Brendan Howlin (Wexford, Labour) | Oireachtas source

Perhaps the finest testament to the progress made by this Government in three years is that the anarchy and chaos that defined the final years of the previous Administration seem like they occurred a long time ago. In three years, the current Government has brought stability in the place of chaos, economic growth in the place of decline, and employment in the place of unemployment. If both Deputy Maureen O’Sullivan and I both acknowledged the positive elements in addition to the negative ones and did not get trapped on one side the argument, there might be more relevant points made in the debates in this House.

Where there was a real and substantial threat to the viability of the State, as was a fact three years ago, there is now hope and progress. Although we were once one of Europe's failures with a tarnished reputation, we are now the European country with the best long-term growth prospects.

I made the point during one of my budget speeches that, in time, the Irish will look back at this period not only with regret over allowing the Irish economic disaster to occur but also with pride based on how they knuckled down and fought the way back. There has been a lot of responsibility shown and maturity displayed. We have faced a problem together with not inconsiderable courage. We have resolved it collectively. That fact, more than any other, should serve as a warning to us not to return to the beggar-my-neighbour days of the boom. Undoubtedly there is a lot of work to do. Deputies opposite are right to point that out. The Government knows it, as do the Irish people.

We live in a competitive age. Our capacity to provide the living standards we aspire too for our people, and the public services they deserve, are dependent on our ability to earn our way in the world. We are a proud, resourceful and innovative people. We can compete and we are competing.

Economic growth is not an end in itself, however. It is the building block with which we construct the kind of Ireland we aspire to - an Ireland where effort and work are rewarded, where our children and cherished and supported, where the elderly can live in dignity and where our communities represent what is best in ourselves.

This is the debate we now need to have. Resources will remain an issue for some time so vast was the scale of our economic collapse. We have no room for complacency. When the Government took office three years ago, its first challenge was to return the public finances to sanity. We simply could not sustain ourselves while the gap between what we spent and earned was of the scale it was.

Unlike a private enterprise, however, this could not mean spending less and doing less. The State's commitments and the impact of the economic collapse on our citizens' lives meant we had to do more with less.

The necessity to align public expenditure policy with our public reform agenda was central to the Government's decision to establish a Department of Public Expenditure and Reform. The goals of this Department on its establishment were to contribute to the achievement of the Government's fiscal targets on the spending side, to deliver fundamental change across the public service and to support the Government's political reform agenda. I believe we have made significant progress on advancing those goals and I am pleased to report to the House on the achievements of the last three years.

Central to the programme for Government was the strategy of the consolidation of tax and spending agreed by the two parties in Government to meet the challenging fiscal targets. Sustainable public finances are a prerequisite for economic stability and growth. We therefore pursued a determined deficit reduction strategy. Since its peak in 2009, gross voted expenditure has been reduced by 13.5%, from €63.1 billion in 2009 to €54.6 billion this year. Estimated voted expenditure for 2014 will be approximately €53 billion, with a targeted general Government deficit of 4.8%. The expenditure measures required for 2014 amount to €1.6 billion out of a total consolidation requirement of €2.5 billion.

We are committed to reaching the 3% of GDP target for the general Government deficit by the target date of end-2015. This is a challenging target and one that is set against a difficult economic background which has required fiscal corrections in the form of significant consolidation of voted expenditure. The consolidation measures introduced by this Government have ensured Ireland's successful exit from the EU-IMF programme of financial support for Ireland. This has been achieved at a time when the demand for public services has increased. For example, the numbers in receipt of jobseeker's payments, full-time enrolments in education and medical card holders have all increased substantially since 2008. Notwithstanding these increased demands, we have maintained service provision while reducing staff numbers in the public service by over 30,000 since 2008. The cost to the Exchequer of public service pay has fallen from €17.5 billion in 2009 to €14.1 billion last year.

A one-off correction in the public finances, important as it is, was not sufficient in itself. Not only was the Government faced with the challenge of cleaning up the mess we inherited, we also had to ensure that this problem never happened again. Hand in hand with our commitments to bring spending to a sustainable level, the programme for Government included a comprehensive suite of reforms to Ireland's budgetary architecture. The new measures have been designed to improve the management of public resources and ensure public funds are used effectively in a transparent manner. A new medium-term expenditure framework, setting out multi-annual ceilings for each Department on a rolling three year basis, has been implemented on a statutory basis following enactment of the Ministers and Secretaries (Amendment) Act 2013. The framework allows for sensible, structural planning and prioritisation within each area of public expenditure, encompassing full public input and parliamentary oversight.

We have greatly enhanced the amount of information we provide in the annual Estimates of public expenditure as part of the implementation of our performance budgeting initiative, so that Members of the Oireachtas, members of the public and decision makers can see, at a glance, the financial and human resource input costs, the key outputs and the impact indicators for each expenditure programme. The performance budgeting initiative is complemented by the expenditure and performance information contained in Ireland Stat, the whole-of-government performance measurement website we have introduced which, following a successful pilot, is being rolled out to all Government Departments and policy areas.

We have introduced a new public spending code to ensure that both current and capital expenditure are subject to rigorous value for money appraisal in advance of public moneys being spent. We have also established the Irish Government Economic and Evaluation Service to support better policy making across the system through enhanced economic and policy analysis expertise. In addition to this, I have made all areas of public spending subject to regular review and scrutiny. A comprehensive review of expenditure, CRE, will be conducted regularly to examine spending and to inform the next three-year spending cycle. The first CRE took place in 2011, published in December 2011, and informed the expenditure ceilings from 2012 to 2014. The second CRE will be commencing shortly and will inform the expenditure ceilings for 2015 to 2017.

The scale of our economic problem and our exclusion from the markets as a result in 2010 closed off policy responses we might have considered in other times. Deficit sustainability had to take priority. Nevertheless, this Government remained committed, even against the backdrop of the financial crisis, to sustaining the maximum possible capital investment in our economy to support employment and recovery consistent with meeting the increased demand for services. Our current five year capital framework sets out a €17.1 billion investment programme, from publication of the programme to 2017, to maintain and improve the country's infrastructure. In fairness, it sought to build on the considerable progress made in our infrastructure during the boom years.

However, in recognition of the importance of stimulating economic activity, we have sought to augment that programme where possible, consistent with our troika commitments. In July 2013, I announced a €2.25 billion additional infrastructure stimulus package to deliver a new public private partnership, PPP, programme and support further intensive capital projects in areas such as schools, transport and primary care centres. These projects are progressing and 13,000 direct and many more indirect jobs are expected to be created by this programme.

In a similar vein, we sought to maximise the opportunity afforded by the expiry of the national lottery licence to generate funds for investment in support of infrastructure and jobs. As the House is aware, last week I granted the next licence to operate the national lottery to Premier Lotteries Ireland, a consortium comprising Ontario Teachers' Pension Plan, An Post and An Post pension funds. Half of the €405 million achieved for this transaction will be paid now and will be used for a number of job-rich projects which I listed last week, including the Wild Atlantic Way, the 1916 commemoration and the National Sports Campus. In nine months, the second instalment of €202.5 million will be delivered and will be devoted to constructing the new national children's hospital.

The same thinking also drove our approach to the asset disposal commitments made in the troika programme. I was pleased to negotiate with the troika to allow a greater share of the proceeds from the sale of State assets to be used for investment purposes. Significant progress is being made under the State assets disposal programme in fulfilment of our programme for Government commitment to sell non-strategic assets to generate resources for additional investment in job creation initiatives in the economy. I expect to receive €400 million in special dividends arising from the disposal of non-strategic assets of the ESB in the United Kingdom and in Spain. In addition, the ESB has announced that it is to sell its two peat stations, West Offaly Power and Lough Ree Power. The company will be proposing to prospective buyers an arrangement under which it will continue to operate and maintain these stations with existing staff. Financial advisers have been appointed for the sale process, which is likely to conclude in mid-2014.

With regard to Bord Gáis Éireann, BGE, a consortium comprising Centrica plc., Brookfield Renewable Power Inc. and ICON Infrastructure was selected in December as preferred bidder for Bord Gáis Energy on the basis of a bid that put an enterprise value of up to €1.12 billion on the business. It would be inappropriate for me to comment in further detail on this transaction, but the terms of the sale will be outlined in due course when the deal has been signed. I do not expect that to be long in the future.

Investment in our recovery is not confined to Exchequer or PPP spending. The Minister for Finance will shortly introduce legislation to provide for the establishment of the Ireland strategic investment fund, ISIF, by reorienting the National Pensions Reserve Fund and making the €6.4 billion in the fund's discretionary portfolio available for commercial investment in Ireland.

The Ireland strategic investment fund, ISIF, will develop a clear investment strategy, which will deliver investment in areas of strategic importance to Ireland particularly in areas that support economic growth and job creation in the years ahead. The fund will seek to recycle its capital investments over time to be in a position to make new investments again and again in a growing Irish economy. The fund's investment strategy will be consistent with Government policies. The National Treasury Management Agency, NTMA, will be responsible for the management of the Ireland strategic investment fund and an investment committee will be established that will have discretion to make investment and disposal decisions.

The programme for Government also commits us to examining the viability of establishing a State investment bank to provide additional impetus in the banking sector and I welcome the Minister for Finance's commitment in this regard which was announced in recent days. Similarly, on foot of our programme for Government commitments, in 2011 NewERA was established on an administrative basis within the NTMA to reform the manner in which the Government manages its commercial State companies in the sectors of energy, forestry, water and telecommunications. NewERA now manages the shareholder function in the ESB, Bord Gais, EirGrid, Bord na Mona, and Coillte as well as providing specialist investment and financial advice to Ministers on the corporate governance of these important commercial State companies. NewERA is closely involved in the establishment of Irish Water, which will also come under its remit.

As I have already indicated, not only was the public sector charged with downsizing in pursuit of fiscal realities, it was challenged with doing so at a time of increased pressure and demand for its services. By necessity, the programme for Government committed us to new approaches and new thinking which would form a constant backdrop to the design and delivery of public services. We knew the Government and the public services had to think and act in new ways if we were to meet our commitment to protect the most vulnerable from the effects of the economic crisis. It is for this reason we embarked on the most comprehensive and far-reaching programme of public service reform ever seen in the State.

Our first public service reform plan was published in November 2011 and I am pleased to say we have made good progress in delivering on its aims of bringing real and substantial change to the public service in terms of how it is managed and organised and how it delivers services. For example, PeoplePoint, the Civil Service-wide human resources and pensions shared services centre, has been operational since March last year and now services more than 24,000 employees in 19 organisations. When fully operational next year, PeoplePoint will provide services to 40 organisations and will save €12.5 million annually. Other shared services projects are progressing well in the Civil Service and other sectors, as I reported to the House last week.

The Office of Government Chief Information Officer has been established in my Department to build on our strong performance on e-Government and to maximise the potential benefits of cloud computing, digitalisation and open data to deliver services and information in efficient and innovative ways. In this regard, the Government services portal, gov.ie, now includes links to more than 400 information and transaction services, including those relating to Revenue, social welfare, higher education grants, motor tax and property registration to name but a few. A number of customer-focused online services have also been launched. These include fixyourstreet.ie, which allows the public to report non-emergency issues to their local authorities, and intreo.ie, through which employers and jobseekers can access all existing information and services on support, training and entitlements.

We have issued more than 580,000 public services cards. These cards are used for social welfare payments and the free travel scheme, and we are considering extending the card to cover a greater range of services. We have undertaken a major review of public procurement and are implementing a radical overhaul of our approach, with the new Office of Government Procurement targeting €500 million in savings over the next three years. We are working on measures to address any obstacles to SMEs participating fully in the public procurement process and to improve the capacity of SMEs to tender for and achieve public sector contracts. An action plan setting out a broad range of measures to deliver efficiencies in the State's extensive property portfolio was published last summer and is being implemented. We have commenced a programme of Civil Service renewal to ensure our Civil Service is a strong and capable organisation, equipped to address current and future challenges and bolstered by a workforce which has the skills, capacity and tools to meet the challenges of the future. Many of our commitments in the programme for Government have been met or are far advanced. Further details of what has been achieved can be found in the second progress report on the public service reform plan, which I published in January and circulated to all Members.

Many of the reforms I have referenced have been enabled by the climate of industrial peace the Government has maintained over the past three years. In this context, it is important that we recognise the significant contribution made and commitment shown by public servants in the State to restoring our public finances to sustainable levels and ensuring we deliver on our international commitments. I have already mentioned the substantial reduction in the public pay bill. In addition, new working arrangements have been introduced, including longer working hours, new rosters and standardised arrangements for annual leave and sick leave. The Government has shown it can work with staff to secure significant cost reductions and deliver necessary reforms and work place changes, initially through the Croke Park agreement and more recently through the Haddington Road agreement.

Despite significant reductions in pay and increased workloads, public servants continue, day in and day out, to deliver a high-quality international public service. In looking closer at the Croke Park agreement, it is clear from the various reports of the implementation body that the agreement delivered on its objectives, through the delivery of €1.8 billion in pay and non-pay savings and through the delivery of the majority of commitments on reform and work place changes. The Haddington Road agreement represents a further major achievement of the Government. It sets out a number of equitable and sustainable measures to deliver a further reduction of €1 billion in the public pay and pensions bill by 2016 and will enable the delivery of the next stage of the Government's ambitious reform agenda. It also provides for a total of 15 million additional working hours across the public service. These additional hours will help to deliver long-term and sustainable increases in productivity, while helping to improve the provision of services to citizens.

I want to pay tribute to the public service. Too often debate in the House centres on what is wrong in public service delivery. This is the job of our committee system, of which I am a long-term supporter and advocate. With this opportunity also comes the responsibility to recognise the enormous contribution made by public servants to our economic survival in recent times. They have fronted up to the challenge and sought to do more with less without grumbling. For too long Fianna Fáil sought to solve problems in the boom years by throwing money at them. Not only was this practice not sustainable when the money ran out, it undermined the real innovation and reform which was absolutely necessary in the public service.

In recognition the Irish financial collapse was not simply economic but also included a collapse in oversight, we have committed to implementing an ambitious and far-reaching suite of reforms to make the Government more open and accountable to the people to rebuild public trust in the State. We have enacted a full suite of changes, but unfortunately I will not have time to lay them out in detail. These are very important political reforms, including many which are before the House such as whistleblowing, the register of lobbyists and enhancing the committee system.

Each and every member of the Government knows our work is not done. The Taoiseach and Tánaiste made this clear this morning. We have come a long way since the dark days of 2010, but undoing the damage of the previous administration will take a considerable length of time. We are on the right path thanks to the fortitude of the Irish people. They have high expectations of us and they are right to have them. We have come through a once in a lifetime economic experience, which has left a legacy of hurt and disappointment, but we are slowly and surely putting in place the building blocks of a sustainable recovery. It is the defining task of the Government and one to which we will dedicate ourselves in the years to come.

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