Seanad debates

Friday, 15 December 2006

Appropriation Bill 2006: Second Stage


Question proposed: "That the Bill be now read a Second Time."

12:00 pm

Tom Parlon (Minister of State, Department of Finance; Laois-Offaly, Progressive Democrats)
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As today's debate on the 2006 Appropriation Bill will be brief, on the basis that the Seanad intends to have a more substantial debate on the topic of public expenditure early in the new year, I propose to confine my contribution to setting out the purpose of the Bill and its provisions.

The main purpose of the Appropriation Bill 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. The gross provision for public expenditure in 2006 inclusive of expenditure from the social insurance fund and the training fund is €50.7 billion, comprising €43.9 billion current and €6.8 billion capital. Some €35 billion or 69% of the total provision for current spending was allocated to the priority areas of health, social welfare and education.

In addition to providing for the 2006 Estimates, the Bill in section 2 provides for the carryover of unspent voted capital into 2007 amounting to just over €159 million under the multi-annual capital envelopes. In section 3, in line with what is now established practice, a technical provision is included to allow for deferment of the end-year deadline for the financial resolutions passed on budget night. Again in line with established practice, the Seanad is also being asked to approve an early signature motion to facilitate a request to the President to sign the Bill earlier than she would normally do.

Section 1 appropriates for the year 2006 the net sum of almost €40.2 billion to the various services listed in Schedule 1. The 2006 sum includes Supplementary Estimates of almost €455.7 million on 12 Votes which have been approved by the Dáil. The figure of €455.7 million includes a Supplementary Estimate of €340 million in respect of reimbursement of certain long-stay charges. I understand from the Department of Health and Children that expenditure of some €26 million is now expected under this scheme in 2006, due to delays in getting the scheme up and running. I understand these difficulties have been resolved and provision of €360 million has been made for this purpose in the Health Service Executive Vote for 2007.

The latest indications are that overall spending for 2006 will be within budget. The projected outturn on net current spend for this year is €33 billion which is broadly on target and it is €6.63 billion for capital. The actual end-year Exchequer outturn will be published in the end-year Exchequer statement on 3 January 2007

This section of the Bill also seeks approval for the use of departmental receipts of more than €4.02 billion as appropriations-in-aid for the services listed in Schedule 1.

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 carryover of some €159 million from 2006 to 2007 or 2.4% of net voted capital for 2006. The corresponding capital carryover from 2005 to 2006 was €289 million or 5% of net voted capital.

In accordance with the provisions of section 91 of the Finance Act 2004 which is the legal basis for capital carryover, section 2 of this Bill provides for this carryover by Vote. The relevant Votes are listed in Schedule 2.

The €159 million of capital carryover cannot be spent in 2007 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 carryover facility means this money is not required 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 2007.

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. 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 to ensure the necessary legislative authority is in place for the final end of year issues from the Exchequer.

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 2006. Under the provisions of the Central Fund (Permanent Provisions) Act 1965, the enactment of this Bill also provides for essential continuity by allowing for interim expenditure to be incurred on existing services in 2007 until such time as the 2007 Estimates are voted on by the Dáil.

I look forward to returning to the Seanad in the new year to outline the Government's approach to public expenditure policy and to discuss, in more substantive terms, the improvements in public services and what has been achieved for the substantial levels of public expenditure. I commend the Appropriation Bill 2006 to the House.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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I welcome the Minister of State and his officials to the House. The Appropriation Bill is an annual event on the last Friday before the Christmas recess. The House will have an opportunity in the new year to have a longer exchange of views on the items referred to by the Minister of State. The sums of money involved are extraordinary. I recall the remarks made by Senator O'Toole during the debate on the budget when he said that when one refers to €1 billion here and €1 billion there, one is soon talking about serious money.

The sum of €44 billion appropriated in current expenditure is serious money. I heard a reference on the radio to the time when the late Mr. Haughey was Minister for Finance and to an initiative of his at the time. Current expenditure at that time was in the hundreds of millions and we have come a long way in the intervening years. I am interested in the Minister of State's remarks about the delay in setting up the long-stay charges reimbursement scheme. I am pleased provision is included in this year's expenditure for that scheme and that there will be future funding to ensure those who were incorrectly charged are refunded.

I will hold my fire until the House has a fuller discussion in the new year. Senator Quinn on the Order of Business referred to inflation. Both the Minister, Deputy Cowen and the Minister of State, Deputy Parlon, have contributed to the discussions on inflation. The further increase in the monthly rate of inflation announced yesterday is a worrying development. The Opposition will have an opportunity in the new year to have a fuller and more frank discussion on the issue. This side of the House will not cause any difficulty to the Minister of State when putting this Bill through the House today. We will facilitate its early and swift passage through the House.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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I welcome the Minister of State and his officials to the House and wish them a happy Christmas and an equally successful new year.

The end of the year sees the public finances in excellent order, with economic growth of 7%, employment rising, economic activity buzzing and visible all around the country and the same prospects for next year.

Reference was made to inflation. I would point out that the average inflation for the year is likely to be under 4% as it also will be next year, and a close eye will be required to be kept on it.

I will make the opposite point to that made on the Order of Business this morning. By and large we get very good value for our public services. People who have not worked in the public service simply do not appreciate the amount of work done which is way beyond the minimum by many public servants and civil servants, and in many cases for no extra reward. The productivity is far higher than organisations like ISME and, dare I say it, sometimes the farming organisations are inclined to credit. This Bill is a piece of budgetary housekeeping. I support it and wish it a speedy passage.

Tom Parlon (Minister of State, Department of Finance; Laois-Offaly, Progressive Democrats)
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I thank the Senators for their contributions. Senator John Paul Phelan referred to the changes that have come about. I remember when we used to talk about big figures as being telephone numbers but now none or our telephone numbers, local or otherwise, would be the size of €50.7 billion. This substantial figure indicates the success of our economy.

I thank the staff of the Seanad and wish everyone a very happy Christmas.

Question put and agreed to.