Seanad debates

Tuesday, 15 December 2015

Appropriation Bill 2015: Second and Subsequent Stages


11:30 am

Photo of Simon HarrisSimon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank all Senators for their constructive contributions to what is a technical item of legislation.To pick up where Senator Hayden left off, I agree that it is worth giving time to scrutinise this legislation because that would be a useful overview of where we find ourselves in terms of the public finances. Undoubtedly, the economic crisis had a profound impact on those finances. When the Government was elected, the budget deficit stood at 12.5% of GDP. This year, it is on track to be below 2%. General Government debt has reduced from a peak of 120% of GDP and is forecasted to decline to close to 90% in 2016. That is still much too high, but is back in the realm of the European average and is something that we can reduce further in the coming years.

Sustainable public finances are required if the Government is to provide the necessary infrastructure to encourage economic growth and job creation and deliver essential public services to our citizens. The fiscal adjustment implemented in order to exit the EU-IMF programme of support successfully and return sustainability to the public finances required significant tax increases and expenditure reductions. Gross voted expenditure was reduced from its peak of just over €63 billion in 2009 to €54 billion in 2014. In implementing expenditure reductions, the Government's priority was to ensure that a targeted approach was adopted in order to protect key public services and social supports to the greatest extent possible at a time of increasing demand. It is fair to say that budget 2015 marked a turning point in our recovery, when expenditure reductions were no longer required to meet our fiscal targets and we were in a position to provide targeted increases for front-line services.

Against a background of Exchequer tax receipts being almost €3 billion ahead of profile this year, additional funding has been made available through Supplementary Estimates of €1.4 billion to support key services and social supports. While the bulk of the additional revenue has gone to pay down debt, the key sectors of health, social protection and education have been prioritised. These are issues of importance to Senators on all sides of the House and account for more than 80% of gross current expenditure. The Government has protected core social welfare rates and, under budget 2016, the State pension will be increased by €3 per week. Though small, this is the first increase in the State pension since 2009. Our commitment to protecting society's most vulnerable is found in data published by EUROSTAT this year, which showed that Ireland's system of social transfers - the redistribution of wealth and income to those most in need - is among the most effective in Europe at reducing the risk of poverty.

Aside from social transfers, the Government's fundamental reforms to labour market activation represent a significant modernisation of Ireland's tackling of unemployment through a two-pronged approach. Pathways to Work ensures that the unemployed are given a chance to upskill and rejoin the workforce while the Action Plan for Jobs has directed its efforts towards boosting labour demand through key reforms. Unemployment has decreased from a peak of over 15% to below 9%. While that remains too high, it is moving in the right direction towards full employment, which must be our collective relentless pursuit. I am not just referring to headline full employment, but real full employment, in which we tackle issues like long-term unemployment and people with disabilities wanting to access the workforce but not being afforded the supports to do so. I challenge the next Oireachtas to do that.

One of the Government's first acts was to reverse the cut to the minimum wage. From January, the new statutory minimum wage will rise to €9.15 per hour. Our investment in the health sector has ensured that key front-line services have been maintained and will be enhanced further through initiatives such as extending free general practitioner, GP, care to children under six years of age, which is due to be extended next year to children under 12 years of age. The additional funding provided to health this year has allowed staffing levels within the sector to be increased by more than 3,700 in the first ten months of 2015, with this increase primarily and rightly concentrated in our hospitals. The amount to be allocated to health next year will bring funding back to pre-crisis levels, but I take Senator Ó Murchú's point that it is not all about funding and must be about continuing to reform. I welcome the initiative taken by the Irish Nurses and Midwives Organisation, INMO, today in deferring industrial action and considering a number of the proposals that it discussed at the Workplace Relations Commission, WRC, last night to address the important issues being experienced by front-line nurses in accident and emergency services on a daily basis.

Since the beginning of 2012, we have invested more than €1.25 billion in school buildings, sought to protect DEIS expenditure, which prioritises the educational needs of children and young people from disadvantaged areas, protected the pupil-teacher ratio and, in budget 2016, reduced the ratio from 28:1 to 27:1 at primary level and from 19:1 to 18.7:1 at second level. The allocation set out in next year's budget will provide for more than 2,260 new teaching posts, including 600 resource teachers. The expansion of the early childhood care and education, ECCE, programme announced in budget 2016 will provide a second free preschool year to 75,000 children and support children with special needs in accessing those preschool years.The social housing strategy aims to deliver 3,100 social housing units in 2016, with 3,000 units to be delivered in 2015. An additional 10,000 households will receive housing assistance payment in 2016.

I want to return to the issue raised by Senator Ó Murchú regarding the recent flooding. This issue is very close to my heart and to my ministerial responsibilities. The recent flooding has clearly highlighted the need for the Government to do exactly what it wants to do, which is to increase significantly our investment in flood risk management in this country. We cannot get away from the fact that we are seeing more and more severe weather events and we are likely to continue to see that. We are all aware of the consequences of climate change. Through our capital plan, we intend to spend more on flood relief in the next five years - €430 million - than has been spent in the last 20 years. That cannot be lost on people. While I very much welcome the generous remarks of Senator Ó Murchú, it is important that people do not play politics with this. People have gone through a very difficult few weeks. We have had a national weather crisis. We have seen over a month's worth of rainfall in 24 hours in parts of this country.

Yesterday, I met with the people in Bandon and Skibbereen. I met with people whose shops had been flooded again. This is a situation we all have to resolve, but we must also be honest with people. Major flood relief schemes take about five years to deliver. We have to get them right. There is only one chance. One cannot retrofit a flood relief scheme. We have to get the consensus of the community. One often has to try to acquire land or go through landowners' property. We have to go through procurement and planning. These are difficult procedures, but the important thing is that we get on with the job. We now have the funding scheme and we have the national policy, through CFRAM, where people can now see 300 areas in this country on cfram.iethat are at risk of flooding, and by this time next year we will have solutions and options to rectify those problems and to put flood relief schemes in place. It will take a significant amount of time to deliver this programme, but the OPW will move from delivering, on average, six flood relief schemes per year to 20 flood relief schemes per year. This is a major increase in capacity.

We have done exactly what Senator Ó Murchú has suggested. We have put in place supports for business, which is something we have not been able to do in the past. We have put in place supports for businesses that have been flooded and that do not have flood insurance. I heard very clearly from business owners in Bandon that they did not want a complicated, bureaucratic scheme wrapped up in red tape. They have been through enough and they want a simple scheme. We have put in place a Red Cross scheme. Claimants self-declare up to €5,000 worth of damage, we take them at their word, they get their form stamped by the local authority and they get payment before Christmas. There is a further €15,000 for each business that has experienced more significant damage. In the interest of the taxpayer, that is vouched and does take longer, but we can get initial payments of up to €5,000 to every business with up to 20 employees that has been flooded and does not have flood insurance.

As I have also made clear, the Government is examining the policy area of flood insurance, looking at what other countries do. Through an interdepartmental group on flooding, the Department of Finance is examining this and will report to Cabinet in the spring. Whoever is in Government in the spring will be faced with policy choices in this area. People are going to have to face up to these choices if we want to ensure we are proactive and not reactive to the issue of flooding.

I thank the emergency services, the Red Cross, the Civil Defence, the Garda, local authority workers and the communities that have worked day and night. We always hear, and rightly so, about the towns, the businesses and the homes that have been flooded, but I know from my briefings with the national emergency co-ordination committee that there are so many homes and businesses that were not flooded as a direct result of their heroic efforts. More than 700 members of our Defence Forces have been deployed and 20,000 sandbags were filled in County Clare alone. That is a testament to the inter-agency and community response to this crisis.

Senator Hayden is right that there is a balance to be struck between avoiding what used to happen in the past, before 2004, when at the end of the year Ministers would rush to spend because they had to get rid of the money or lose it into an apparent black hole, and spending the money required. They can now carry over that money. The sum of money Ministers have been given is an estimate of what they expect to spend this year, but there has been criticism - including of the OPW - when a Minister does not spend all his or her capital in one year. The prudent thing to do is to ensure that one can only spend the money when it is legally right to do so, when schemes are right. The capital carryover allows people to do that. I agree with Senator Hayden on the capital programme. I do not think anyone in Government would disagree. We could do with a larger capital programme, but we now have one. Cleverly, the Minister for Public Expenditure and Reform, Deputy Howlin, has built into that programme a review in 2017, so that if the country continues on this track - and that cannot be taken for granted - we will be able to look at further expanding the capital programme at that stage.

This Bill is important. While technical in nature, it will ensure that people on jobseeker's allowance, disability allowance, and the State pension, along with public servants such as nurses, gardaí and teachers, get paid, and that all other pay and pensions funded through voted money, along with pay to suppliers of goods and services across a range of SMEs, is provided.It is to authorise our supplementary expenditure and to approve the expenditure that is incurred during 2015. I commend the Bill to the House.


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