Séamus Healy (Tipperary South, Independent)
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Question 81: To ask the Minister for Finance the amount of current budget surplus on revenue accounts for each year from 1998 to 2004 in accordance with Irish and European accounting procedures; and the use to which these surpluses were put. [26931/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I assume that when the Deputy mentions Irish and European accounting procedures, he is referring to the Exchequer accounts and the general Government accounts, respectively.

The published finance accounts show that the Exchequer current account surpluses for the years 1998 to 2004 inclusive were as follows: 1998, €2,649 million; 1999, €4,367 million; 2000, €6,971 million; 2001, €4,724 million; 2002, €5,400 million; 2003, €4,410 million; and 2004, €5,619 million.

The general Government balance is a broader measure of the fiscal performance of Government. In addition to the Exchequer, it includes local authorities, non-commercial State sponsored bodies, the national pensions reserve fund and the social insurance fund. It also includes elements of accrual accounting while the Exchequer balance is a cash-based measure. On a general Government basis, the current account surplus for each of the years in question was: 1998, €3,471 million; 1999, €6,039 million; 2000, €8,011 million; 2001, €5,828 million, 2002, €4,272 million; 2003, €4,975 million; and 2004, €6,713 million.

The current surpluses on Exchequer account have been used to meet existing and future needs. For example, investment in capital infrastructure has been increased in recent years to around 5% of GNP per annum, twice the EU average. Capital expenditure is funded, in whole or in part, by current surpluses.

The national pensions reserve fund, established in 2001, requires the statutory investment of 1% of GNP annually, to meet part of the escalating costs of social welfare and public service pensions. The current surpluses meet the cost of the 1% contribution. The surpluses are used to reduce the national debt, thereby freeing resources to fund other priority areas. Debt as a percentage of GDP has fallen to below 30%.

The planned budgetary policy stance is to continue with our prudent management of the public finances and keep them in a sustainable position to ensure that room for manoeuvre exists to provide and enhance public services now and in the future.

Séamus Healy (Tipperary South, Independent)
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What the Minister has told us is that in the eight years since the Government is in office there is something like €34 billion of a surplus on day-to-day spending. From what he said it is clear the vast majority of that is being spent on capital projects. Should we not prioritise human need over physical infrastructure? What is, in fact, happening with those large surpluses is that they are going to fund roads, bridges and broadband, and not to fund issues such as health, education and housing. Is it not the case that the most important infrastructure is a healthy and well educated population rather than roads and bridges? Should we not ensure that human needs services, such as health, education and housing services, which have been subject to under funding historically, are funded properly through the surplus? Is it not normal practice in any other European country to fund capital projects through borrowing? The surplus gained in the day-to-day running of the economy should be spent on funding the various human services to which I referred. Should we not stop regarding the funding of health, education and housing services, as distinct from roads, bridges and other forms of infrastructure, as a cost to the Exchequer? Rather, we should consider it as an investment in people.

The considerable budget surplus, amounting to €34 billion since 1998, would go a long way towards bringing us up to international levels. Where the funding of education is concerned, Ireland is 19th out of 26 OECD countries. The figure for second level education in particular is even worse, we are 21st out of 26. There is historic under funding in the health and social services. Should we not use the surplus to fund these services and engage in prudent borrowing to fund capital projects which we would be allowed to do under EU guidelines and legislation?

Brian Cowen (Laois-Offaly, Fianna Fail)
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There needs to be investment in health, education and social welfare and there also needs to be investment in housing, hospitals and roads.

Séamus Healy (Tipperary South, Independent)
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It is a question of how that is done and of where the money comes from.

Brian Cowen (Laois-Offaly, Fianna Fail)
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Exactly. We are doing it more successfully than anybody else. The Deputy will have noted unprecedented rises in current spending on health, education and social welfare under this Administration. These rises are greater than any in the history of the State. Increases to pensioners under this Administration are greater than any others the Deputy will remember. The resources being made available under the current mix of policies are greater than they ever were. The Deputy suggests we should put at risk the ability to continue the economic activity that funds these resources so we can look after all our people. I do not agree with that economic philosophy, which the Deputy obviously holds.

To increase the indebtedness of the country one can go to the people to seek support for doing so. Had the Government borrowed all the money the Deputy said we should have borrowed for capital purposes, or were he holding the reins of power, we would now have an interest bill amounting to approximately €1.3 billion or €1.4 billion more than it amounts to today, and therefore we would not have €1.4 billion per year to spend on improved health, education and social welfare services on a sustainable basis. The Deputy is entitled to his opinions but I am here to defend very strongly the mix of policies the Government has provided over the past seven or eight years, which, on the basis of the figures on both the current and capital sides, led to unprecedented investment in all the areas he mentioned.

We know exactly what we got for being highly indebted in the 1970s and 1980s, namely, high unemployment and high emigration. There are thousands of people in America, Australia and the United Kingdom who prove where that policy leads. It leads nowhere. Now that we have the ability to provide employment for our people, we must also remain prudent fiscally to ensure we can remain competitive, keep people in employment and give them a greater disposable income, and provide greater resources to meet all the social needs to which the Deputy alluded. We can now do so in a sustainable way which would not be possible if we adopted the Deputy's approach. His approach was tried and it failed.

Séamus Healy (Tipperary South, Independent)
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Is it not true that every other European country borrows for capital projects and that those projects serve generations of people, not just a single generation? Therefore, capital projects should be paid for over a number of generations through capital borrowing. Is the Minister saying he is successful in spite of the trolleys and MRSA in hospital wards, the 50,000 families on the waiting list for housing and Ireland's lying 19th out of 26 OECD countries in terms of spending on education? This is hardly a success story.

Brian Cowen (Laois-Offaly, Fianna Fail)
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It has been a great success story. If the Deputy goes to his constituency, he will note the number of schools that have been refurbished. The number has been far greater under this Administration than under any other.

Séamus Healy (Tipperary South, Independent)
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Almost 1,000 people are unemployed in Carrick-on-Suir. The Minister could have done something about it by decentralising a State body to the region. Why did he not do so?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy's policies, if applied nationally——

Séamus Healy (Tipperary South, Independent)
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He could have done so two years ago. Why did he not do it?

Brian Cowen (Laois-Offaly, Fianna Fail)
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——would lead to an unemployment level of 20%. He knows this well.

Séamus Healy (Tipperary South, Independent)
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Some 20% are unemployed in Carrick-an-Suir.