Dáil debates

Thursday, 17 December 2020

Appropriation Bill 2020: Second and Subsequent Stages


1:15 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move: “That the Bill be now read a Second Time."

The Appropriation Bill represents the final fiscal action of the year to be taken by the Oireachtas. This year has been like no other. The arrival of Covid-19 on our shores in March represented a major challenge for the people of this country and us, as their representatives, in this Oireachtas. People have been cut off from family and friends, have lost jobs and have seen their businesses collapse. Tragically, 3,283 people lost their lives on the island of Ireland as a result of this virus. Our fight against Covid-19 continues. Even at this time as we approach Christmas, a special time for so many individuals and families, we are reminded of the impacts this virus is having and the actions we all must take to prevent its spread.

The scale of the response taken by the previous Government and the current Government has been truly extraordinary and it needed to be. The Appropriation Act 2019 approved €54.6 billion in net voted expenditure. In this Bill, subject to the approval of the House, we will be approving €69.7 billion, representing a €15.1 billion increase on 2019. That is a rise of 27% and it highlights in a stark manner the scale of the Government response. Much of this money was spent on meeting the health crisis: through investment in the public health system; in supporting incomes and jobs through the pandemic unemployment payment, the temporary wage subsidy scheme and the employment wage subsidy scheme; and in saving businesses through the restart grant, the local authority commercial rates waiver and the Covid restrictions support scheme. While the challenge has been unprecedented, so too has the response from Government and from the Oireachtas.

The Appropriation Bill 2020 is an essential element of financial housekeeping that must be concluded by the Dáil this year. The Appropriation Bill has two primary purposes. The first is that it provides legal authorisation for all of the expenditure that has occurred in 2020 on the basis of the Estimates voted by the Dáil over the course of this year. These allocations, known as the amounts to be appropriated for supply services, are set out in section 1 and Schedule 1 of the Bill. These relate to the Revised Estimates, Further Revised Estimates and Supplementary Estimates agreed by the Dáil. In aggregate, these Estimates amount to €69.7 billion. This represents not only the substantial level of support provided to households and businesses with regard to Covid-19, but also the commitment to provide for the necessary infrastructure to support our continuing social and economic progress, and a significant investment in the delivery of our essential day-to-day public services, which the people we serve rely on.

In aggregate, taking into account expenditure on the Social Insurance Fund and the National Training Fund, total gross voted expenditure made available this year was €87.3 billion. The equivalent amount planned for 2020 in the pre-Covid Revised Estimates Volume was €70.4 billion. Making provision for additional exceptional spending of this scale was absolutely necessary given the profound effect of the pandemic on our people. Over the course of the year, the Government has taken significant steps to cushion the impact of the crisis on households and firms. These additional resources, approved by Dáil Éireann in Estimates over the course of the year, have been crucial to support our key front-line services in responding to Covid-19 and to support workers and businesses devastated by the impact of the virus.

This response has been driven by the priority to protect citizens from the virus and to ensure that the health service can respond effectively to meet demands for services while dealing with the impact of the pandemic.

The second key purpose of the Appropriation Bill is to provide a legal basis for spending to continue into next year, in the period before the Dáil votes on the 2021 Estimates. As set out in the Central Fund (Permanent Provisions) Act 1965, the authority for spending in 2021, prior to the agreement of the 2021 Estimates by the Dáil, is based on the amounts included in the 2020 Appropriation Bill. It is for this reason that it is so important that this Bill is enacted before the end of 2020. If it were not, there would be no authority to spend any voted moneys in 2021 from the start of January until approval of the 2021 Estimates.

In recognition of the difficulty faced by Departments in planning for capital projects, the rolling multi-annual capital envelopes introduced in 2004 allow for carry-over of up to 10% of unspent voted capital expenditure from the current year into the following year. This provides a degree of flexibility in terms of capital expenditure planning. The 2020 Appropriation Bill sets out the capital amounts which are to be carried over to 2021 on a Vote basis. In aggregate, capital carry-over from 2020 to 2021 amounts to €748.5 million, which is approximately 7.5% of the overall Exchequer capital programme for 2020. This is significantly higher than last year's equivalent figure of €215 million. This increase has been driven by the delays to capital projects that occurred in 2020 as a consequence of Covid-19. As evident from the monthly expenditure figures, spending plans were impacted by project interruptions due to the pandemic.

In addition, substantial additional capital resources were made available to Departments to ensure that all feasible work could proceed over the course of 2020. As can be the norm in capital development, planning and procurement of capital projects can take some time to become operational. Therefore, while some of the stimulus projects have commenced in 2020, it will be 2021 before some of them are completed.

With almost €750 million in carry-over to fund capital investments next year, this will bring the overall amount available to Departments for Exchequer capital spending in 2021 to more than €10.8 billion. This represents a record level of investment as we seek to address the challenges of Covid-19 and Brexit next year. Schedule 2 of the Appropriation Bill sets out the proposed capital carry-over amounts. The Revised Estimates Volume for 2021, published yesterday, includes for each Vote availing of the capital carry-over facility a table listing the amounts to be deferred by subhead.

As in previous years, the Appropriation Bill provides for a repayable advance from the Central Fund to the Paymaster General's supply account in order to meet certain 2021 Exchequer liabilities due for payment over the first week of January. The need for this provision arises because, with the banking system closed on 1 January, funding will need to be in place in departmental bank accounts before the end of this year in order to meet those liabilities on a timely basis. The amount provided in section 3 of the Bill is €280 million. There is also a need to pre-fund An Post in order to meet certain payments due between 1 January and 5 January 2021, so that payments can be transferred from the Department of Social Protection to the network of post offices throughout the country.

The annual Appropriation Bill is an essential element of housekeeping undertaken by the Dáil each year. The passage of this Bill will authorise in law all of the expenditure that has taken place in 2020, on the basis of the Estimates voted on by the Dáil in the course of this year. Importantly, it will also ensure that voted expenditure can continue into 2021 in the period before the Dáil approves the 2021 Estimates. This means keeping our public services such as schools and hospitals operating, as well as continuing payments funded from voted expenditure in 2020 such as the employment wage subsidy scheme and the other social assistance scheme payments. I commend the Bill to the House.


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