Feargal Quinn (Independent)

I welcome the Minister to the House. I envy him as well, as all former Ministers for Finance must given that he is €2 billion better off than last year. I take his point that €670 million of that is a one-off that should not otherwise be used. It is also fair to say that he is the envy of every finance Minister in Europe and our role today is to steer the use of these finances in the correct direction. It was interesting to read the supplement on Ireland published last month by The Economist which mentioned the luck of the Irish. I suggest that luck has nothing to do with it. The figures given show that GDP per person rose from 69% of the EU average in 1987 to 136% today. This shows that a great achievement has occurred. We have also done well in the case of GNP. It seems that we have succeeded by having a very steady hand on the tiller, in bad times and in good. This happens to be one of the good times, so let us make sure that the steady hand remains and that we use it to invest in the future rather than overcome immediate problems.

There is something fundamentally unrealistic about this annual song and dance we go through about the Book of Estimates. The discussion tends to fall into two categories. One is to compare what a particular Vote got this year with what it got last year. Success in this area is judged by how big an increase a particular spending area managed to squeeze out of the Department of Finance. The other is to compare the different areas of spending and pit them against each other in a race to see which arm of Government gets to spend the most. That is the way it has always been, but I suggest that we must change. This issue gets the most attention and consumes the largest amount of newsprint and air time because it sets all the people with particular special interests in a great struggle against each other. This struggle keeps the mandarins in Merrion Street very happy, because as long as people are fighting each other for a share of resources they do not have time to address more fundamental questions.

The kind of question that gets ignored in this annual struggle is the issue of value for money. The Minister mentions value for money twice in his 14 page speech and I am glad he did so. However, in deciding how much a particular Vote is to get, the system never asks if the public get value for this spending. Will we get a better return on our money if we spend it on this rather than on that? Instead of questions like that, we hop up and ask questions like the one I am about to ask. How can we be serious about making Ireland a leader in the knowledge society if we do not fund our universities properly?

In the past two years, the Book of Estimates has seen cuts in the amounts made available for third-level education. There is provision for some increase this year, but not enough to repair the damage that has been done. It is certainly not enough to provide the quantum leap in third-level funding called for in the recent OECD report. That report very effectively called our bluff. It stated that if we want to be world class, we must put our money where our mouth is, which means much more money than is being made available now.

I can do special pleading as well as anybody else, but I also want to focus on a basic challenge we face in running this country. Where is the money going to come from to pay for all that we want to do? In this vast sum of €38 billion provided in the Book of Estimates, we can see that the three big areas of Government day-to-day spending are in health, education and social welfare of one kind or another. Each of those areas gobbles up a sizeable fraction of that €38 billion. However, what those areas share, apart from the fact that they cost a lot, is that each of them is failing to do the job we expect and need it to do. No one can argue that our health services are satisfactory or that our health system provides for all our citizens in a fair and equitable manner. No one can argue that our education system is appropriate to our needs. Quite apart from the need to resource third-level education properly, there are major gaps in the provision at all levels of the system. Too many of our children suffer educational disadvantage and have their potential in life restricted as a result. Too many of our children go to rat-infested primary schools where the roofs are falling in. Too many children, at both primary and secondary level, do not receive the kind of individual attention that will bring out the best of their abilities. Nobody can argue that we have eliminated poverty in this affluent country. Not only have we failed to do that; we have actually widened the gap between the haves and the have-nots. Whenever the time comes to tighten the belt, it is always the have-nots who are squeezed the most.

We are not doing a good enough job in these three big spending areas. The obvious response is to say that each needs more money, but before we do that, let us consider the reality that faces us. Over the past decade, we have moved to a low-tax society and have reaped the benefits of that approach. However much we might argue on a philosophical plane that we should raise more of our national income through taxation and spend it on better services, the political reality is that this is simply not on. Senator Mansergh has already stated that we have shown that a lower tax rate actually increases the amount of tax raised and the amount of money available to us. No political party that seriously wants to get into office would dare suggest we turn our backs on the low-tax society we have created in this country over the past decade. As we look into the future, this puts a serious constraint on the money we have available to spend.

The returns from our economic growth will create more resources in the form of taxation. We should recognise, however, that there is a limit to that growth. There is no serious possibility of greatly increasing the amount of money available for expenditure because it is unlikely that any Government in the foreseeable future will be able to find a solution. Raising taxes does not appear to offer such a solution. Our dilemma is that we are not doing the job we want to do adequately — we have heard already today from some of the many people who are screaming for more resources — and the total amount of funding which is available is increasing only at a modest rate. What can we do? If we want to come to grips with the challenges that face us, we need to find ways of spending our money better. It is as simple as that — there is no alternative.

I have previously spoken in the House about the crazy way we spend money in trying to run this country. We can talk about spending €38 billion a year without seriously considering the concept of value for money. The Minister referred to it twice in his speech, but when the fight for resources starts, the Department of Finance says "No" all the time. Those who wish to squeeze money out of the Department shout loudly and use as much political clout as they can. It happens in this House and in the Dáil. As a consequence, money is allocated not on the basis of where it will be of most benefit or provide the greatest return on taxpayers' investment, but on the basis of political considerations which do not relate to value for money. There is no follow-up after we have spent the money, which is even worse. If something fails, that is seen as a reason to throw more money at it.

There is no systematic effort to measure the results of the money we spend. There is no system in the public service to ensure we get better and better value for each euro the taxpayer invests in running the country. I suggest that the money is forgotten about after it has been allocated. Businesses assess the cost of achieving certain goals and objectives and decide whether to pursue them on the basis of whether they represent good value for money. We have heard in recent days of instances in which money which was allocated was forgotten and not spent at all. If we continue to run the country in such a spendthrift way, we will not achieve the great things we want to do. If we stop the annual Book of Estimates charade and turn our attention to getting better value for what we spend, however, we will have taken a step in the right direction.

I congratulate the Minister for Finance on the steps he has taken so far, but I would like him to devote his attention to a different way of doing things in the future. I ask him to concentrate on value for money, in particular. I thank the Minister for staying in the House to hear my contribution.