Noel Ahern (Dublin North West, Fianna Fail)

I welcome the opportunity to address the Seanad on the Appropriation Bill 2007. I propose to outline briefly the purpose of the Bill, to mention its provisions, to highlight the significant reforms introduced to the budgetary and expenditure process this year and to run through some of the outputs from the amounts appropriated in 2007.

The main purpose of the Appropriation Bill 2007 is to give statutory effect to the departmental Estimates for supply services, both current and capital, including all the Supplementary Estimates which have been approved by the Dáil since the last Appropriation Act. This year's Appropriation Bill takes account of the transfer of marine functions from the former Department of Communications, Marine and Natural Resources to the new Department of Agriculture, Fisheries and Food. The Bill makes provision for net voted public expenditure in 2007 of over €45.1 billion, consisting of current expenditure of €37.3 billion and capital expenditure of €7.8 billion. Some €29.3 billion, or 66% of the total provision for current spending, has been allocated to the priority areas of health, social welfare and education. In addition to providing for the 2007 Estimates, the Bill provides in section 2 for the carryover into 2008 of unspent voted capital amounting to over €126 million under the multi-annual capital envelopes. A technical provision is included in section 3 of this legislation, in line with established practice, to allow for the deferment of the end of year deadline for the Financial Resolutions which were passed on budget night. The Seanad is also being asked, in line with established practice, to approve an early signature motion to facilitate a request to the President to sign the Bill earlier than she normally would. This request is being made to allow the Comptroller and Auditor General to clear the end of year issues from the Exchequer.

Section 1 appropriates for 2007 the net sum of almost €45.1 billion to the various services listed in Schedule 1. The 2007 sum includes Supplementary Estimates of almost €323 million, which have been approved by the Dáil in respect of 13 Votes. The latest indications are that overall spending for 2007 will be within budget. The projected outturn on net current spending for this year is €37.1 billion, and that of capital spending is €7.7 billion. These are broadly on target. The actual end-of-year Exchequer outturn will be published in the end-of-year Exchequer statement on 3 January. As is normal, this section of the Bill also seeks approval for the use of departmental receipts of more than €4.2 billion as appropriations-in-aid for the services listed in Schedule 1.

Turning to section 2, under the multi-annual capital envelopes up to 10% of voted Exchequer capital may be carried over to the following year. There will be a capital carry-over of some €126 million from 2007 into 2008, or 1.7% of net voted capital for 2007. This is the lowest capital carry-over since the introduction of the facility in 2004, which provides evidence that Departments have increased their capacity to deliver significant capital projects within the targeted timeframe. The corresponding capital carry-over from 2006 to 2007 was €159 million, or 2.4% of net voted capital.

In accordance with the provisions of section 91 of the Finance Act 2004, which provides a legal basis for capital carry-over, section 2 of this Bill provides for the carry-over by Vote. The relevant Votes are listed in Schedule 2. The €126 million of capital carry-over cannot be spent in 2008 until the Dáil approves an order early in the new year specifying the capital subheads in each of the Votes concerned against which the money will be spent as a first charge. The availability of the carry-over facility means that this money does not have to be surrendered at the end of the year and that it is available for spending on priority capital programmes within the Votes concerned in 2008.

Article 17 of the Constitution requires that the financial resolutions of each year must be enacted into law by the end of that year. However, the end-of-year deadline can be deferred if an Act to that effect is passed before the end of that year. As is normal, section 3 of the Bill makes provision for this deferment to be invoked. The inclusion of this provision in the Appropriation Bill will maintain the usual statutory deadlines for passing budget measures into law. Identical provisions have been included since the 1997 Appropriation Act. The Seanad is also being asked to approve an early signature motion. This is sought each year in order to ensure that the necessary legislative authority is in place for the final end-of-year issues from the Exchequer.

I will give a brief review of economic and expenditure developments in 2007. In regard to the general economic situation, the Minister for Finance noted in his Budget Statement speech an easing of the pattern of strong growth, although it continues at a rate that is the envy of many other countries. For 2007 as a whole, GDP growth of around 4.75% is expected. We estimate that an additional 72,000 jobs will have been created this year and that unemployment will still be among the lowest in the EU. In terms of public expenditure, 2007 has seen the roll-out of significant reforms in financial processes. Some of these were announced by the Minister for Finance in his 2006 budget, including the publication of the pre-budget outlook in October of each year and of annual output statements by Departments in conjunction with their annual Estimates.

The pre-budget outlook, which was published for the first time in 2006, has made an important contribution to informing the public and the Oireachtas of the background that underlies the annual budgetary and expenditure process. The annual output statements specify the public service outputs that the public should expect to see delivered from the moneys that are voted to Departments by the Dáil each year. These output statements were prepared for the first time earlier this year, and I look forward to the 2008 round of statements, which will include a report on the actual performances of the Departments compared to the output targets set for 2007.

The latest step in the ongoing budgetary and expenditure reform process was announced by the Minister on 13 September last. This involved the introduction of pre-budget Estimates on an existing-level-of-service basis in the pre-budget outlook and the presentation of a unified budget. The pre-budget Estimates make clear to the Oireachtas and to the public at large the estimated cost of providing in 2008 the level of public services that were provided in 2007. In the unified budget delivered earlier this month, full details were provided on the areas in which additional spending is proposed. This transparent approach is in accordance with the proposal from the Committee of Public Accounts in its October 2005 report on Estimates reform that a clear distinction be instituted between pre-budget and post-budget allocations.

The unified budget has assisted the Government in managing public finances in a more transparent and effective manner. All of the key decisions on both the spending and revenue sides of the budget were made together and announced on the same day. This is altogether a more coherent approach to budgetary policy-making. I am pleased to state that these major reforms have been achieved and are delivering a more constructive and relevant examination of the way in which the nation's finances are run.

I will give a brief outline of some of the outputs and outcomes achieved for the expenditure we are appropriating today. The Minister's introduction of annual output statements, as I set out earlier, should lead to a greater linkage between the outputs and the net expenditure of €45.1 billion included in this Bill. There have been many achievements in priority areas such as social welfare, health, and education. Last year the Minister for Finance announced the largest ever welfare budget package, with an increase of over €1.4 billion. This historically high package delivered on the Government commitment to bring State pensions to €200 per week, with the contributory pension increasing to over €209, and with substantial across-the-board increases providing very tangible benefits to more than 1.5 million men, women and children, including pensioners, low-income and welfare families, carers, those with disabilities, and dependant relatives. In the budget the Tánaiste announced further improvements on these fronts.

In the area of health, waiting times for most common procedures have been reduced to between two and five months, aided by the work of the National Treatment Purchase Fund, which has arranged treatment for more than 90,000 patients. Another improved outcome is that the number of persons holding a medical card increased by almost 60,000 in 2007. At the end of November the total number of medical card holders was 1.28 million.

Education is key to promoting our future competitiveness and building a modern knowledge economy. The staffing schedule at primary and post-primary level has been reduced by a further one point during 2007. There are greater numbers of places available in third level education than at any time previously. The number of full-time places available in 2007 was brought up to almost 139,000.

This year saw the initial roll-out of the ambitious programme for social and economic investment set out in the national development plan. As I mentioned earlier, the relatively low level of capital carry-over being sought is testament to the fact that our capital programme is proceeding apace. Indeed, 2008 will see a further increase of €836 million in gross capital investment, bringing the total to over €8.6 billion, or greater than 5% of GNP. This sustained commitment to investment in our economic capacity is essential to lay the foundation for continued economic growth, competitiveness and prosperity into the medium term.

The Bill before the House is necessary to appropriate the public moneys that have been granted by the Dáil for spending on public services in 2007, of which I have given a number of examples. Under the Central Fund (Permanent Provisions) Act 1965 the enactment of the Bill also provides for essential continuity by allowing for interim expenditure to be incurred on existing services in 2008 until such time as the 2008 Estimates are voted on by the Dáil. I commend the Bill to the House.