Dáil debates

Tuesday, 16 December 2014

3:10 pm

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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94. To ask the Minister for Public Expenditure and Reform his views on the additional €1.1 billion in supplementary allocations sought from him by the various Departments for 2015. [47796/14]

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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My question refers to the supplementary allocations sought by various Departments for 2015. A figure of some €1.2 billion has already been noted, the largest Supplementary Estimate in the history of the State. I appreciate that, since filing this question, time has been set aside tomorrow for a debate on the Appropriation Bill and that we will at least have some discussion in that format. We told the Minister how disappointed we were that these matters were to go through on the nod without debate and about the failure to bring forward, within the agreed timeframe, information for me and Deputy Sean Fleming. Is it fair to say a Supplementary Estimate of this scale is an explicit recognition by the Minister that the health, education and other sectors were underfunded by him?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Government published the Revised Estimates in December 2013, with the amount allocated being consistent, as I indicated, with the budget 2014 target of reducing the deficit to 4.8% of GDP.

In the period since then, the fiscal and economic outlook has improved and strong growth has returned an initial 30,000 jobs. Receipts into State coffers are €1.1 billion ahead of what we profiled. As a result, we have been in a position to focus, for the first time in many years, on increasing the delivery of essential public service spending and to consider dealing with certain expenditure pressures through Supplementary Estimates. We are still going to meet all our fiscal targets in spades. The reduced 4.8% deficit for this year will be handsomely exceeded and we will have a deficit of well below 4% this year, reducing next year to 2.7%. Therefore, it is clear we should deploy some of the additional capacity we have to meet pressures. After years of tight budgeting, we should ease the pressure in some areas.

The Deputy is quite wrong on a number of the assertions she made and I have corrected them. The €1.2 billion additional Supplementary Estimate is not new money. Some of these things are a timing issue, as indicated. Some €177 million, for example, in the Department of Agriculture, Food and the Marine, arises because moneys expected from the European Union this year will not come until next year. We will get the money next year, but we must provide for it this year. A sum of €77 million from the Department of Education and Skills is an accounting sum, because the Comptroller and Auditor General asked for it to be accounted for in 2014 rather than 2013. Of course, that will reduce the expenditure in 2013.

The real and only additional money - because the rest has arisen largely from savings we have made across all other Votes - is in the health area, because I am conscious of the real pressures in that area. It is not that there was underfunding last year. For ten years we have had a Supplementary Estimate in the Department of Health and Children, because the provision of health services has become more complex and new drugs and services are coming on stream. There will always be that sort of pressure, not only in the Irish health service, but in every health service on the planet. I have discussed this with the OECD.

3:15 pm

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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I am glad the Minister has discussed this with the OECD. No matter who the Minister discussed it with, he or she would not have to be an expert in economics or health management to tell him the effect underfunding has had within the health system. In my view, the allocation of these moneys to health are an explicit recognition that the figures the Minister delivered here in October fell well short and that he was well aware of that at the time.

I welcome the fact that additional moneys are going to the health service as they are badly needed.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Deputy cannot have it both ways. She cannot criticise it and -----

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Deputy McDonald, to conclude.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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We talked earlier about the expenditure benchmark under the six-pack and European semester. How will Supplementary Estimates fall once this new regime is introduced, from 2016 onwards? What will be the effect of that expenditure break on any Supplementary Estimates?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Deputy is focusing on health expenditure and I have indicated to her that I took the opportunity to talk to the expert panel with the OECD on health expenditure generally within OECD countries. Health expenditure is a pressure point everywhere and there is no simple solution anywhere. It amounts to some degree of rationing, either through an insurance or public health model and will be a difficult nut to crack in the future. The notion that we can accurately determine at the beginning of a year exactly what the health pressures will be, what pressure will be on hospitals, what drug refunds will be made or what new drugs will come on stream to meet demand is not facing reality.

On the question regarding the effect of the new European semester on budgeting, I indicated previously that we will be able to increase expenditure in line with projected growth increases. The exact modality of that is a matter of discussion between the Commission and the Department of Finance currently. I am confident we will be able to meet all the social pressures we can afford to meet within the moneys we can generate in this country without impediment from the European Commission.

3:20 pm

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister for Health was not short about being able to predict accurately and speedily that the moneys allocated in October would fall well short of what will be required in the system. I am concerned about the new rules that will apply from 2016. In response to an earlier question, the Minister said he and the Government will regard the expenditure benchmark as binding on the State, as it is on all others. There is another school of thought within the European Commission that says the benchmark is simply a policy instrument and it is indicative and not binding in the way the Minister suggests.

I am concerned on two fronts - first, he will succumb to the notion that this is binding and, therefore, he must follow every detail of it; and, second, the effect that will undoubtedly have on the capacity of any future Government to introduce Supplementary Estimates. The Minister was quite glib when he said that as a matter of course we can meet all the additional spending and social pressures. If the benchmark is set at the 0.5% structural deficit limit, he will not have that discretion, which is worrying, not least at a time he is heralding the end of austerity in his own words.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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With regard to the Minister for Health being able to predict an overrun in October, I had indicated to the House that there would be an overrun in the health Estimate by October 2014. The Deputy is asking for me to have been able to predict this in October 2013 when I introduced the budgetary parameters. That would be a little more challenging but from now on it would be a brave Minister who would ever stand up and say with certainty there will never be a Supplementary Estimate required for the Department of Health because of the complexity in delivering a modern health system with incredibly fast changing diagnostics, treatment procedures and drugs, all of which put pressures on the system. However, thankfully, they are improving both life expectancy and the quality of life.

On the general question of how we will operate in budgetary terms within the fiscal parameters, I answered a previous question on that at length.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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What is the current exposure of the State and its agencies, including semi-State bodies, to public private partnerships, PPPs, that have been entered into in recent years? Has he plans to increase the use of PPPs?