Richard Bruton (Dublin North Central, Fine Gael)

Later this year the Minister will award himself a salary of €270,000, which will give him more than twice what the US Treasury Secretary, Mr. Paulson, earns. We will need to apply strict performance rules if the Minister takes that pay increase.

I would look to his record and ask a serious question on the extent to which he has addressed the economy's needs in the series of budgets he has introduced. Every one of those budgets was expansionary except this year's and they were introduced against the opposition of groups such as the IMF, which considered their impact on our competitiveness down the road. These expansionary budgets were introduced at a time when the property sector was booming and we had close to full employment. The difficulty is that the actions of Government fuelled an unsustainable, debt-driven property boom. The decision to remove the tax reliefs to the building sector was continually pushed back — they will not be entirely gone until July next — when it was plainly obvious in 2000 that these tax vehicles were driving the property sector in a way we did not need.

A further difficulty is that the Government's repeatedly expansionary approach of increasing public spending by on average 40% more than the rate of growth of the economy has put pressure on prices. Inflation, as the Minister points out in one part of his speech, has been running approximately 50% faster than in the rest of the EU, although he chooses to highlight the one month in which we appear to have converged. The difficulty is that the erosion of our competitiveness has happened over a series of years and the fortunate or unfortunate discovery that we happened in one month, December, to have a similar inflation rate to the rest of the euro zone has not changed the reality of our competitiveness problems.

The issues in regard to public service reform are ones the Minister has totally failed to address. The elephant in the room, which no one will face up to, has been the drive to implement decentralisation, which was ill thought-out from the beginning. I do not believe any public servant could stand over the claim that these were strategic decisions based on the best implementation of the public service. One year after the deadline, we are still struggling to achieve less than 10% of what was projected. The amount of public service energy that should have been devoted to delivering strategic change on climate change and e-government, strategies which failed, were dissipated in this pointless exercise. We need a decentralisation programme that is strategically based, well thought-out and implementable. We do not need what has happened in recent years, when huge energy was devoted to undermining the capacity of the public service to deliver change.

By its decision to pay itself and top earners huge increases in public pay, the Government has totally undermined its credibility when it turns around to others and suggest this is a time for wage restraint. How can one ask the ordinary worker on the shop floor to accept it is time for wage restraint when he sees the bosses in the public sector being paid big increases without a demand for performance and without productivity tests being applied? This is the underlying flaw in the Government's position. It looks to others to meet the highest standards of productivity and to tighten their belts yet when it comes to applying the same principles to itself and those at the top of the public service, it claims there is no need to consider performance or productivity and states it will simply apply a pay rate calculated and imposed by some outside group. The Government claims everything in the garden is rosy but this is not the way it works in the real world. If the Minister is serious in the rhetoric about competitiveness, performance and productivity which was speckled throughout his speech, he would know this must apply to himself and senior public servants, particularly if we are to deliver the agenda he has set out for us.

The difficulty is that the Government persists in managing its own resources as if productivity does not matter, it does not need to deliver efficiency and the strategic plans it announces do not have to be delivered. It acts as if someone does not have to be held accountable for the consequences when these strategies go off the rails. With regard to public transport, the Government has not delivered integrated ticketing or competition, although these were solemnly promised by Ministers, but no one takes responsibility. The climate change strategy was announced in 2000 but nothing has been delivered and there has been no change in the trend line of Ireland's emissions of carbon dioxide, yet no one took responsibility. With regard to e-government, the Minister had a high level Cabinet group and a group of Secretaries General and assistant secretaries but nothing happened and no one has taken the consequences. The Minister and the Secretaries General do not feel they are responsible. If an important strategic statement was involved, there should have been a roadmap with various milestones to be met. If a milestone was not met, those responsible should have had to explain why not.

We seem happy to accept that less than half of what was intended was achieved. No one bothers to put up a hand and admit that he or she failed. It is not good enough. If we are talking about building a knowledge economy and building at the front end — the Minister's speech referred to how service exports will be built at the front end — the Government must take the issues seriously and drive e-governance and the application of information technology in government and people must be held responsible for it. The tragedy is that we have probably reached a stage where there have been so many disasters in this area that public servants would probably see it as the end of their career to take on ICT projects. No one will put up his or her hand and say "I will drive an ICT project" because he or she has seen the pattern. This is a serious reflection on what has been happening and the laxity in the way strategic plans are drawn up, tested and applied.

It is a serious problem which has run through many areas. At the end of the day, competitiveness will be driven by the quality of our public service in many areas, and our ability to think strategically and make the necessary reforms. In communications, for example, we are way behind on broadband because we botched the privatisation of Eircom, which was denuded of resources by a private sector company which wanted fast bucks and did not invest in the network. We have been left with the consequences. These were Government decisions yet no one troubles to ask why this was so seriously botched.

While I am not blaming Ministers for all this, there is a major and repeated underlying failure to deliver in areas where the Government holds the ace cards. Ireland has slipped in competitiveness, although the Minister's speech says it is regarded as one of the best places in the world to do business. He should have added that we have slipped 17 places in the rankings in the past six years. The Minister's scriptwriters did not put that in because they do not want to face up to it. The sad point is that many of the reasons we are slipping in those places are generated from within the public sector for which the Minister is ultimately responsible. If the Minister took care to examine reports by the National Competitiveness Council or any other bodies that examine why Ireland is sliding, he would see we are bottom of the league for ports, communications and energy infrastructure, all of which are Government responsibilities. The same theme is repeated when one talks about competitiveness but the Minister does not mention the issues that must change. It makes me despair when there is no strategic change of mind that would be necessary for us to survive in a tougher environment. The property boom is over and it will not recur in the same way so we must now return to basics and survive as a small open economy capable of trading.

From 1995 to 2000, export volumes grew at 20% per annum. The Minister and his Cabinet colleagues are now lauding achievements at one quarter of that figure. A little over 5% growth in exports is regarded as something wonderful but that illustrates the measure to which expectations and ambitions have fallen within Government. The belief that a small open economy no longer needs to be driven by exports seems to have taken hold within Government circles. If we continue to think in those terms we will pay for it. I can see nothing in either the Finance Bill or the Minister's statement to show that the Government is doing what the National Competitiveness Council asked, to have a national plan to deliver competitiveness. There is no such project.

The Government has addressed regulatory reform but it has not put its money where others have. It has not said it will reduce costs by 25%, as other governments have done. The Minister is backing off and is unwilling to put his name on the line to bring about changes and make people accountable for delivering regulatory reforms in different sectors. He is backing off from that. Although the Taoiseach said he would aim at the 25% target, no Minister, including Deputies Cowen and Martin, will say "Yes, we will set a figure of 25%; here is the baseline and this is our strategy to deliver a 25% reduction." One must act that way to back up the rhetoric. I have no problem with the Minister's rhetoric but I do not see the changes being made to match it.

Perhaps I have been too long in the job as Opposition spokesperson, but I am getting really frustrated with the Finance Bill as a process. According to the Revenue Commissioners, the amount we are dishing out in tax expenditure, as the economists would call it, apart from PAYE, marriage and other personal tax credits, is €9 billion. That is more than all but three Departments spend. It is more than the Department of Education and Science spends but where is the scrutiny? If the Minister for Education and Science proposed some higher education projects or plans for autistic children or disadvantaged schools, the Minister and his officials would go through them with a fine-tooth comb to see if they were justified. However, there is no scrutiny for this €9 billion expenditure under the tax code. We are not even told what the expenditure is expected to achieve.

No effort has been made by the Minister or his Department to offer a view of the tax code. For example, why is there €3 billion in relief on pensions this year? Everyone knows that pension provisions are important but the ESRI recently showed that 80% of that money is going to the top 20% of families, so does that continue to be good public policy? That matter is not debated in this House; we just pretend that the existing amount of tax relief is, by some strange chance, perfect and so we keep going.

The Finance Bill and the Minister's speech deal with only a few marginal changes. I do not object to many of them, which are worthy, and I will support them on Committee Stage but they are not part of the big agenda of how we can reform Ireland Inc. If we want the tax code to be up to scratch we must be willing to place it under scrutiny, which the Minister has repeatedly been unwilling to do. The one time he did so, when he commissioned work on tax reliefs, it was found that they cost twice the benefits involved. It was found that at the time the Minister started to withdraw them, 60% of the costs had not yet been incurred. It was a commitment over the next 13, 14 or 15 years on something that was not washing its face.

The Minister and his predecessor delayed an examination of those reliefs, which probably should have been withdrawn in 2000 or 2001, if they were ever justified in the first place. However, they persisted and we are only seeing the end of them in 2008 after a long property boom when they were totally unjustifiable. If we had the sort of scrutiny I am talking about, including an obligation on the Minister's officials and the Revenue Commissioners to give us some information, that would not have happened. The Minister should not have allowed it to happen, yet he is quite happy to come here again and he has not learned the lessons. The lessons at that stage included introducing a sunset clause on all new ideas, but I see no sign of such a clause in this Bill. I am sure the Minister spent money on that report, which was a good one in so far as it went, but he has not learned from it. The Minister is not offering cost benefits on any of the new reliefs. Why is he willing to allow his officials to get away with something that he would not allow the Minister for Education and Science or the Minister for Health and Children to get away with? This double standard will not deliver the best methods for public expenditure.

I am disappointed at the way in which the Minister is handling pensions. Everyone knows that we need to reform the pension structure. The ESRI's finding just puts figures on what we have all intuitively known. Half the population does not have any pension, while the vast bulk of tax relief is going to those who can make big pension contributions of up to €250,000. I acknowledge the Minister inserted a cap but it is at a very high level. The truth is that the €3 billion of taxpayers' money we are using to subsidise pensions is benefiting people who are particularly privileged. We should examine that situation to see what changes we need to make but such an examination is being put off. When Deputy Séamus Brennan was Minister for Social and Family Affairs he said we should have a one-for-one scheme and at least offer a real incentive for people up to a certain income, building on the back of the SSIA's success. Why have we put that off? It is not a big cost item and it could be accommodated as part of a coherent strategy. It could be funded, if necessary, by putting caps elsewhere to take it out of the existing €3 billion expenditure. I do not see why we should have to keep delaying these issues that are staring us in the face and need to be addressed.

Once again, this year's Finance Bill persists in not exposing the whole tax system to scrutiny. We are selling the electorate short because we are not putting the system under scrutiny. When things go wrong with public expenditure and people realise we spent it badly, we will not be able to say that we did our best to scrutinise it at the time. We certainly did not do so in respect of all those reliefs that were abolished because they were shown not to be washing their faces.

Last week, the IMF gave us a fairly timely warning when it showed that a 1% decline in the US economy could result in a 1.75% decline in the Irish economy. We are exposed and cannot pretend, as the Taoiseach suggests, that it is all business as usual, nothing will happen and we will just continue with our policies. We must square up to the issue of competitiveness sooner rather than later. It is not enough to talk about the need for productivity growth unless one starts to drive it from within. The Minister's approach to top civil servants' pay is not consistent with his belief that driving productivity is the way to go. We have also ducked the reform issue in many markets where the OECD and others have time and again told us that uncompetitive practices are persisting. We still do not have competition in the public transport market. It must be eight years since the then Minister for Finance stated this issue had to be addressed. Why did we have to wait eight years for something to happen in this area?

The list of areas in need of reform goes on. Significant challenges are coming towards us. The climate change issue will hit, hurt and cost unless the Tánaiste is a fast mover. However, the Government in 2000 moved to come up with a strategy but nothing was delivered under it. That is not the way to ensure competitiveness and to proof the economy against the tougher winds blowing our way. This must change, particularly when it comes to the Tánaiste's own spending of public money. The test of good governance is not the ability to spend, as a number of Ministers think when they refer to how much their budgets have increased, but the use of that money efficiently to make changes that affect people on the front line. I have heard the Tánaiste make his case previously and while everything is not deteriorating, a number of basic matters he should be able to get right are not happening.

For example, I refer to the accident and emergency department issue. The departments in the Mater, Tallaght and Beaumont Hospitals, which are the three largest in the State, cannot guarantee that old, infirm, vulnerable people who turn up for care will be treated in an acceptable way. There is something radically wrong when the health budget has quadrupled and hospitals cannot do that. Tests need to be put in place and someone's head needs to be on the line when services are not delivered but that does not happen. Last week the HSE blamed the hospitals which retorted that they had not been given additional resources commensurate with our population growth. Someone is right but there should have been a knowledge about what it takes to deliver a health strategy, that does not leave vulnerable people sitting on trolleys for 24 hours but that thinking never took place and everyone is passing the parcel when things go wrong.

Ireland is entering a much tougher period and the Tánaiste needs to move on from his contribution, which contains an element of self-delusion. He referred to Ireland being top of the world and the best place to do business. He said all we need to do is maintain our competitive advantage but we are losing ground in many areas. The Tánaiste is not putting the system under scrutiny. I refer again to value for money within the public service. The first initiative was to deal with one third of public spending through a three year programme. However, that was completely demolished. Under the Tánaiste's predecessor, Charlie McCreevy, 0.25% of spending was scrutinised. Last June the Tánaiste announced 66 value for money audits would be carried by the end of 2007 but only 18 were completed and none identified a saving to be implemented. Such audits must be carried out in meaningful areas and they must have an impact. In addition, people must be accountable if the recommendations are not implemented. However, that is not part of the process and that culture is not being built in. The Tánaiste must change that to ensure value for money audits are meaningful.

Naturally, most of my contribution is critical but I look forward to Committee Stage when we will agree on some issues and disagree on others. Regrettably, I oppose the Bill because it is not adequate in the context of the challenges we face.

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