Dáil debates
Thursday, 5 February 2009
Priority Questions
Local Authority Funding.
3:00 pm
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 3: To ask the Minister for the Environment, Heritage and Local Government if he expects to make changes to the local government estimates arising out of the discussions with the social partners; and if he will make a statement on the matter. [4169/09]
John Gormley (Dublin South East, Green Party)
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The Government decision to introduce public sector pension-related measures announced by the Taoiseach in the House on Tuesday will apply to all public sector employees, including those employed by local authorities.
While there will be a saving in respect of local authority staff, there will be a neutral impact on local authority finances as there will be a corresponding reduction in the Exchequer contribution to the local government fund which supports local government expenditure.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Will the Minister clearly indicate what will be the reduction in the local government fund? I am sure he knows the figure. Many staff will be involved. What are the overall numbers? What is the average pension contribution levy required from these staff?
John Gormley (Dublin South East, Green Party)
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For 2007, the total amount paid by local authorities on salaries and wages amounted to €1.7 billion or 35% of their total expenditure. More than €1.5 billion is projected to be available to the local government fund in 2009. The general purpose grants are the contributions from my Department to meet the gap between the cost of providing a reasonable level of day to day services and the income they obtain from other sources.
General funding grants to local authorities have increased quite dramatically in recent years. The grants provided for 2009 are approximately 190% above the corresponding grants provided in 1997.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister is going back a long way.
Terence Flanagan (Dublin North East, Fine Gael)
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What is the difference between this year and last year?
John Gormley (Dublin South East, Green Party)
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We are broadening the base.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I asked the Minister and he is not answering.
John Gormley (Dublin South East, Green Party)
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I just answered it.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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What is the cut in the local government fund?
Terence Flanagan (Dublin North East, Fine Gael)
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What about last year?
John Gormley (Dublin South East, Green Party)
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We are broadening the base and it is expected that the new pension levy on local authority staff will yield an amount of €80 million per annum.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The cut is €80 million.
John Gormley (Dublin South East, Green Party)
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This will be realised by the Exchequer through a reduction of this amount in the Exchequer contribution to the local government fund. Grants to local authorities for 2009 will be reduced by an equivalent amount. That is the answer.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I have another question. Will the Minister give an absolute guarantee that there will be no cuts in current or capital funding in 2009 other than those relating to the pension income levy?
John Gormley (Dublin South East, Green Party)
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I can go better than that.
John Gormley (Dublin South East, Green Party)
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This is what I tried to state a moment ago. The broadening of the base and the introduction of the levy on second homes will provide extra money to local authorities and this is what they are asking for. I want to ensure that not only can this money be collected locally but that it can be used locally.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I asked a different question.
John Gormley (Dublin South East, Green Party)
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Deputy Hogan asked whether local authorities are getting extra money.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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No, I did not. I asked what was the cut. I asked the Minister a direct question.
John Gormley (Dublin South East, Green Party)
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I gave the Deputy an answer.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I will ask the second part of the question again. Will the Minister give an absolute assurance that there will be no cut in the capital or current programme, whether that is in housing in the Department of the Minister of State, Deputy Finneran, that the estimates given for 2009 are sacrosanct and that there will be no cut in capital or current expenditure in any programmes in 2009 other than the €80 million discussed with regard to the local government fund arising from the pension contribution levy?
John Gormley (Dublin South East, Green Party)
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The Deputy knows only too well that adjustments had to be made.
John Gormley (Dublin South East, Green Party)
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Nothing in the current climate is sacrosanct. We have tried to ensure we invest in labour intensive activities.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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So "yes" is the answer.
John Gormley (Dublin South East, Green Party)
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We need to ensure that water infrastructure, which has increased by 19% to €560 million——
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister will not cut that.
John Gormley (Dublin South East, Green Party)
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——will remain intact.
John Gormley (Dublin South East, Green Party)
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That is my intention.
John Gormley (Dublin South East, Green Party)
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We also discussed issues which are of interest to Deputy Hogan's area such as flood protection measures. The measures in question will remain intact.