Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

Maybe not. I am delighted to see that we are getting more than €2.5 billion back, but I do not think people realise that we are paying that sum into the EU's coffers this year. My point - which I will continue to make until people are tired of hearing it, so that maybe somebody will act eventually - is that it is never discussed in this House. It is excluded because it is called non-voted capital expenditure.

In addition, this year we are making an Exchequer contribution to the insurance compensation fund of €272 million. The promissory note payments for certain banking institutions amount to €3 billion. The ESM share capital obligation is €510 million, while miscellaneous payments amount to €34 million. Given the €510 million for the ESM capital obligation, where is the ESM helping us out in dealing with our debt, including what we had to invest in our banks in taking a shareholding? I note that €510 million is going from Ireland to the ESM this year, but I thought the traffic should have been going the other way. It is extraordinary, given what we did to look after German bondholders, that we have to pay €510 million to the ESM this year. That is on top of the same amount paid last year.

This year alone we will be paying out in the order of €15 billion in non-voted expenditure, yet there is no discussion about it in this House and no reference to it in the Minister's legislation. The legislation is good in so far as it goes, but what it leaves out needs to be examined in further detail. We will come back to ask about these matters in due course. All those items are not included on constitutional grounds. One cannot discuss FEOGA, payments to politicians, the ESM capital obligation, payments in respect of the Kinsale gas field, and postage for referendums. All of these issues should be discussed here annually. It is not right to have a debate that only deals with certain elements of expenditure while we are not allowed to discuss other matters.

I wished to ventilate those points concerning what is not in the legislation. It has been a fault with the whole expenditure process in this House for a quite a while. The largest areas of expenditure are excluded from the Bill before us, so to that extent the legislation is deficient.

I now wish to move on to some other points. The Minister referred to the Estimates procedure in his opening speech. It was nearly the last sentence in that contribution. Barring those of the Department of Public Expenditure and Reform and the Department of the Taoiseach, none of the Estimates for line Departments have gone to committees yet. We will be here in June passing that. The Minister is talking about a new enhancement of the Estimates process, yet we do not even get to discuss it in the first half of the year. That is a poor reflection of the process. Is someone trying to fool us by calling that an enhanced Estimates process? We are discussing it halfway through the year when most of the money has already been spent. That is not a process at all and it is certainly not an enhanced one.

The voted expenditure we are discussing also takes into account net expenditure after appropriations-in-aid. Therefore, income raised by line Departments is included and netted off against an expenditure ceiling. As I said earlier, all expenditure has to go into the Central Fund, except where legislation states that it can be retained directly by Departments which use it to offset their departmental expenditure. Therefore, they must go to the Minister, Deputy Howlin, when voted expenditure is reduced by the amount of the funds they collect.

I will mention one or two issues that arise under the heading of expenditure in aid. In the Department of Health alone, €1.5 billion of income is raised through the Department. The biggest part of it is the amount raised from private insurance companies for private beds in public hospitals. The tobacco levy is also included, as well as a number of other items. I am not exactly sure into which account in the Department of the Environment, Community and Local Government or the Department of Transport, Tourism and Sport motor tax goes. Such issues arise from those figures, yet they are not being discussed as part of this legislation but are being netted off in the expenditure figures we are discussing. It would be more useful if we discussed the total income for the State in those areas that are not captured in this legislation and the total non-voted expenditure.

The budgetary system has been criticised, and rightly so, for facilitating levels of annual expenditure growth that were not prudent over the years. This is illustrated by the fact that there was average growth of 10% in the years 2001 to 2007, which outpaced economic activity in the country at the time. One of the flaws in the budgetary process at that stage was that while there was always a three-year expenditure plan, one analysis of expenditure growth identified as a shortcoming in the system the fact that there was almost a complete focus on the current year in setting the Estimates. The Department of Finance undertook a study which showed that the first year's outturns - those voted by the Dáil as part of the Estimates each year - typically came in within approximately 1% of the projection. I will come back to the thing that blew that figure out of the water last year, which was the largest Supplementary Estimate in the State, after the setting up of the Department of Public Expenditure and Reform. I do not understand that. The second year outturns came in ahead of projections by 6% because people were over-optimistic in what they projected the expenditure figure to be, including restrictions. The projections for the third year were out by 12% on average. In other words, every time somebody produces a projected figure for the next 12 months, even though it is done as accurately as possible, there is always a rose-tinted-glasses approach to figures for the second, third, fourth and fifth years. We always think there will be more growth and that the figure will be better. This probably applies just as much in the private sector, with companies going to banks seeking finance. It certainly happens here with public expenditure figures also, including the budget deficit and growth figures. It is good to be optimistic but somewhere along the line all those figures have been proven by the Department of Finance to be between 6% and 12% off the mark. We need to get that in order, so it is important to have tighter medium-term fiscal targets.

The Department of Finance acknowledges that our budgetary system is based on cashflow. All private businesses work on their income and expenditure and have figures for debts incurred and money owed. While it has its uses, our budgetary system is basic and simplistic. People understand what is taken in and what goes out, but it does not take account of money owed or debts incurred, which are omitted. It is also recognised that the system does not facilitate proper multi-annual planning, as it works on a cash receipts basis. Therefore, the system needs to be adjusted.

The Minister mentioned some key reforms of budget matters. In 2006, we brought in the pre-budget outlook to replace the previous approach, under which an economic review and outlook was published each summer by the Department of Finance.

In 2007 we produced a unified budget approach under which the annual Estimates of expenditure were published separately. They were the abridged Estimates but now it is a unified budget approach and that is important. We also have the annual output statements, which have the potential to be very good, but have not got there yet. Some of the changes the Minister is bringing in regarding the budget Estimates process are very good but some have yet to be implemented.

There have been some developments as a result of international developments. The EU-IMF programme has made us change some of our rules. The legislative programmes in terms of the six-pack the Minister mentioned have made us change some of our approach and that is welcome. The adoption of the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union, known as the fiscal compact treaty by the Irish people, was a key element in why we are doing what we re doing here today. The medium term expenditure framework to which the Minister referred is consistent with the document I referred to. The medium term fiscal statement is important there too. They all contribute into the discussion we are having here.

Last year the Minister published a schedule for the expenditure ceiling within the Department but it has already been breached by the Departments of Social Protection and Health and he had to give them more money because the Ministers could not be reined in. I would like the Minister to have a strong arrangement in place when the EU-IMF troika leaves here in December, so that there will be proper expenditure control on those two Departments. We had the largest Supplementary Estimates in the history of the State here last year. I mentioned this in passing before and I will not labour the point. Some €1 billion had to go through in December for the Departments, some of it connected with the two Departments I just mentioned. I have also mentioned that the 2013 Estimates timescale is hopeless. There is no organisation. We would support the Minister. Thank God, because of the EU we will have our budget Estimates in October this year and our Estimates should be completed before the end of the year, which will be very helpful. We will fully support the Minister on that.

I say to my colleagues in the House, "Please pay attention to the Estimates debate at the committees." I have seen the following in some committees in this House year in year out, on all sides of the House, whether Government or Opposition. The Minister comes in and gives an opening statement, and there could be €10 billion going through a Department and they spend time talking about one small aspect of that sum. Years ago Deputy Rabbitte, when he was in opposition and on the Committee of Public Accounts, did an analysis of the time spent by the various Dáil committees studying the Estimates, and the average time was less than 90 minutes. Only one committee, the finance committee, had even spent more than two hours.

Deputies will spend the rest of the year complaining about Government expenditure, the money being spent in Departments and waste, and yet when they have the opportunity to grill the Minister and the senior officials at the Estimates debate they give it only cursory time. I plead with Members to take it more seriously. I ask that in future the Minister considers the social impact of the Estimates and ensures they are poverty-proofed, gender-proofed and employment-proofed.

Spending on public private partnerships is not included in this. Another item excluded from the legislation is what I would call the tax incentives. We do not know the cost-benefit ratio of the many tax incentives. Some of them are valuable in encouraging private expenditure but they should be factored in and counted as income foregone as part of this issue, almost like an expenditure.

I have covered most of my points. The Minister has inherited the spending pattern across all the Departments and he has given them all a ceiling. Somewhere along the line the Minister should stand back and ask whether that is the proportion we would like to spend. He is tied by the current spending commitments in the historical arrangements of what we spend in each Department. Perhaps there is a need for some Departments to get a higher proportion than others in the future and that is something that needs to be looked at.

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