Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I will respond to Deputy McGrath's question first. The economic forecasts announced on budget day are also the economic forecasts that underpin the Finance Bill. We are proposing no change at present and we envisage no change. On the public service pay situation, the view of the Government is that the Lansdowne Road agreement provisions are still the agreement we have with the public services. We knew at the time of the budget that there were outstanding matters relating to pay in the Garda Síochána and the pay of Garda inspectors and sergeants. We also knew that one teachers' union, the ASTI, was in potential dispute at that time, even though settlements had been made with the TUI and INTO.

It is also true to say, as I did in Brussels on Monday, that the Labour Court's ruling in respect of Garda pay was more generous than the Government had anticipated. The possible extra charge there needs to be quantified in addition to any moneys that are envisaged as going to gardaí from the €290 million provision for pay increases that is included in the budget. According to the Minister for Public Expenditure and Reform, the total estimated cost of the proposed Garda settlement is €40 million. In the context of a budget of €58 billion, this is within the normal swings and roundabouts of a budget. As Deputies will be aware, when we announce the monthly expenditure figures, tax returns and Exchequer returns, there are variations from what was forecast each month. Those variations are sometimes positive and sometimes negative. We do not envisage making any changes to the budget forecasts. I believe everyone in the House is familiar with those forecasts at this stage. We are still of the view that the deficit for this year will end up at 0.9% of GDP and the deficit for next year will be 0.4% of GDP. In addition, the debt ratios, etc., remain the same. Unexpected events that have not been allowed for occur in any budgetary cycle. They have to be allowed for as the year goes by. So far, the amounts of money in question are not huge in the context of a €58 billion budget.

Deputy Burton asked about capital. Given that she acted as Tánaiste when the budget for 2016 was designed, she will be familiar with the amounts for capital expenditure that are included right up to the end of this calendar year. Of course we would like to have additional capital expenditure for economic and social infrastructure. We are working towards this. The former Tánaiste will be aware that we took issue with EUROSTAT's post factointerpretation of rules, particularly in respect of public private partnerships. Matters we thought would be off the balance sheet were put on the balance sheet. A helpful circular that came out from EUROSTAT in September has changed the position and, at least, will give us forecasting certainty in respect of what is on and off the balance sheet for the purposes of public private partnerships. In addition, the smoothing arrangement that applies to capital expenditure, as distinct from current expenditure, provides that just 25% of the fiscal space is reckonable in the first year. This smooths out over a four-year cycle, thereby providing an opportunity to have extra capital expenditure as well. This year, the Minister for Public Expenditure and Reform's fiscal space was approximately €660 million, but because of the smoothing effect of capital, the Minister's total current and capital expenditure increased to approximately €860 million. That is an example of the smoothing effect.

Now that we are out of the corrective arm of the fiscal rules and we are below the 3% rule, some flexibility is allowable in capital expenditure for reasons of structural change or strategic investment. We are not yet in a position to avail of that because of the intricacy of the rules, but we have the potential to avail of it as we go forward. As a general principle, the bigger countries seem to get more flexibility under the fiscal rules than the smaller countries. This is something I am not silent on. Sometimes it is more effective to protest quietly and privately and sometimes it is more effective to protest publicly as I have done. When Deputy Burton referred to what I said recently, I assume she was talking about my comments at the Tatra conference in Bratislava when I was invited to talk about the fiscal rules. I expressed my views on this issue pretty strongly on the record. If one examines the assessments of the budgets in France and Italy, as distinct from the assessments of budgets in smaller countries, one will find that the rules are applied with greater flexibility in the larger jurisdictions. I think that has to change if we want our people to comply with the fiscal rules. If we are to support Governments in complying with fiscal rules, it stands to reason that those rules must be fairly applied.

As a general principle, I agree with Deputy Burton that the economy is now at a point where additional capital expenditure is desirable and is needed to provide the necessary economic and social infrastructure. I believe this could be done without overheating the economy. I am sure the Government will evaluate that position in the course of next year with a view to enhancing capital expenditure in a variety of ways as we plan for the 2018 budget.

I think I have dealt with the points made by Deputy Doherty. I do not rule anything out of order. I do not have a role in making determinations on questions like what is in order and what is out of order, or what is acceptable as an amendment. Under the guidance of the Chairman, an amendment that is ruled out of order cannot be discussed. However, the points that Deputies would have made on that amendment, if it had been in order, can be made during the discussion on the relevant section. When we are discussing sections, I have no problem discussing proposals that would have been set out in amendments if they had not been ruled out of order.