Martin Mansergh (Fianna Fail)

I welcome the opportunity to debate vigorously with Senator Higgins the state of the public finance. The Appropriation Bill is formal legislation which provides legal authority for spending during the year, not only the original Estimates but also the Supplementary Estimates. Referring to a Supplementary Estimate of €500 million, the Minister of State said this is a gross rather than a net figure and the expectation of the Minister and the Department is that spending will be on target. That is a good achievement in a general election year. It defies the predictions of the political and media critics. Senator Higgins referred to the Minister's earlier career. In the election year of 1981 public spending was considerably above target.

I am pleased to see the signs that public spending is on the rails. It is not out of control, nor are the public finances in crisis. The projected borrowing requirement for 2003 is 0.7% of GDP and the debt to GDP ratio is 34%, the second lowest in the European Union. We need a sense of perspective. Despite the urgings to the Minister that he should borrow considerably more, I am pleased he is being reasonably conservative. He wants to keep the country well away from any kind of financial precipice. Nobody knows how long the difficult economic conditions will continue and it is right that great prudence is being exercised.