Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I thank colleagues for their positive remarks concerning this legislation. In its simplest terms, it puts general Government expenditure over a three-year period and Government ceilings on expenditure, Minister by Minister, Department by Department, on a statutory basis. That is very useful because colleagues will know what they have to spend over a three-year period and the Government knows what it needs to spend over a three-year period. It is important that this is set out in law.

In respect of the last point made by Senator Mooney, we must take responsibility for our problem. Yes, there is an international component to it. We cannot spend money we do not have and at the moment, we are spending money we do not have, which is not sustainable. One thing that struck me during the course of the referendum on the fiscal compact treaty was that people are not stupid. They understand economics and that one can only spend what one has and they want a more sustainable basis for public expenditure. We as politicians across the political spectrum need to engage with the public on this issue. This is about us taking responsibility for our problems and addressing them in the best way we can.

The dilemma was well put by Jean-Claude Juncker, the long-standing Prime Minister of Luxembourg, who is in a bit of trouble at the moment. I was at a Eurogroup meeting chaired by him two years ago. I was standing in for the Minister for Finance. The issue of VAT and tax fraud came up and a representative from one of the countries around the table said that we must always do the right thing - the moral thing - in terms of tax fraud. Mr Juncker said that, of course, we must always do the right and moral thing but that sometimes elections get in the way. It explained perfectly the cyclical political problem faced across Europe in terms of politicians spending money they do not have and another parliament then having to make up the deficit. That is the problem we face.

We must deal with the runaway train of public expenditure. We have managed to do that. I have consistently said that we were caught in a perfect storm. In 2008, our tax base went from €51 billion to €37 billion over a period of months. Within a year, our tax base collapsed at a time when huge numbers of people were coming on the live register and the number of medical cards virtually doubled. At a time when taxes were coming down, expenditure was going up because of this existential crisis. Obviously, we must get the deficit down. It is worth pointing out that this Bill is effectively creating a statutory basis for making sure our public expenditure system is put on a long-term sustainable basis. That is something that is very important.

It is important that we have a debate on long-term economic planning. I understand this was touched on by Senators Bradford and Barrett. Having these three-year ceilings in place, which is more medium than long-term, will help public discourse and will certainly help us to take a more prudent approach to public expenditure given the crisis the country has faced in recent years.

I fully agree with Senator Darragh O'Brien about openness and transparency. The Government has a very open view about debates in this and the other House about alternatives for the budgets. It is also worth saying that we have put in place a new budgetary approach to annual budgets for committees and Departments whereby they are encouraged to have a discussion in advance of the debate and have some input into that and Ministers will take responsibility for replying to those proposals at committees. I wish to be frank about this. This is not just big bad Government tagging off committees. We have seen lots of ways to spend money but very few ideas about bringing in money either through tax or cutting back. We need to have an honest discourse about this at committees. Rather than producing wish lists of things we need to spend money on, we need a frank engagement about the things we need to stop spending money on if we are really honest about this. Yes, we want an open and transparent debate once it is honest for everyone and once Opposition parties and Independents are frank about what needs to be done rather than pretending that one can find €500 million by better management without actually specifying what it is. That is just hocus-pocus. Nobody actually believes that.

I do not mean to attack Sinn Féin but the problem it has every year is that it opposes all the cuts we must implement and in the following year's pre-budget submission, it does not compensate for those decisions it proposed so it takes our figures as the baseline figures despite the fact that it objected to all the cutbacks we have made. It is a fundamental lie because if it is going to change all the things it is opposed to, it means the hole it must fill is twice as large as the one we must fill. I know we will come back to this issue in September and October. I apologise. I do not mean to pick on Senator Reilly.

We need openness and transparency and for all of Parliament to be involved in this. Senators Barrett and Darragh O'Brien spoke about capital expenditure. If I can be frank, we are building bog standard stuff now. We are putting money in roads; social housing, for example, retrofit schemes; and primary health care centres. The day of the dramatic big project is over. I will follow up the point made about Narrow Water Bridge. My understanding is that it is PEACE money. I know some of the funds are coming from our Government and from the Northern Ireland Executive but most of the money is EU PEACE money. I will find out about the €20 million. I did not know about that and I thank the Senator for bringing it to my attention.

The point was made that we need cost-benefit analysis by my colleagues here and Senator Barrett. Yes, we need rigorous cost-benefit analysis and local authorities should be doing the same. I have a very simple arrangement in my own Department for the OPW. We have a model for all applications from local authorities to spend public monies on minor grants. One puts the information into the model and gets the benefit from it. If one hits the target, one gets the money and if one does not hit it, one does not get the money. The question of whether I have an involvement with it is irrelevant. The local authorities know where they are coming from when it comes to applications to us. There is an objective model, which we need to see across the system.

Senator Barrett made the point that if one does not have money, one should not be spending it. A friend of mine has a business. He told me that in December of every year, nobody travels because the budget is used up. His point is that if the money is not there, it is not there. We need to have the same attitude, particularly in those Departments that overspend every year. A total of 80% of all Government expenditure is in three Departments so we must keep a very close eye on them, which is why the new Department of Public Expenditure and Reform is there to make sure we have that oversight. I agree with the Senator that we must reduce the size of Government. We have done it. Three years ago, we had a public sector of 330,000. Now, we have a public sector of 290,000 and within two years, we will have a public sector of 280,000. We have taken 20% from the cost of running Government. We have gone from €20 billion to €17.5 billion and it will be €16.5 billion by the end of 2015. I am a Minister in three Departments but I am paid once. In previous Governments, there would be three Ministers of State so I am doing three jobs for the price of one, which is not bad.

In response to Senator Barrett's comments about the fiscal council, it results from the Two Pack. Under the Two Pack agreement signed off in May 2013 by the ECOFIN and the council, a country must have an outside body which endorses the model upon which its forecast for the future is made. We thought it logical that the fiscal council, which is independent of Government and is in statutory form, would effectively give that endorsement, not so much to the Commission but to the Irish Government. It will be producing a piece of work between now and the budget to determine whether our forecasts are prudent and right or wrong. That is good because can undertake rigorous academic analysis on the basis of the profiling of the models that are made.

I have good news for Senator Feargal Quinn. The Senator thinks nobody listens to him but that is utterly wrong.