Dinny McGinley (Donegal South West, Fine Gael)
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Question 11: To ask the Minister for Defence if his attention has been drawn to the fact that the amount of money allocated to Defence over the past ten years has dropped from 1.6% of GNP to 0.8% in 2004; and if he has satisfied himself with this level of funding. [24265/04]

Willie O'Dea (Limerick East, Fianna Fail)
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Based on GNP figures received from the Central Statistics Office gross expenditure on defence was 1.3% in 1994 and not 1.6% as indicated in the Deputy's question. The level of expenditure on defence in any particular country is influenced by a variety of factors, including the country's political and security environment, its history, demography and economy.

There has been an unprecedented level of expenditure on infrastructure and equipment for the Defence Forces in recent years. This was made possible by the Government's decision that pay savings arising from the re-organisation of the Defence Forces set out in the White Paper of 2000, along with proceeds from the sale of surplus properties, would be reallocated for investment in modern facilities and equipment. More than €174 million was spent on the capital investment programme for the upgrade of barracks, accommodation and other facilities between 1997 and end of 2003. This year's Defence Estimate includes a further €19 million for such capital works.

Significant progress has also been made in recent years with the acquisition of modern equipment for the Army, Air Corps and the Naval Service, details of which I will provide in reply to a later question.

Dinny McGinley (Donegal South West, Fine Gael)
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I note and accept the Minister's correction. I was quoting from an article in An Cosantóir which specifically stated the amount allocated to Defence had dropped from 1.6% of GNP to 0.8%.

The figure of 0.8% can be fairly misleading because it included an element of the proceeds of property sales, something we cannot depend on in future. I specifically heard the Minister say in Letterkenny last Thursday that he does not have on his agenda the proposed sale of any further barracks, so that source of revenue is drying up. Is the Minister aware that senior members of the Defence Forces have expressed concern at the reduction in revenue available to the Defence Forces? While such reductions may not have repercussions for the near future, the long-term viability and efficiency of the Defence Forces will be affected if we repeatedly continue to reduce funding.

John Gormley (Dublin South East, Green Party)
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I asked a similar question of the Minister's predecessor who suggested the allocation to the Defence Forces had been reduced to 0.6% last year. I will have to check up on that figure.

Does the Minister accept that Ireland has the lowest defence spending in Europe as a percentage of GNP? The Minister said the United States spends almost 3.25% of GDP in this area. Does the Minister accept the analysis of many economists that one of the reasons for Ireland's economic performance in latter years has been the fact that our spend on defence is much lower than in other countries?

Willie O'Dea (Limerick East, Fianna Fail)
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I am amazed that Deputy Gormley is concerned about the reduction in expenditure on defence. There is no comparison between the United States and Ireland in that regard.

John Gormley (Dublin South East, Green Party)
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I am saying that we are better off.

Willie O'Dea (Limerick East, Fianna Fail)
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I thought the Deputy was worried that the percentage is decreasing. Looking at overall expenditure on defence in the context of the budget, we were able to reduce expenditure as a percentage of GDP because we had money coming in from savings as a result of reductions in personnel and the sale of surplus property. Defence expenditure would not have made any major difference to our economic performance in the past ten years.

In 1994, the gross expenditure on defence was €546 million and in 2004 it will be €900 million. Inflation between 1994 and 2004 was 40%, whereas the gross expenditure on the defence and Army pensions Votes increased by about 65% in the same period, a substantial increase. I accept Deputy McGinley's point that the sale of property and other one-off funding sources is drying up but I have no plans to sell any more barracks. There may be some minor property sales but no more barracks will be sold. I must now go back to the Estimates system to get money to ensure the substantial improvements to equipment, infrastructure, efficiency and training are maintained. The House can rest assured that I will fight my corner at the Cabinet table to ensure sufficient resources are forthcoming for those purposes.