Vol. 853 No. 3
1. Deputy Sean Fleming asked the Minister for Public Expenditure and Reform the way he will ensure greater transparency and independence in the appointment of persons to State boards; and if he will make a statement on the matter. [38317/14]
First, I apologise on behalf of the House for the late start here today. The Government Deputies chose not to turn up to create a quorum. It shows their commitment to the Dáil reform of scheduling questions for 9.30 a.m. I apologise to the people watching this on television. It should not be the case.
Will the Minister ensure greater transparency and independence in the appointment of persons to State boards and make a detailed statement on the matter?
The Government recently announced a revised model for ministerial appointments. In future, all appointments to State boards must be advertised openly on the State boards portal at www.stateboards.ie, which is operated by the Public Appointments Service. The new arrangements will apply to all appointments other than those where vacancies must be filled through a particular process under law or where a Minister is reappointing a board member who has already demonstrated the capacity to perform effectively. Applications will be processed by way of a transparent assessment system designed and implemented on an independent basis by the Public Appointments Service. Appointments must meet the specific and detailed criteria determined by the relevant Minister as necessary for effectively performing the duties of a member of the particular board. Appointments will remain the exclusive responsibility of the relevant Minister in line with the statutory requirements relating to the appointment of specific persons to State boards on an ex officio basis or on the basis of nominations received from other Ministers or particular stakeholders as set out.
The revised approach strengthens requirements on Ministers to develop comprehensive criteria for the filling of vacancies on State boards in consultation with key stakeholders as determined by the relevant Minister. Such stakeholders include the current chair of a relevant State board concerned and the Public Appointments Service itself. Ministers will be expected to provide the Public Appointments Service with the key requirements that a candidate must meet, including specialist skills and technical knowledge; relevant experience and sectoral expertise; educational and other qualifications, and particular personal attributes. My officials are currently preparing overarching guidelines on appointments for approval by Government, including issues related to diversity. As part of this process, all Departments have been contacted seeking comprehensive details on all State boards under their aegis.
The new arrangements will also provide that as well as being the sole portal for the receipt of applications for all State boards, www.stateboards.ie will also contain definitive and current information on all statutory boards. This material will be published on www.stateboards.ie in the near future. A review of the new arrangements will be carried out and completed within 18 months.
I thank the Minister for the information he has provided. He states in his reply that he is introducing a new model, but we were told this would be up and running by 1 November. I do not understand what he means when he refers to "18 months".
I refer to the review in 18 months' time to show it is working.
I have asked the Taoiseach here whether the new arrangements would require legislation. It appears from the Minister's reply that he is now talking about guidelines. Guidelines are voluntary and Ministers can take or ignore them. While the Public Appointments Service will have a role under the new arrangements, it will be up to the relevant Minister to decide and the relevant Minister will still have the power to appoint people who do not even go through the service. It is important to know who will enforce the new procedure. Will the Minister for Public Expenditure and Reform have a direct oversight role in regard to how Ministers behave in relation to the new regime?
This is a fundamental shift. There will be one access point for the general public and anyone interested in serving on a State board. It will take some time to fully populate the website but I intend every State board to set out the requirements for membership of such board as determined by the relevant Minister.
To address the Deputy's questions, I note that the final determination will, of course, be made by an elected Minister under the law. Who else would be accountable to the House by way of parliamentary questions and so on and answerable for the decisions that are made? That is the way it should be. There will be one access point, however, and Ministers will not be able to appoint people who have not come through the Public Appointments Service system unless they are reappointing members who have shown they have the ability to serve properly or where the law providing for the membership of a particular State board refers to another nominating body. For example, some boards are populated by direct nominees of the Irish Congress of Trade Unions, IBEC or other designated bodies under statute.
In essence, the Minister is saying that if he or any other Minister wants to appoint one of his or her cronies, he or she will have to insist that the person makes an application through the Public Appointments Service portal first. The Minister will say to the person, "Send in the paperwork and I will sort you out after". The reason I say that to the Minister, Deputy Howlin, specifically is that I hope the following names ring a bell in terms of his own party - Paschal Fitzgerald, Henry Upton, Ciaran Byrne, Michael Frain, Denis Leonard, Dermot Lacey, Joseph Walsh, Gerard Barron and Tracey Magee, all of whom are former Labour Party councillors, candidates or special advisors.
P.J. Mara, Celia Larkin.
In particular, I see this morning that the Government has reappointed to the board of the Central Bank Des Geraghty, who was there during critical-----
The Deputy should not name persons outside the House.
If they are on State boards, that is public information. Public boards are not beyond the remit of discussion in the House. That is the essence of what we are here for and these people are publicly appointed by the Government. It should not be a secret. Recently, the Government reappointed Des Geraghty to the board of the Central Bank. What expertise has he brought to bear in view of his previous experience on the board and is it right that we are going back down that same old route?
I am a bit taken aback by the Deputy's attitude. He is therefore of the view that anybody involved in a political party is a crony and that if one offers oneself for election in the public space at either local or national level, one is somehow debarred. I regard it as an asset not a liability. It is a fundamental blow against democracy for the Deputy opposite to play the populist game and pretend that people who involve themselves in the democratic life of the State are somehow debarred. I refer the Deputy to the etymology of the word democracy, which comes from the demos - the people. In Athens, the people who were not involved in the political system were called "idiotes", from which we get the word "idiot".
2. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform his plans and timetable for appointments to State boards. [38319/14]
Whatever about the etymological analysis of various words, my question also relates to State boards. I ask the Minister to set out his plans and the timetable for reform. He has mentioned November and an 18-month review. I ask him also to explain why it took him so long to bring forward this initiative when his party's election manifesto for 2011 contained a specific and strongly-worded commitment in respect of State boards.
I thank the Deputy for her questions. This is a new and groundbreaking departure which has not happened in the history of the State before. We now have a very open, accessible way for any citizen in the State to apply to be a member of a State board and for an independent evaluation of that person's suitability to be a member of a State board on the basis of the set published criteria. That is a very important new development. We have been working on the system for some time in the Department and many people commented on the convenient fact that we had a fleshed-out, ready proposal to meet the requirements and bring to Government as expeditiously as we did. The Deputy asked about the timeline for its development. It will be little bit of time before the website is fully populated with every single State board and each Minister determines the specific criteria for each board.
I hope that we can have that up and running from 1 November, as the Government has promised. Having handled legislation with the Deputy opposite for a number of years, I know she is anxious for a review of such processes. It is suggested, therefore, that in about 18 months we will look to see if this is working as effectively as we would like or whether it requires any further change.
I thank the Minister and, as he says, I support review mechanisms for innovations. It is good practice. As regards the timing of this matter, it strikes me that the Government, including the Minister, only moved when they were caught out in respect of the McNulty affair. That is certainly my analysis of the Minister's position. It is tremendously disappointing. In 2011, Labour said it would end political cronyism and start work immediately on overhauling the appointments system to State boards. It was great stuff and I supported it absolutely because it was the right position. We are now the best part of four years into this Government's term, yet the Minister has been forced into a position whereby he has to introduce these changes.
As the Minister with responsibility for the integrity of public appointments, did he endorse the McNulty appointment to the board of IMMA? Does he endorse the 11th hour appointments made by his colleague, Deputy Pat Rabbitte, as he exited Cabinet? He appointed a Labour Party by-election candidate, Denis Leonard, and a former Fine Gael Deputy, John Farrelly, to Bord na Móna. Is the Minister aware that his colleague and former party leader had, on an earlier occasion while he was in government, appointed his former constituency organiser, Noel Ward, to Ordnance Survey Ireland? Was the Minister aware of those appointments and does he approve of them?
Board members are appointed under law, in the way that we have determined, by the relevant Ministers. We have now put in a fundamentally new, transparent, open, innovative and ground-breaking system. I wonder whether the Deputy will now ensure that her party applies the same sort of criteria to Sinn Féin's nominees to the North-South bodies - I will not list the names because that would be tedious - and to appointments in Northern Ireland.
That is different.
I will go back to my other point concerning some of the eminent people named in this House by the Deputies opposite. Association with politics or standing for public office is not a debarment to service. It is demeaning public life and democracy for anybody who has the courage to put their name on a ballot paper or who works in the political sphere to be designated as a crony. It might get short-term gain for the Deputies opposite but ultimately it does great damage to the democratic process. We are all, in parties and as Independents, seeking to get people involved in the political system. If we determine in this House that association with any of our political parties or with the political system would debar a person from being selected - even if one is eminently suitable, as many of the people listed by the Deputies opposite are - it will do our democracy a great disservice.
I do not query the eminence of any of the individuals I have named. I am querying the big dilemma for us as a society, which is the continued use and abuse of political patronage by the Government, by the Minister's party and by Fine Gael, his partners in government. That is the issue; it is not about individuals. It is about the fact that the Minister still believes, à la Fianna Fáil, that he is in charge and that he can use these State appointments either as consolation prizes for people or a mechanism - as in the case of Mr. McNulty, who I am sure is a very good man - to give someone a leg-up in terms of his electoral ambitions.
Incidentally, the North-South body appointments are cleared by the North-South Ministerial Council. The Minister's current party leader, the Tánaiste and Minister for Social Protection, Deputy Joan Burton, was at the meeting that cleared those appointments. That is how it works. The North also has a public appointments system.
Did the Minister approve of Mr. McNulty's appointment and does he approve of Deputy Pat Rabbitte's carry on?
The North-South body simply validates nominations from the political system.
They are explicitly political appointments.
All those on the Sinn Féin list of appointments - all of whom I am sure are excellently suitable people, many of whom served in office for Sinn Féin or worked for that party - are simply validated by the process, as the Deputy knows.
They are political.
The issue now is that we have changed that system. For the first time in our history, we have put in a new transparent system to get away from the Sinn Féin and Fianna Fáil nominations that have scattered the landscape for years. We have a new system at the heart of which we have set out objective suitability criteria. Individuals apply and are individually vetted and assessed by the Public Appointments Service. They are then submitted if they are appropriate. Only an appropriate person can be submitted to a Minister for appointment and that is the way it should be. I know that it will be transformative from now on.
3. Deputy Joe Higgins asked the Minister for Public Expenditure and Reform his views on a reversal of the reductions in public sector pay; and if he will make a statement on the matter. [38320/14]
I want to know when the Minister will reverse the savage cuts to the pay of middle and low income public sector workers in particular.
The scale of the fiscal crisis that began in 2008 led to the first permanent cut in public service pay rates in the history of the State. In total, the Exchequer pay bill has been reduced from a peak of €17.5 billion gross at the onset of the recession to €14.2 billion net of the pension-related deduction in 2013, with a further substantial reduction this year. Given the scale of the fiscal crisis facing the country and the fiscal consolidation measures required to restore our finances, and to achieve the deficit target of below 3% next year, the contributions made by public servants were essential. I explained that to them and all their unions, and they voted on it.
I acknowledge that the absolute requirement to reduce public expenditure, including in part through pay and pension reductions, does not lessen the impact on the daily lives of hard-working public servants who are also subject to the tax and other revenue raising measures that were necessary to fix this broken economy.
Pay and pension reductions, together with substantial productivity improvements, have been facilitated by a series of legislative enactments by this Government and its predecessor - the Financial Emergency Measures in the Public Interest Acts 2009-2013. They have been supported by two significant collective agreements: the Croke Park agreement negotiated by the previous Government and, more importantly, the Haddington Road agreement negotiated by this Government.
As provided for under section 12 of the FEMPI Act 2013, I am required to review annually the Financial Emergency Measures in the Public Interest Acts 2009-2013, which gave effect to these reductions. The Act requires me to provide a written report to the Houses of the Oireachtas. My last review was laid before both Houses in June. In that review, I concluded that there is a need to continue to apply the relevant provisions as we work our way through recovery.
The nature of the financial emergency measures legislation is that the powers granted by the Oireachtas under the legislation are temporary in nature and are predicated on the presence of the financial emergency. While we have clear signs of recovery, we still obviously cannot undo all of them immediately. I hope, however, to open negotiations next year to have an orderly unwinding of these provisions as we now work our way into recovery.
The Minister continued the Fianna Fáil-Green Party policy of transferring billions from the public sector and from the incomes of middle and low income public sector workers to pay off the European financial markets, bondholders and bankers. The measures that he says were facilitated by the financial emergency measures in the public interest were of course measures that dragooned further cuts in public sector workers' pay and conditions.
In May, the Minister's former leader and then Tánaiste, Deputy Gilmore, was talking up the idea that the next time the Government met the public sector unions they would be talking about increasing pay, not cutting it. Considering that 15% to 20% cuts, which is savage austerity, were implemented for many low paid workers among others, can the Minister give us a precise deadline or timescale in which these hard-pressed workers can look for a reversal of those cuts?
The Deputy is quite wrong when he says that all the borrowings we have had are to pay back banks. The vast bulk of the borrowings are to maintain social provision in this State - to pay for doctors, nurses and so on.
It is a small cohort that is actually paying back the debt.
If one disaggregates the banking debt, it is our expectation to get the significant sum of money put into the pillar banks, Bank of Ireland and AIB, back in full. As for the other black hole of what was Anglo Irish Bank or the Irish Bank Resolution Corporation, the decision to recapitalise that bank was made by the former Administration. I, among others in my party, voted against that. I cannot remember if Deputy Joe Higgins did on the night or if he was here at that stage.
The Government was stuck with that decision. We liquidated IBRC and will get a significant return from that, the details of which will be known by the end of the year. We have re-profiled the loan to sustain that from the disastrous bullet payments negotiated by the former Administration into a 44-year series of loans at a very low interest rate.
This year alone the Government will pay €8 billion in interest alone on the national debt. A significant portion of this is for the bad debts that were made good for speculators, bankers and bondholders.
That is a small portion, however.
A significant other part is on the loans taken in as a result of the crash caused by the bankers and bondholders. In effect, a significant amount of this €8 billion payment is directly attributable to those who crashed the economy. The same bondholders speculating in property are again taking from the taxpayer. That is a direct transfer from working people - in this case low-paid and middle income public sector workers - to the financial markets in Europe. Will the Minister give me an indication of timescales and figures which I asked him already?
I am glad the Deputy has accepted the vast bulk of the interest rate repayments are to sustain public services. Whoever caused the crash is a matter for debate and, it is hoped, will be elucidated upon by the inquiries undertaken by this House. I do not believe the Deputy would want it any other way, that we did not borrow the money to maintain health, social welfare and education services over the years. It would be unconscionable to collapse our social provision. We are required to borrow this money because the State’s income collapsed by 30%. We need to maintain decent social provision, something we have strived to do for several years.
On the unwinding, as I indicated publicly during the summer, I intend to start negotiations with public sector unions with the books opened in the same way during the Haddington Road agreement negotiations. It is hoped we will come to an orderly and fair mechanism for unwinding the emergency provisions that were necessitated by the economic collapse.
4. Deputy Sean Fleming asked the Minister for Public Expenditure and Reform if he will publish the comprehensive review of expenditure prior to budget day to allow for a more informed debate on expenditure priorities and provision of front-line services; and if he will make a statement on the matter. [38318/14]
Will the Minister publish the comprehensive review of expenditure prior to budget day to allow for a more informed debate on expenditure priorities and provision of front-line services? He announced on 23 July that there would be a public consultation on the comprehensive review. In the meantime, Opposition Deputies are operating in a vacuum and will not see sight of it until it is printed and delivered on the floor of the House next week.
The primary purpose of this year's comprehensive review of expenditure, which involved every Department, was to provide an evidence base for Government decisions on ministerial expenditure ceilings for current expenditure for the next three years. These ceilings will be finalised in the coming days and announced as part of the budget next Tuesday. They will also be presented, in detail, in the comprehensive expenditure report 2015 to 2017, which will be published on budget day also.
As was the case with the previous comprehensive expenditure review, which was carried out in 2011 and which informed budget decisions for the following three years, this year's process has provided the Government with a basis for making decisions on how best to realign spending with the priorities set out in the programme for Government and to meet overall fiscal objectives for the next several years.
In addition to the analysis carried out by each Department, submissions were invited as part of a public consultation. More than 60 proposals from individuals and representative organisations were received and considered as part of the review. The final step in the process is for the Government to decide on its priorities for the period ahead. When these decisions are made and announced next Tuesday, there will be plenty of opportunity through the various Oireachtas sectoral committees to discuss and examine them in detail.
Part of the Minister’s political reform agenda was that there would be discussions at committee level in advance of the budget. He is not facilitating this because he is not providing any information to allow it to happen. We have talked about a greater role for Oireachtas scrutiny but it can only happen after the Budget Statement is delivered.
I also hope there will be more transparency when the Estimates are published this year than there was last year. The Government produced an invalid health Estimate on the floor of the House on last year’s budget day which was made clear within 24 hours by the Health Service Executive. It was announced there would be a medical card probity review and everyone knew the Government would require a Supplementary Estimate as a result.
A footnote in the review last year stated savings from additional resources and other services would achieve €600 million. No details of this were contained in any of the budget documents delivered on budget day. We were only able to get the details of some of this by way of parliamentary questions. Although the Government does publish budgetary information, it keeps quite a lot back at the same time.
By public acknowledgment, the volume of information published on budget day is unprecedented. The comprehensive review of expenditure process is an innovation introduced by the Government. We publish the horizons for expenditure up to the end of this year. Accordingly, it is up to committees to invigilate these but they have not for the past three years. We will be publishing another three-year horizon next week which committees can invigilate for the next three years.
My experience is that in times of difficulty, Deputies opposite are not prone to evaluating priorities, never saying spend on that but not on this. They are always willing to give the recommendation to spend on everything.
The Minister knows that is not the case. Every party on this side of the House has produced its pre-budget alternatives, albeit in a vacuum, relying on what we read in the newspapers as to where the Government is heading and the amount of funding available. We do not get adequate information.
The Government has made matters worse over the past two years. Prior to coming into office, the draft Estimates dealing with taxation measures were published in advance of the Budget Statement. People could see from this how much tax was required on budget day. The Government, since coming into office, has published both of these on the one day. While I accept it is earlier in the year because of the European semester commitment, publishing them on the one day does not allow separate scrutiny as happened before this Government came into office.
The Deputy is correct that the new European semester requires the early publication of this information. Obviously, we have to dovetail taxation and expenditure. It is challenging to do this because one needs the data which only come in during September. It is tight enough to have a proper snapshot of resources that might be available in the subsequent year. There is an opportunity between the publication of the draft Estimates on budget day and the publication of the Revised Estimates for people to review particular expenditure issues and raise matters accordingly. The detailed scrutiny has to happen at committee level. We would like to facilitate that before the end of the year when expenditure begins. That is the whole idea of having the earlier budget.
I have not seen Fianna Fáil's budget proposals yet. If the Deputy wishes to impact on budgetary thinking, publishing them a day or two before the budget is announced is not of assistance.
5. Deputy Joe Higgins asked the Minister for Public Expenditure and Reform his views on a reversal of the pension levy for public sector workers; and if he will make a statement on the matter. [38321/14]
When will the Minister reverse the pension levy for middle and low-income public sector workers, as we now enter the sixth year of austerity?
The public service pension related deduction, PRD, referred to as the pension levy in the Deputy's question, was introduced in March 2009 under the Financial Emergency Measures in the Public Interest Act 2009. The PRD is a progressively structured multi-band reduction imposed on the pay of pensionable public servants. Based on the current PRD rates structure across all sectors of the public service, it is estimated the deduction raises €950 million per year. Unfortunately, it continues to be necessary because it is a critical part of our national fiscal consolidation.
Notwithstanding encouraging evidence of progress in respect of the public finances, immediate reversal of the PRD would require revenue to be raised from other expenditure reductions in other areas and there is no obvious area where I could find an extra €1 billion in cuts. Nevertheless, a start has been made in respect of the amelioration of the impact of PRD on public servants. As legislated for in the Financial Emergency Measures in the Public Interest, FEMPI, Act 2013 and as provided for in the Haddington Road agreement, the rate of PRD on the €15,000 to €20,000 band of pay received in a year fell from 5% to 2.5% on 1 January 2014. This rate cut is worth €125 annually in gross terms to most public servants. The first part of income up to €15,000 is exempt from the PRD.
The powers granted by the Oireachtas under the FEMPI legislation are temporary, as I have already indicated. The PRD is reviewable as part of the overall review I mentioned and I present that review annually to the Oireachtas. My next annual report on PRD and the other emergency measures will be laid before the Houses of the Oireachtas by the end of June 2015.
As I have already stated, the Government also has to have a plan to address the legislative position as the extreme fiscal situation comes to an end. As part of the general discussions next year, the pension levy will be on the agenda.
The Minister would get many billions if he introduced a progressive tax on super wealth and a financial transaction tax and if he made major corporations pay something approaching a fair rate of tax rather than allow them to bask in the type of tax shelter they have here. The will to do that is not there. We have had much talk of recovery and much propaganda from Government sources. In reality, from the answers the Minister has given me this morning, it does not mean anything as far as low and middle-income workers are concerned.
I was fascinated to see the Minister on television recently when he speculated about possible tax breaks for workers. When he was asked about water charges and their effect next year, he said it had nothing to do with the Government, ignoring the fact that a family of four including an 18 year old and a 19 year old will have just under €500 demanded of it next year according to Irish Water. Irish Water seriously underestimates the amount that will be used and one will be talking about €600 or €700. Does the Minister not appreciate the contradiction between what he is saying and what the reality is for working people?
The Deputy raises a number of questions. I am acutely aware of the pressure on hard-working families and this will be a very significant focus of the budget next week. The point I made about water is that it is not part of the Government take. It is a commercial semi-State company. If we took it all on balance sheet, as the Deputy advocates, and just had a company that was funded by the State, I would have to find an additional €800 million of cuts next year because the entire cost of it would be on balance sheet.
The Deputy makes a good point about the financial transaction tax. It is a matter of debate. Obviously, Ireland could not act alone on that. We had a discussion on that very point with the British Shadow Chancellor at the Labour parliamentary party meeting this week. It is a pity that Deputy Higgins is still not there as he could have participated in that.
In respect of the increase in corporation tax advocated by the Deputy, the prime focus of this Government is to create jobs and I think we have done that with great success. The unemployment rate is now 11.1% and the projection is that it will be below 10% next year. That is a sea change from the calamitous situation we inherited when we were heading to a half a million people unemployed and there was 15% plus unemployment. Since this Government came to office, we have created 76,600 net new jobs.
One of the Minister's colleagues, Patricia King, was on the radio this morning outlining in a very articulate manner the nature of many of those jobs - low-paid, insecure and exploitative. The fact is that the Government has continued the policies of its predecessor, which was the decision that working people and the poor would pay for the price to ensure that the major bondholders and bankers of Europe did not lose out. Discussing the financial transaction tax with his British counterpart is somewhat amusing considering that the City of London has heavy battalions to ensure not a single extra cent of tax comes out of that hugely lucrative area.
The question is when low-paid workers in the public sector can hope for some relief with regard to the pension levy?
I answered that question already but, obviously, the Deputy was not listening. We will open negotiations next year on all these matters. The Deputy is wrong again on low pay. We restored the minimum wage cut by Fianna Fáil. We would like to do more which is why the Tánaiste has insisted on the establishment of a low pay commission because having a liveable wage is an absolute priority not only for my party but for the Government as well. The Deputy is also wrong about the impact of the recession. I am sure he has read the data published by the ESRI that states that the biggest impact was on the wealthiest people in this State.
