Tuesday, 23 October 2007
Ceisteanna — Questions
Programmes for Government.
Question 4: To ask the Taoiseach if he will report on the implementation of An Agreed Programme for Government; and if he will make a statement on the matter. [16821/07]
I propose to take Questions Nos. 4 to 9, inclusive, together.
The new programme for Government agreed between Fianna Fáil, the Green Party and the Progressive Democrats, and supported by certain Independent Members of Dáil Éireann, has been translated in accordance with the Official Languages Act and is available in both languages on my Department's website. The Department is in the process of printing hard copies, which will be made available to every Deputy shortly.
The programme for Government sets out a comprehensive blueprint for Ireland's future up to 2012. I am happy to report to the House that implementation of this new programme is now under way and progress is being made on all areas of vital concern to the Irish people. The programme recognises that we must build upon the hard work of the people. This work has helped to create a dynamic society and a strong economy of which we can all be proud. In our programme, we have set out clearly the manner in which we will work with the people to safeguard the gains made and to build a strong and sustainable nation for future generations. It is a programme that recognises the clear challenges we face as a nation and provides a strong policy platform to meet these challenges head-on.
The programme for Government is one in which every Irish person can take pride. It provides a clear direction for the country and will deliver a stronger, more caring and environmentally sustainable Ireland for generations to come. The programme is fully costed and makes it clear that our budgets for the next five years will be kept in broad balance and fully within our commitments under the Stability and Growth Pact. In addition to the general overview role of the Department of the Taoiseach within the Government, which includes preparing and publishing an annual report on the implementation of the programme for Government, the Department has a number of other specific responsibilities. In particular, it is charged with continuing to lead the implementation of the social partnership process and specifically the current agreement, Towards 2016; instigating a review of the economic regulatory environment as set out in the programme for Government; promoting the active citizenship agenda to ensure we have vibrant local communities throughout the country; and organising commemorative activities such as a programme of events to celebrate key historical events that took place between 1913 and 1923.
While the Taoiseach's response is well-written, I am not sure that everyone takes pride in the programme for Government. When the programme was being drafted in the aftermath of this year's general election, the two remaining Progressive Democrats Deputies sat idly by and allowed things to happen, the Green Party Deputies were seduced and the Independent Deputies——
The Fianna Fáil election manifesto, which formed the basis for the programme for Government, included tax and spending promises of approximately €7.1 billion. The pre-budget outlook published by the Department of Finance forecasts that there will be a shortfall in tax receipts of €4.9 billion, when compared with the forecast made by Fianna Fáil, by 2010. While the projections do not extend beyond 2010, it is reasonable to expect on the basis of Fianna Fáil's assumptions as far as 2011 and 2012 that there will be a shortfall in tax receipts of €5.7 billion, when compared with the Fianna Fáil manifesto, by 2012. Does the Taoiseach accept, on the basis of the assumptions of Fianna Fáil and the projections of the Department of Finance, that the Government will not be able to deliver on the programme for Government while also keeping its promise to keep the public finances in balance or in surplus? If that cannot be done, the Government will have to decide between keeping the public finances in balance or in surplus and keeping some of the other promises in the programme for Government, such as employing an additional 4,000 teachers, 2,000 gardaí and 2,000 hospital consultants. Will the Government be able to increase the old age pension to €300 per week, as I expect it to do? Will it keep its promise of spending €512 million on overseas development aid? Will it reduce the top rate of tax to 40% and the standard rate to 18%, as promised? Will it reform PRSI, as it has committed to do? These are fundamental issues. Does the Taoiseach accept, on the basis of Fianna Fáil's assumptions and the Department of Finance's projections, that it will be impossible to implement the programme for Government? If so, which of the promises in the programme will not be proceeded with by the Government?
In 1997 and 2002, I heard similar arguments within the first few months of the new Government's term of office about the stage of the economic cycle we were at. I was asked whether the Government would be able to implement its entire programme for Government by the end of its term. As Deputy Kenny is aware, the last two programmes for Government were implemented almost in full. While a small number of items in those programmes were not implemented, other items which were not mentioned at all in the programmes were implemented.
Good financial management is the overall principle that underpins the work of the Government. That is what is important for the country. It is our intention to keep the budget in balance, almost in balance or in surplus, as we have been doing for the better part of 20 years. When the cycle is at a particular stage, we have to continue to stabilise the economy. We need to reduce the debt-GDP ratio when we can, as we have done almost every year for many years. We have to continue to cut taxes when possible. We will honour our commitments in respect of rates and credits, as we have done to date. We have to respect the commitments into which we enter with the social partners, including the voluntary and social pillars and the active retirement groups in relation to pensions. We need to bring the ratio of welfare payments up to the figure that we fix. We have done all of these things in the past and we believe we can meet our commitments in respect of them again. The national development plan involves expenditure of €184 billion over seven years. We have made a commitment to complete the acceleration of Government investment across a range of Departments and agencies. Over a five-year period, perhaps some issues may have to be put back a bit at some times. I do not see, within the financial model used which was cross-checked with the Department of Finance and the detailed figures, that we will not be able to implement our programme in a comprehensive way. The fact is this year's surpluses are not as big but by prudent management of the economy and the reduction achieved in the debt over the past number of years we now have an historically low ratio of debt to GDP which is saving the country a significant amount of annual interest payments.
This year will be no exception and neither will the years ahead. This allows us the headroom to do things that otherwise would not be possible. The key issues are the national development plan, Transport 21, the business expansion schemes, our commitments to agriculture and to social welfare. These are issues which we believe we can honour.
Much of the Taoiseach's reply is absolute nonsense. In ten years of unprecedented economic development, he has failed to establish any value-for-money framework for public spending. He has failed to achieve real reforms in benchmarking, as we discussed. There has been an explosion of bureaucracy in the HSE, serious over-runs in the Luas and Dublin Port tunnel projects, sheer mismanagement and waste in e-voting and PPARS. There has been an unplanned explosion in the number of quangos with 500 established at national level and 300 at local level and a total of 5,000 Government appointments. Cost over-runs have been massive and the rate of inflation is more than two and a half times that in most of the eurozone. The public spending profile is completely out of line in the context of value for money.
Following the general election of 2002, the Government loaded a range of stealth taxes onto Irish households and business and for the first time in 25 years our competitiveness and our level of exports have fallen. Can it be expected there will be no repeat of this policy and that the Government will not lorry more stealth charges onto households and businesses which cannot sustain them?
In view of the buyers' strike which is happening in the property market and as the construction industry is crucial to the national economy, will the Taoiseach agree this is an appropriate time to do something substantial with stamp duty for first-time buyers and those wishing to trade up and down — without setting off a stampede in the market — in the manner proposed by Fine Gael and the Labour Party before the last election? Will the Taoiseach grasp that nettle at a time of serious slow down in the construction business with a buyers' strike in operation? This would be his opportunity to take progressive action in a critical area.
We have already implemented our programme for Government commitments on stamp duty and that matter is closed. Deputy Kenny knows what he has stated is not true. For the past decade this economy has been growing by approximately 7.7%. Our debt to GDP ratio is one of the lowest in Europe. We are able to fund our capital programme from our own resources and we have been able to reform the tax system and reduce personal, company and property taxes. We have been able to give significant increases to social welfare and lift the welfare customer base to the same level as an industrial wage which is second to none. We have been able to continue to implement huge expenditure plans across educational and health services with huge increases in staff numbers which is giving better delivery to individuals. We want to continue with what is arguably one of the best economic models in any country in the world.