Enda Kenny (Mayo, Fine Gael)

It might not happen directly, but it is beginning to happen. There is also some rustling in the undergrowth from those who wish to contend against the anointed one. The Minister for Finance has had a favourable press for quite some time. If he was serious about being seen as the iron chancellor, I would have thought he would have measured up in his fourth budget to making some difficult decisions. He funked every difficult decision that faced him. No difficult decisions were taken and the easy option of borrowing €5 billion was taken to balance the books. Yesterday evening Deputy McGuinness said the public service was a shambles with the levels of service and efficiency 20 years behind where they should be. The Taoiseach's comments this morning about a vision for the future, leadership, efficiency and world class standards revealed vastly contradictory elements within the Government. If the Minister for Finance were serious about setting out his charge of leading the Government half way through its tenure of office, or whenever, one might have expected that he would at least have taken the decisions that had to be made for the future. It is a budget without courage or vision and which will not inspire the confidence set out as its hallmark, including in the Taoiseach's speech.

The alarming consequence of the budget is that in the face of a modest slowdown in the economy the public finances have plunged precipitously, turning a €2.3 billion Exchequer surplus in 2006 into a €4.9 billion borrowing requirement next year. This will require at least €16 billion in borrowing over the next three years. The Taoiseach previously said we would eliminate borrowing and Government debt. This is the largest deterioration in the public finances in the history of the State, despite the comments by the Taoiseach and the Minister for Finance. Can we believe their words anymore?

Yesterday the Minister for Finane blamed global economic conditions for the fiscal mess over which he presided. However, the public finances have been left dangerously exposed to a domestic property downturn due to his inability to be competent and face the difficult decisions, the Government's mismanagement of the public finances and reckless cheerleading of an unsustainable and debt-driven housing boom.

Last month experts from the International Monetary Fund reported that no other economy was more vulnerable to a property downturn than this one. The international credit rating agency Standard & Poor's estimated that the economy faced a prolonged slowdown, possibly to 2013, as the property bubble deflated. Even more worrying than the recent slowdown in property related tax receipts has been the Government's longer term ratcheting up of public sector day-to-day spending without any consideration of value for money or public service reform. By urging on the property boom, Fianna Fáil generated a large tax bonanza for itself. This allowed it to increase spending dramatically, faster than economic growth without resorting to traditional tax sources to fund its extravagance.

Most commentators did not notice the tax and spend cuckoo that had crept into the nest. However, the end of the debt-fuelled property boom has shown it up in stark relief. For the last seven years Government spending has grown on average 40% faster than the economy. It has grown as a proportion of GNP from under 25% in 2000 to 31% today. Since the Minister for Finance took office he has presided over an acceleration rate of day-to-day spending growth of 10% in 2005, 11% in 2006 and 12% this year. So accustomed have pundits and commentators become to the Minister's extravagance with taxpayers' money that his promise to slow current spending growth to 8% next year, still 45% faster than the economic growth forecast, is presented as ambitiously prudent.

The budget is an opportunity to reflect on the Government's overall allocation of taxpayers' resources for the achievement of the country's economic, social and environmental objectives. Ireland's most significant challenge stems from Ministers presiding over vital areas of the public sector with inflated budgets which are not delivering results on the front line. I listened to some comments from Ministers on the requirement to face the challenge of making decisions and delivering efficiency in the public sector, but there was no mention of this in the Budget Statement other than waffle and cotton wool. At the end of next year the situation will have deteriorated because this runaway horse is on the road and there is nothing in the budget to control it.

An unfortunate aspect of the budget and all of the Government's previous budgets is that only the marginal tax and spending changes receive attention. There is almost no focus on the €39 billion in current spending allocated to Departments on an "existing level of service" basis. There is little focus on the €27 billion non-social welfare Government spending on day-to-day goods and services. There was the usual lazy assumption in the budget presentation that every euro spent by Departments offered value for money for the taxpayer and that the purpose of the budget was to allocate extra resources on top of historical spending patterns. That is a fundamental weakness in the Government's capacity to deliver efficiency in the public service, not just this year but in the past seven years. The Government has turned its back on the opportunity for public sector reform and achieving real value in the public spend. It has spurned the process of budgetary scrutiny recommended by the Committee of Public Accounts. It allowed the culture of performance initiated in the 1997 Act to be stillborn. It failed to use benchmarking which will cost the taxpayer €14 billion in today's money to leverage real reform. It is five years since I made the point in Killarney that if one was to pay benchmarking, one should build in targets, objectives and specifics for the delivery of efficiency in the public service. I was ridiculed for the cost of €1 billion per year for that benchmarking process. The attitude was pay the money and to hell with efficiency. As a result, we have a public service of greatly inferior quality than we should.

The Government has overseen the expansion of bureaucracy in the Health Service Executive. When one examines the titles of many of the higher administrators in the HSE and tries to figure out their roles, functions and responsibilities, it boggles the mind. The Government has outsourced its job to 178 new agencies, bringing the total at national level to over 630. This issue was raised by Deputy Varadkar when he spoke on the extent of quangos, the jobs they were supposed to do and the waste of public money involved in many of them.

The Government has overseen the high cost overruns on capital projects such as Luas and the Dublin Port tunnel, now in situ and working well but at vastly inflated costs. As a result, the CSO estimates that the rate of inflation in public services has run at an annual average of 6% since 2000, 45% higher than the rate of cost inflation in the public sector in the United Kingdom. If cost inflation in the Irish public sector had been kept down at the UK rate, we would have had an extra €13 billion for tax reforms or front line services in education and health in the period 2000 to 2007, including an additional estimated €3.2 billion in 2007 alone. Mr. Gordon Brown's Government in the United Kingdom insisted that public sector managers target and measure efficiency gains for every Department, delivering a total of €30 billion in efficiency gains between 2004 and 2007. This stands out as something that could have been done here. They are now targeting further efficiency gains of 3% per year by 2010-11, which will release an extra €42 billion for frontline services. In contrast, the Government here has never required Departments to measure or deliver specified efficiency gains. The reference in the efficiency review 2008 says each Department will be required to examine all administrative spending under its own or its State body's aegis. What does that mean when there is no target inserted, no timeline and no specifics? If the Minister for Finance was serious about whipping public service efficiency out to the frontline of delivery, there would be efficiency targets and timelines which would be monitored and reported back to the Department of Finance on a monthly basis.

The measures identified should not jeopardise the maintenance of frontline services. So much more could have been provided for by way of frontline services had this been set out in a realistic, achievable and targeted manner.

In Britain they cut the number of administrative posts by almost 80,000, through technology-driven automation, with a high proportion of those posts being allocated to frontline services in education, health and policing. If the Irish Government had shown any semblance of a comparative level of ambition, there would now be 6,000 fewer administrative posts, with that capacity freed up for frontline services.

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