Seán Fleming (Laois-Offaly, Fianna Fail)

I welcome the opportunity to speak on this subject. I recognise that we do not have the level of expenditure for these areas that we might have liked or that we had in the past. Some reduction was possibly necessary in capital expenditure and other expenditure headings, but the document in front of us, which was published by the Minister for Public Expenditure and Reform, Deputy Howlin, last week, goes a little too far and deep with regards to cuts in capital expenditure.

It was intended to spend approximately 3.5% of GNP on capital expenditure in 2012 but this document cuts this figure to 3%. The 2011 budget for capital expenditure is €4.65 billion. We proposed that this should be reduced by approximately €350 million to approximately €4.3 billion and everybody accepted this. The document proposes to cut this figure to €3.9 billion which reduces total capital expenditure next year by €750 million compared to this year. That immediately translates into people who are working on the €4.6 billion worth of projects this year in order that approximately 9,000 fewer people will be working on those jobs next year. That is because the budget for capital expenditure in 2012 will be cut to €3.9 billion. It surprised me that twice in one week the Minister went public with new documents of this nature. Just a few days after that he came up with another figure, saying that he would cut public service numbers by far more than was previously understood to be the case - another 12,000. I understand it is a coalition Government and there have to be compromises. I also understand that Fine Gael wants to cut the public service right, left and centre but it was disappointing that the Minister went so far down the Fine Gael road on that particular issue.

As regards the limited resources available to us, it is a question of how one prioritises the amount of money one has. I think the Minister of State, Deputy Kathleen Lynch, will support me on this important point. The first chart in this report's executive summary shows that roads and public transport will get 25% of this infrastructure and capital investment programme in the next couple of years. Environment and housing will receive approximately 19%. Much of the environment budget concerns waste water treatment services, with which we all agree. Meanwhile only 13% is being invested in the future of education. More disappointingly, however, health is only getting 11% of the €3.9 billion next year and from the €17 billion in the programme. As a percentage of expenditure and the Government's priorities, health has therefore been relegated to one of the smallest levels of any Department. I would have thought that health warrants a higher priority, as should education. However, the Government has chosen to give 25% of the entire capital programme to roads and transport, as well as another 25% to housing and the environment. At the same time, we are spending less on health and education combined than on roads.

We do have a massive roads infrastructure and I would like to see extra road projects. We have built motorways and additional Luas lines as well as toll bridges, underpasses, overpasses and flyovers. That infrastructure is a credit to where we are today and it helps competitiveness, but in times of scarce resources I thought that health and education would have featured more strongly in terms of the Government's priorities. If capital expenditure in 2012 is to be €3.9 billion, then so be it. I would like it to be more but that is a Government decision. Within that figure, however, I am disappointed that health and education are to receive so little. I would like to concentrate on those kinds of issues and I would support a rejigging of priorities within the overall budget to give greater priority to health and education. If children do not get a good education, it will cause difficulties later. Equally, older people also need to be looked after. Deputy Stanley and I were with the Minister for Health, Deputy Reilly, last night talking about the closure of nursing homes for the elderly in Abbeyleix and Shane. The Minister was convincing and I was happy with the outcome of the meeting because what he is trying to do sounds positive. Although it is running against this direction, he wants to maintain as many people in HSE facilities for the elderly as possible. That can be done for a small extra amount. I know HIQA has new standards coming in but the figures being brought forward in that area would be a tremendous boost for the health services which need it.

As the main Opposition spokesperson on the public service, I told the Minister that we would support lifting the recruitment embargo for nurses. I think everybody in the House would support such a move because that embargo is causing the problem with all those nursing homes. Nurses are retiring and are entitled to do so as part of the agreement by moving out before next spring. If teachers or doctors retire, they are replaced, as psychiatrists and psychologists can be. By and large, teachers are exempt from the recruitment embargo, although some posts are not, such as non-teaching principals and assistant principals. Generally, however, if a mainstream teacher leaves a classroom, that teacher will be replaced and the same applies to doctors, surgeons and consultants. We now need to do the same for nurses. We would therefore support a reallocation of priorities within the budget to help health services and the education sector.

There is no mention of job loss or creation figures in this infrastructure and capital investment programme. None the less everything we are doing now should be focused on jobs, which is the biggest issue. The more people we get back to work, the fewer we will be paying on social welfare. The priority should be about jobs, although there is nothing in the programme about that, apart from job reductions. The same applies to the other public sector reform document I mentioned. There is nothing in it apart from job reductions.

It is intended to raid the National Pensions Reserve Fund for another €250 million. Last July, €500 million was raided by way of the pension levy, but that money was not spent on job creation. In fact, the majority of it has still not been spent. I know people on the Government side are smiling at me but those are the facts. More than €200 million of that has not been spent, although they say it will be spent next year. That may be so but the money is being deducted this year for job creation, yet it is not being spent. The Government is upfront and accepts that the money has not been spent. It is in the Government figures which were produced at the end of September. Nonetheless the Government reduced VAT in that jobs initiative to increase employment. However, it is now proposing to increase VAT in the forthcoming budget. People may say it has not been decided but we know it has been. As that will cost jobs, I cannot understand where the Government stands on jobs. It reduces VAT to help job creation but then turns round with the biggest macroeconomic statement of the year to announce a VAT increase. By definition that will cost more jobs. When one adds up the loss of jobs in this infrastructure and capital investment programme and those announced by the Minister, Deputy Howlin, last week for public service reductions, which are greater than those ever planned by the Labour Party or Fianna Fáil going into the last election, as well as job losses as a direct result of the budget, it is worrisome that priority is not being given to jobs.

I would like to see this plan being fleshed out further. Where construction work is going ahead, including on school buildings, a mechanism should be put in place so that small and medium-sized local businesses will get an opportunity to tender for such jobs. Most tendering bodies, whether they are local authorities, the HSE, the Department of Education and Skills or other Departments, only want companies that have had a massive turnover in the previous year to be allowed to tender. The majority of companies that are well capable of doing this work are not even allowed to tender at the moment. As a result, big companies are getting all the work while small and medium-sized companies lose out, although they do provide local employment. For example, in County Laois about four or five schools are under construction but not one of the contractors comes from Laois, and some of them do not even come from Leinster. They are coming from all over the place.

It is well documented in the Department of Education and Skills that people who are in the black economy are working on every publicly funded contract in County Laois. The main contractor employs subcontractors who, in turn, employ other subcontractors, and they employ people who are on the dole. They are working at a cheap rate. I have documented these matters regularly and have given examples to the Department of Education and Skills. The Minister for Education and Skills, Deputy Ruairí Quinn, is having a meeting on that issue because if they are publicly funded contracts, we must ensure that people in the white economy get those jobs, not those in the black economy. People who want to work properly should not be disadvantaged by those working in the black economy. I do not even need to put it on the record here because it is well documented in the Department of Education and Skills by way of correspondence. When I make statements like that, I always back them up.

I welcome the fact that we do have a plan but I am disappointed that priority has not been given to health and education.

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