Seanad debates

Friday, 18 December 2020

Appropriation Bill 2020: Second Stage

 

10:00 am

Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

I thank the Leas-Chathaoirleach and Senators for having me here today.

The Appropriation Bill 2020 is an essential element of financial housekeeping that must be concluded by both Houses of the Oireachtas before the end of this year. The Bill serves two primary purposes. First, the Appropriation Bill is necessary to authorise in law all of the expenditure that has been undertaken in 2020 on the basis of the Estimates that have been voted on by the Dáil during the year. Section 1 and Schedule 1 set out the amounts to be appropriated for supply services. These relate to the amounts included in the Revised Estimates for 2020 voted by the Dáil earlier this year, and the Supplementary Estimates voted by the Dáil earlier this month. In aggregate, these Estimates amount to nearly €69.7 billion. Undoubtedly, this is a significant investment and reflects, when including expenditure on the Social Insurance Fund and the national training fund, approximately €16.75 billion in additional Covid-19 related expenditure supports provided this year. Without an investment on this scale, the Government would not have been in a position to introduce a series of critically important expenditure measures that were required to support our economy, enterprises and households from the unprecedented shock of Covid-19, and to provide the necessary funding to our health service to respond to the pandemic.

A further key purpose of the Appropriation Bill 2020 is to provide a legal basis for spending to continue into 2021. The passage of the Appropriation Bill allows, in the period before the 2021 Estimates are approved, continued funding of social welfare payments from the social protection Vote, Exchequer pay and pensions and other voted expenditure. If the Bill was not enacted before the end of December there would be no authority to spend any voted moneys in 2021 from the start of January until approval of the 2021 Estimates, since this authority for 2021, as contained in the Central Fund (Permanent Provisions) Act 1965, is based on the amounts provided for in the Appropriation Act 2020.

Under the rolling multiannual capital envelopes introduced in budget 2004, Departments may carry over, from the current year to the following year, unspent capital up to a maximum of 10% of voted capital. The multiannual system is designed to improve the efficiency and effectiveness of the management by Departments and agencies of capital programmes and projects. It recognises the difficulties inherent in the planning and profiling of capital expenditure and acknowledges that capital projects may be subject to delays. The carryover facility allows for a portion of unspent moneys, which would have been lost to the capital programmes and projects concerned under the annual system of allocating capital, to be made available for spending on programme priorities in the subsequent year.

The Appropriation Act determines definitively the capital amounts that may be carried over to the following year. The aggregate amount of proposed capital carryover from 2020 into 2021 is €748.5 million, which represents 7.5% of the total Exchequer capital programme of more than €9.8 billion for 2020. This figure is considerably higher than last year's carryover figure of €215.4 million, which amounted to 2.9% of the 2019 capital allocation. This increase reflects both the increase in the core capital allocation from 2019 to 2020 of approximately €1 billion, as well as the impact of Covid-19, both in terms of additional capital allocations to certain Departments and delays to other capital projects as a result of public health measures and restrictions.

The proposed amounts to be carried over by Vote are set out in Schedule 2 to the Bill. The 2021 Revised Estimates Volume sets out detailed financial and key performance information for Departments and offices. Part III of the Estimates includes, for each Vote availing of the capital carryover facility, a table listing the amounts to be deferred by subhead. In line with last year, section 3 of the Appropriation Bill includes a specific provision to allow for an advance from the Central Fund to the Paymaster General's supply account, with this advance then being repaid to the Central Fund in January. The amount included this year is up to €280 million. The need for this provision arises as certain Exchequer liabilities and social welfare payments are due for payment by electronic funds transfer on 1 January and 4 January 2021. With the banking system closed on 1 January, funding will need to be in place in departmental bank accounts before the end of this year to meet those liabilities on a timely basis. In addition, An Post needs to be pre-funded before the end of 2020 in order to physically transfer cash to its network of post offices throughout the State.

These Exchequer pay, pension and social welfare payments form part of the supply services for 2021, and these costs will come under moneys voted in 2021 in respect of which the usual processes and mechanisms for voted moneys will apply. The signed Act is required by the Comptroller and Auditor General for clearance of the end-year issues from the Exchequer. Under Article 25.2.1o of the Constitution the President may not sign a Bill earlier than the fifth day after the date on which the Bill is presented to him. However, there is provision in Article 25.2.2o of the Constitution whereby, at the request of the Government and with the prior concurrence of Seanad Éireann, the President may sign a Bill on a date earlier than the fifth day mentioned. In view of the urgency of this Bill, the provision in Article 25.2.2o is sought, and a motion to this effect is placed before the Seanad.Such an earlier signature motion has also been sought in relation to the Appropriation Bill in previous years.

The Appropriation Bill is an essential element of housekeeping which those of us in both Houses of the Oireachtas are required to undertake. The passing of the Bill will authorise in law all of the expenditure that has been undertaken in 2020 on the basis of the Estimates voted on by the Dáil during the year. The passage of the Bill, which is of fundamental importance to those who depend on our essential public services, will also ensure that payments funded from voted expenditure in 2020 can continue to be funded in 2021 in the period before the Dáil approves the 2021 Estimates. I commend the Bill to the House.

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