Brian Cowen (Laois-Offaly, Fianna Fail)

During the course of this debate on the 2007 Estimates the Opposition sought to deny reality and claimed that this is more of the same and that there is no indication of how the money will be spent, no strategy, no coherent approach to value for money and no proper scrutiny by the Dáil of the Estimates. The reality is that in its contribution to this debate the Government side has clearly set out the main outputs that will be delivered across the sectors in the provision for 2007.

In transport we indicated that the €1.5 billion capital for roads will fund the continuing upgrade of the major interurban routes to motorway or high quality dual carriageway standard and fund some eight roads projects involving more than 84 km in length which are scheduled for completion in 2007 and some six projects amounting to 212 km in length which will commence next year. We spoke about the €1.3 billion capital for housing that will fund the Government commitments under Towards 2016 of planned increases in social housing output to the target of 27,000 social housing starts and 17,000 affordable housing starts over the next three years. There will be a €7.9 billion current provision in 2007 for education that will fund service improvements in a number of key areas, including 800 additional teachers, which will bring to almost 1,900 the number of new teachers provided since last year in order to reduce class size and help tackle problems of disability and disadvantage; more than 1,400 additional special needs assistants to significantly improve the experience of education for people with special needs; and the 13% increase in capitation grants for schools. I could go on and repeat the outputs cited by my colleagues in the debate.

I reiterate my personal commitment to getting value for money and better accountability. In last year's budget, I introduced significant reforms of the Estimates process. Under these reforms, consideration of the 2007 Estimates will be better informed than in previous years. After the Revised Estimates Volume for next year is presented to the Dáil in February and referred to the various select committees for detailed consideration of the 2007 Estimates, each Minister will be tabling with his or her Estimate an annual output statement covering the Departments and offices under his or her aegis. The output statement will set out the high-level goals of the Departments and offices as contained in their strategy statements. It will set out for each goal the programmes and the key strategies being followed to achieve them. For each programme, it will outline the financial resources contained in the Estimates and the human resources deployed and, on the outputs side, it will give the key output targets to be achieved next year.

Under the improved value for money and policy review arrangements announced last June, some 90 value for money reviews, with an indicative minimum coverage of 10% to 15% of each Department's budget, will be carried out in the period 2006 to 2008. Contrary to claims, neither the health area nor the Office of Public Works is excluded from these arrangements. These reviews and other general reviews that impact on value for money carried out by Departments and agencies must be sent by them to the relevant select committees. This will complement the information that will be available in the new annual outputs statement. When the select committees consider the Estimates in detail in 2007 and in future years the quality of the information, which will be available to them to assist their consideration, will be far more comprehensive.

I reject claims that the 2007 Estimates are based on stealth taxes or that the significantly increased levels of public expenditure under this Government have been funded through increased taxation. Aside from a technical increase in the employees' annual ceiling for PRSI purposes in line with normal practice, these Estimates are not based on increases in charges nor did increases in charges form part of the discussions with my ministerial colleagues on the Estimates.

The money available for local authorities through the local government fund will amount to approximately €1.5 billion in 2007. The Exchequer contribution to the fund continues to be in excess of the statutory minimum set out in the 1998 Act establishing the fund. Since 2000, nominal GNP has grown by an average of just under 9% per annum, while the increase in Exchequer total expenditure, which includes infrastructural investment, has averaged approximately 9.75% per annum in the same period, which is broadly in line with GNP. For every year in the period with the exception of 2002, we have run a general Government surplus and by the end of this year our debt ratio will have fallen from approximately 38% to approximately 25% per cent, which shows that the public finances are in a very sound position indeed.

Claims about increased taxation are simply not supported by the facts. The average tax rates have fallen for all categories of taxpayer since 1997. All employees have seen their average tax rates fall since 2002. People are earning more and paying proportionately less tax. There is greater equity in the tax system and more people are paying no income tax at all. Approximately 80% of people pay less than 20% of their wages in income tax. This year, more than 750,000 people on low incomes will pay no tax at all compared with fewer than 400,000 in 1997. For a married one-earner family with children on 150% of the average industrial wage, the reduction has been from 24.4% to 16.8% of gross income.

I refute the accusation that the Government has adopted an approach to health care that is driven by profit rather than care. The approach of seeking to meet priority health care needs though an appropriate combination of public and private provision of services on a value for money basis means that greater progress can be made in meeting those needs than would otherwise be the case. Health has consistently been a key priority for the Government. On a pre-budget basis, we will be spending some €14.6 billion on health next year. Health spending is set to reach 7.7% of GDP next year, which is 9% of GNP. This compares favourably with international trends and is above the EU average.

The major improvements in health services outlined in my opening statement in this debate have been made possible by the significant increases in front-line staff provided for by the Government, with almost 2,400 additional medical and dental personnel, almost 8,400 additional nurses, more than 750 additional consultant posts bringing the total to more than 2,000 and more than 8,000 other health professionals, such as speech and language therapists, physiotherapists; social care and social workers; psychologists and environmental health officers. The Government has undertaken radical reform of health services through the establishment of the Health Services Executive to improve the management of the health services. The Health Bill 2006 is continuing this process of reform and will set up an independent statutory body, as part of the Health Information and Quality Authority to establish standards and inspect all nursing home places, both public and private.

I wish to address claims that no provision has been made in the Estimates for environmental issues arising from energy use. As indicated in the recently published Green Paper on energy, the overall aim of our energy policy is to ensure that Ireland can develop sustainable sources of energy, increase our energy efficiency and improve the security of our energy supply. Investment in research is vital in order to support national energy policies. Some €14.7 million has been provided for energy research next year, which represents an increase of more than €10 million over the amount provided for energy research in the 2006 Estimates. Some €2.5 million has also been provided for energy efficiency initiatives, including the continuation of the national advertisement campaign designed to highlight the changes that individuals can make in order to reduce wasteful energy consumption.

The Government's commitment to the environment is further demonstrated by the substantial investment in the environment across a number of Votes. More than €81 million has been provided for the farm waste management scheme to help farmers meet requirements of nitrates directive while the allocation for forestry is €114 million. An additional €28 million, bringing the total capital provision to €427 million in 2007, is provided to support enhanced investment in water and sewerage services. An additional €7 million in current expenditure is being allocated to the Environmental Protection Agency to support its ongoing work and in particular the new demands of monitoring the EU water framework directive.

On the issue of the purchase of carbon credits raised by Deputy Boyle, the Government is strengthening arrangements in this regard. Under legislation to be introduced by the Minister for the Environment, Heritage and Local Government, the National Treasury Management Agency will purchase the carbon allowances by making a drawdown, as and when required, from the central fund. This will give the NTMA the flexibility it requires to purchase the credits. There will be an Estimates provision in the Environment Vote the following year and subsequent years to repay the central fund, which will ensure full accountability and transparency in the purchase of the carbon credits.

Through the robust value for money framework now in place and our reform of the Estimates, the Government is determined to ensure full value for money and accountability in the delivery of public services. Before the budget, we are providing an extra €4 billion for spending on public services, an 8.1% increase. Of this, more than €3 billion is for current spending on day to day services and almost €1 billion is for capital purposes.

We remain committed to pursuing the sound fiscal and economic policies which have provided the resources to fund real improvements in public services and to target priority social needs. On budget day I will provide for a social welfare package and some additional expenditure on health. I commend the motion to the House.

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