Tom Parlon (Laois-Offaly, Progressive Democrats)

Much has been said about different projects delivered under the previous national development plan. Frankly, many of these comments have been blown out of all proportion and are ill-informed. That is being polite about some of the comments. Taking the port tunnel as a case in point, the proper comparison to make is between the price at tender and the price at delivery. The tender price for the port tunnel was €580 million and the final cost was €750 million. Much of the difference between the two is due to the operation of the price variation clause, which captures construction inflation, and also the higher than anticipated land settlement costs. Taking the two issues into account, the final cost overrun is a more modest 6%. These are the facts of the matter.

In general terms, the experience of delivering infrastructure projects is positive and, as a number of Senators on this side of the House stated, increasing numbers of capital projects are being delivered, both on time and within budget. We are putting in place a range of measures to strengthen our focus on delivering projects on a value for money basis. The Government is well aware that there is more to public expenditure management and delivery of public services than making available the resources, as we have done. Good governance also requires that we ensure that the public gets good value for every euro spent. That is why the Government has put in place a comprehensive value for money framework that addresses every aspect of public expenditure, from the planning phase right through to implementation and delivery.

For example, in February 2005 the Department of Finance published new detailed capital appraisal guidelines to ensure that major capital projects are planned in a cost effective manner. In January 2006 the Department of Finance followed this up with a range of value for money requirements codified in a value for money, VFM, circular to all Departments. The new rules include the following requirements: an individual must be appointed as project manager for all major capital projects to monitor and manage progress; all projects costing more than €5 million must undergo a preliminary appraisal and a full detailed appraisal; all projects costing more than €30 million must undergo a full cost benefit analysis at detailed appraisal stage; all capital programmes with an annual value in excess of €50 million and of five years' duration or more must be evaluated at the beginning and mid-point of each five-year cycle unless otherwise agreed; for major information and communications technology projects an independent peer review process must be carried out at key decision points by an experienced team; and Departments and agencies must report progress on their capital programmes and major projects in their annual reports. The Department is certainly taking those issues seriously.

Senator O'Toole raised Irish language issues. To enlighten and remind him, the Official Languages Act 2003 was brought in by this Government, the first to bring in such legislation. We were the first Government to appoint an Irish language ombudsman. The Irish language has official working status in the EU and this took effect on 1 January 2007. Funding was introduced in 2006 for an advanced Irish language skills initiative and that is continuing into 2007. There has been investment of €132 million in Gaeltacht infrastructure schemes since 1997. An additional funding of €1 million was provided to assist organisations involved in language maintenance in the Gaeltacht, including a language planning initiative. In total, approximately €103 million is being made available in the 2007 Estimates for the Irish language and the development of the Gaeltacht.

Questions were raised about the sustainability of the national development plan and whether the country could afford it. I certainly heard some ill-informed criticisms from different quarters to the effect that public spending growth is not sustainable or that the national development plan is not affordable. The reality is quite different. Growth in current and capital public spending has been maintained at around 10%, on average, in the past five years, compared with an average annual gross national product, GNP, growth of around 9% in the same period. This level of increase has allowed for major improvements in public services, with tangible impacts in areas such as education, roads and public transport, and more resources are being allocated to strengthen front line public services such as health and justice. We have invested considerably in building our economic infrastructure in a way that supports the growth potential of our economy and the recent national development plan will provide a coherent framework for this strategic approach to resource allocation.

I do not feel I need to cover the subjects of health and child care, but more than 1,200 additional in-patient beds have been put in place since 2001. More than 50,000 patients have been treated under the National Treatment Purchase Fund and all persons aged 70 and over are now entitled to a medical card. In addition to significant improvements in the income guidelines for standard medical cards a general practitioner, GP, visit card is being introduced for certain low earners.

Reference was made to overruns and I think I have explained them fairly well.

A number of Senators raised the issue of stealth tax and it is important to point out that average tax rates have fallen for all categories of taxpayer since 1997 and all employees have seen their average rate of tax fall since 2002. People are earning more, paying proportionally less tax, there is greater equity in the tax system and a substantial number of people are paying no tax at all. Some 80% of people pay less than 20% of their wages in income tax and this year more than 750,000 people on low incomes will pay no tax, compared with fewer than 400,000 in 1997. There is now a statutory minimum wage and those earning the minimum wage are out of the tax net. I could go on in this manner with reference to a number of areas.

Reference was made to the Government's tax measures in support of the environment and Senator O'Toole referred to bio-fuels in this regard. The Finance Act 2004 provided for the introduction of a scheme for bio-fuels providing relief from excise duties. The number of applications made for relief under this pilot scheme indicated a strong interest in developing a bio-fuels industry in Ireland. Consequently, a provision was made in the Finance Act 2006 for a significantly expanded five year scheme on mineral oil tax relief, the scope of which extends to projects which are not of a pilot nature.

The scheme commenced in November 2006 and will provide for excise relief on up to 163 million litres of bio-fuel per annum, at a cost of more than €200 million over five years. When fully operational the scheme will result in CO2 savings of more than 250,000 tonnes, meet a target of 2% transport fuel market penetration by bio-fuels by 2008, help reduce our dependence on conventional fossil fuels and stimulate activity in the agricultural sector. As mentioned, the Minister for Agriculture and Food, Deputy Coughlan, made a significant announcement in this regard. These fiscal incentives were designed to kick start the domestic bio-fuel industry and the evidence suggests this is happening. Vehicle registration tax, VRT, relief for hybrid vehicles was introduced in January 2001.

Reference was made to the purchasing of carbon credits. The Government's approach is to meet our mission targets based on three fundamental areas. We will participate in the EU emissions trading scheme, a range of measures across the remainder of the economy and the purchase of State carbon credits. The purchase of carbon credits is just one element of a broader strategy aimed at meeting our ambitious targets of cutting greenhouse gases.

I have answered most of the questions raised and my colleagues on this side of the House have also dealt with them. The discussion this afternoon has illustrated that this Government has spearheaded a remarkable strengthening of Ireland's economic fortunes over its period in office. We have an economy that is, in many ways, the envy of Europe. With far-sighted initiatives such as Transport 21, the national spatial strategy and the national development plan the Government has demonstrated its vision for sustaining our economic development in the medium and long term.

Today's discussion has also shown that there is very little new or valid in the criticisms voiced. We all know the challenge is to ensure delivery of our commitments and value for money in the use of public funds. This is what the Government is determined to achieve and we have put in place structures and mechanisms to this end. I thank the Acting Chairman and Senators for the courtesy extended to me in the House today.