Yes, it is a reduction at this point in real terms compared to the amount spent last year.
Much of it is being spent under a few major headings, the most obvious of which is roads. Senator Dooley is here so we should acknowledge that the Ennis bypass is once more at the starting line and we should hope it crosses it some time during the year. I look forward to the ribbon finally being cut. Senator Minihan listed the roads he expects will be in place before 2006, the 70 kilometres to Portlaoise and the motorway to the Border. The entire network was supposed to be in place by 2006, a much more extensive list of projects than those the Senator listed. The programme is way behind schedule.
We should be spending more on roads. It was inevitable that we would not even be in a position to spend money in the first couple of years because the planning and design was not done in many cases. Extra money was spent two or three years ago on planning and design and some of those projects are now in a position where they could go ahead if the money was available. In simple terms, this is not a straight line. We are not looking at a situation where one would spend the same amount on motorway construction over a period of seven years, but where it will start low and bulge around the middle, which is the position at present. However, there is no bulge because we are spending money on a very small number of projects next year.
The NRA is suggesting there will be 12 or 13 major projects and no more than that. To put it in context, €1.3 billion is a lot of money but when one is spending approximately a third of it on the Dublin Port tunnel, it puts it into context. To be anywhere near meeting the targets for the motorway projects – we are not going to meet them – we need to spend a great deal more on them than we are currently intending to spend.
The Minister for Finance and the public service would say that we did not get the best value for money in the first two years. In truth, he is right. There is no doubt that when the construction industry was at full belt a couple of years ago, the industry's inflation rate was running well ahead of the rest of the economy. We were not getting the value on the return that we needed. We are not in that situation now. Clearly, the construction industry has slowed down somewhat. Labour is available in a way that it has not been for the past few years. We would not have the same downside risks in terms of increasing expenditure on motorways now and that is what we should be doing.
On the subject of health, it has been the primary political focus not just for the past 18 months since the general election, but for a year or two previously. The Government clearly, and rightly, anticipated in the period before the last general election that it would be the primary political issue and it commissioned the health strategy to assuage an increasingly angry electorate. I have spoken before about the health strategy in this House and elsewhere. It is an imaginative strategy and if it was implemented, it would improve the health service. However, it comes at a considerable cost, which is acknowledged in the strategy.
Within six or seven months, the Minister for Finance has made a nonsense of it and he has made it clear since the general election that he has no intention whatsoever of delivering on it. Sadly, if we look at the provision in the health capital budget this year, it is slightly down on last year, €504 million in comparison to €511 million. The amount needed if we are to make any progress whatsoever on the delivery of the health strategy would be at least twice and probably three times that figure.
The Minister is entitled to point out that we have spent significantly more and are spending more now on the health service compared to ten years ago. However, for a whole range of reasons, be they demographics or whatever and not least because we started off with a seriously underfunded and inequitable system, we needed to spend much more and needed the increases in spending that were provided. Much of that increase needs to go towards increased capacity. However, in view of the Estimates provided by the Minister for next year, that cannot be done.
It might be useful to put that in the context of the Hanly report. There is much good in the report and if we are looking for value for money, we need to go down the road suggested by Hanly. However, we cannot really expect people living in places such as Nenagh, Ennis or Roscommon to accept the Hanly report if they see no effort being made by the Government to deliver on the improved services that would be necessary for them to accept the broad rebalancing within the regions the report proposes. To put that simply, if we say to people that we will introduce an ambulance service but we do not provide resources for it, or that we will improve local delivery in places like Ennis and Roscommon for services other than accident and emergency but there are no resources, or we will increase the number of consultants but we make no provision for that, it is not difficult to understand why people are sceptical.
If the downside is that they lose local services, but the upside in terms of improved primary care and ambulance services is not delivered, what can one expect except tens of thousands of people on the streets of Nenagh and Ennis, which is what will happen? It will be almost impossible for those who would like to look at the positive side and to support the general policy thrust to do it because we do not expect that the plus side or the whole package will be delivered. Unfortunately, in the Estimates, there is all too much evidence for those who see in the Government a lack of willingness to deliver the improved primary care, ambulance services, etc.
Mention was made by others of ODA. I will not be speaking in the debate later so I will mention it as it is something in which I have taken an interest. It would be fair to acknowledge that ODA has improved fairly consistently since 1993 and that the Government has played a part in that regard. Some years ago the Department of Foreign Affairs, when Deputy O'Donnell was the Minister of State with responsibility for overseas development, agreed a multi-annual budget with the Department of Finance. That was, by and large, delivered. The Taoiseach, two or three years ago, announced that as part of the Government's then strategy to win a seat at the Security Council, we would increase our ODA commitment to meet the UN target of 0.7% by 2007.
The sad reality is that there is no longer any multi-annual commitment in that regard. At the current rate of increase, we will not meet the 2007 target and NGOs and even bilateral aid cannot work on the basis of stop-go decisions. It does not allow for planning or for projects to be put in place if one does not know from one year to the next exactly how much money will be available for investment in particular projects. This is something in which people in all parties have an interest. It will not cost a huge amount of money, but we need to get it right. We need to agree it on a multi-annual basis so that we know, over three or four years, how much will be spent. I appeal to the Government to look at the ODA budget for the next three years, assuming it will be in power that long, and to set out in clear monetary terms exactly how it intends to reach the 0.7% target in three years, if that remains its intention.
We had a debate in the House a few weeks ago during the Labour Party's Private Members' time and I do not want to repeat what I said then, or what others on these benches said. However, I want to put down a couple of markers for the budget next week. The Government is committed to increasing the old age pension to €200 a week. It is also committed, under its review of the NAPS, to increasing the lowest level of social welfare payment to €150 in real terms before the end of its term, which will, in effect, be about €180 by that time. That will not be achieved if we try to increase social welfare payments by the level of inflation. It will require a payment of at least double the rate of inflation to make it possible to stay on course to meet those targets. I put down this marker now that we will expect the Minister for Finance and the Minister for Social and Family Affairs to deliver on this when the budget is announced next week.
In that context, the cuts Senator Higgins referred to so eloquently earlier are really difficult to take. The overall saving probably will be less than €60 million and I do not know why the cuts have been introduced. One suspects, when one looks at the provision on the rent allowance, that it has more to do with turf wars between individual Departments than with any refocussing of benefits. They are petty and, unfortunately, the effect on individuals who will be affected by them will be considerable. They are targeted at those who are most vulnerable and least able to look after themselves. I hope, in the context of the budget and as we move into next year, that the Government will find it possible to reverse at least the two or three most prominent cuts in the rent allowance and the back to education allowance, which we all agree should not have been introduced. These cuts should be reversed and I hope that will be done.
Senator Ross's comments were interesting, particularly those about low tax. The Labour Party is not in favour of high tax for the sake of it – I do not think anybody is, at least I hope not. I acknowledge that tax can and should play a role in redistribution within society; it is right that it should do so. However, primarily, at this point in the economic cycle and in our development, the Labour Party is interested in securing as much as is necessary from the taxation system to provide a decent level of public service. Some of those services should be provided free at the point of delivery, some should be provided on a universal basis and some should be provided at a cost to some people, but not to others. If I was framing a budget, I would look at priorities in terms of service provision and at ways of finding the money from taxation or elsewhere to finance them. That is the difference between Senator Ross and the Labour Party. Senator Ross believes taxation is bad and should be reduced to the basic minimum, while the Labour Party takes a different view. We look at the service which is needed and try to find the money to pay for it.
I cannot help but refer to what the Minister of State said earlier about stealth taxes and his suggestion that there is no such thing. Some of the charges are justifiable, such as the increase in the television licence, for example. It is reasonable to ask people to make a contribution to services. However, to suggest that there is not a programme of stealth taxes is asking us to swallow a lot. There have been significant increases under a range of areas, such as the drugs payment refund threshold which has been increased from €53.33 to €78 per month. That is an increase of approximately €300 per year for someone who buys drugs on a monthly basis. Unfortunately, many people are in that position. The costs of visiting accident and emergency departments and of staying in public hospital beds have increased, as well as the VHI rates. Virtually all the public utilities, such as the ESB and the gas company, have increased their charges well beyond the rate of inflation. That does not happen by accident. The Government's policy is to increase indirect taxes either by straightforward means, such as excise duties, or through charges made by public utilities rather than increasing direct taxes or capital taxes.
