Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Capital Expenditure Programme

Mairéad Farrell


94. Deputy Mairéad Farrell asked the Minister for Public Expenditure and Reform the way in which the emergency measures in budget 2021 will increase capital expenditure in 2021 to €9.1 billion as per the July stimulus; and the way in which this differs from the Revised Estimates for Public Services published in December 2019, prior to the Covid-19 pandemic, which had already laid out capital funding of €9.1 billion in 2021. [26634/20]

The July stimulus includes an emergency measure to increase capital expenditure by some €1 billion to €9.1 billion, which is claimed as an increase of approximately 12%. However, the Revised Estimates for Public Services published in December 2019 already laid out Exchequer capital funding of €9.1 billion for 2021. As such, I fail to see any additionality in what is indicated in the July stimulus. Will the Minister outline how the emergency measures in the budget will increase capital expenditure in 2021 to €9.1 billion and how that differs from what was signalled in the Revised Estimates published in December 2019?

I thank the Deputy for her question. As she points out, the capital expenditure levels for 2021, as originally set out in the Revised Estimates Volume of December 2019, amounted to €9.1 billion. This figure, which was set out in advance of the Covid-19 pandemic, was almost €1 billion, or 12%, higher than the corresponding 2020 allocation.

As part of the July stimulus, the Government decided that rather than scaling back on planned capital investment in 2021 in response to budgetary pressures elsewhere, we would commit to preserving and maintaining this unprecedented level of capital investment. It is a commitment I will carry through fully in budget 2021. Of course, the precise configuration and prioritisation of the overall increased 2021 capital allocation of €9.1 billion, including the remaining unallocated reserve and any potential for enhancement to those allocations, will be specified further and more comprehensively in the context of budget 2021.  

The national development plan, NDP, sets out five-year expenditure allocations by Department for the period 2018 to 2022. These multi-annual allocations are devised to give Departments a degree of certainty for future planning. In direct response to Covid-19, however, the Government made necessary and large-scale revisions to capital allocations for 2020. The capital expenditure allocations for 2020 were increased by in the region of an additional €1.5 billion, bringing total capital investment for 2020 to above €9.7 billion. This is the highest ever investment in capital projects and programmes in the history of the State.

In line with programme for Government commitments and in my capacity as Minister for Public Expenditure and Reform, I am bringing proposals to the Government regarding the launch of a structured, in-depth review of the NDP in order to advance the priorities identified in the programme for Government, including climate change, housing policy, transport policy, implementation of Sláintecare and balanced regional development, aligned with the associated multi-annual resourcing requirements. The revised NDP, to be published next year, will assess the balance of resourcing between sectors in light of the programme for Government and will consider if there is a need for any strategic changes in allocations beyond 2021.

The figure of €9.1 billion was mentioned in the Revised Estimates for Public Services. Prior to the pandemic, we saw voted capital expenditure of that sum for 2021. It is my understanding, therefore, that there is no additionality in what is currently proposed and we are left exactly where we started. Capital expenditure was always planned to be at around the €9.1 billion mark. That was the plan before the onset of the Covid crisis and it is the plan now.

Capital expenditure has a large positive multiplier effect in terms of employment and as a means of tackling the crisis in comparison to the likes of the services industry. The Irish Fiscal Advisory Council, IFAC, has demonstrated that fiscal policy can have positive and significant initial impacts on Irish output. According to EUROSTAT, in terms of investment as measured by gross fixed capital formation, we are currently the worst-performing economy in the EU. Yet the Minister is saying that the allocation for capital investment is the same as initially stated, before the current crisis.

First, we should not understate the significance of the State committing to a capital investment programme of more than €9 billion at a time when we are forecasting a deficit in the current year of somewhere in the region of €25 billion to €30 billion. Ten years ago, in very different times and when different circumstances applied, capital expenditure was slashed by some 60%. What we are doing now is in marked contrast to what happened in the past. We are going to maintain, and have the ambition to increase, capital investment.

The within-year increase in capital expenditure this year was for exceptional measures. These include the measures in the July stimulus programme, under which some €500 million was added. There is approximately €900 million extra in the Department of Business, Enterprise and Innovation Vote, much of it to do with the enterprise grants, restart grants and so on which were brought forward as an exceptional measure this year. The Deputy should reserve final judgment until she sees the actual allocation on budget day. On a no-policy-change basis, we are saying that it is €9.1 billion. That does not mean things are set in stone with regard to budget day.

It seems that the current indicated allocation is the same €9.1 billion that was indicated before the crisis. I have also heard rumours circulating that the Government plans to keep capital expenditure at around the €9 billion mark for the duration of this crisis. That greatly concerns me because we do not know how long that will be. All indications are that the crisis will last for some time. If we assume that it continues for a two- to three-year period, then this provision represents a real cut per capita when factoring in inflation and population growth. It is austerity by stealth, under the table or through the back the door. Call it whatever one wants but we have seen it before.

The Minister said that this Government is taking a different approach to this crisis from what was done previously. We saw during the last crisis, especially after 2014, that despite the announcements that austerity was over, it did, in fact, continue, albeit in a sneakier fashion. A recent report from the Halle Institute for Economic Research on the impact of Brexit estimates that more than 700,000 jobs will be at risk in the EU, with Ireland set to lose more than 35,000. We are facing a crisis on two fronts and the State needs to be willing to step in with the types of large-scale capital projects that can offset the decline in private sector investment. If that is not done, people will feel the hit in their pockets. People are not naive.

I strongly support investment in capital expenditure projects. Now is the right time to make that investment because we can borrow at historically low levels of interests. There are many unmet infrastructure needs throughout the country. We have an opportunity now that should be taken and it falls to me to be the advocate within Government for doing so. To be fair, the prioritisation given to capital investment within the programme for Government is very clear. The context within which we are maintaining more than €9 billion of capital investment next year has changed dramatically in the past six months. The reality is that we will probably get a lot more done with the same amount of money, given the changes we have inevitably seen so far and are likely to continue to see within the construction industry. There is already evidence of better value for money coming into the process of tendering for projects.

I ask the Deputy to reserve her judgment. To be clear, there has been no decision within Government simply to maintain capital investment at this level through the unknown duration of the crisis. The NDP review will happen in the coming months and it will set out a capital expenditure envelope for the next decade.

Ministerial Advisers

Gerald Nash


95. Deputy Ged Nash asked the Minister for Public Expenditure and Reform his views on the appointment of ten special advisers for Ministers of State; and if he will make a statement on the matter. [26735/20]

Ahead of the announcement of the July stimulus, the Government decided to appoint teams of special advisers to the offices of the Taoiseach, the Tánaiste and the Minister, Deputy Eamon Ryan. I described it at the time as the Government parties' very own job creation initiative, or a July stimulus for Fianna Fáil, Fine Gael and the Green Party. In the week that the pandemic unemployment payment, PUP, is being cut, the Government, with the sanction of the Minister, Deputy Michael McGrath, as the Minister in charge of spending, gave the go-ahead to appoint ten new special advisers to Ministers of State. Does the Minister believe this is the right thing to do? Will he, as Minister responsible for reform, establish criteria for such appointments? Can he inform the House as to the total annual cost of the 64 advisers appointed to date? Finally, will he confirm that he will not sign off on the appointment of any additional ministerial advisers during the term of the Government?

The appointment of special advisers by Government to assist Ministers and Ministers of State is provided for under section 11 of the Public Service Management Act 1997.  

Special adviser appointments were initially considered by my Cabinet colleagues and me at the Government meeting of 4 August last. At that meeting, the Government approved the proposed guidelines setting out the process for the appointment of special advisers to Ministers and Ministers of State of the Thirty-third Dáil, as well as the terms and conditions applying to those appointments. The guidelines were published by my Department on the gov.ie website and are broadly consistent with those applying under the Thirty-second Dáil, both in terms of the number of appointments and the terms and conditions on appointment.

The appointment of special advisers to the Ministers of State in question, which the Deputy refers to, was considered by the Government meeting of 22 September last. These appointments are being made in accordance with the existing guidelines that I mentioned.

In considering proposals to appoint special advisers, my Cabinet colleagues and I had specific regard to the scale and complexity of the portfolio, the budgetary responsibility and programme for Government commitments.

I reassure the Deputy and the House that my colleagues and I in the Government are fully committed to transparency for all such appointments. As with the previous Government, once the formal appointment of all special advisers is concluded in the coming weeks, my Department will publish a list of special advisers to the Thirty-third Dáil. This list will include their names, the Departments to which they are assigned and their respective rates of pay. Additionally, as the Deputy will be aware, a copy of each special adviser’s signed contract of employment must also be laid before the Oireachtas by Ministers within 60 days of each special adviser’s formal appointment by Government.

I thank the Minister for his comprehensive reply. I assure the Minister that I am not throwing cheap, political potshots at the Minister and his Government colleagues on the appointment of a raft of special advisers for junior Ministers. I do not believe it is in my nature to do so and the Minister may know this. The Minister of State at the Department of Public Expenditure and Reform, Deputy Ossian Smyth, correctly pointed out on "The Week in Politics" this week that I enjoyed the support of two special advisers during my own short spell as a super junior Minister. I am old enough to remember when Government only merited one super junior Minister at the Cabinet table, and the two special advisers that the super junior Minister is entitled to have. This time around we have three. The only reason we have three super junior Ministers is not because of any particular policy focus in Government that would require the support of three particular voices at Cabinet with specific expertise, it is to keep the three Government parties sweet. This is what it is all about, nothing more and nothing less. I am not convinced or persuaded at all of the merits of appointing almost double the number of special advisers that the 2011-16 Government merited. That was a Government that was in the mire and in battle to try to save Ireland's economy, as this Government is doing. I am not persuaded by the Minister's response and I am not persuaded of the merits of appointing a raft of special advisers to junior Ministers. I am not persuaded whatsoever.

I should point out that special advisers are appointed under section 11 of the Act. It would be helpful to set out what the functions are. The Act provides that a special adviser shall assist the relevant Minister by providing advice and by "monitoring, facilitating and securing the achievement of Government objectives that relate to the Department" and "performing such other functions as may be directed by the Minister" provided this does not involve the exercise of any specific powers conferred on the Minister or any other officeholder under the Act.

The Deputy's question related to the special advisers appointed to the Ministers of State. For the information of the House, special advisers to those Ministers of State who do not regularly attend Cabinet are to be placed on the assistant principal officer standard scale, which is currently a number of points between €67,659 and €78,816. That is the cost of that particular decision.

Will the Minister clarify for the record that he does not have any plans to sanction the approval of or appoint any additional advisers? I believe that 64 is more than enough. During the 2011-16 Government the country was in the mire and battling for its very survival and it had 30-plus advisers. For a country with 15 Cabinet Ministers, a Chief Whip, a super junior Minister and probably the largest majority we have ever seen in the history of the State, I am open to be persuaded but remain to be convinced of the merits of appointing this number of special advisers.

I am a fan of good government and good governance, and anything required to deliver that should be supported. While I do not want to individualise this in any way, given the raft of cock ups we have seen over the last few months and weeks since this Government has come into office, all of the evidence so far suggests that the support being provided by special advisers may leave a little bit to be desired. This is not about seamless Government and delivering better outcomes. It is about keeping the parties in Government happy. It is as simple as that.

Ultimately the Government will be judged by its performance on the key issues: managing the pandemic; ultimately bringing about economic recovery; and on addressing the pre-Covid challenges. Those challenges are still very much there and will become even more acute if we do not address them. They include the housing crisis, the long-term structural reforms needed in our health service and the existential challenge of climate action. That is ultimately how we will be judged. I am the first to acknowledge that the appointment of special advisers is a sensitive issue. As Deputy Nash has acknowledged, he has benefitted from the services of special advisers-----

As a Minister of State, not as a super junior Minister.

Yes, absolutely. The Deputy has put that on the record and acknowledged that fact. I assume they provided a good service and were valuable to the Deputy.

I shall now turn to the numbers. Once the process has been completed - and it has not been completed at this point, even on the numbers the Deputy has speculated on - all details will be published in an open and transparent way.

Public Sector Pay

Mairéad Farrell


96. Deputy Mairéad Farrell asked the Minister for Public Expenditure and Reform if a commitment will be given to remove FEMPI legislation. [26636/20]

The current public sector pay agreement expires on 31 December this year. There is no doubt that the Minister will be sitting down with representatives of ICTU's public service pay committee. I am concerned that with the Financial Emergency Measures in the Public Interest Act, the FEMPI legislation, still in place the Government will hold a big stick over the heads of the public service unions. Does the Minister plan on committing to remove the FEMPI legislation before entering into negotiations with ICTU's public service pay committee?

The Public Service Pay and Pension Act 2017 provides for the restoration of reductions made to public service pay and pensions by the Financial Emergency Measures in the Public Interest Acts 2010 to 2013. That process of restoration began on 1 January 2018 and is due to conclude by 1 July 2022.

In that regard, on 1 October 2020, public servants will receive a 2% pay increase by way of restoration. This will complete the pay restoration for public servants earning up to €70,000 per annum. Also on 1 October, reductions of between 5% and 8% made to certain allowances in 2010 will cease.

The Public Service Pay and Pensions Act 2017 provides that by the end of 2020, an order is made to restore, at a date to be decided, reductions made to certain public service pensions. In addition, section 20 of the Public Service Pay and Pensions Act 2017 provides explicitly that for certain public servants, pay restoration cannot be completed before 2 October 2021.

Under section 12 of the FEMPI Act 2013 the Minister for Public Expenditure and Reform is obliged, before 30 June each year, to submit a written report of the operation, effectiveness and impact of the FEMPI Acts of 2009, No. 2 of 2009, 2010 and 2013 to the Oireachtas. As part of that report, consideration must be given to whether or not any of the provisions of the relevant Acts continue to be necessary having regard to the purposes of those Acts, the revenues of the State and State commitments in respect of public service pay and pensions. Key considerations include the economic circumstances of the State, the budgetary outlook, debt, returns from taxation, Brexit and preparedness for other economic shocks.

The 2020 report that was laid before this House last June concluded, on the basis of the prevailing economic and fiscal outlook, that the timetable for pay and pensions restoration up to July 2022 continued to be appropriate and necessary. I assure the Deputy that the Government will continue to take the most appropriate course of action in this key policy area into the future.

We should not forget that the FEMPI legislation was emergency legislation introduced to tackle the onset of the financial crisis of 2008, when we saw the first permanent cut in public service pay rates in the history of the State. Here we are almost 13 years on and the legislation is still in place. Today we face a crisis of a very different kind and the emergency measures that were introduced to tackle a very different crisis cannot be used to tackle this one. Is the Minister planning to slowly unwind the legislation in the future and remove the more draconian parts of it while keeping other parts he considers necessary? Will the Minister tell us prior to that, which parts will be removed and which retained, and what is the rationale behind such decisions? I would urge the Minister to do so.

To be clear, if we were to repeal the suite of FEMPI legislation tomorrow then certain former public servants on quite high pensions would have the pension reductions that were imposed on them reversed immediately. In addition, all very senior public and civil servants, including politicians, would have the cuts that were imposed reversed overnight. We need to deal with this issue in a managed and phased way.

To return to the point made by the Deputy earlier, it is my objective to negotiate a new public service pay deal. It is in the interests of the State, the trade unions and the workers that they represent to have the certainty and stability of a new public service pay agreement. We are in difficult circumstances and it will not be easy to negotiate a successor agreement. We are in exploratory discussions at the moment with the trade unions and will see where that goes in the weeks ahead. As the Deputy said, the current deal runs up to the end of the year. We are seeing that deal through and part of that involves paying the 2% increase which, on balance, is the right thing to do.

We need a new collective pay agreement and I think I am correct in saying that the Minister will be the first in the history of this State not to have such an agreement in place. It is extremely important to ensure that an agreement is reached with the unions which brings about real pay equality in our public services. We need to have good public service wages. We have been quick to clap in this Chamber. I have been here when we clapped front-line public sector workers since the onset of this crisis but applause do not put bread on the table for these families or keep a roof over their heads, which is extremely difficult to do in the current housing crisis. This Government regularly says that we are indebted to our public sector workers but it is time to put its money where its mouth is and reach a fair deal that recognises the pain they have suffered since 2008 as well as the heroics they have performed since the onset of Covid-19.

I have put on the record on a number of occasions as Minister my admiration for the work of our public servants. We now have approximately 340,000 public servants, over one third of whom work in our health service. The work they have put in over the last number of months has been immense, against huge adversity. We are doing the right thing as a Government in honouring the agreement that was entered into, even though it was entered into in much better times. We have had an enormous economic shock as a result of Covid-19 but honouring that agreement and paying the 2%, albeit at a significant cost, is justified in the circumstances.

I want to negotiate a new agreement and my officials are in initial, exploratory discussions at the moment and we will see where that goes in the next number of weeks. I hope a deal can be agreed but there is no certainty about anything. We have had periods in the past where we have not had an agreement in place. There is real value in a collective agreement and it is the Government's objective to secure one but it cannot be at any price.

Public Sector Pay

Richard Boyd Barrett


97. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform if the forgoing of the pay rise for all public representatives as part of a Covid-19 solidarity measure will be agreed to; and if he will make a statement on the matter. [26939/20]

On what planet is it okay for politicians earning extraordinarily high salaries - €96,000 in the case of Deputies - to get a pay increase when hundreds of thousands of workers have seen their incomes decimated or jobs completely eliminated as a result of Covid-19 and the measures the Government has imposed, and when the Government has cut the pandemic unemployment payments of many thousands? How can the Minister possibly justify a pay rise for politicians when huge numbers of working people are seeing their incomes savaged?

I thank the Deputy for his question. The first point to note is that the 1 October adjustments to pay in the public service form part of the broader ongoing process of unwinding FEMPI reductions which was negotiated with public service trade unions and delivered through successive collective agreements, from the Lansdowne Road agreement to the current public service stability agreement.

The remuneration of Members of the Oireachtas, including Ministers and other officeholders, has been examined a number of times by the former review body on higher remuneration in the public sector. In its 38th report in September 2000, it recommended that the rate of salary for a Deputy should be linked to the grade of principal officer in the Civil Service. The recommendation, which was accepted by Government at the time, was based on independent and expert consideration of the level of responsibilities and the commensurate level of pay. Accordingly, the pay of Dáil Deputies has been linked for 20 years to the prevailing pay of principal officers in the Civil Service, including through the significant pay cuts of the FEMPI legislation and now through the pay restoration measures involved in the phased unwinding of that legislation agreed with public service unions and set out in public service agreements. This process of unwinding FEMPI reductions, including the forthcoming pay increase on 1 October, is also provided for in legislation enacted by the Oireachtas under the FEMPI Act 2015 and the Public Service Pay and Pensions Act 2017.

As the Deputy is aware it remains open to all Members of the Oireachtas to forego pay increases on a voluntary basis and I understand that many have been doing so. For its part, the Government has already decided that Ministers and Ministers of State, in addition to taking a 10% pay cut, will also forgo the 2% pay increase when it becomes due in October. This decision was taken in light of the Covid-19 emergency and the challenging economic and fiscal situation the country faces.

The Covid emergency did not stop the Minister from giving a €16,000 increase to the super junior Ministers, which is absolutely outrageous. The ordinary public servants who were robbed to pay for the bailout of the banks should get their pay restored. Indeed, it should have been restored long before now but the idea that politicians on extraordinarily handsome salaries of €96,000 should get a pay rise at the very same time that the Government is cutting the PUP for people who have lost their jobs and seen their incomes hammered as a result of measures imposed by the Government is sickening.

The increase that Deputies will receive is around €45 per week on top of an already very handsome salary. That is just a little less than the amount the Government has taken off PUP recipients. These are people who were, in most cases, on much lower incomes in the first place. Their income fell to €350 per week because of pandemic measures imposed by the Government and now their incomes are being hammered down by another €50 or €100. Does the Minister not think that is sickening and unacceptable in the current climate?

In essence what the Deputy is proposing is that the link between the pay of a Deputy and the principal officer grade in the Civil Service be broken. I am not sure what alternative system the Deputy is proposing to carve out the pay of politicians. It is up to each individual to make whatever decision he or she wishes to make. I am forgoing the increase because it is the right thing to do. I assume Deputy Boyd Barrett is doing the same. I am not sure in what manner the Deputy forgoes his increase. Does he sign a gift back to the State or does he put it into a fund, the details of which he publishes? Is there transparency in terms of how that money is used? I do not know the details of how Deputy Boyd Barrett does it but I know that those of us in the Government who are doing it are gifting it back directly to the Exchequer so that the cost to the State is reduced as a result. I ask the Deputy to explain the alternative system he wants for politicians to set their own pay but I do not believe we should be going down that road. We have a system in place whereby we are linked to a certain grade in the Civil Service, whether that rate of pay is going up or down. It is up to each individual then to make a decision based on his or her own circumstances. People have different circumstances and we should all acknowledge that too.

Within People Before Profit our policy is that politicians should be paid the average industrial wage and that is what happens internally. That means we are in the same position as the people we represent and have a vested interest in representing the collective and not just looking after ourselves. That is our policy.

In the case of the 2%, we will be handing it back to the Exchequer because we think it is unconscionable in the current situation to take any pay rise, although, frankly, it hurts me to think we are handing it back to a Government that will then give it on to some other pampered group rather than give it to the people who actually need it.

The Minister has not really answered my central question. Does he think it is okay, that it looks very good or that it is not simply sickening for people who have lost their jobs and income, who are on the PUP and have just had their payments cut by the Government, to see the politicians who are doing that getting a pay rise? Does he not think that looks awful, is unacceptable and is a kick in the stomach to people who are already down?

What the Deputy is saying is that politicians should decide their own pay. I do not believe that is a good system. I do not believe that, in any other walk of life, people get to decide their own pay. There is a pay increase that people can decide to either accept or reject. Apart from the 2% increase, which the Deputy says he is gifting back to the State, what I hear him say, in essence, is that he is accepting the full salary from the State but that he is deciding what to do with it. This means he has already accepted a number of rounds of restoration of previous FEMPI pay cuts. Politicians within People Before Profit are accepting that and they are then putting that into some fund, apparently, which they presumably then make a decision on how to distribute, and in respect of which the State has no role whatsoever. Apart from this 2%, what I hear the Deputy saying is that he is accepting the full salary from the State. What we are doing is open and transparent. The Deputy is preaching over there while, at the same time, he has been taking the full salary from the State but not telling everybody what the balance is, in net terms, that he says he does not take. Is it gross or is it net? Where does that money go?

We are saying we should cut the pay of politicians. What we are doing with the 2% is that we are not taking it, but we do not think it should be a choice for the politicians to take it. In terms of the average industrial wage, we use that money as we pledged in our election manifesto in a very clear way. We pledged that we would take the average industrial wage, so I have not benefited one cent personally from any pay increase that other politicians have all benefited from in the context of their already high salaries, We use that money to fund constituency services, campaigns, groups and organisations that campaign for social justice and for equality. That is what we use it for, as we promised. We would much rather do that than give it to you lot to then give to bankers or give further pay increases to politicians. It is a far more admirable strategy. If the Minister was really concerned about this, and was concerned about the things he is implying he is concerned about, he would cut the pay of politicians and certainly would not increase it.

I call the Minister.

We have had the full round of questions but I am happy to come back in.

We can move on.

Deputy Boyd Barrett got an extra round so, to be fair, I will take a further moment. I assume he is suggesting that legislation would be introduced to set politicians' pay, and then we would be the only body I am aware of that would have the power to, in essence, set its own pay. I hear the Deputy talk about a fund that his party uses to distribute to worthy causes, and I have no doubt they are worthy, although I have not seen the operation of that fund or how transparent it is. I assume that is fully published for everyone to see. The Deputy talks about the average industrial wage. Is that gross or net? I do not know. The truth is he is taking the full money from the State and then he makes a decision, as he sees fit, on what to do with it. He should be honest and upfront with people that this is what he is proposing.

Politicians should not set their own pay. We have a system in place which goes back 20 years. If individuals do not wish to accept the increase, they are perfectly open to doing that, as I am doing myself.