David Cullinane (Waterford, Sinn Fein) | Oireachtas source

Yes. I somewhat agree with the Chairman's concerns and echo some of them. We are confined to asking questions about the Minister's statement. As the Chairman has said, we are asked to consider the Estimates under different Votes. It is in that context that I looked at the headings in the Minister's opening statement.

My first question is on public sector pay. The Minister quite rightly stated that the Lansdowne Road agreement will be in place up to September 2018. As I have said before, my party has given qualified support to the implementation of the agreement. My question on pay is linked to the summer economic statement released yesterday.

The latter set out the net fiscal space for the next five years. For 2017 and 2018, it is exclusive of the Lansdowne Road agreement. There was no provision in yesterday's statement for any further public sector pay restoration. The Minister has indicated the Lansdowne Road agreement is a way of setting out an agreed pathway to pay restoration and I presume he is speaking about the period up to 2018. There will be a difficult issue confronting all of us - members of the committee, Members of the Dáil and the people of the State - with regard to the unwinding of the financial emergency measures in the public interest, FEMPI, legislation. Those cuts were brought in - the Minister indicated the amount involved was €2.2 billion - and I am not in favour of scrapping the FEMPI legislation in one go either, as that would not be possible when considered in the context of the State's revenue. It will be somewhat problematic for the Minister to say we will scrap the universal social charge over five years, while putting €3 billion into a rainy day fund and not making any provision for any restoration of pay in the period 2019 to 2021.

We can all accept there must be some level of pay restoration in those years so it would be more honest of the Government to indicate the available current spend for the years - the fiscal space - but within that there must be some provision for more pay restoration in the public service. How can the State justify saying there is still an emergency with how it deals with public sector pay when it is seeking to put money aside for a rainy day fund and abolish taxes of up to €5 billion in the form of the universal social charge? There are trade unions already saying they will challenge this in the courts. I am not asking the Minister to give away a negotiating position or a figure, but will he at least concede that for the years 2019 to 2021, inclusive, we will have to make provisions for pay restoration beyond the Lansdowne Road agreement?

Public procurement was also mentioned in the Minister's statement. In the past we spoke a great deal about opening public procurement to small businesses and making it easier for them. Does the Minister or the Department have any plans for reform in the area? It was not set out in the statement so will the Minister give us his view on it? I also have a question on capital investment, which was also mentioned in the statement. I acknowledge there was some increased investment in capital announced yesterday and I welcome that, as far as it goes. The stability programme update contains figures charting revenue and expenditure as a percentage of gross domestic product, GDP, for the next five years. Both revenue and expenditure decreased as a percentage of GDP year on year. That factored in the Government's planned budgetary proposals, which includes tax cuts. One must accept that we have one of the lowest capital investment spends as a percentage of GDP already in the European Union and yet it is going to decrease year on year. Those figures did not appear in yesterday's statement, so will the Minister comment on that?

I have a technical question for the Minister. With regard to capital investment, we are also providing for what is called the smoothing of the capital formation. If, in a budget, we provide for €1 billion in additional capital spending, would it be smoothed over four years, meaning it would only eat into a quarter of the fiscal space? If that is the case, some of the money earmarked for capital expenditure would already be spent in a previous year, so there may not be an accurate reflection of what is to be spent in a given year. Will the Minister outline how the smoothing process works and also explain the logic behind it?

The next point relates to the flexibility of European Union rules. The Taoiseach has spoken about this, as did one of the Minister's MEP colleagues, when there was a request for the European Commission to be more flexible. The Minister's party and other parties agreed the fiscal rules in the first instance but it is interesting that there is now a call, even from the Taoiseach, to relax the fiscal rules. What is the Minister's view on that?