reciprocal debate, yet we are governed by the same treaty. If the same debate can be held at European level, it should be possible to have it here.
In respect of payments to the ESM, I know there are very large amounts of money but I suspect that very few members of the public are aware that those payments are going through because they are not being discussed here. There is no reason that items like the Houses of the Oireachtas Commission and election posting cannot be included in the Estimates and if, for example, there is to be a referendum that was not planned, a figure could be included as part of the Estimate that would be brought forward to cover the actual referendum.
The Minister understands my point. He will probably not accept these 13 amendments. He did not accept them on Committee Stage and I do not expect him to accept them here. It is a point we will wish to revisit separately from this legislation because €10 billion should not be spent each year on behalf of the Irish taxpayer without a debate in the Chamber. Perhaps it would not happen in the voted expenditure mechanism about which we are discussing but there should be a debate. A payment of €8 billion or €9 billion should not be made each year in respect of the national debt as if the Members of the Dáil and Seanad could not even have a discussion of the matter. They may not have the power to amend it but I think they could.
The Minister refers to international obligations and legally binding agreements. In respect of the promissory note, every known agreement that we draw down is always subject to renegotiation if the NTMA can source other funds and perhaps re-finance it in a better way. That is what the NTMA does every day of the week. It tries to re-finance some of the existing loans in a better manner so there is an ebb and flow in these matters each year, yet we are not allowed to have that debate. The Minister knows my views well.
Deputy Fleming is right. We had a comprehensive debate on these matters on Committee Stage. I do not disagree with the argument that we should always be pushing out the boundaries of scrutiny to ensure that we can take full account in this House and make officers of the State, particularly the Executive, amenable to Dáil oversight.
As I previously stated, non-voted expenditure represents expenditure which the Oireachtas has declared by law to be paid from the Central Fund without annual reference to the Dáil. These are items that are a permanent charge on the State's revenues. They represent those services that are payable out of the Central Fund - many of them are listed in the amendments tabled by Deputy Fleming - by the continuing authority of statute law. We debate them when we pass laws here that this is an ongoing charge that should be paid from the Central Fund. Therefore, they are not subject to the normal annual voted expenditure-type process.
The Central Fund activity is regularly reported. It is in the public domain through the monthly Exchequer statements that the Department of Finance and my Department publish. In addition, the Department of Finance publishes detailed annual accounts of the Central Fund for the previous year, known as the financial accounts. As I explained in some detail to the committee, these accounts contain detailed analysis and classification of receipts and issues of the Central Fund, as well as details of the national debt. In the presentation of the Exchequer figures for this period published this week - I do not know whether Deputy Fleming had a look at them - we disaggregated out the debt servicing elements of it, which was a suggestion of the Deputy, so that it is much clearer.
They must be laid before the Dáil not later than 30 September each year. As discussed on Committee Stage, debt servicing requirements are encompassed in the budgetary arithmetic and are shown in the annual budgetary papers on the presentation of the budget every year. The Bill before us does not deal with debt service or any other Central Fund charge. Consequently, the Bill does not propose any change to the long-standing practice with regard to such non-voted expenditure. Such practices are in accordance with the Constitution and, as I stated on Committee Stage, changing them in the way Deputy Fleming suggests would primarily be a matter for the Minister for Finance rather than for me. I am speaking about treating the annual expenditure voted Estimates in the way I am describing. I understand the transparency issues the Deputy has raised and they are something we can work on.
Even in terms of the Estimates process, we can do much better. The Deputy is right in this regard and I hope we can do this proactively. We will have an opportunity this year as the budget will be in October and all the Estimates must be debated and passed between October and December. Before any euro is expended next year it will have been debated, rather than doing it afterwards, which has been the practice for as long as I am here. This is an innovation in and of itself. This is an evolution rather than a revolution and Deputies will embrace this detailed analysis. I hope more resources will be available to the committee system, particularly if we move to a unicameral House, so we have not only ongoing analysis of expenditure in advance of the money being expended, but also a look at options for expenditure so we will have a real Estimates debate.
The Minister stated the various items I have mentioned in amendments Nos. 1 to 13 are matters which the Oireachtas has decided by law are to be paid. If the Oireachtas can decide by law that they should be paid, the Oireachtas can equally decide by law to remove them from the arrangement they are in and make them voted expenditure. We will return to this issue.
Thank God for Europe and the six pack because they are forcing us to do something which is right. It is an indictment of the Oireachtas and all of us that if we were left to our own devices, we would happily speak about next year's spending next summer when half the year had gone. Europe has brought financial discipline to how we do our business and forced us to consider these matters before the money is spent. The European Parliament has rules whereby if the budget is not passed by the end of January, one twelfth will roll forward until the budget has passed. We have arrangements in place whereby we cannot go over 80% of the previous year's budget and on occasion we had to rush measures through. It had to be done with regard to the Department of Public Expenditure and Reform this year.
Correct.
One reason we had to bring it forward was for the shared services programme because the budget figure last year was not big enough and we could not spend too much this year. The system is up and running and I hope it is working well. Thank God for Europe, and perhaps Europe might tell us to do this by way of voted expenditure at a future date.
Amendment, by leave, withdrawn.
Amendment No. 2 not moved.
I move amendment No. 3:
In page 3, line 23, after "approval" to insert the following:
"and includes payments to PSE Kinsale Energy Limited".
Question put and declared lost.
Amendments Nos. 4 to 13, inclusive, not moved.
Amendment No. 14 arises out of committee proceedings. Amendments Nos. 14 and 17 are related and may be discussed together.
I move amendment No. 14:
In page 4, line 1, after "Government” to insert ", to include all cabinet members".
We discussed this matter at Cabinet-----
A future promise.
I am getting ahead of myself. That was quite a Freudian slip.
A left-wing government.
We discussed this matter on Committee Stage and I proposed two amendments to clarify that where the legislation states, "Each financial year the Government", this should include all Cabinet members. I made the point that significant criticism has been made within the Cabinet because of what is perceived by senior Ministers to be their exclusion from key expenditure and budgeting discussions and decisions. I instanced comments made by the Ministers, Deputies Joan Burton and Simon Coveney.
There is certainly a view that the core of power in Cabinet now resides in the hands of the four Ministers on the Economic Management Council. The four men involved in the group have the balance of influence and this excludes others. I have tabled this amendment to make the point yet again that where expenditure ceilings and spending plans are being set out which represent discipline and rigour to be adhered to, it is only right that Cabinet Ministers and the line Ministers should be fully involved at every stage of the decision-making process. To ensure this is the case in reality it would be most helpful to introduce words after "the Government" to clarify that this includes all Cabinet Members.
As I informed the Deputy on Committee Stage, the Government is defined in the Constitution, which sets out the role and principles under which the Government operates. A decision of Government represents a decision undertaken by the Government acting collectively, inclusive of all members of the Government. The word "Government" in the Bill automatically constitutionally and legally encompasses all members of the Government.
That being the case and given this clarification - of course, I know the constitutional definition of the Government - this definition should be borne in mind when budgetary decisions are being made and when expenditure plans and binding plans are being set out. The inclusivity of the definition cited by the Minister should be recalled and honoured.
I do not think I will breach Cabinet confidentiality if I state every decision on a budget, including the two most recent budgets in which we have been involved, was individually and then collectively agreed by every individual member of the Government.
Amendment, by leave, withdrawn.
Amendments Nos. 15, 18, 20 and 22 are related and may be discussed together.
I move amendment No. 15:
In page 4, line 7, after "year" to insert the following:
"with due regard of the State’s equality and human rights obligations".
It was a very positive move that the programme for Government stated explicitly that decisions of public bodies would be taken with due regard to the State's equality and human rights obligations. This was a very important statement of political principle and political intent. If this is to mean anything, the same equality and human rights obligations need to be hardwired into the entirety of the budgetary process and decisions on expenditure ceilings. It is for this reason I have again tabled these amendments.
If the Government is serious, as it should be about honouring the State's equality and human rights obligations, then those very obligations must be knitted as a constituent part into the budgetary process, step by step. It should not simply be an add-on or a secondary consideration, or perhaps in some instances not a consideration at all.
The policy issues raised in the amendments, as I said on Committee Stage, are different from the subject matter of the Bill. We had a disagreement on the matter. This Bill is ultimately concerned with the technical rules for setting limits on expenditure. The fact that I used the word “technical” on Committee Stage caused some ire with the Deputy opposite but that is the fact of the matter. Therefore, the proposed amendments are not appropriate for inclusion in this legislation.
However, considerations of equality, and a range of other issues, form an important component of all budgetary discussions by Cabinet. Cabinet procedures require that proposals put to Government indicate clearly whether there is any impact of the proposal on, among other things, gender equality, persons experiencing or at risk of poverty, persons at risk of social exclusion and people with disabilities. Those considerations are taken into account when Government decisions are being made on any issue, and certainly in regard to budgetary matters.
The Private Members' Bill that will continue to be debated this evening is concerned with amendments to the Equal Status Acts and the matter of equality budgeting. The Government is opposing the legislation. It cites the Bill’s imperfections, which could be remedied on Committee Stage, but the truth is that despite commitments and rhetoric on equality and human rights obligations, there is a fundamental resistance from Government - perhaps even from the permanent government - to hardwiring those considerations into the technical, procedural elements that are necessary to bring forward a budgetary proposition.
The disagreement we had on Committee Stage was not so much about the Minister’s use of the term “technical”, because I accept that this is technical legislation. He might recall that the difference of opinion was based on the Minister saying that equality and human rights considerations were, by definition, subjective. I challenged him on that. I do not believe they are. In any event, I am disappointed that the Minister will not accept the amendments. They would not in any way scupper or compromise the type of system which I support for multi-annual budgeting, proper planning and discipline. All of those matters are very welcome. The Bill is a step forward but it is a huge disappointment that the Minister will not take another logical step and fulfil the commitment to equality and human rights and write it into the technical process by which decisions on spending are made.
Although this is a technical Bill, we must be conscious at every turn that technical processes such as this have real, lived consequences and outcomes for citizens. The reason we set budgets and make decisions on expenditure is bound up with our view of what society needs, what the service needs are or where different categories of citizen and groups within society are and what they need. That is the very process in which we are involved. For that reason, by right the Minister should not alone accept the amendments but I would have thought it would have been something he would have considered at the start of the process when the legislation was being drafted. I am disappointed he has not changed his position. Soft language and in some cases lip-service on equality considerations will not cut it in the long term. At some stage the Government or a subsequent government will have to take the plunge and write into law budgetary processes, expenditure ceilings, decisions, frameworks and equality considerations to make them real.
Amendment put and declared lost.
Amendments Nos. 16 and 21 are related and may be discussed together by agreement.
I move amendment No. 16:
In page 4, lines 23 and 24, to delete “as soon as may be” and substitute “immediately”.
The Minister will be familiar with the amendment because we discussed it on Committee Stage. As he is aware, the amendment seeks to replace the term "as soon as may be" with the word "immediately". When we discussed the issue on Committee Stage, the Minister said by way of explanation that "as soon as may be" was a more appropriate and standard turn of phrase and that it gave flexibility in the event that, for instance, a decision is taken and the Dáil is not sitting. However, if one goes back to the process that is envisaged, it would be most unusual and irregular for the Dáil not to be in session when these types of decisions are taken. In the event, "immediately" captures not only the immediacy of the need to communicate the consideration to the Dáil but it also has sufficient flexibility if it were to happen that the Dáil was not sitting that the Government would avail of the first immediate opportunity to communicate the decision to the Dáil.
The reason I have tabled the amendment again, having discussed it unsuccessfully on Committee Stage, is that the new legislative framework should not allow not just this Administration but any future Administration a flexibility that could by accident or design result in slippage and important decisions not being reported to the House with all due urgency and immediacy.
This is a technical debate about what is practical in the circumstances. I argued on Committee Stage and I still argue that the form of words, "as soon as may be" is more appropriate as there might be circumstances where the Dáil might not be sitting for any period for a decision to be laid immediately before the Dáil. The normal phrase "as soon as may be" is understood to be an imperative to do it quickly. If the Dáil was in session it would be done as soon as practicable to lay it but one could ask whether the term “immediate” means that day or the next day. "As soon as may be" means as soon as is practicable to do so. The normal way in which that is stated in legislation is "as soon as may be". There is no intention to have any delay in that regard but that is the normal parliamentary phrase which means with great expedition.
Just to clarify then, "as soon as may be" is terminology that means, in effect, immediately and without any delay.
As soon as may be.
That is as clear as mud.
Amendment, by leave, withdrawn.
Amendment No. 17 not moved.
I move amendment No. 18:
In page 4, line 34, after “concerned” to insert the following:
“with due regard of the State’s equality and human rights obligations”.
Amendment put and declared lost.
Amendments Nos. 19 and 23 are related and may be discussed together by agreement.
I move amendment No. 19:
In page 4, line 34, after "concerned." to insert the following:
"The Ministerial expenditure ceiling shall be set out by way of regulation on or before 15 September 2013.".
The main section in the legislation relates to Government and ministerial expenditure ceilings, a matter that we discussed on Committee Stage. I wish to firm up the significance of ministerial expenditure ceilings. I suspect that the Minister would be happy with the general approach, although he might not agree with my exact mechanism.
Last year's expenditure ceilings were breached by the Departments of Social Protection and Health. The Minister might claim that the Government has matters under better control this year, but my perspective is based on the largest Supplementary Estimates process in the history of the State, amounting to more than €1 billion, because the Department of Health sought hundreds of millions of euro in December after failing to control its expenditure. Its Estimates were not valid to start with. This was stated at the outset and proved to be the case. In terms of the Department of Social Protection, requirements in demand-led schemes can change. That Department also returned to the Dáil for additional money. The outcome was that expenditure ceilings for the following year needed to be rejigged, so much so that the members of the troika whom I met last year expressed concern regarding the excessive expenditure by these two Departments in particular. The troika wanted to meet the Ministers in question during some recent visits to discuss why they were not in control of their Departments' spending. Several times during the past 12 months, I told the Minister present that the Minister for Health was not listening to him, the Taoiseach or anyone on the issue of expenditure. It took being hauled in by the IMF. I welcomed Europe's intervention. Perhaps the IMF did some good work in this regard as well.
The Minister for Health claimed that various legislation would reduce expenditure as the year passed, citing two examples. They are the reason behind this amendment. The first legislation was to deal with recouping money from private insurers, some of which has been done. The second was to get a better deal from the pharmaceutical companies on the products they supply in Ireland. It might come as a surprise to the Minister but when the Committee of Public Accounts recently asked the most senior officials at the Department of Health and the HSE, bodies that spend hundreds of millions of euro of taxpayers' money with the companies that supply these products, to explain what happened when they sat down opposite those companies and asked for price reductions, we were told that they had never sat down to have that conversation with the companies. They told us that they met a representative body of the companies concerned and did not deal with them on a one-to-one basis. It would be as if the Government tried to negotiate with the Irish Banking Federation, IBF, instead of the major banks that the IBF represents. This came as a shock and made it immediately clear why we were not making progress, that being, we were not even having face-to-face discussions with the companies.
I will make a suggestion about the cost of medicines, a matter on which I tabled a parliamentary question this week. It is germane to this Bill, as the largest expenditure ceiling is at the Department of Health, where one of the largest costs is the purchase of drugs. We will find out how we stand in the ESRI's international comparison. We should approach the country that is getting the best deal, be that England, France or the Netherlands, and ask it to buy our medicines for us at the price for which it gets its own and to sell them to us at a mark-up of 5%. The cost to us would be a fraction of our current outlay. Other countries seem to be able to get a better deal.
This is the background to the overspend and the need for the expenditure ceilings. I am asking that the latter be set by way of regulation, as there is no sight of an expenditure ceiling in this Bill. The section refers to Government and ministerial expenditure ceilings for this and the coming three years, yet the legislation contains no figures. The Minister might claim that including them in a Schedule would require us to change them each year, but we deal with the finance Bill, the social welfare Bill and appropriation accounts every year. A similar mechanism could be used in this case, thereby strengthening the Minister's hand in his dealings with other Ministers who might not be keeping within their expenditure ceilings. He could tell them that their ceilings were not just something agreed at the Cabinet table, but were on a statutory footing. The Minister will tell me that the figures are printed in some other document, but there is no sight of them in this legislation, the essence of which relates to expenditure ceilings.
Amendment No. 23 on the same issue would set out statutorily those items that are current expenditure and those that are capital expenditure. The Minister will recall the confusion between how Departments interpret current and capital expenditure. He announced a stimulus package recently. Some of that money will go to filling potholes and repairing roads, which I consider to be current expenditure as routine maintenance. However, someone else might view it as capital expenditure because the tar will be there for the next ten years. I do not know which it is.
I hope it will survive ten years.
Depending on the winters. I have seen crossovers between capital and current expenditure, which is not meant to happen. Even where there is no crossover within a Department, what it considers capital might be considered current by another Department. This issue must be examined.
From an overall public expenditure and policy point of view, the Department of Public Expenditure and Reform should produce a schedule or other document, backed up by way of regulation, that sets out for each Department what is meant by capital and current expenditure in order that Departments might not move from one to the other. It is easy to see how, depending on need and where the budget is flush, something could be considered capital expenditure today and current expenditure next month. We want to know where we are going. The definition should be set out by way of regulation so that, as opposed to just ourselves, everyone in the country and those who are carrying out international comparisons can know what is capital and what is current. Perhaps it was not intended, but the impression is that last year's stimulus package was new capital investment for infrastructural projects, schools and roads. Lo and behold, some of it was current expenditure. For example, I do not know whether the retrofitting of local authority housing is considered capital or current expenditure. Perhaps the finance officers of various local authorities have different opinions on the issue. It is important that there be uniformity so that everyone can know how to compare.
I picked the date of 15 September because it was one month before the annual budget or thereabouts, providing time to examine the ministerial expenditure ceilings and the amounts of capital and current expenditure. As with the appropriation accounts at the end of the year, if the ceilings must be changed, so be it, but it should be done on the floor of the House by way of regulation and legislation.
We have discussed this matter. A subset of issues are involved. As the House is aware, from this year on, the budget announcement on the expenditure and the taxation sides will take place on 15 October each year. This forms part of the new European semester to which we have all agreed. We will not have a two-phased budget, that is, where the Estimates will be published in advance. When I saw the Deputy's amendments, I wondered whether he had made a mistake in wanting the Estimates ceilings debated a month before the budget. Things change in that month-----
Are they not fixed for three years?
-----in the final determination and so on.
It would be odd to set a ceiling by statutory instrument and then alter it a month later. All the budgetary arithmetic happens on the night of the budget. We lay out the fiscal parameters and both the expenditure and taxation sides are done.
With regard to regulation, the multi-annual ceiling expenditure will be set out as part of the expenditure report, which will be placed before the House alongside the budget. This will happen this year and in every year going forward. It is not proposed to set ceilings through the use of a statutory instrument for the reasons I have just outlined. The departmental expenditure ceilings are decided by the Government and will be laid before the House and published, as is normal. Reconciliation tables will also be published alongside any revision of the ceilings to show details of any and all changes.
In discussing the previous amendment, I have already referred to the new approach to whole-of-year budgeting, which we have tried to bring in. This will facilitate a much greater ex-ante discussion of expenditure, including all the matters the Deputy is talking about. Regularly examining expenditure ceilings and how we are going can all be encompassed in the committee system working more effectively. That is something we will see in future.
The approach we are proposing in this legislation is analogous to that used for capital ceilings, which has been shown to work successfully. The multi-annual capital ceilings have been in place for a number of years. They do not require the use of regulations to set ceilings. In essence, it is a balance between proper oversight and transparency and practical administrative purposes. That is what we aim to achieve with our proposals. In that regard, therefore, I do not think that Deputy Fleming's proposals are practical or helpful, although I understand entirely what he is seeking to achieve.
The Deputy referred to the overspend last year. If one thinks of Ireland Inc. providing services for 5 million people on a 24-hour demand-led basis, the growth outturn was 0.2% last year. Therefore, the excess spend was 0.2% or one fifth of 1%. That puts it into some context.
I am not sure of the percentages. Taxation probably came in in terms of the overall output.
Yes. PRSI was part of the net figures.
On the expenditure side, there was €1 billion but we will not go there again. The Minister might clarify one small item. He said that the expenditure ceiling will be laid before the House, but can he explain what he means by that? If something is laid before the House, is it just put in the Oireachtas Library?
It is part of the budgetary documentation which is given on the day of the budget, as is normal.
So it is just part of the documentation.
When the Minister said it was laid before the House, I thought we could see everything.
It is given to every Deputy as the budgetary process is unfolding, so they can have a comprehensive view of it.
Is the amendment being pressed?
Amendment, by leave, withdrawn.
Amendment No. 20 has already been discussed with amendment No. 15.
I move amendment No. 20:
In page 4, line 42, after “concerned” to insert the following:
“with due regard of the State’s equality and human rights obligations”.
Amendment put and declared lost.
Amendment No. 21 not moved.
Amendment No. 22 has already been discussed with amendment No. 15.
I move amendment No. 22:
In page 5, between lines 12 and 13, to insert the following:
“(c) the State’s equality and human rights obligations.”.”.
Amendment put and declared lost.
Amendment No. 23 has already been discussed with amendment No. 19.
I move amendment No. 23:
In page 5, between lines 12 and 13, to insert the following:
“(11) The Minister shall set out by way of regulation those items that are current expenditure and those that are capital expenditure under the Ministerial expenditure ceilings on or before 15 September 2013.”.”.
Amendment put and declared lost.
I move amendment No. 24:
In page 5, between lines 12 and 13, to insert the following:
“(11) Any Government stimulus package or infrastructure programme that involves current or capital expenditure shall be set out by way of regulations by the Minister.”.”.
We had a brief discussion on this topic on Committee Stage. This amendment states that "Any Government stimulus package or infrastructure programme that involves current or capital expenditure shall be set out by way of regulations by the Minister". The Minister will probably say that it is not helpful and will tie his hands. We regularly have announcements of capital expenditure and that we might have a reduction in capital expenditure, yet the following month we see a press release on a stimulus package of €150 million. People think it is new money, while it is part of the capital expenditure. I know the Minister would say the last €150 million was new, but-----
It was new.
It was new money but less money is being spent on capital expenditure purposes compared to the previous year. In the way these things come out, however, one often thinks otherwise. The Minister may make a big cut in capital expenditure of €600 million or €700 million and then he announces an extra €100 million in March and another €100 million in July. People then say that he is great to spend an additional €200 million but he is actually spending €500 million less than last year. The amendment seeks to provide an overall framework for that in the interests of transparency if there is a stimulus package or infrastructural programme that involves current or capital expenditure.
We did not get a full reply to the current versus capital expenditure issue, so perhaps the Minister can spell out the differences between those two areas. He might give some thought to how best that could be done because people are confused. I still do not know about the retrofit scheme in local authorities, including how different finance officers will record it in their local authority accounts, or will they all do the same thing? It would be useful if we knew whether these retrofit schemes will be considered as maintenance or refurbishment. I am not quite sure.
As regards that issue, stimulus packages should be done by way of regulation. Sometimes we get the public relations announcement but it could be three years later before anything happens. Some of the projects that were intended to be covered by the stimulus package might never happen. The amendment might be one way of ensuring that whatever is announced has a legal standing. It might force some of them to happen sooner rather than falling by the wayside.
We discussed this matter on Committee Stage. The Bill is ultimately concerned with the technical rules for setting multi-annual limits on expenditure. It is a short and discrete Bill in that regard. I do not propose that sub-components of expenditure should be set out by way of regulation within these departmental ceilings. I understand why Deputy Fleming would make a point concerning capital expenditure.
The €150 million I announced was an allocation of €50 million to three different Government Departments. Obviously, that has to be accounted for and voted upon in the normal way. Assuming that they spend everything that has already been voted, there will be an additional €50 million to be dealt with by way of supplementary Estimate. That is the way it will happen. If they make substantial savings, it might not be required, but on the capital side I do not want them to make savings in those areas. We have tried to strike a balance between what is affordable in terms of capital expenditure and maintaining as much State expenditure to a depressed sector of the economy. I wish we could spend more and hopefully through our interaction with the European Investment Bank and other lending agencies we will be able to get more available capital in construction and other sides of the economy including, for example, money for the SME sector.
I am not quite sure whether the Deputy is serious about this or is making a point. However, I do not think it is appropriate to the technical Bill before us.
The Minister might be able to help me as this is the third time I have asked this question. If he does not have the answer, perhaps he can send it on. We are talking about current versus capital expenditure concerning the amendment. The recent stimulus package was very current when we discussed it on Committee Stage because the Minister had just announced it. Does the Minister or the Department know how much of that €150 million is current expenditure versus capital expenditure? I would expect that the part for new schools in the Department of Education and Skills is capital expenditure. That is agreed but I do not know if the bit for roads is capital or current expenditure. The Minister might be able to give me a straight reply as to whether it is current or capital expenditure. The other bit was for insulating local authority houses, but is that considered maintenance or refurbishment? Will it be considered in the Department of the Environment, Community and Local Government's Estimates as a current or capital item? I am not quite sure and felt it could be either, so that is why I am asking.
I tabled this amendment because I felt it would be helpful to Opposition spokespersons to know what is capital expenditure and what is current expenditure. As an Opposition spokesperson, I would like to know how these matters are accounted for, whether a supplementary Estimate is being met from current or capital expenditure or whether that is still open for debate. The essence of my previous amendment was this should not be open for debate but should be one or the other.
I do not have with me the public financial procedures booklet which all good civil servants carry around with them so they can check the rules therein. The Deputy is correct to the extent that there are things intuitively one would think are capital rather than current expenditure and vice versa. On the Deputy's specific question in relation to the €150 million, the €50 million to supplement the Department of Education and Skills' schools programme is capital expenditure, the €50 million for house insulation is capital expenditure and the €50 million being allocated to roads is also capital expenditure. They are all capital expenditure.
Amendment, by leave, withdrawn.
Amendment No. 25 not moved.
I move amendment No. 26:
In page 5, line 28, to delete "endorse" and substitute "give its opinion".
We had an extensive debate on this issue on Committee Stage. The Bill provides that the fiscal council shall endorse as it considers appropriate the macro-economic forecast prepared. Despite that we had a lengthy debate on this issue, none of us was convinced and we are all reasonable people.
I sought clarification on the matter.
Fine. If that is the legal Parliamentary Counsel's opinion, then the Minister should send him or her on a English course. What is provided for in the Bill is not plain English. We are all competent people but none of us can accept that "endorse" means "endorse or not endorse". I know that the Supreme Court often attaches a negative to an interpretation and that such can go either way.
To remove doubt, the amendment seeks the substitution of the word "endorse" with "give its opinion" so that the Bill will read that the fiscal council shall give its opinion as it considers appropriate. The council can then give a positive or negative endorsement, refuse to endorse or give its qualified or, as the case may be, glowing opinion as it considers appropriate. The use of the word "endorse" was unacceptable to us on Committee Stage. While I accept that the Minister has clarified the matter, I do not accept the plain English version of what we are being told.
I am almost afraid to read out the legal response I was given in relation to this issue. Apparently, one cannot in law ask people to not do something. The word "endorse" encompasses both. It will allow the fiscal council the binary option of endorsing or choosing not to endorse as it considers appropriate. The binary option is encompassed in the word "endorse". It is understood, legal and normal. There is no mandatory requirement on the council to endorse. It will have the power to endorse or not endorse. I did have the matter clarified. While in plain English it might sound the appropriate question to ask, I can assure the Deputy that this is how legislation of this type is crafted.
From what document was the Minister reading?
It is the response to my further inquiries of the advisory counsel from the Office of the Attorney General.
I bow to his or her superior knowledge of the English language.
Is the amendment being pressed?
Yes, in the interests of clarity.
Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
I move amendment No. 27:
In page 5, between lines 38 and 39, to insert the following:
"(d) the Minister shall, by way of regulation, provide on an annual basis, a detailed reconciliation between the macro-economic forecast and the official forecast.".".
Again, this issue was discussed at length on Committee Stage, at which time I indicated my intention to table it again on Report Stage. The intention is not to change the wording in the legislation. The Minister will recall that all of those present during the Committee Stage debate were confused by the provision that the fiscal council shall endorse as it considers appropriate the macro-economic forecast prepared by the Department of Finance and shall then provide an assessment of the official forecast. This means there will be two different documents. While one or two people may have grasped the essence of what the Minister was saying, I am not sure others did. It would be helpful if legislation is understandable to the ordinary lay person. I would be surprised if there are 50 people in Ireland who could tell the difference between the two documents concerned.
Rather than tamper with the wording of the Bill, which I am sure is in place for good reason, the amendment seeks that the Minister shall provide by way of regulation, memorandum or information to the House, on an annual basis, a detailed reconciliation between the macro-economic forecast and the official forecast. What is proposed in the amendment would not tamper with either of the definitions as set out in the legislation but would help the public to understand the difference between the two documents and to reconcile one with the other.
The Minister might, when replying to the amendment, spell out in plain English the difference or similarities between the macroeconomic forecast and the official forecast.
On the amendment, the Deputy's suggestion relates to the possibility that the fiscal council could endorse a set of forecasts in advance of a budget and that last minute budgetary measures, involving contraction-stimulation of the economy or on the price side, would have to be taken into consideration in the final forecast. However, existing procedures under the agreed two pack will allow the reconciliation to be made without any difficulty.
Member states are already obliged under regulation 473 on budgetary plans to state the underlying assumptions, the methodology and economic models which drive the forecast underlying the budget. Specifically, each member state is obliged to show the main assumptions of the independent macro-economic forecasts and important economic developments which are relevant to the achieving of the stated budgetary targets.
An annex containing the methodology, the economic models and assumptions and other relevant parameters underpinning the budgetary forecasts and the estimated impact of aggregated budgetary measures on economic growth must also be provided in the documentation. This allows for comparisons to be made between the endorsed and final macro-economic forecasts given that the type of stimulation or contraction about which I spoke would have to be set out in the assumption of both forecasts. The annex on forecast methodology and models would set out how stimulus or contraction impacts on growth for the working of a fiscal multiplier. A departmental working paper on forecasting methodology is being prepared and will explain how this is calculated.
It would be helpful if the Minister could circulate that note to Members tomorrow. The Minister stated earlier that a reconciliation can be done.
Will it be done and, if so, where will it be done? Will it be done this year or will it be next year or the following year before it is done?
Once the budgetary documentation has been presented on budget day the reconciliation must be done.
How long after budget day will it be done?
It will be done on budget day.
Will it be contained in the budget documentation?
Amendment, by leave, withdrawn.
Bill received for final consideration.
Question proposed: "That the Bill do now pass."
Although this is discrete, short legislation covering the area of multi-annual budgeting, it is important to put it to bed before we embark on the early budget. For this reason, it must be enacted this side of the parliamentary break. I thank the Deputies opposite for facilitating this requirement and giving robust and good consideration to the measures in the Bill. I look forward to an ever improving budgetary process as a result of what Deputy Sean Fleming described as impositions from afar, albeit impositions which are encouraging and helping us to have a more transparent budgetary cycle and ex ante budgetary process.
Question put and agreed to.