Dara Calleary (Mayo, Fianna Fail) | Oireachtas source

I thank the Minister. We will be supporting the Bill. There is not exactly a rapt Dáil Chamber here, which is extraordinary given that we are approving the expenditure of so much money. It is important to reflect that this Bill is the end of a process in terms of the scrutiny of the Supplementary Estimates by committees in recent weeks, and the important consideration that was given in the course of the Social Welfare Bill 2016 to the payments the Minister has mentioned.

In advance of next year's planned expenditure review, I take this opportunity to speak about expenditure generally. The Minister referred to the need to make the Government expenditure process more robust. There have been annual Supplementary Estimates for the Department of Health, something that we will no longer be able to do from next year yet the health service has gone beyond creaking at the seams. The seams are broken, as we can see in the pressure on accident and emergency departments, despite that continued injection of money. I hope the process next year will involve a review of how we determine expenditure ceilings for each Department to make them more accurate, relevant and accountable and make those in charge of them more accountable. Is it worthwhile having a discussion and maybe bringing in penalties where expenditure ceilings are breached? If the process is robust and they are discussed and scrutinised enough there needs to be a consequence when they are breached, otherwise the process is undermined. I understand and know, having been through the process and through the most recent budget process, that calculating expenditure ceilings is exceptionally challenging in many Departments. I include the Departments of Health and Social Protection, which we are discussing this evening. This evening we also have an allocation for flood defences. It is very difficult at times to anticipate expenditure. We need, however, to take our responsibilities as fiscal monitors more seriously and be far more responsible about expenditure ceilings.

The idea behind the multi-annual expenditure ceiling was to move away from the past where the expenditure was set on a short-term year to year basis. This system offered very little control over Government expenditure and as a result when the crisis hit it seemed much more difficult to regain control of the country’s finances. Multi-annual expenditure ceilings were introduced to ensure that governments would think in a more long-term and strategic way about budgeting, to provide relevant Departments and their Ministers with a clearer picture of the resources available to them over several years rather than just one. In short, they were brought in to provide control of Government finances but also to allow short, medium and long term planning for Government programmes. The current framework requires Government to set expenditure ceilings over a three year period. It sets upper limits for each Department based on an expenditure benchmark. The system, however, is flawed and does not work.

In a recent report the Fiscal Advisory Council was explicit that the current system of expenditure ceilings is not working. In many of the budgets since 2011 the actual out-turn of expenditure has been greater than was budgeted. The council says that for 2018 and 2019 currently planned expenditure already exceeds the ceilings and therefore upward revisions to ceilings are likely to be required. That suggests the ceilings were either too low or expenditure is getting more difficult to control. We have to have a discussion and make choices about that. In many ways the Fiscal Advisory Council operates in a space where it does not have to consider the complexities of that process. We had a discussion with it at the Committee on Budgetary Oversight yesterday where it accepted that it operates in an environment very different from ours. We need, however, to have fiscal and expenditure discipline because that is one of the lessons that should surely have been learned in recent years. We need to have a sense that medium and long-term plans are properly funded in advance and the funding is there to allow those plans to come to fruition and make the impact that we all hope they will make. We are also realistic enough to know that things happen. This time last year, for example, nobody would have anticipated the impact of Brexit on our country's finances over the next three years. Events are often outside our control but that does not take away from the fact that we need a far more robust process and discussion about expenditure ceilings.

I hope we will reach a point where revisions are rare and with the new fiscal rules we have to get to that point because if one Department breaches expenditure ceilings another will have to pay for them. That means a cut in services or plans for another Department. That sets the context for the next six months. It will be a busy year for the Minister in respect of the expenditure review, the capital plan review, public service pay talks, all in the first six months. On the night that is in it we wish him a good break before what lies ahead. Let us learn the lessons of the past few years and not have a situation arise where a Minister has to cut the life out of programmes because of fiscal rectitude. We owe it as legislators to take the lessons of the crash on board in so many areas, be they housing or services, but in respect of expenditure and controlling expenditure we need to get real.

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