Bertie Ahern (Dublin Central, Fianna Fail)

Enabling all our citizens to live life with dignity is a commitment we have made in the national anti-poverty strategy and in our agreements with the social partners. We are taking practical and effective steps to recognise and support the invaluable role of carers. We are also taking the opportunity to make more flexible some of the conditions which apply to the receipt of social welfare payments, to encourage people to maximise their independence and to contribute to the common good if they wish, through undertaking some paid work. It would not be right that they alone would be prevented from supplementing their income within reasonable limits.

It is right that at a time of buoyant incomes and record employment levels we should create the opportunity for the less well-off to share in the success of our society. We are doing this in a way that reflects the mutual obligation on all of us to support the less well off, but also the obligation on every citizen to provide for his or her needs and to contribute to the greatest extent possible to the common good through their active participation in the workforce and in society. This is a record €1,120 million social welfare package. It is an enormous welfare package at a time when unemployment is at historically low levels and the economy is in such a good state with the vast majority of our people working.

The very substantial resources we are committing through this budget to the development of public services and the building up of our physical infrastructure make it essential that we use these resources to best effect. Waste and inefficiency are no more acceptable in the context of the very large resources made available in this year's budget and Book of Estimates than when resources were much more constrained. That is why the modernisation of the public service is of crucial importance to the Government. We need to maintain progress in the streamlining of our administrative and regulatory systems, and the updating of our work practices and use of technology. In fairness, much has been achieved in these areas, as evidenced by the independent performance verification groups for the different sectors of the public service.

However, we need to ensure that best practice standards are operated in our public departments and agencies. In particular, we need the flexibility of staff at all levels, and their willingness to embrace change including new technology if the goals for a successful society and economy are to be achieved.

The budget also demonstrates the continuing commitment of this Government to creating a modem, world-class physical infrastructure to serve our people for the 21st century. The extent of that commitment is evident, both from the specific additional capital investment announced by the Minister in the budget yesterday, but also from the detailed provisions set out in the Book of Estimates published last month. In total, capital expenditure in the coming year will amount to more than €9 billion, equivalent in terms of the net Exchequer contribution to 5% of GNP. This is double the European average.

Transport 21 is a bold and ambitious programme to address not only the inherited transport deficit, but to anticipate the growth in population and commerce for the decades ahead. What is important is not just the scale of that financial commitment, dramatic though that is — but the focused and effective manner in which it will be managed. The enhanced project management system within the transport sector has been steadily delivering infrastructure projects within budget and ahead of time. It is no secret that the substantial ramping up of capital expenditure in transport put strains on our administrative, planning and management systems. What is clear is that these challenges have been met and we have developed both our capacities and our policies. Managing large projects of this nature requires consistency and continuity, as well as a process and contracting changes to deliver value for money. That is why the Government decided to introduce a ten year capital envelope for transport investment, thus providing both the timeframe and the confidence to ensure value for money in the planning and execution of our ambitious transport plans.

Our productive capacity is also dependent on the quality of our people, their qualifications and skills. That is why providing high quality educational facilities at all levels is of such a high priority to the Government. The provision for the development of new schools for a growing population, and the upgrading and refurbishment of literally hundreds of primary and post-primary schools, are evidence of that commitment. It is also critical that we continue to develop our talent base of graduates and researchers. That is why the Government has made a further commitment not only to the ongoing development of our third level sector, but also to its transformation, and to the development of a fourth level system meeting the highest international standards in important areas of research and development.

Developing our physical infrastructure extends beyond the economy's productive capacity to underpinning the quality of life of our people. In particular, our capital investment in health care, both hospitals and community-based facilities, provides a clear expression of our commitment to the modernisation and greater effectiveness of the health services. The challenge is not only to provide substantial additional resources, but to manage them in a way that reduces unnecessary strains on the system.

In addition to flexibility and modernisation, value for money in public services also requires that our wage bill remains reasonable. Pay costs in the public service represent a high percentage of total expenditure, to a greater extent than in the enterprise sector of the economy. We must ensure that wage costs are managed and that any pay increases are realistic, having regard to our low inflation environment and to trends in productivity compared to international norms.

As a small society, we have an innate capacity to move quickly and to anticipate change. We also have the capacity to engage in dialogue with one another and to work together for the benefit of a real, national common interest. The social partnership framework which we have operated since 1987 provides a tried and tested mechanism to realise that potential. It has delivered in the past. It can deliver again, not only for trade unions and their members, but also for employers and the enterprise sector, including farmers, through its contribution to the successful management of change, and for the wider community, through the stability and confidence which industrial harmony and a shared understanding can provide. I strongly believe that early engagement between the social partners and the Government, and early agreement on a new social partnership framework, would be in the best interests of the entire community. The measures announced in the budget should significantly help to underpin progress towards such an agreement.

This budget provides the means by which we can consolidate our strong growth and development, based on high employment and rising productivity into the future. It provides a generous and sustainable response to the needs of those who are most at risk in our society. It provides realistic and effective support for families and children facing the pressures of life in a modem and dynamic economy. Above all, it provides evidence that this Government continues to honour its commitments to manage our economic and social affairs with care and imagination and to balance securing long-term growth with more immediate improvements in the quality of life of our people.

I commend the second budget of the Minister for Finance, Deputy Cowen, to the House and congratulate him on his considerable achievement.

See this speech in context