Wednesday, 24 October 2007
One of the most important responses required from Government is clarity on its policies and positions. As I understand it, until recently, Government policy on the disposal of waste was to incinerate it and having examined and analysed the capacity of incinerators, eight were to be located throughout the regions. The Minister for the Environment, Heritage and Local Government, Deputy John Gormley, who is not here this morning, seems to have changed that policy. The situation is quite confusing. Deputy Gormley states there is only capacity for two incinerators in the country. Will the Taoiseach tell us about Government policy in this regard; is it proposed to have two or eight incinerators?
He does not influence the decisions on planning issues, such as on capacity. Deputy Gormely took the view that we should look at the modern technologies and the new systems being used in the Nordic countries and if we did that we would not need the number of incinerators that had been previously listed.
There are four major applications for incinerators in the planning process. Based on his examination of new technologies, perhaps we will not need eight incinerators — four was the number mentioned in a number of reports. In two applications, the capacity of the incinerator for which planning permission is being sought is higher than what was originally planned. Let us be very clear, the Minister's view——
In his view, some of the proposals that were previously examined did not take account of the most modern technology and if we go with the most modern technology we would not need the number of incinerators that had been envisaged.
That does not answer the question. The question is whether we will have eight incinerators or two incinerators. I remind the Taoiseach that the Minister stated on Thursday, 11 October: "Ireland requires no more than two incinerators to deal with waste which cannot be recycled or processed, rather than the eight that are currently planned."
Dublin City Council has been working for quite a long time on a major incinerator in Poolbeg. Obviously the city council and local authorities must take account of Government policy. Was the Minister just spoofing when he stated the country needs no more than two incinerators instead of eight? Does that mean there will be no incinerator in Dublin city? I have put some straight questions to the Taoiseach, and I hope he will clarify the situation in his reply.
It does not mean that. As the Deputy knows there are contractual commitments and a considerable amount of work has been completed on the Poolbeg incinerator. However, that does not remove the need to look at modern technology for that incinerator. That is the point the Minister has made. We have seen where in at least one case and possibly two, the capacity of the proposed incinerators has been increased. The number of incinerators required depends on the capacity of each.
We want to move away from landfill. We should take account of the most modern technology available and as we have not started to build the incinerators, why should we use technology that is six or seven years out of date? That is a valid point for the Minister to make.
At the last general election, there was one issue on which all political parties were agreed, namely that the level of social welfare pension should be increased to €300 per week. In addition to committing to increase the pension to €300 per week, the Taoiseach's party also promised to cut the PRSI rate by 2%. When that promise was made, the Government had in its possession an actuarial review of the social insurance fund — the Government refused to publish it at that time but it was published last week — that showed that the social insurance fund would begin to go into deficit in 2010, in three years time and according to the analysis that has been done since, the shortfall could be as high as €12 billion by 2016. I have three questions related to that. When will pensioners get €300 per week? Will the Taoiseach go ahead with the promised reduction of 2% in PRSI? How does he propose to square the circle? The cost of the promise on PRSI is €640 million and the cost of the €300 pension is just over €2 billion per year. During the election the Taoiseach said he would make up the shortfall from general taxation. What increases in taxation does he intend to make up that shortfall?
Ten years ago, when I took over as Taoiseach, the pension was €70 and we have brought it to €200. As we promised, we will bring it to €300 in the lifetime of this Government. On the issue of our tax commitments, we intend to implement our policies over the five-year period as we have done in the past two Governments.
We published the Green Paper on pensions last week, in fulfilment of a major commitment, not in the programme for Government but in Towards 2016. That Green Paper reviews the pensions system, it identifies the challenges and includes all the issues that will affect the social insurance fund in the years ahead, such as demographic change, issues regarding the sustainability of the pension system, pensioner incomes, the contribution of various elements of the pension system, including the social welfare system and work flexibility. They will affect whether it is in surplus or deficit. The Government has set out its position in the Green Paper and we have already engaged in discussions with the social partners. The issue has been opened out to wider debate in the next nine months or so and, based on that debate, we will make the decision, not just for the short term, which is obviously important for the social fund for the next few years, but also into the longer term.
I do not recall the figures off the top of my head but it is very clear they will have a huge effect on the social area. The proportion of the population aged over 65 is expected to more than double between now and mid-century from 11% to 28%. The number of people of working age compared with those aged over 65 will decrease from 6% now to 2% by mid-century. The spending on public pensions, social welfare and public service is projected to increase from 5% of GDP to 13% of GDP. These are fundamental issues that will not greatly affect the social insurance fund in the very short term but will have profound effects in the longer term. We hope, over the next 12 months to make those decisions for the short term and the longer term, rather than allow the matter to drift.
I thank the Taoiseach for giving me all that information about the Green Paper on pensions. I did not ask him about the Green Paper on pensions. I asked him about the actuarial report, carried out by Mercer Consulting, on the social insurance fund. Let me raise it a second time. Do I understand from the Taoiseach's reply that the €300 pension will be introduced in five years' time? He said it would be introduced at the end of the term of Government, by which I presume he means in five years' time. Is that correct?
The Taoiseach promised during the general election campaign that the rate of PRSI contribution would be cut from 4% to 2%. Will that go ahead? How does he propose to fund it? The Taoiseach had available to him, at the time he made the promise, the information that the social insurance fund would go into deficit in three years' time. Will he go ahead with the cut in the PRSI rate and how does he propose to finance that cut?
——but that is not the policy of this Government. We do not want to go back to what his colleague did and give such miserly pension increases. We refuse to go down that road. Our practice has been to give significant increases.
It is our intention to implement our tax policies but it will be a matter for the budget. On Deputy Gilmore's point about the disimprovement of €1 billion in taxes in 2007 and the implications for future resources and political choices——
More of the growth, it is assumed, will come from the external sector. This means the growth in tax revenues will ease somewhat. That does not take away from our commitments and we intend to keep our budget in broad balance so that the general Government deficits remain close to balance in years ahead. We will, however, continue to implement our policies as we have resources to do so.