We will move on to Other Questions. Question No. 24 will be taken with Question Nos 25, 29, 39 and 53. The maximum time under Standing Orders allowed for group questions is 18.5 minutes. I will endeavour to be as fair as possible to each Member, but they should bear in mind that the longer they speak the more time they are taking from their colleagues. The Minister has six minutes to make an initial reply. The 12 minutes allowed following that will be divided between the number of people who are down to speak.
How much time is available?
The Minister has six minutes, Deputy Boyd Barrett has a minute and the Minister has a minute to reply. Deputies Shortall, Barry, Coppinger and Murphy each have a minute and the Minister will reply to each Deputy. Deputy Boyd Barrett can then ask a final question, with the Minister to reply. I am only carrying out Standing Orders. If the Minister does not use the full six minutes and there is time available at the end, I will allow people to speak for a second time.
Deputy Barry is at a meeting of the Business Committee.
If he is not present in the Chamber, somebody can deputise for him.
Public Sector Pay
Richard Boyd BarrettCeist:
24. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform his rationale for renewing the financial emergency measures in the public interest legislation, given recent reports that Ireland is the European Union's fastest growing economy; if he had discussions with the Department of Finance prior to this renewal on alternative possible revenue streams to replace the €2.2 billion that public sector workers contribute to the economy; and if he will make a statement on the matter. [19754/16]
25. Deputy Róisín Shortall asked the Minister for Public Expenditure and Reform his target date for the complete unwinding of the financial emergency measures in the public interest measures; and if he will make a statement on the matter. [19801/16]
29. Deputy Mick Barry asked the Minister for Public Expenditure and Reform if he will repeal the financial emergency measures in the public interest legislation given the Government's claim of economic recovery. [19762/16]
39. Deputy Ruth Coppinger asked the Minister for Public Expenditure and Reform his plans to repeal the Financial Emergency Measures in the Public Interest Acts. [19803/16]
53. Deputy Paul Murphy asked the Minister for Public Expenditure and Reform if he will consider a repeal of financial emergency measures in the public interest legislation in view of the Government's claims regarding economic recovery; and if he will make a statement on the matter. [19800/16]
One of the most shocking aspects of the emergency measures taken was what was done to newly qualified teachers, nurses and public servants. There is nothing in the Lansdowne Road agreement that commits to doing anything about that pay apartheid. What is the Minister going to do? How can he justify the sort of pay apartheid that will mean that somebody who happens to come in after 2012 will, over the course of 40 years of a working life, earn €250,000 less than somebody who happened to come in before that?
I propose to take Questions Nos. 24, 25, 29, 39 and 53 togther.
I have already touched on some of the points regarding the justification for renewal of the legislation. I will not read the text of my reply again because the Deputy is already familiar with it, and I will not waste his time and the time of those in the Gallery by not responding to the questions.
On the particular point put to me by the Deputy regarding the status of people who joined our public service at various points during the crisis we went through, for one employer - namely, the State - its resources and ability to hire people were very badly affected because of the crisis we were in at that point. As was the case with other employers who also found themselves facing difficulty, employees were taken on in changed circumstances.
In reply to Deputy Calleary, I said that the Lansdowne Road agreement puts in place processes and ways in which representatives of employees - that is, unions - can deal with their employer, which in this case is the Government. We made progress in that area a short while ago regarding the status of issues raised by firefighters. I have now indicated to the House that meetings took place yesterday regarding the INTO and TUI on that very issue. We will now determine how and whether we can work with unions on that matter.
I want to acknowledge the significant contribution that public servants make to our country every day. I refer to the stark figures I outlined to the Deputy earlier. The immediate repeal of all of the measures taken across that phase of our emergency actions would cost €2.2 billion per year. I cannot reconcile that figure with the need to fund all the other public services that the House wants me to deliver.
Talk of negotiations is not a commitment to get rid of something that is patently unfair. Rather, it suggests that the Minister does not intend to fully get rid of something that is completely unjustifiable - namely, this sort of pay apartheid.
In terms of new entrants, a lot of teachers now have no incentive whatsoever to increase their qualifications, particularly those that would allow them to work in areas such as special needs or with vulnerable groups, because most of the cuts imposed on newly qualified teachers were in the areas of allowances, which are mainly linked to qualifications. Not only has the Government imposed an unfair pay apartheid on teachers and other public sector workers but, now that the embargo has been lifted, a bomb will go off in terms of the injustice facing such public servants. The Government is also undermining the quality of education for children, particularly those who are vulnerable, in the education system.
The Deputy accused me of acting in bad faith. If I stood up in the House and said the negotiations and discussions were not on the way he would condemn me for that, as he has done in the past. I am now confirming that the discussions began yesterday. The Deputy used a crucial phrase in saying that the embargo was gone. We now have the ability to hire more public servants to take on front-line roles than would have appeared possible or realistic number of years ago. This is all due to the very change in our circumstances that the Deputy said would never happen. The Government now wants to use the benefits of that to try to support those who provide invaluable work in our classrooms, our teachers, the work gardaí do-----
The Minister has not answered the question. He is waffling on.
Now, through the Lansdowne Road agreement, we will honour the agreement we have with them. As I said, we began discussions with representatives of teachers yesterday.
I have three points to put to the Minister. Last year, when the then Minister, Deputy Howlin, introduced legislation to start the restoration of pay that had been cut, he said there was a real threat of legal action given that the State was no longer in an emergency situation. Has the Minister taken legal advice in this regard and, if so, what did it state? By any measure, the State is no longer in an emergency situation. For that reason, does the Minister accept that there is a very strong case for accelerating the restoration of public sector pay, particularly for low-paid workers, many of whom still qualify for family income supplement, and pensioners?
I refer to new recruits. Does the Minister accept the urgency of the situation? Many young teachers are heading off to places such as Dubai and Abu Dhabi to try to get some money together in order that they can live in Dublin, in particular. This is a wholly unsatisfactory situation. Teachers, nurses and gardaí are affected. I heard what the Minister said about starting talks with the two teacher unions, but does he accept that this is an urgent issue and he needs to move quickly to restore pay?
I thank Deputy Shortall for her questions. In response to her first question on whether I am aware of the potential for legal action, of course it is always open to any group within society to challenge any piece of legislation introduced by the State. Deputy Shortall put a direct question to me, asking whether I am acting in a manner consistent with the legal advice I have received. The answer to that question is "Yes". I would not bring forward the maintenance of a piece of legislation unless I was absolutely satisfied it was legal, and I am.
In response to the second question the Deputy put to me on acceleration beyond the Lansdowne Road agreement, I do not have plans to go beyond that agreement at the moment. I stress to Deputy Shortall that we are halfway through the first year of that agreement. As I said previously, what I do not want to see happen - because I have seen the harm it causes - is promises of wage increases today that the State will find out it cannot pay for in the future. That would become the savage wage cut of tomorrow.
I thank the Minister.
I do not want that to happen.
On the third point, I am aware of people whom we want to work in the public service who are going abroad.
The Minister will have other opportunities to respond.
I want them to be able to stay at home.
Over a 40-year career, a teacher starting out now faces a loss of €250,000 compared to when I started teaching. Does the Minister think that is justified? The starting salary for a teacher now is €8,500 less than it was a few years ago, which is a 20% cut. The Minister is maintaining that in the new agreement. The reason the ASTI and others have not signed up to the agreement is that they are not willing any longer to go into the staff room and look young teachers in the eye when some people are earning higher pay and others are not. The media is very fond of saying that the unions sold out young teachers. Here is a union taking a stand against selling out young teachers and they are being blackguarded as a result. It was the same with Luas workers. They took a stand against new drivers being put on a lower pay scale and they were blackguarded by the media and the Government. That is what happens when people opt out of an unequal arrangement.
Nobody is being blackguarded by this Government. As Minister for Transport, Tourism and Sport, I dealt with some of the Luas issues. I have dealt with many industrial relations matters. I have always recognised the right of people to be outside collective agreements and their democratic right to ballot on any agreement that is put to them. It is for union members to make a decision on whether they want to be part of an agreement or not.
I am pleased that Deputy Coppinger specifically mentioned the ASTI. The Minister for Education and Skills, Deputy Bruton, has made it very clear that he wants to engage with the ASTI on its association with the Lansdowne Road agreement and other issues of concern to the union. However, I also respect those people who voted in favour of the agreement. Deputy Coppinger took no cognisance of the point I made a moment ago, namely, that yesterday we began engagement with unions on the issue she raised.
I wish to respond to the point about democracy. It is utterly cynical to attempt to portray a vote by workers in favour of, for example, the Lansdowne Road agreement as an endorsement that the Minister can now use to justify the financial emergency measures in the public interest, FEMPI, legislation, considering that FEMPI existed previously. FEMPI existed in order to act as a gun to the head of workers and unions and to create pressure on them to vote in favour of the deals. That was its explicit purpose. FEMPI is fundamentally anti-democratic, as is the way it is being processed. The intention is to cut across democracy. The way it is being dealt with in this House and the fact that we do not get a vote on the extension of FEMPI is fundamentally undemocratic.
FEMPI is also fundamentally misnamed. Where is the financial emergency? How can the Minister tally that with the statement by the Minister for Finance, Deputy Noonan, that the economic recovery is now firmly established? Also, it is not in the public interest; neither the destruction of public service nor the undermining of people's wages and conditions was in the public interest. It was in the interests of bondholders and bankers, who got that money, and other private sector employers who wanted to benefit from a divide-and-rule situation.
What is cynical is putting words in my mouth that I never said. I never said that anybody who voted for the Lansdowne Road agreement was voting for FEMPI.
But the Minister used it as justification.
No. Deputy Murphy is putting words in my mouth. I can see the Deputy has already acknowledged that he is wrong.
What I said is that those people who voted for the Lansdowne Road agreement simply voted for that agreement.
But in the context of FEMPI.
I did not make any reference to FEMPI.
The Minister threatened people.
The Minister should be allowed to speak without interruption.
In relation to the latter point, Deputy Murphy put to me his concerns regarding the process being anti-democratic. What would be anti-democratic is a failure to take account of the fact that the majority of unions have voted for the agreement. That is what I have done.
Because of FEMPI. That is why it is anti-democratic.
What the Deputy has put to me is how we make use of the benefits of a recovery that he alleged would never happen.
Is there a financial emergency or a recovery? The Minister cannot have both at once.
There should be only one speaker at a time.
Deputy Paul Murphy said in the House on a number of occasions that the very kind of change in the economy that is enabling this would never happen, and because it is now happening, we are in a position to hire 18,000 more public servants-----
There are more people on lower pay. That is the strategy.
-----and to honour the commitments we have made.
We never said there would not be economic growth. The question is whether the benefits of that growth would accrue to the majority or to a tiny elite. That is why we raise this issue. It is extraordinary, cynical and laughable for the Minister to suggest that FEMPI was not a major factor in essentially threatening people with a stick or sword over their head and saying that if they did not sign up to the Lansdowne Road agreement they would not get their increments and allowances. Could the Minister confirm that this is what he is going to do - namely, that the gardaí and the members of the ASTI are not going to get their allowances and increments? Does the Minister expect anything other than major industrial strife and justified resistance from teachers and gardaí if he goes ahead and does that?
We have a motion on the Dáil Order Paper calling for the rescinding of FEMPI. We are having a debate because we kicked up last week about this.
I thank the Deputy.
Will we have the right to vote on the motion so that Members can at least show their colours in terms of their attitude to restoring the pay and conditions of public sector workers?
The latter question is a matter for the Business Committee of the Dáil, as Deputy Boyd Barrett well knows. The ordering of the business is now done by this House rather than by me as Minister or by the Government. It is a matter for the House.
As the adjectives the Deputy ascribes to me get more extreme, could we just look at some of the points and facts about the Lansdowne Road agreement? It is a fact that the largest percentage gains under the agreement accrue to those on lower incomes first, and that the people who gain the most from the agreement are those who are paid the least in the public service.
Those on more than €65,000 benefit following the pay restoration provided for under the Haddington Road agreement. The Minister well knows that.
The Minister should be allowed to speak without interruption.
The figures are very clear. The moment one puts facts on the record, those who call for new politics the loudest do not want to hear. They want to stop the discussion.
That is not a fact.
The facts are clear. The benefit for people who are earning €23,000 per year is an 8.7% increase.
The Minister is getting an 8% increase.
That is needed in recognition of the contribution those people make every day in the delivery of public services.
They had their pay and conditions slashed by FEMPI.
I go back to many of the points-----
That is so patronising when the Minister is cutting people's pay.
When one attempts to put arguments to the people who tabled questions, they have no interest in what one has to say.
We hear the Minister.
I have said again and again-----
The time is up now.
-----and I am happy to do so again, in case the Deputy did not hear me when I said it earlier, that I recognise the huge contribution public servants make in classrooms-----
They are sitting in the Gallery and they have heard the Minister say that at least five times.
-----and offices, the Garda-----
They want to see the money back in their pay packets.
Deputy Smith should be fair.
I recognise that again and again. Our ability to restore their wages and to increase them over time does depend on the future ability of the State to pay for that.
I thank the Minister.
The annual cost to the State of all the measures the Deputies are asking me to repeal is more than €2 billion.
That could be collected in corporation tax.
Social and Affordable Housing Expenditure
26. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the scope which exists for additional expenditure on social housing by State agencies which will not impact on overall deficit targets; and if he will make a statement on the matter. [19747/16]
The all-party Oireachtas Committee on Housing and Homelessness has recommended that we need 50,000 social housing units to be built. This is providing a challenge to the financing arrangements. What work has the Department done in looking at alternative off-balance sheet financing to try to meet this very necessary target?
The Minister for the Environment, Community and Local Government, Deputy Coveney, is preparing an action plan on housing, to be published shortly, which will consider the scope for using off-balance sheet mechanisms which would not impact on overall deficit targets, to supplement direct Exchequer expenditure. Since the budget of 2015, the Government, under the auspices of a group led by the Minister for Environment, Community and Local Government, has been exploring the options available for using such off-balance sheet mechanisms to fund the provision of social housing without impacting on overall deficit targets. Following detailed examination of proposed options and extensive consultation with relevant State authorities, as well with a wide range of potential providers and financiers of social housing, my understanding is that no new or additional mechanism that would be capable of providing social housing on an off-balance sheet basis has been identified. However, this group is continuing with its work.
The group has also examined the scope for significantly increasing the use of any existing or known off-balance sheet models, already operating for the provision of social housing. While these models obviously have a continuing role to play in this area, the assessment is that it is very challenging to envisage how these models may be capable of being upscaled to provide the solution we require to address the shortfall in social housing provision.
Will the Minister confirm whether it is his view or his sense that there is no way of doing this off-balance sheet? There was something to this effect in the middle of his response, but he went on to say it was still being looked at. If this cannot be done off-balance sheet, given the emergency we face with the number of children in emergency accommodation, how will the Minister deal with it and give it the urgency needed and that his party colleagues have signed up to in the all-party Oireachtas committee? Will the Minister clarify that for me, please?
So did yours.
I said there were no additional mechanisms, so there are off-balance sheet mechanisms that are being used at the moment or that have been considered in the past. They are being looked at again. To answer the question the Deputy put to me, I do not believe there are any new further models that have not been considered and which are available to the State to deal with this issue. I believe that the role of the Exchequer in directly funding social housing projects and the delivery of new homes is something we will have to consider. It is something I am reviewing at the moment. The social housing strategy brought forward by the previous Administration outlined €3.2 billion of Exchequer funding available to build new social homes, and not just build them but gain them. Use would be made of rent supplement and the housing assistance payment. There are no additional ways of doing this at the moment that are apparent to me.
On the additional measures, how many houses will they supply over the next 12 to 24 months? How can we wrap up those existing measures that are off-balance sheet to respond to an emergency? The Minister mentioned in his first response that this has been looked at since last autumn. The situation has considerably worsened since then. In the context of an all-party committee that did very solid work, we need to recognise and respond to the urgency of the situation by looking at its recommendations, but on the funding and especially going off-balance sheet, that is where we need to inject the urgency.
This is being urgently looked at. The Deputy asked me what the off-balance sheet models are. He will be aware of two of them: the approved housing bodies and the so-called NARPS models, which are a special purpose vehicle of NAMA. Those are the two main models being used to provide off-balance sheet funding. As I said to the Deputy a moment ago, I do not believe that there are any new models on top of the ones I have just identified that are capable of providing large quantities of homes off-balance sheet. There will be only two ways to respond to this urgently in the short term: making use of the existing two models I referred to, which will be done off-balance sheet, or the Exchequer making a larger contribution across next year and the year after that to directly building social homes.
Flood Prevention Measures
Éamon Ó CuívCeist:
27. Deputy Éamon Ó Cuív asked the Minister for Public Expenditure and Reform the amount of money provided in 2016 to date to deal with flooding issues arising out of the floods of last winter; the projects for which this money is provided; and if he will make a statement on the matter. [19553/16]
I wish all the best to my colleague, the Minister, Deputy Seán Canney. I know that he is fully familiar with the problem relating to flooding. The big challenge we all face is that it was an acute issue in the media every day at Christmas, but now that the weather is a bit better and the floods have subsided, it will go at the normal pace. I would like to know how much money we have, but a much bigger challenge is what works will be done this year and maybe in the early part of next year out of that money and how quickly they will be done. Winter is coming and we could get a repeat of last year's weather.
I thank the Deputy for his kind words. I, too, am acutely aware of the flooding that happened throughout the country last winter. I will cut to the chase. The total funding available to the Office of Public Works for its overall flood risk management programme in 2016 is €80.746 million. This amount includes expenditure on capital flood relief works, drainage maintenance activities, the catchment flood risk assessment and management, CFRAM, programme, purchase of plant and equipment, hydrometric and hydrological investigation and monitoring, and the general administration costs for operating the entire programme.
Of the total allocation, €52.561 million has been provided in 2016 for expenditure on flood relief capital works. This amount provides for the preparation and design of flood relief schemes, the construction of flood relief works, the payment of compensation costs arising from these works and the carrying out of minor coastal and non-coastal works by local authorities with funding provided by the OPW under the minor works scheme. It also provides for the carrying out of CFRAM studies. The 2016 allocation includes a deferred surrender or capital carryover of €7 million from the 2015 allocation.
The expenditure to date by the Office of Public Works in 2016 on the flood risk management programme has been €23.223 million. Good progress is being made on the implementation of all of the main elements of the programme. In relation to the capital works element of the programme in particular, major schemes in Ennis, Waterford and the River Wad in Dublin will be completed this year. Works are continuing on the major schemes in Bray, on the River Dodder in Dublin and on the quays in Dublin. The Deputy will be pleased to know that works have now commenced on the River Clare scheme in Claregalway, contracts have been signed for Skibbereen and Bandon and the contractors are mobilising. The schemes at Templemore, Foynes and Dunkellin, again in Galway, are expected to commence construction in 2016.
Additional information not given on the floor of the House.
Another 21 schemes will continue to be advanced through design and planning stages.
Smaller-scale flood relief works continue to be funded in 2016 through the OPW's minor works scheme, which puts local authorities in funds to carry out more localised flood mitigation measures. Expenditure of €2.5 million to €3 million is anticipated on this scheme in 2016. Approximately 30 projects have been approved for funding to date in 2016, which brings the total number approved since 2009 when the scheme was introduced to 544, with total expenditure of €30 million approximately.
Good progress continues to be made this year also on the implementation of the CFRAM programme. The programme involves the production of predictive flood mapping for 300 areas of significant flood risk, the development of preliminary flood risk management options and the production of flood risk management plans for those areas.
The draft flood mapping is now being finalised, work on the development of preliminary options to address flood risk is under way, leading to the development of integrated flood risk management plans containing specific measures to address in a comprehensive and sustainable way the significant flood risks identified. The draft plans are scheduled to be made available for public consultation from mid-2016. Following the public consultation process, the finalised plans will include a prioritised list of measures, both structural and non-structural, to address flood risk in an environmentally sustainable and cost-effective manner.
The Government recently announced increased levels of investment in the area of flood relief as part of the overall capital investment plan 2016-2021 and this investment programme will allow for consideration of measures arising from the flood risk management plans.
Arising out of the particular difficulties experienced last winter by home owners along the Shannon, the Government decided on 5 January 2016 to establish the Shannon flood State agency co-ordination working group to enhance ongoing co-operation across all of the State agencies involved with the River Shannon. The group has met on three occasions to date and has conducted an audit of the roles and responsibilities of State agency organisations and has published its Shannon flood risk work programme for 2016. This work programme, which is available on the OPW website, sets out co-ordinated actions and activities for the Shannon catchment. The group has engaged in a programme of public consultation and has held a series of open days on its work programme. It is also considering, in co-operation with the Attorney General's office, the development of appropriate guidance that will set out more clearly the rights and responsibilities of non-statutory bodies in relation to watercourses.
An interdepartmental flood policy co-ordination group, established to support the OPW’s CFRAM programme, was reconvened in July 2015. This group is looking at a range of policy issues, including insurance, community resilience, individual property protection, a national flood forecasting and warning service, a review of the planning and development guidelines and, if necessary, voluntary home relocation to ensure that policies that can benefit communities and individuals directly - to be prepared and respond to or live with flood risk - are fully and carefully considered. The report of the group will be finalised for submission to Government shortly, in conjunction with the completion of the draft flood risk management plans.
I think it is clear from the foregoing that a very considerable amount of work is under way by the OPW to address in a comprehensive and sustainable way the problem of flooding and flood risk nationally. It will take time for all of these measures to have effect, but it is important that the right solutions are found and put in place that will provide a lasting protection to those communities affected by flooding.
The Minister of State's public servants have provided him with a lot of information. Unfortunately, most of it does not really relate to the question I asked, which was quite specific, on the amount of money provided in 2016 to deal with flooding issues arising out of the floods of last winter, the project for which the money has been provided. I give the Minister of State a good example. As he knows, there was severe flooding during that period in south Mayo, from Cong, The Neale and right across towards Claremorris. From what the Minister of State mentioned, it would appear that nothing has happened, that there is no money provided but, more important, no projects are in place to ensure this does not happen again.
I am sure that particular pattern is being repeated throughout the country. The places mentioned by the Minister of State are very worthy. They are long-term programmes, including Claregalway which has been in gestation since 2009. Specifically, what has been done for the areas that were flooded last winter that had not been flooded before, to ensure that remedial works are carried out and it does not happen again?
The Deputy mentioned some areas such as Cong, which I visited last week. Local authorities have a mechanism under the minor works scheme by which they can apply for funding of up to €500,000 for any of these projects. As regards Cong, which the Deputy specifically mentioned, the local authority is preparing the necessary estimates to submit them to the OPW for funding approval. In other areas in Mayo and Galway similar minor works applications have been made continuously since 2015 and that is replicated across the country. However, local authorities could be submitting more of these applications. Funding is there for works that happened last year and up to €500,000 can be provided if they meet the criteria.
Our major projects are taking far too long to bring through the process so we can get construction on site. I am acutely aware of that and have done an analysis of what happened in the past since I came into office. As regards the future, I have created a working group in a few Departments to try to reduce the time taken to get flood relief projects on the ground. It is frustrating for people but small projects can be dealt with by local authorities immediately.
I do not envy the Minister of State his task. Year after year, before he assumed office, there was a carry-over. That meant that one fought in the Estimates to get the money, but at the end of the year it was not spent. It is heartbreaking for any Minister worth his salt. It has been happening in the OPW. As the Minister of State said, we need to shorten the system and put more projects into it because there are always unforeseen delays. I hope the Minister of State will do that and will be single-minded in ensuring it happens.
I am very interested in what he said about local authorities not getting projects in fast enough. I welcome the idea of allowing them to do small projects on a developed basis up to €500,000. In a lot of the smaller areas that will do considerable work to alleviate this problem.
What steps has the Minister of State taken to try to put the skids under local authorities to get projects in that could save houses next winter? That would ensure that places vulnerable to coastal flooding will not be flooded again. It would also ensure that significant work could be undertaken.
I want to commend the Minister of State. I know from first hand that he has injected a sense of urgency into this process. How many applications has he received from local authorities nationwide directly related to damage done in 2015? How many of those have been approved for work that is under way by the Department? We are in July and are moving into the flood season again, so this work needs to be done now.
As regards Deputy Calleary's question, I do not have the figures nationally but it is an ongoing process. For instance, Galway County Council has produced its report and a schedule of works. About eight schemes have been approved and six are in the process of being approved. Approximately 24 more are being worked on at the moment. I do not know if that is reflected all over the country but that is what has been happening since the flooding in 2015.
Everything that can be done will be done under the law to try to shorten the process by which we get works done. We must obey the rules and directives, but I am confident that when we have finished the process - which I have set out with the Department of the Environment, Community and Local Government, involving my colleagues the Minister, Deputy Heather Humphreys, and the Minister of State, Deputy Eoghan Murphy - we will create a framework by which we will get procurement, design and implementation of projects. We will thus shorten the time involved to a reasonable period.
Currently, on average, it can take up to seven years to get major projects from inception to arrival on site. We have to do something about that. I assure Deputies that I will do everything to try to improve on that with the co-operation of all the other Departments involved. I am confident that we will achieve that.
28. Deputy David Cullinane asked the Minister for Public Expenditure and Reform why his Department is ready to oversee a reduction in Government expenditure as a percentage of gross domestic product as shown by the summer economic statement figures given the serious issues facing public infrastructure. [19804/16]
I tabled a parliamentary question on this issue last week and received a reply from the Minister for Finance, which set out the State's total gross expenditure as a percentage of GDP over the course of the next five years, comparing that to this year and over the next five years. In 2016, the total gross expenditure as a percentage of GDP was 24.1%. That will shrink to 22% by 2021 because of the Government's budgetary plans. Is it not a fact that the Government is shrinking the State?
The additional capital expenditure that the Minister for Finance and myself announced is precisely in recognition of the additional investment needs our economy has. The figures we outlined in the summer economic statement were very clear. We indicated that €5 billion worth of additional funding would be made available for capital investment, which is €1 billion more than we had originally indicated before the economic statement was announced. That is an increase of 18.5% on the previous Exchequer-funded capital investment programme. Across the period, if and when we can deliver that additional investment, capital investment as a percentage of national income will increase from 3.2% to 3.7% by 2021.
The Minister is using GNP figures, not GDP ones. Leaving that aside, however, the reality is that figures do not lie. The total amount of money the State will spend as a percentage of GDP is 24.1% this year and 22% to 2021. In a letter to Jean-Claude Juncker, An Taoiseach, Deputy Enda Kenny, said that public investment in Ireland currently stands at just 1.8% of GDP. That is the lowest level in Ireland for many years. His letter went on to talk about the need for flexibilities.
The OECD, Tasc, IBEC and ICTU are all calling for greater State investment. The figures in the summer economic statement are included in these calculations. The reply to my parliamentary question builds in the so-called extra public spend to which the Government is committed. Even with that, the amount of money we spend every year is declining as a percentage of GDP and that is because of tax policies. It is building in tax cuts the Government will plan over the next five years. That flies in the face of a need for greater capital investment.
I have outlined to the Deputy that the percentage of our national income that is absorbed through capital investment is going to increase. It will increase because of the Government's decision that any additional resources that become available will go into capital investment.
The Deputy makes a point regarding total Government expenditure as a percentage of national income and what will happen to that in the future. Much of what happens in the latter period of the summer economic statement is as a result of the decision taken to set up a rainy-day contingency fund, so that as additional resources become available we will prioritise them in two areas. We will make €1 billion per year available after the books have balanced. In addition to that, as additional resources become available we will go into capital investment.
Does the Deputy not acknowledge that we are now seeking to increase capital expenditure as a percentage of our national income and to increase the total level of capital expenditure? We did this as part of the economic statement published a week ago.
Yes, but the Minister entirely misses the point because the economy is growing. GDP growth is evidence of a growing economy. This does not just concern expenditure: we also tabled a similar question on income. The total amount of income the State takes in as a percentage of GDP year-on-year for the next five years is going down. The total amount of spend as a percentage of GDP is going down year-on-year also.
This means we are taking in less and we are spending less as a percentage of the overall economy. That is the reality. These figures are the basis for budgetary plans, which flies in the face of what the Taoiseach is saying in correspondence to President Juncker. It also flies in the face of what many organisations are quite rightly calling for, namely, more capital investment as a percentage of GDP. That is how the European Union measures capital investment. We have one of the lowest levels of capital investment in the European Union. I agree that it might marginally improve because of the additional money being spent. The Minister is correct that, in terms of what was being spent in previous years, additional money is now being spent. However, as a percentage of GDP, because the economy is growing, it is actually less, which is the point the Minister is missing.
I am not missing any point.
I welcome that the Deputy has at least acknowledged that we are planning to increase capital expenditure. Four to five billion euro is not a small amount of money. It is an increase of 18% on the €27 billion already provided for additional schools and hospitals, to maintain the roads we have constructed and to provide new transport projects where needed. The Government has prioritised capital expenditure if additional resources become available to the State precisely because we accept there is a need to do so. As I stated earlier, this is enabled by the recovery that Sinn Féin claimed would not happen. Now that it is happening, we have these resources available to us.
I heard what organisations and stakeholders had to say during the National Economic Dialogue regarding the important role the State plays in capital investment. That is one of the reasons we made this decision.
UK Referendum on EU Membership
30. Deputy Pearse Doherty asked the Minister for Public Expenditure and Reform the contingency plans he has developed to deal with the result of the British referendum on withdrawal from the European Union. [19751/16]
The issue on the lips of many people is Brexit. The summer economic statement warned about the dangers of Brexit, yet last night during a discussion between the Minister for Finance and myself on a parliamentary question regarding data provided in the summer economic statement, the Minister said it was too early to speculate on the potential impacts. How has the Department of Public Expenditure and Reform prepared for Brexit, and what will it mean for the capital programme, given that much of the funding in the capital programme is dependent on EU funding on a cross-Border basis?
As I indicated earlier in response to another question, my Department is represented on the interdepartmental group on EU-UK relations which was convened by the Taoiseach in advance of the UK referendum on EU membership. Therefore, my Department contributed to the risk assessment conducted by the Department of the Taoiseach in advance of the referendum. This was included in the Department's own risk register. In addition, the matter was discussed by the Department's management board prior to the referendum. I also engaged with my officials on the issue in advance of the referendum and in the aftermath of it. The matter will continue to be reviewed by me and my Department on a regular basis. The Department's contingency framework sets out the approach being taken to deal with all of the issues consequential on the UK referendum result.
In regard to the Deputy's question about the effect of the result on our capital plans, as I have already stated, the spending plans for 2016 and 2017 will not change, including capital spending. In regard to what will happen after that, the likely UK-EU relationship and the effects of Brexit on the UK and Irish economies will become clear after the UK has triggered Article 50. Any indication that can be formed prior to that will be flagged as part of the preparatory work for budget 2017 in October. On the choices that may be made, I wish to confirm again that the Government views capital expenditure as an appropriate response to the uncertainty that is being triggered by the UK referendum result.
As pointed out by my colleague Deputy Cullinane, capital expenditure in this country is at a historic low, which the Taoiseach pointed out to Mr. Juncker. We are coming from a base that is way out of kilter with the European average. Even with the additional capital expenditure, capital investment by Ireland is among the lowest in Europe. The Government might get away with that if it was for only one year, but ten years of reduced capital expenditure is not acceptable. There is a big issue in this regard in terms of Brexit. The North-South plan, under the heading "Capital plan", states:
The Irish Government reaffirms its support for the EU PEACE and INTERREG programmes....It will continue to work closely with the Northern Ireland Executive to ensure that funding opportunities are maximised under the EU programmes. Almost half a billion euro will be available from EU sources during the period 2016 to 2021.
As stated, €500 million of EU funding is available. The model of capital investment is based on co-funding. We are speaking in this regard of cross-Border EU funding. As somebody who has to cross the Border twice in my travels to and from the House, I want to know the types of project that are at risk as a result of Brexit. I also want to know that the Department has in place a contingency plan to fund those projects. Will the Minister provide a list of the projects that may now be doubtful as a result of the possibility of being unable to draw down the €500 million in funding from the EU?
We had a discussion on this point at the plenary session of the North-South Minister Council which took place earlier in the week. I will meet with Deputy Doherty's colleague in the Northern Ireland Executive, the Minister for Finance, tomorrow to discuss this issue. The INTERREG and PEACE programmes provide co-funding for infrastructure projects in this country, including across the Border. The Government is committed to those programmes but uncertainty has been generated as a result of the Brexit referendum result. I am committed to working with the Minister for Finance in the Northern Ireland Executive to do all we can to work with the European Union to maintain funding to cross-Border projects. Much work remains to be done in that area.
The Government's commitments to various infrastructure projects under A Fresh Start will be honoured. However, we will have work with the Northern Ireland Executive and the European Commission to address the consequences of the Brexit referendum on funding and projects that are important to everybody on this island.
The Border region is one of the most deprived on the island of Ireland in terms of the infrastructural deficit that exists in many areas, including in my own home county of Donegal. What we need from the Minister is reassurance followed by actions to ensure that, in relation to these projects, which he mentioned are at risk because of the decision of England and Wales to force Northern Ireland out of Europe, they will be funded regardless of the impact of the Brexit result on these funding programmes. That is what we need to know. In other words, in regard to the cycleway projects, the flood defence programmes that were being funded on a cross-Border basis, the waterways projects and the tourism projects, will the Irish Government step in and ensure that a region that has been underfunded in the past will be funded in the future? This will require a realignment of the capital programme to deal with the consequences of Brexit.
I agree with the Minister that there is a great deal of concern about this issue. I welcome his intention to meet with the Northern Ireland Minister for Finance, Mr. Máirtín Ó Muilleoir, tomorrow. Is the Government going to do more than just talk?
I cannot help but wonder whether this is the European Union that Sinn Féin during all of its existence has campaigned against.
We campaigned against Brexit.
The Minister without interruption, please.
The Sinn Féin party campaigned for a "No" vote on the Lisbon and Nice treaties.
We were proven right.
Deputy Doherty's colleague, a Sinn Féin MEP, recently said that the economic and fiscal policies of the European Union had had catastrophic affects on the lives of many of its citizens.
We have all lived through it.
The Minister without interruption, please.
This is the same European Union from which Deputy Doherty was lamenting, and was correct to lament, the exit of the United Kingdom. Deputy Doherty and his colleagues have campaigned against the European Union and the treaties of the EU for many decades. As I stated, the European Union has made a big contribution to the kind of projects that we all care about.
Answer the question.
What we are now hearing from Deputy Doherty is a change of view on the European Union. As already stated, I am meeting the Northern Ireland Minister for Finance tomorrow in recognition of the uncertainty that has been generated by the UK's decision to exit the European Union.
I welcome hearing Deputy Pearse Doherty acknowledge the benefits of the EU after he and his party have spent decades campaigning against it.
Public Sector Pay
31. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which a capability exists to address the levels of lower pay imposed on members of An Garda Síochána, teachers, nurses and a number of other Public Servants arising from the downturn in the economy, given the disruptive effect this can have within the workplace; if he expects to be in a position to address these issues in the forthcoming or subsequent Budgets; and if he will make a statement on the matter. [19714/16]
36. Deputy Paul Murphy asked the Minister for Public Expenditure and Reform if he will introduce changes to end the two tier system of pay and conditions in the Public Service that is particularly badly felt for new entrants; and if he will make a statement on the matter. [19799/16]
37. Deputy Mick Barry asked the Minister for Public Expenditure and Reform the steps he will take to end the two tier system of pay in the Public Service. [19761/16]
Richard Boyd BarrettCeist:
38. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform if he will end the new entrants pay differential across the public sector given the expanding economy and if he will make a statement on the matter. [19756/16]
49. Deputy Bríd Smith asked the Minister for Public Expenditure and Reform if he has undertaken any study or research into the effect on the Public Service of the reduction in starting salaries of newly qualified teachers, nurses and other Public Servants. [19717/16]
51. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the cost of ensuring full pay equality, including in respect of allowances for all public servants recruited post-2011 when compared with those employed pre-2011; his plans in this regard; and if he will make a statement on the matter. [19744/16]
52. Deputy Bríd Smith asked the Minister for Public Expenditure and Reform his plans to reverse the reductions in the starting salaries of newly qualified teachers, nurses and other public sector workers. [19716/16]
My question attempts to ascertain the extent to which the Minister may find it within his capacity to assist more recent recruits throughout the public service, including gardaí and teachers, who find themselves employed at a lower level causing them difficulties in respect of housing, rent and the cost of living and to ascertain whether the Minister can identify a programme for restoration.
I propose to take Questions Nos. 31, 36 to 38, inclusive, 49, 51 and 52 together.
For the majority of public servants, the difference in incremental salary scales between those public servants who entered public service employment since 2011 and those who entered before that date was addressed with the relevant union interests under the provisions of the Haddington Road agreement. There are, however, a number of areas across the public service where, due to the decision by the then Government in 2012 to cease payment of certain outdated allowances to employees recruited after that time, differences remain.
The Lansdowne Road agreement through the Financial Emergency Measures in the Public Interest, FEMPI, Act 2015 is delivering a three-year programme at a full-year cost of €844 million in 2018. The agreement is also flexible enough to allow for the concerns of recent recruits to the public service to be addressed in a negotiated way and in return for workplace reform to drive greater productivity in the public service, as has already been agreed with representative bodies of one group of public servants. In that context, officials of my Department and the Department of Education and Skills agreed yesterday with the INTO and the TUI, both of whom are inside the agreement, to have engagement later this month to begin to fully scope out the issues involved regarding pay arrangements for newly qualified teachers.
Additional information not given on the floor of the House
The programme for Government also states that Government will establish a public service pay commission to examine pay levels across the public service, including any issues relating to new entrants' pay. The precise structure of such a commission and the technical aspects as to how it will operate have yet to be decided upon and will require broad consultation, including engagement with staff representatives as was committed to in the Lansdowne Road agreement.
I thank the Minister for his reply. To what extent is it within his capacity to encourage those who remain outside the Lansdowne Road agreement with a view to reducing the friction that continues to exist within those branches of the public service affected by the disparity in income and does he see an opportunity in the course of the negotiations that are taking place or are likely to take place to encourage those who remain outside the agreement to come within its scope?
It was a day of shame for the former Minister for Public Expenditure and Reform, Deputy Howlin, and the Labour Party when he cut the pay of new entrant teachers and other public servants, something that played a big part in the decimation of the Labour Party. It is really unconscionable that this pay apartheid continues. I know the Minister has talked about negotiations but we want to know when he will commit to getting rid of something that is just plain wrong and indefensible. Pensioners have also asked about whether the Minister is willing to fast track the rolling back of the pension cuts imposed under the FEMPI legislation. Can the Minister give some commitment about whether he is willing to speed up the process of restoring moneys to pensioners who, along with the young, were another group attacked by the FEMPI legislation?
The process in which the Minister has engaged with the Department of Education and Skills needs to be urgent. We have a brain drain with people leaving the country because they have to do so. We are losing this talent. In respect of new entrants in nursing and health care generally, are there any plans with other Departments to initiate a process for a similar review of pay and conditions for new entrants across the health care sector and other sectors who are in similar situations in respect of allowances and pay?
In respect of Deputy Durkan's question about how we can engage with unions outside the Lansdowne Road agreement, the Minister for Education and Skills and his Department have carried out significant work to gain the TUI's agreement to enter the Lansdowne Road agreement. The Minister has made very clear, as have I, that we will engage with unions who are outside the Lansdowne Road agreement to look to address issues that are of concern to them. However, we must do so in a way that respects the fact that 23 unions are inside the Lansdowne Road agreement. We will continue with that approach in the coming weeks and months where we will look to work with people. However, we must respect those who are inside the agreement.
In respect of the question about the brain drain, I have answered the questions from Deputy Boyd Barrett over the course of the afternoon. The Minister for Education and Skills and I are working with unions inside the Lansdowne Road agreement on matters of concern to them. This is why we initiated the discussion yesterday with the INTO and the TUI.