Dáil debates

Wednesday, 21 October 2009

Ceisteanna - Questions

Programme for Government.

11:00 am

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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Question 13: To ask the Taoiseach when it is intended to publish the promised progress report on the implementation of an Agreed Programme for Government; and if he will make a statement on the matter. [30237/09]

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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Question 14: To ask the Taoiseach if he will make a statement on the review of the programme for Government. [30238/09]

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Question 15: To ask the Taoiseach if he will report on the implementation of the Agreed Programme for Government; and if he will make a statement on the matter. [30634/09]

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 16: To ask the Taoiseach if he will report on his involvement in the revision of the programme for Government; when the revised programme will be published; and if he will make a statement on the matter. [31178/09]

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Question 17: To ask the Taoiseach the provisions of the renewed programme for Government agreed on 9 October 2009; and if he will make a statement on the matter. [36654/09]

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Question 18: To ask the Taoiseach the timescale for the implementation of those aspects of the renewed programme for Government that relate to his Department; and if he will make a statement on the matter. [36655/09]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 13 to 18, inclusive, together.

The revision of the programme for Government has been completed and it will serve us well in the years to come. The new programme sets out the development of the country over the remainder of the Government's term up to 2012 and is designed to act as a blueprint to meet the challenges we face. We have worked well together, as two parties in Government with others, providing good Government for the country during a period of unprecedented global economic turmoil.

The initial programme for Government agreed in the aftermath of the 2007 general election made clear that its delivery was based on an economic growth rate of 4.5%. It was negotiated prior to the worst global downturn since the 1930s. This review is about ensuring the programme for Government reflects current economic realities. Achievement of the goals set out in both documents, subject to resources, will continue to provide the political basis of Government action until we complete our term in 2012. As has been the practice in previous years, it is our intention to publish on the web in the next few weeks a progress report relating to the delivery of our initial programme for Government.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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I will first deal with some of the specifics in the revision of the programme for Government, particularly in the area of education, because I want to get clarification on them. I welcome the commitment in the revised programme for Government that there will not be a reintroduction of third level tuition fees in the lifetime of the Government. Is there a commitment that the university and college registration fees will also not be increased? There has been some concern that while there is a commitment not to increase the tuition fees, the registration fees might be increased. Can the Taoiseach clarify the position on the education items in the revised programme for Government? Is it intended that they will be funded out of the education budget or will the funding be found elsewhere?

While there were many specifics in areas such as the ones I mentioned, I was surprised by an absence of specifics in other areas such as the handling of the public finances. Is there agreement, and did part of the discussions involve how the public finances will be dealt with? Is there agreement or, as part of these negotiations, was there discussion, on what adjustments are to be made in respect of the different years in the remaining expected life of the Government? What was the position, or was there any position agreed, in respect of issues such as public sector pay and social welfare payments? While we all read of the specifics there were in areas like education, it is surprising there were no specifics agreed on those areas which I would have expected the two parties in Government would need to address, particularly heading into the budgetary process.

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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The review of the programme for Government does not replace the budgetary process in any given financial year but the overall parameters under which the programme for Government operates remain the same as have been outlined in the budgetary statement by the Minister for Finance in overall terms in April. The overall economic realities remain the same and it is important to point out that such is the case. Every programme for Government must be subject to the availability of resources at any given time. This review highlights some of the priority areas.

On the question of any specific issue related to education, parliamentary questions may be put to the Minister, who is involved at present in bilateral budgetary discussions with the Minister for Finance. We have outlined the areas to which we intend to give priority. The Deputy will be aware of our position in regard to the teachers. The provision of sufficient funding for that purpose will be required in future budgets. While the overall education budget has yet to be fixed in terms of what is available and what is possible, we are at this point indicating a preparedness to move on some of those areas as outlined in the programme for Government. It is a question of setting out a priority without indicating the status quo in respect of every aspect of the programme.

On the issue of social welfare payments and public sector pay, the position is simple. We have a situation in this country whereby we are spending more than €55 billion and taking in only €32 billion. We have to make a serious correction during the course of the budget. As indicated in April that correction is of the order of €4 billion. One cannot reduce expenditure by that amount simply by looking at the cost of providing services. If, for illustration purposes, this was to be achieved on a one-third, one-third, one-third basis across the board one would be seeking a cut in the provision of services of 25%, which is not tenable. One must look at every area of expenditure, including the overall social welfare budget and public sector pay and pension bill, if one is to make the corrections that are necessary.

It is time that everybody in this House acknowledged that regardless of the various aspects of the corrections, this is the scale of the difficulty facing us, in terms of the public finances, that must be addressed. We are seeking to do this over a number of years as it cannot be done overnight. In this regard we are trying to stabilise what is a high deficit position this year going into next year and to do this in a way that meets the requirements of the situation, which is what is required of all of us. We would like to see a nationally supported effort in that effort. The idea, which has once again been suggested, that nothing in terms of two-thirds of expenditure in the public purse can be touched is not a realistic starting point from which to address the scale of the problems we face.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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I want to come back to what was agreed in the revised programme for Government. I have read the programme, which is specific in some areas. A huge range of areas are mentioned. For example, there are to be 41 reviews of policy. The word "review" is mentioned 41 times in the 43 pages of the revised programme.

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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It was in the high seventies under the rainbow coalition-----

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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It is impressive that the Government is to undertake that level of reviewing.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Repetitio est mater studiorum.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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What I am trying to get an answer to, in the context of the two parties in Government having sat down together to revise the programme for Government at a time when there is a hugely important budget due and there are huge problems with the public finances, which we all acknowledge, is not what is the scale of the problem or what are the options but has the Taoiseach agreed with his partners in Government how this will be dealt with? I appreciate that agreement has not been reached on the budget, which will come later. For example, what are the target figures - I raised this yesterday with the Taoiseach - for the adjustment in the public finances? We already know, as it was published in last year's budget and announced last April that the target is €4 billion. The Minister for Finance broke down that figure in the Budget Statement in terms of how much will be savings in public expenditure, taxation and the capital programme.

The Taoiseach let slip that the Government is now thinking of addressing this on a one-third, one-third, one-third basis. Is that what has been agreed with the partners in Government? Has agreement been reached on the big items, including pay, welfare and taxation? The Government had before it two significant reports which would have informed its discussions. Did it agree on what recommendations of the report of an bord snip nua would be advanced? Did it agree on what measures of the Commission on Taxation report would be progressed? None of this is dealt with in the revised programme for Government put before the Green Party conference. It is difficult to imagine that the two parties in Government, having had discussions on revising the programme for Government, would not have agreed how these big issues are going to be dealt with. We have not, to date, heard how they are to be dealt with. I am not asking the Taoiseach for the content of the budget but whether the Government has reached agreement on the broad parameters of how these issues are going to be dealt with.

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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What the Deputy is asking for is the outcome of Estimates discussions which are ongoing. I explained for illustration purposes the composition of public expenditure in terms of three broad headings. I have indicated to the Deputy that it is not possible to deal with the scale of the problem we face by regarding any aspect of that expenditure as immune from consideration for cuts. I have stated this clearly. While that is not the position the Deputy is prepared to take, it is the position I am taking. Every area of expenditure will have to make a contribution towards the solution to this problem. It is not a position-----

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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Has that been agreed with the Green Party?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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That is the position of the Government. The Government has made that clear. The an bord snip nua report has been under consideration since September by way of bilateral discussions between the Department of Finance and independent Departments and discussions in this regard are ongoing. The Deputy has been previously involved in the Estimates discussions and will be aware they take time. Various options are looked at, alternatives are sought and people who have priorities or other issues to put forward can do so. Ultimately, savings have to be identified and agreed. The process is ongoing. I cannot indicate to the Deputy during the process of those discussions what will be the outcome in this regard, except to say that the Government is determined to bring forward an adjustment that meets the requirements of the situation as we see it and that avoids a situation of drift whereby we increase the level of debt, deficits and the burden of debt on the State, which will increase further taxation levels into the future.

The Government and, the Minister for Finance, has made clear that 95% of our tax revenues come from the four main heads of income tax, VAT, excise and corporation tax. That there is available to us a big range of tax revenues in current circumstances over and above what we are already receiving in view of the fragile nature of the economy is an option that would have to be carefully considered. One would have to be slow to do that in an effort to maintain jobs and competitiveness.

The suggestion has been made that there exists a range of people who can provide sufficient funds to fill the gap. Taking the example of people earning €150,000 upwards one would be required to increase the marginal rate to 67% to raise €1 billion in that area. The impact this would have on the enterprise economy and maintaining jobs would have to be taken into account. We have already seen the marginal rate raised to 52%. Considerable tax impositions have been already introduced in the two budgets introduced in October 2008 and April 2009. It has been recognised that this was the correct action to take in the short term as we sought to investigate every area of expenditure, which was the whole purpose of the exercise undertaken by the McCarthy group. The McCarthy report is now forming the basis of further political discussions.

Deputy Gilmore has stated he does not want details. What he wants to know is what is the outcome of the Estimates process, which is ongoing. I am suggesting that given the scale of the issues to be dealt with, it is not possible to leave aside any area of public expenditure, including public sector pay and pensions and welfare, and to expect that the remaining area of public expenditure will provide the correction that is needed without, in my opinion, greatly undermining the provision of public services to those who need them and saying that those who provide the services, and those in receipt of public support, are not in a position to make some contribution towards the overall effort.

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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I will allow a brief supplementary question from Deputy Kenny.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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What is the Government's estimate of the cost of the revised programme for Government between Fianna Fáil and the Green Party as signed off recently?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I am sorry; what was the question?

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I was asking the Taoiseach whether he has an estimate of the cost of the revised programme for Government agreed recently by Fianna Fáil and the Green Party.

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I explained to the Deputy last week that this programme is subject - as is every programme, including those introduced when Fine Gael itself was in Government - to the overall financial parameters in which we operate. The programme sets out priorities and the areas and initiatives that need to be considered and in which progress needs to be made. However, the overall position is that we are spending €55 billion and taking in €32 billion, and no programme for Government is sustainable on the basis of that alone. Thus, we must make corrections. What will emerge from the budgetary and Estimates process are those areas of activity we are prioritising in the various Departments of State next year based on the resources that are available to us.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I estimate that the value of the tax increases will be of the order of €2.5 billion in personal taxes. To break this down, the cut in pensions relief represents €120 million; the abolition of the PRSI ceiling is €200 million; the carbon tax is €500 million; the site value of people's homes represents around €1 billion; water charges are €500 million; extra local government taxation is €100 million; and the closing down of tax reliefs will be at least €100 million, which represents a total of €2.5 billion. Would the Taoiseach agree that those figures are reasonably accurate? Was this considered by the parties when they were negotiating this deal?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I do not accept the figures given by the Deputy for the site acquisition tax and others, because there is much work to be done before we can even see what the rates will be. The Deputy also leaves out the fact that all tax expenditures are being considered in the context of the Commission on Taxation report. Many tax expenditures take place at the moment as part of our effort to achieve an enterprise economy, and these must be considered. Thus, there are expenditures on tax as well as the question of the introduction of new taxes.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I give the Government credit for maintaining a strong capital programme, which is necessary in terms of jobs. From my involvement with architects and builders dealing with school buildings, I know it is now possible to build permanent buildings for less than the cost of prefabricated buildings. The time taken to obtain planning permission and for procurement is the same, but the construction period is a little longer for permanent buildings. Given the real value and skills that are now available from contractors and builders, the extent of employment that is possible, and the fact that they are such a necessary part of our infrastructure for the future, is it the intention of the Government to consider extending the capital injection into the schools building programme? If we compare the building of 20 km of motorway with the possibility of building all those school buildings, is it a question of juggling moneys in areas in which we can achieve greater employment and real value?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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Our focus with regard to the capital programme has been on completing the projects to which we are contractually committed on time and within budget. This has, I am glad to say, been the case without exception, particularly for major road works, for which we must congratulate the NRA and the contractors it has employed to do these works, the most recent of which was the Waterford bypass, which was opened this week.

The Minister for Education and Science introduced a good initiative in the area of temporary and permanent accommodation by providing block grants to local boards of management which can identify and locate local contractors at competitive prices, where the building is planned in good time prior to the September in which the school intake will require the extra provision. Much work has been undertaken at local level by the use of that initiative. There will always be, as there is in any system, the requirement for some prefabrication because of the immediacy of the problem that arises and the need to provide temporary accommodation as an interim solution. As we know, there have been many major school building projects with which we have proceeded through the years, certainly during the good times, and we have seen improvements in our school building programme for not only tens or hundreds of schools but thousands of schools.

This has been against a background of historic under-investment because of the lack of resources available to Governments through the years to achieve modernisation. Particularly in education, we can all be proud of the many advances that have been made. The provision of facilities in many of our schools has been exemplary, although problems remain in developing areas, particularly where demand rises quickly. The acquisition of sites and suitable locations for schools - and the provision of the many different school models now being promoted in our education system - has brought certain pressures. However, in overall terms, the work of successive Ministers in this area has been good. I am not saying there are no problems, but there are far fewer problems now than was the case in the past.

Looking to the future, the questions of capital appraisal and the employment involved in projects are important, and will be considered by the Minister for Finance in the context of the capital budget allocation.