John Gormley (Dublin South East, Green Party)

We should be honest in admitting that there are no votes in this respect and where there are no votes, people will say that we can afford to cut expenditure in that area. That would be the wrong attitude because politics has to be underpinned by a set of principles and values and defending the world's poorest is something that needs to be maintained going into the term of the next Government.

On my Department's Estimates, reflecting the extremely difficult position in the public finances, and in common with other Departments, budget 2011 sees a reduction in the financial resources available to my Department – down from €2.2 billion in 2010 to €1.6 billion in 2011. In response to the new financial situation since 2008, the Department has in its programmes developed and maintained a strategic focus on contributing to economic recovery, assisting those in need of support and protecting and enhancing the environmental resource base on which economic progress ultimately depends. This strategic focus will continue in 2011, using the significant resources that are still being made available.

The budget provides for Department current spending of €599 million in 2011 compared to €686 million in 2010. The reductions in the 2011 Vote on the current side mainly affect Exchequer support for the local government fund and savings in the environmental and built and natural heritage areas. Certain areas of Vote spend will be substituted by expenditure from the ring-fenced environment fund, which will amount to €101 million in 2011. The budget provides for Department capital spending of €1.002 billion in 2011.

While there is a significant reduction in overall terms, the main effect will be to extend the timescale for full implementation of programmes, while taking account of refocused priorities in the current economic context and getting greater value for money, through more competitive tendering and greater efficiency, from the €1 billion which will still be invested in Department capital programmes in 2011.

Turning to water services, there has been a radical transformation in water services infrastructure in Ireland in recent years. More than €5 billion has been provided by the Exchequer for water investment in the period 2000 to 2010. This has enabled some 476 major projects to be completed in the period 2000 to 2009, resulting in an increase in water treatment capacity equivalent to the needs of a population of 1.1 million and an increase wastewater treatment capacity equivalent to the needs of a population of 3.7 million.

Compliance with EU urban waste water treatment directives on secondary waste water treatment facilities now stands at some 92%, whereas at the beginning of the decade the figure was approximately 25%. The provision of €435 million in my Department's 2011 Estimate to fund the provision of water services infrastructure must be seen against this backdrop and the much more competitive tendering environment in the past two years, which has led to significant reductions in the tender prices for water and waste water schemes. This level of investment in these difficult times is a clear statement of the priority which the Government is giving to preserving and protecting our water resources, meeting EU standards for drinking water and waste water treatment and providing critical infrastructure that will ensure ongoing support for economic development.

Investment in water services must strive to ensure that it meets demand in critical locations for industrial and commercial development in order to facilitate economic recovery. That is why my Department carried out a root and branch review of the water services programme in 2009. A new carefully targeted programme covering the period 2010 to 2012 was published in April this year and I am confident that the contracts included in the programme are well aligned with economic and environmental objectives.

There are currently 120 major water services capital contracts in progress and these will continue to be funded up to 2011. New work in 2011 will be targeted on key projects in the programme required to meet the strategic needs of gateways and hubs, critical mains rehabilitation, improving drinking water supplies with identified risks and upgrading of waste water infrastructure required as a result of European Court of Justice cases and the measures required under the Water Framework Directive.

My Department's rural water programme continues to make very good progress in bringing rural water supplies, particularly in the group water scheme sector, up to standard. In recent years, we have been concentrating on carrying out improvements to group water supply schemes which were identified as in need of improvement following the European Commission case against Ireland on non-compliance with drinking water standards. Thanks to the substantial progress made on these works the Commission closed the case last March. The main priorities under the programme in 2011 will be providing the funding necessary to complete any remaining works; continued special funding to allow for remedial works to public water supplies identified by the Environmental Protection Agency as having potential issues regarding the safety and security of the supplies; and the improvement of small public water and sewerage schemes.

As the House is aware, the Government has decided that domestic water charges for households connected to public water supplies will be introduced in the next few years, preceded by the roll-out of a programme of metering. As indicated in the National Recovery Plan 2011-2014, the metering programme will be funded by the National Pensions Reserve Fund. The installation of water meters in households will strengthen the capacity of local authorities to manage their water distribution networks; it will also provide an incentive for consumers to reduce their consumption of water and should, as a consequence, reduce both the operational and capital costs for local authorities.

In addition, metering will provide an opportunity to address customer-side leakage, leading to both improvements in the networks and further cost savings. The move to universal water metering will lead to a transformation in the way people use water, improve value for money and lead to a customer service focus in the provision and management of these services. It will also significantly change how these vital services will be funded in the future. The labour-intensive metering programme itself will have the key advantage of providing badly needed jobs in the construction sector.

Turning to housing, my Department's capital resources are being scaled back for 2011. The year will see continued restructuring of the social housing investment programme towards greater levels of delivery under the rental accommodation scheme and leasing, and with a lesser need for capital finance. While this shift in emphasis is being accelerated by the current economic and financial climate, it is a change that my Department has been developing for some time on the basis that it is right to work towards a system of graduated and flexible housing supports to meet the varying needs that exist at the different stages of the life-cycle. We are maintaining in 2011 a continued strong commitment to economic, social and physical regeneration of the country's most disadvantaged communities through the provision of €172 million towards major regeneration projects and remedial works, including Limerick regeneration and the Ballymun work.

In Limerick, for example, this will allow significant progress be made following the approval by Government in June this year of the phase 1 implementation plan. The planning and design stages for a number of new housing developments are being fast-tracked to have construction commencing as early as possible in 2011. Given that some 500 houses have been demolished or boarded up at this stage, there will be a strong emphasis on building replacement units in the early stages of phase 1. In addition, 2011 will see the provision of €32 million in dedicated funding to support labour-intensive efficiency improvements of the public housing stock through the retro-fitting programme. In addition to the main capital programmes, we are also making a provision of some €47 million in respect of the smaller capital programmes in the fire, heritage, libraries and other areas.

As the House is aware - we considered it in a debate last week - we have witnessed very severe weather in many parts of the country recently. Local authority staff have been working around the clock with other State bodies and transport agencies to minimise disruption and to ensure society functions as close to normality as possible. I again thank all involved for their exceptional efforts and the spirit of public service that they have so clearly shown.

In recognition of the severity of the issue, I am pleased that I have been able to make available an additional €15 million in contingency funding for those local authorities most in need of supplementary funding. This is aimed at covering exceptional costs for them associated with the extreme weather experienced.

Looking ahead, all parts of the public service must operate within the very difficult financial realities we face. The local government sector must continue to play its part by curtailing and reprioritising expenditure in common with the approach of central government. While I will continue to support local authorities next year through significant general purpose grants from the local government fund towards the cost of providing their day to day services, it must be recognised that the financial pressures we face in central government will impact on the grant allocations that I will be in a position to make to individual authorities.

The Government must make savings in its expenditure programmes and the Exchequer contribution to the fund is not immune. Exchequer support for the fund is set at €164 million in 2011, in addition to income from motor tax of €950 million. In addition to the water charges that I mentioned earlier, the National Recovery Plan2011-14 provides for a new site value tax. A flat rate "household charge" will be introduced in 2012 as an interim measure. It will be followed in 2013 by a final site value tax, which will be introduced when valuations have been completed.

The new tax will offer a more stable, sustainable and reliable source of local government finance. The initial estimated yield from the household charge is €180 million in 2012; this will rise to €530 million on full introduction of the site value tax, or an average of just over €200 per dwelling or site. Whereas the measure will involve additional costs for consumers, it will also widen the financing base for local government, which provides essential services in the community.

Although the 2011 local government fund Exchequer contribution is down, it will be supplemented by the pension-related deduction that was introduced in 2009. Local authorities continue to retain the full proceeds of the deduction, which are estimated at approximately €80 million in 2011. Revenue from the charge on non-principal private residences will provide additional income to local authorities in 2011 of over €60 million.

I have not listed many of the areas in the Department of my colleague, the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan. Great strides have been made in investment in renewables and retro-fitting programmes, and the Minister has repeatedly stated that these produce jobs for those in the construction sector while reducing significantly our carbon footprint. I have had the opportunity to listen to the contributions of Deputies Kenny, Gilmore and Howlin, who made reference this morning to climate change legislation. I am pleased to tell him this will be published shortly.

I had an opportunity to reflect on the contributions made this morning. As I stated, the analyses of the budget, including those of commentators, are undoubtedly correct in many instances. This is a difficult budget. The question members of the Opposition must answer is exactly what cuts they would reverse if they were in government. In all likelihood, the Fine Gael Party and Labour Party will have overwhelming numbers to form a Government shortly. I listened to contributions of Opposition Deputies and did not hear what measures they would reverse. Would the Opposition reverse the reduction in the minimum wage? I do not believe it would do so. Deputy Joe Carey appears to be indicating it would but I doubt it.

The Opposition parties know from the meetings they had with the European Commission, International Monetary Fund and others that this eventuality is extremely unlikely. Let us have a little honesty. The Opposition should inform people which of the draconian cuts, as it described them, it would reverse. I do not believe it would reverse any of them.

We heard about heavy lifting. The heavy lifting has been done. It is unprecedented in Irish economic history to remove €14 billion from the economy, followed by a further €6 billion. To lift a heavy object, two people need to work in unison. I fear the Fine Gael Party will go in one direction-----

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