Tom Parlon (Laois-Offaly, Progressive Democrats)
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I am glad of this opportunity to appear again before this House to resume our discussions on public expenditure and the background to the enactment last December of the Appropriation Act 2006, which gives statutory effect to voted expenditure for 2006.

Before we examine the detail of public expenditure it would be useful to put it in context by reviewing briefly our economic performance and the performance of the public finances in 2006. The economy continued to prosper and grew by more than 5% last year. For the first time in our history there are more than 2 million people employed in the State. Unemployment has fallen from 10% in 1997 to just more than 4% today with only 1.2% on long-term unemployment benefit. Our unemployment rate is one of the lowest in the EU, where the average unemployment rate is double that in Ireland.

The Exchequer Statement published last month showed the Exchequer recorded a surplus of nearly €2.3 billion in 2006. This compares to an Exchequer deficit of half a billion euro the previous year. The nation's debt now represents less than 25% of our income. It is no wonder the European Commission consistently ranks Ireland as one of the top performers at EU level when it comes to managing our public finances. In its recent assessment of Ireland's Stability Programme Update, the Commission noted once again that Ireland's budgetary strategy provides a good example of fiscal policies conducted in compliance with the Stability and Growth Pact. With so many more jobs and people employed, more goods and services are being produced and the consequent increase in tax receipts has allowed for a significant increase in the level of public services.

The end-year Exchequer statement showed that, on an issues basis, net voted current spending increased in 2006 by 11.2% or some €3.3 billion. Some 79% of these increases were targeted at the priority areas of social welfare, which received additional resources of €736 million last year; health, which received €1.2 billion extra; and education where additional current funding of €663 million was made available.

Net voted capital expenditure grew by 11.5% or by some €666 million in 2006. For the fifth year in a row expenditure in 2006 is expected to be within profile, reflecting the sound management of the public finances. The 2007 Revised Estimates Volume, to be published on 22 February next, will set out detailed provisional expenditure outturns by Vote. The Government is also determined to ensure these significantly increased levels of public expenditure result in real improvements in public services. It is relevant in this context to point to some concrete examples of the progress that has been made.

Social welfare impacts directly on the quality of life of many sections of society, including our most vulnerable citizens. Last December the Minister for Finance announced the largest ever welfare budget package with an increase of more than €1.4 billion. The historically high package delivers on the Government commitment to bring State pensions to €200 per week, with the contributory pension increasing to more than €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 dependent relatives.

In addition to the significant rates increases, the Minister for Social and Family Affairs has introduced a number of fundamental reforms targeted directly at tackling remaining child poverty numbers, supporting carers through increased incomes and supports, increasing the status and incomes of women pensioners as well as enhancing the incomes of older people generally.

The resources allocated to the health sector have increased almost four-fold since 1997 to around €13 billion in 2006. All services have benefited from this greatly increased funding. To get the most out of the increased resources, a major programme of health reform is under way, building upon the establishment of the Health Service Executive as the single agency charged with the management and delivery of health services at a national level. More than 1,200 additional hospital in-patient beds and day places have been put in place since 2001. Waiting times for most common procedures have been reduced to between two and five months, helped by the work of the National Treatment Purchase Fund which has arranged treatment for more than 50,000 patients. Primary care services have been improved and the roll-out of primary care teams is now well under way, with 100 teams being put in place in 2006 and a commitment to create 500 teams by 2011.

A national child care strategy was launched by the Government in the 2006 budget. The early child care supplement has been introduced, which is worth €1,000 for each child up to his or her sixth birthday. An extra 50,000 child care places will be created by 2010 under the five-year national child care investment programme. To complement the roll-out of these new places, a total of 17,000 child care workers will be trained over the next five years.

Education is key to promoting our future competitiveness and building a modern knowledge economy. There are now almost 11,000 more teachers in our schools than there were ten years ago, including teachers at post-primary level. There are now almost 8,000 teachers working solely with children with special needs and learning difficulties in our schools. There are about 8,300 special needs assistants meeting the care needs of these children compared with fewer than 300 in 1997. The pupil-teacher ratio at primary level has fallen from 22:1 a decade ago to 17:1 students in 2005, and at post-primary level from 16:1 to almost 13:1 over the same period. More children are now completing second-level education. There are higher participation rates at third level, with more than 30,000 more third level places than in 1997.

I happen to take a particular interest in agriculture. Direct payments to farmers amounted to almost €2 billion in 2006. The percentage of payments made is significant and compares very favourably with the situation in all other member states. Moreover, the single payment scheme has simplified processes for farmers, reduced the level of paperwork and halved inspection levels.

This Government has also nurtured the agrifood sector, which has seen its gross value added, GVA, increase by more than 60% between 1997 and 2005. The value of agrifood and drink exports to the EU market has grown by more than 40% over the same period. Exports of Irish food and drinks in 2006 are estimated at a record €8 billion.

In 2006, the Government agreed the agriculture provisions of Towards 2016 with the farm pillar. The overall package was €6.8 billion, of which the Exchequer provided funding of €4.7 billion for rural development measures. This is an increase of 135% in Exchequer spending compared with the €2 billion provided in the previous round. The measures contained in Towards 2016 will underpin the €8.7 billion commitment to agriculture under the National Development Plan 2007-2013.

Our sustained period of economic growth has also presented us with an opportunity to tackle the infrastructure deficit and to lay the foundation for continued economic and social progress in the future. Over the past ten years, great advances have been made in expanding the roads and public transport networks. As a direct result of our investment in national roads, major traffic bottlenecks have been eliminated and journey time savings have been achieved throughout the country. The worst traffic bottlenecks including those at Drogheda, Dundalk, Balbriggan, Kildare, Monasterevin, Cashel, Limerick, Ballincollig, Youghal and Kinnegad, have been targeted first. Further work to eliminate other bottlenecks on the major inter-urban routes continues, while relief roads for Castleblayney and Waterford city are well under way. It is now possible to travel from north of Gorey to north of Dundalk on almost 180 km of continuous motorway and dual carriageway, or from south of Portlaoise to Dundalk on 170 km of continuous motorway and dual carriageway.

Iarnród Éireann is now the fastest growing railway service in Europe. Almost 70 new locomotive-hauled carriages were added to the larnród Éireann intercity fleet in 2006, at a cost of €120 million. In 2007, 150 new intercity self-propelled railcars costing €325 million will start to arrive for service on the intercity routes servicing Dublin, Westport, Ballina, Sligo, Galway, Tralee, Waterford and Rosslare. The bottom line, in terms of additional seating capacity on our railways, is a huge increase of around 6 million passenger journeys per annum.

During 2006, more than 1,300 building and modernisation projects were supported in schools. This investment in our education infrastructure comes on top of a sustained investment drive between 2000 and 2005, during which the Government has delivered 76 new schools, with construction under way at a further 23 new schools; 380 large-scale refurbishments or extensions, with construction under way at a further 54 schools; as well as 6,055 small-scale projects, involving upgrade works and small-scale extensions.

The Appropriation Act 2006 provides for a capital carryover into 2007 of €159 million, or about 2.4% of the 2006 provision for voted capital. To allow for spending of the capital carryover amounts in the following year, the Minister for Finance is also required under section 91 of the Finance Act 2004 to make an order no later than 31 March determining the capital carryover amounts by subhead which will be available for expenditure on those subheads consistent with the amounts by Vote included in the Appropriation Act. The draft ministerial order for 2007 has been tabled for Dáil approval. Under the capital carryover arrangements, €31 million is available for investment by the Office of Public Works, largely on new works, €29 million is available for the Department of Transport to invest mainly in road improvements, and €20 million will be invested by the Department of the Environment, Housing and Local Government on vital water and sewerage works. These investment funds, which are carried over from 2006, are available in addition to the moneys that will be allocated in the 2007 Estimates.

Looking to the future, the period to 2013 represents a major window of opportunity to accelerate the tackling of our infrastructure deficits before population related expenditure pressures in health and pensions loom larger on the horizon. We must use our favourable demographic situation to build up the productive capacity of the economy and lay the groundwork for stronger economic growth in the future. The National Development Plan 2007- 2013 will involve expenditure of €184 billion over the next seven years. As it is based on the achievement of annual average economic growth of between 4% and 4.5% over the 2007-13 period, it is affordable.

The investment will be rolled out within a framework of economic and budgetary stability and in full compliance with the requirements of the Stability and Growth Pact. Among its key objectives are the improvement of everyone's quality of life, the promotion of balanced regional development in the context of the national spatial strategy, greater long-term environmental sustainability and the strengthening of all-Ireland co-operation. Under the plan, resources will be allocated with a "whole-of-Government" approach and a cross-departmental perspective. The plan involves a carefully crafted and integrated strategy, under five priority areas.

The investment of almost €55 billion in economic infrastructure under the new national development plan will finance the completion by 2010 of the major inter-urban road routes; a significant enhancement of the Atlantic road corridor; a quadrupling of investment in public transport, compared to the previous plan; and a significant switch to the generation of much more electricity from renewable sources. Some €20 billion will be invested in the promotion of enterprise, science and innovation. There will be a particular focus on research and development, as well as investment in potential start-up and high-growth companies. Almost €26 billion will be invested in training and education under the human capital priority. This will support the continuing upskilling of the workforce and further increases in the number of people attending third level education, including students from disadvantaged areas. A major programme of reform and modernisation of the third level sector will also take place under this heading.

Some €33.6 billion will be invested in social infrastructure. Approximately 60,000 new social housing units, 40,000 new affordable housing units and 500 primary care health teams will be provided by 2011. The investment of approximately €50 billion under the social inclusion priority, over the seven years of the plan, will allow for the creation of an additional 50,000 new child care places by 2010; a reduction in the number of children with serious literacy problems, particularly in primary schools serving disadvantaged communities; and new supports for older people living independently in their own homes. If older people cannot live at home in independence and with dignity, the plan will fund the provision of high-quality residential care for them.

Under the value for money framework, which has been put in place by the Government in recent years, most capital projects are being completed on time and on or within budget. Value for money will be central to the implementation of the new national development plan. The value for money framework and the capital appraisal guidelines, in particular, will apply to the programmes and projects being financed under the plan. All capital projects above €30 million will be subject to full cost benefit analysis. A project manager will be appointed to monitor the progress of each such project. Robust implementation and monitoring procedures, including the measurement of performance by reference to inputs and target outputs, will be put in place. Progress will be overseen by a monitoring committee that will include representatives of social partners and regional and other interests. An annual report on the progress of the plan will be submitted to the Oireachtas to increase the level of accountability in respect of the delivery of the plan.

I stand proudly over the Government's record in managing public expenditure. The Government has delivered strong and sustained economic growth for over a decade, within a budgetary position that is the envy of the rest of Europe. It has made available unprecedented levels of resources — almost €51 billion in 2006 — to fund improvements in public services. The Government has improved the quality of life and living standards of the people. More people are at work, taking home more of their own income and enjoying more and better quality public services than ever before. I commend the Government's stewardship of the economy and the public finances to the Seanad.

Sheila Terry (Fine Gael)
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I welcome the Minister of State to the House. It is clear the Government knows how to spend money, but that is not news. It is easy for one to spend money when it is available to one. Funds are available to the Government because the success of the economy means that people are paying more tax. The Government knows how to tax people — 50 stealth taxes have been introduced since the last election. The Government's failure to widen the tax bands routinely, in line with inflation, has made the public aware of its approach to taxing workers. The Appropriation Act 2006 does not clarify how the Government intends to get to grips with its pathological inability to tax fairly and spend wisely. The Government is patting itself on the back for its amazing ability to spend the money of hard-working families. I will explain to the House the real consequences of a decade of Fianna Fáil and Progressive Democrats rule.

Despite the Minister for Finance's attempt to move the goalposts, the recent budget confirms that Fianna Fáil and the Progressive Democrats will not deliver on their core promise that 80% of earners will pay tax at the standard rate only. People who earn considerably less than average earnings will continue to pay tax at the same rate as multimillionaires. If one earns an extra €1,000, one will be clobbered with a 47% rate of tax, which is an indication of the Government's failure in this regard. The stamp duty code, which prevents young families from buying homes in established neighbourhoods, needs to be reformed but the Government has not done so. It has failed to end the practice of making families serial victims of its tax policies. It has done nothing to ease the burden of child care expenses. Severe tax penalties are imposed on parents who choose to care for their children at home.

The Government has not addressed the unfairness of the operation of many tax shelters, which allow people with substantial earnings to shelter huge amounts of money from tax. While there is no upper limit on what a person can shelter from tax, the Government gives low and middle income earners less than half the rate of tax relief on pension contributions. Many workers who are outside the tax net, which is to be welcomed, are unable to benefit from the contributions they make to pension funds. I have said consistently that the relationship between tax and pensions needs to be overhauled. I hope the Government will tackle this problem.

The Minister for Finance said that his budget was "a green budget", but he has failed to introduce significant reforms in the tax code to promote more sustainable patterns of development. He is belatedly waking up to the reality that many ordinary taxpayers are being ripped off because they are not getting the full value of the tax reliefs to which they are entitled. While Fine Gael welcomes the decision to make spending on nursing homes and trade union subscriptions deductible at source, the Minister's approach to the matter has been half-hearted. Rather than abolishing the meaningless restriction on health relief claims to cover expenses over €125 for a single person and €250 for a family, he has rationalised them into a single threshold of €125. The Minister, Deputy Cowen, is seeking to trip up taxpayers by preventing the introduction of a simple system whereby every medical expense would attract tax relief.

I remind Government Senators that the national development plan is not a gift from Fianna Fáil and the Progressive Democrats to the people of Ireland. Every family in Ireland will pay €120,000, on average, in the coming years to fund it. Its worth hinges exclusively on the value for money and efficient delivery of the projects which are included in the plan. While there is no question about the ability of Fianna Fáil and the Progressive Democrats to spend this money, I doubt their capacity to deliver value from this spending for those stuck in traffic jams, waiting in accident and emergency departments or looking for affordable houses. The Government's record in such areas does not inspire confidence. Just over half of the roads programme, which will cost three times its original estimate, has been delivered.

The health strategy has almost collapsed with only a tiny fraction of the extra capacity delivered and no serious reform yet pushed through. Less than half the target for social and affordable housing was delivered, while the country suffered damaging urban sprawl. Our hospitals, our schools, our public transport system, our ports, are all crying out for coherent planning and delivery. However, it is disheartening to see so many projects recycled from the last plan and so many targets repeated. Do we have grounds for believing it will be any better next time? No Fianna Fáil or Progressive Democrats Minister was ever made responsible for the serious failures of the last national development plan. Getting it right this time depends on an honest appraisal of what went wrong last time but there is no evidence this has been done.

The new national development plan lists the achievements of its predecessor but fails to mention how far short of target they fell. There is no analysis of the under performances, why public private partnerships did not materialise, why reforms in the work vital to yield the potential from expensive infrastructure were not implemented. Fianna Fáil and the Progressive Democrats have reviewed the period of the last NDP in a way that could only be described as selective and self-serving.

Fine Gael in Government will impose a new framework on the NDP designed to deliver value. We will publish the cost-benefit appraisals before committing taxpayers' money. We will establish an independent unit to audit evaluation work. We will implement a gateway system to ensure that projects have been robustly tested and that responsibility has been pinned. We will require regular public reports on the progress of projects and their status, be that red, amber or green.

The last NDP was an exercise in how not to plan. Numerous spending programmes in the last plan were not delivered on the scale initially promised. In the case of regional development the Government promised to spend €4.09 billion under the BMW regional programme but has spent only €2.48 billion, which is 61% of the total promised. The Government promised to spend €656 million on the e-commerce and communication measure but has spent only €100 million, which is 15% of the total promised. The Government promised to spend €446 million under the child care programme but by the end of 2005 it had spent only €273 million, which is 61% of the total.

The Government promised to spend €1.2 billion on the back to education initiative but will spend only €600 million, which is 51% of the total promised. In the case of health, the Government promised to spend €1.3 billion on non-acute and continuing care but has spent only €844 million, which is 65% of the total promised. In the case of water, only 35% of resources allocated under the management and rehabilitation initiative, including the water conservation programme, were drawn down. Rural water investment was also under-funded with only 54% of the original target realised.

It is timely to reflect on the Government's overall record on spending. In the case of inter-urban routes, the last NDP proposed to upgrade the five major inter-urban routes to motorway or dual carriageway standard. Initially costed at €5.6 billion, they are now expected to exceed €16 billion and were only 50% completed by the end of last year. The original scheme for Luas was for a single continuous line from Dundrum to Tallaght, through the city centre. The project was costed in 1996 for €279 million, but the final cost was €750 million. Its target completion date was 2000; it was not completed until 2004. Do I need to remind Members of all these? The Dublin Port tunnel was originally estimated to cost €222 million in 1999. The contract awarded in 2000 was for €449 million but the final cost is expected to top €1 billion. Is the Minister of State hanging his head in shame or does he regard it as a joke?

Tom Parlon (Laois-Offaly, Progressive Democrats)
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I am as proud as Punch.

Sheila Terry (Fine Gael)
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In 2005, the Minister for Justice, Equality and Law Reform, purchased a site for a proposed new prison intended to replace Mountjoy Prison and the Central Mental Hospital in Dundrum. The Minister spent €30 million for a 150 acre site at Thornton Hall in Swords. This price was estimated by valuers to be more than eight times the going rate for land in the area. Is this value for money?

I remind the House about PPARS which was a health payroll and personnel system under development by the Department of Health and Children. It was costed at €8.8 million in 1998 but the cost of the project had reached €150 million in 2005 when the project was finally suspended.

The record of the Government is simple. It inherited the strongest set of economic statistics of any incoming Government in the history of the State. It presided over a period of immense private success and huge public failure. Thankfully, the people will be able to decide for themselves very soon and give their verdict on how they think the Government dealt with the economy.

Martin Mansergh (Fianna Fail)
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Unlike the last speaker, in my encounters with the people I have found they recognise that fantastic progress has been made and that the country was never better. Equally, a number of unsatisfactory problems require a lot of further attention.

I welcome the Minister of State and his officials. He highlighted in his speech some of the benefits of increased expenditure in, for example, social welfare payments; in health where there has been a considerable increase in life expectancy over the past ten years; in the tackling of educational disadvantage; and in agricultural spending, most of which now comes from the Exchequer rather than from Europe. I wish to highlight the national Exchequer commitment which was not possible in the past. Taking the example of infrastructure, I know of nobody who does not appreciate the Luas enormously and the new trains and new bypasses. I am looking forward to travelling on the Ennis bypass this weekend. I acknowledge there have been some overruns and some trial and error but all the evidence is that the Government is getting this right and that we have learned lessons.

I wish to highlight a few points in the very interesting Central Bank report published in the last week. Growth is very healthy as are the public finances. However, the bank makes the point that continued surpluses — €2.3 billion in 2006 — will be needed, given significant external and internal risks. The Minister for Finance in his budget allowed for surpluses in 2008 and 2009. From the various policy announcements from parties opposite it seems clear to me that if they were in power the cushion of a surplus would very rapidly disappear. Senator Terry has stated that the Government is very good at spending but the budgeted expenditure was at €830 million under budget last year. The conventional wisdom is that one should spend all the money one has got but I do not think one should do that if it will involve waste. The doubling of employment in 20 years is the outstanding achievement of successive Fianna Fáil-led Governments. I will allow that the rainbow coalition, which was in power for two and a half years in the middle of the 20-year period, is entitled to a small share of the credit.

The Central Bank report refers to a pick-up in full-time employment and notes that women's participation in the workforce is climbing above the European average. This is a significant development. Traditional industry, which had been fairly flat in recent years, recorded a growth rate of 3% last year, its best year since 2000. Contrary to the impression that employment in industry is falling, it increased by 8,400 in the first three quarters of 2006.

The Central Bank forecasts that the general government deficit will fall to 22% in 2009. Assuming current Government policies continue, all the evidence suggests that Government finances will be considerably healthier that the bank's projection. The Central Bank report also points to various dangers and risks. For example, it states that the rate of Government spending — under the present Government rather than any alternative — in relation to gross national product is set to rise and that the volume of Government consumption increased by 5% last year.

Members have expressed concern about costs. The Central Bank report gives some interesting examples in this regard. For instance, between 2000 and 2004 the price of alcohol increased by an average of 5.7% per annum. In 2005 and 2006, the rate of increase declined to 2% and 2.5%, respectively. One wonders whether some of the difficulties experienced by parts of the pub trade in recent years were due to well above average price increases over a five-year period rather than the introduction of the smoking ban and random breath testing.

The cost of energy is also a matter of concern. The Central Bank report notes that the average price of electricity for industry is 33% above the European average, while the price of gas is 56% higher than the European average. The American Chamber of Commerce and other industry bodies have warned about these costs. I believe the regulator was too willing to award large increases in gas and electricity prices last year.

The Central Bank report includes an interesting statistic about the cost of building a house. In Dublin, where it costs €195,000 to build a house, the price of a house is €400,000. In Cork, the price of the average house is €300,000 and it costs €146,000 to build a house. If we decide to alter or adjust stamp duty or other incentives, we need to be careful that we do not increase the large profits being made in construction.

The report provides the astonishing statistic that the value of assets, in terms of residential housing, increased from €39 billion in 1981 to €553 billion in 2006. On my reckoning, this amounts to an increase in asset values of approximately 1,400%. It also includes the sobering statistic that Ireland's labour costs per hour in manufacturing, at €18.30, are almost four times higher than those of the Czech Republic which stand at €4.91 per hour.

Public sector pay increased by 7% last year. We also have a number of industrial disputes. In this respect, one does not always compare like with like. I value highly the work done by nurses and teachers; it may well be more valuable than some other activities. We need to watch disparities in this area.

As elections approach, the question of value for money goes out of the window. I wonder how many of the proposals with which we have been bombarded in recent days, mainly by the Labour Party, have been assessed for value for money. Did the Fine Gael Party assess their value for money before eagerly climbing on board and cheering "hurrah"? While the proposals may be worthwhile when viewed in isolation, will the general tendency be to increase Government expenditure above and beyond the rate of growth?

A question never asked in election campaigns is what one will stop doing if one decides to do X, Y and Z. I am certain a rainbow government, if elected, would shove aside several programmes. The Dublin-based spokespersons on finance for the Fine Gael and Labour parties clearly have decentralisation in their sights.

As I stated on the Order of Business, I welcome in principle the Labour Party's conversion to the broad analysis and tax policies of recent years, against which it has fought a less and less convincing rearguard action. I look forward to listening to the contribution to Senator Ryan who has repeatedly stated that tax reductions were not responsible for the Celtic tiger. It now appears tax reductions are the centrepiece of Labour Party strategy.

The Taoiseach is right to warn that ambitious tax cuts should not constrain vital increases in social services. As I stressed on the Order of Business, while I do not object to the Labour Party changing its policy, I object to its utter caricature of the Government's tax policies, which have been geared to taking the maximum number of people out of the tax net. The 38% of taxpayers who were removed from the tax net will not benefit from the standard rate being 20%, 18%, 16% or any other figure unless they are brought into the net again.

As I indicated on the Order of Business, the European Commission has praised the Government for having the friendliest tax regime for low income earners of all European Union member states. This is the main accent and emphasis of Government taxation policy. The reason Fianna Fáil secures around 40% of the vote is that it delivers. There is no truth in the absurd caricature that budgetary policy is for the benefit of a couple of dozen very rich people. Many of those on the higher tax rate earn only slightly more than the threshold.

As far as the wealthy are concerned, the reduction in the top rate to 41%, which was, in a sense, a hangover from the period between 1997 to 2002, when the then Government was supposed to reduce the rate if conditions allowed, does not compensate for the curtailment of tax breaks, on which the Minister for Finance, Deputy Cowen, has taken action across the board in recent years. I will challenge the Labour Party every time I hear it utter the drivel that Government tax policy is for the benefit of the veryrich.

Joe O'Toole (Independent)
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Senator Mansergh should relax given that his party and the Labour Party could be in Government together. I did not intend to interrupt him but as the Labour Party Senators are not present, I thought I would help them out.

I welcome the Minister of State at the Department of Finance, Deputy Parlon, who outlined the money being spent on education. I am glad Senator Mansergh is still present because I wish to correct some of the misinformation he supplied on the Order of Business. Spokespersons on the Government side stated that the reason schools are being built without playgrounds in a country that is awash with money is that it is the policy of the education partners. This is not the case. The fact is that building classrooms and schools is crucially important, as also is class size. I sought such a debate earlier and perhaps we can go into that matter in greater detail on another day.

In fairness to Senator Mansergh, however, the point he was making on the Order of Business was that following consultation with the education partners, the Department decided that this year it would give the lowest priority to outside works in schools. Those proposals concerned new playgrounds, however, whereas I was referring to putting classrooms on top of play areas, thereby losing them. I am asking Senator Mansergh to take an interest in this. As of now, schools which will get approval to build for the next academic year have still not been informed. The list has been determined in the Department and people know it will happen, yet those concerned have not been told that such projects will go ahead. As soon as schools receive approval to proceed, they must then go through the planning process to get it up and running, which means there will be disruption next year. If they got the information now, however, that disruption could be avoided. There are no cost savings involved here. It is just a matter of having a better administrative approach. I am asking for that to be done.

The Minister of State referred to class sizes and the number of additional teachers. To balance the picture, however, it is important to recognise that one quarter of all primary school pupils are in classes comprising more than 30. Therefore, there is no point in the Minister of State telling me that the teacher-pupil ratio is 1:17. That may be a statistical or mathematical fact when one allows for the inclusion of small island schools, compared with large urban schools. However, we need to talk about class size, not the teacher-pupil ratio.

Given the 1:30-plus ratio, the amount of individual time a teacher can give to a student in the course of a day is less than ten minutes. That is the difficulty that has teachers in a state of uproar at the moment because they feel they cannot do the job they wish to do. More importantly, coming up to a general election, I have mentioned this matter because it was a pre-election promise but it has not been delivered upon. In fairness to the Minister, she said she has put the resources in another direction. I will not get into that debate but the fact is that what was promised in terms of class size has not been delivered. That is an important matter to examine.

Ba mhaith liom díríu isteach, agus cúpla focal a rá, ar pholasaithe Gaeilge an Rialtais agus na deacrachtaí ar leith atá ag baint leo. Tá a fhios ag an Teach go mbím ag argóint leis an Aire Gnóthaí Pobail, Tuaithe agus Gaeltachta go minic mar gheall ar an méid atá idir lámha aige. Ba mhaith liom go mbeadh féachaint nua ar pholasaithe Gaeilge na tíre seo. Ba chóir dúinn struchtúr nua a fhorbairt. Ba cheart don Aire agus an Roinn machnamh níos straitéisí a dhéanamh ionas go ndéanfaí dul chun cinn sa mhéid sin. Ba cheart dúinn féachaint ar an nGaeilge i gcomhthéacs an oileáin ar fad. Bhí giota an-tábhachtach sa Good Friday Agreement ag baint leis an Ghaeilge i gcomhthéacs North-South. Tá sé tábhachtach go mbeadh na struchtúir ann chun dul chun cinn a dhéanamh. Ba chóir go ndéanfaí níos mó cúplaíocht idir scoileanna sa Tuaisceart agus sa Deisceart, mar shampla, ionas go mbeadh daltaí i mbunscoileanna agus meánscoileanna — agus sa triú leibhéal — in ann déileáil lena chéile. Má chuirimid oideachas ar fáil trí Ghaeilge sa Tuaisceart agus sa Deisceart, déanfaimid dul chun cinn. Ba cheart dúinn campaí samhraidh agus cúrsaí Gaeilge a eagrú mar shórt scoláireachtaí.

Ba mhaith liom caint mar gheall ar an rud is tábhachtaí a tharla ó thaobh dhul chun cinn na Gaeilge sa tír seo de tar éis bhunú an Stáit i 1922. Trí Bheárla ar fad a rinneadh gach cuid oibre sna scoileanna roimhe sin. Ní raibh Gaeilge ar a dtoil ag múinteoirí bunscoile na tíre. Tugadh deis dos na múinteóirí tréimhse a chaitheamh sna Gaeltachtaí, Gaeilge a fhoglaim, maireachtáil le muintir na nGaeltachta, tuiscint a fháil ar chultúr na nGaeltachta agus grá a chothú don teanga. Nuair a tháinig na muinteóirí thar n-ais as na Gaeltachtaí, bhí Gaeilge ar a dtoil acu agus bhí siad spreagtha chun an Ghaeilge a chur chun cinn. Ba é sin an rud is tábhachtaí a rinneadh an uair sin. Ba cheart é sin — an tseirbhís a chur ar fáil do múinteóirí na tíre — a dhéanamh arís i gcomhthéacs oideachais. Ba chóir dúinn infheistíocht a dhéanamh sa mhéid sin. Tá sé i bhfad níos tábhachtaí ná an chuid is mó de na rudaí atá idir lámha ag an Aire Gnóthaí Pobail, Tuaithe agus Gaeltachta faoi láthair.

Tá na rudaí atá ar siúl ag an Aire faoi láthair ag cur isteach go mór ar muintir tionsclaíochta agus gnó na tíre agus ag cur imní orthu. Tá mé ag caint mar gheall ar na moltaí atá á dhéanamh aige ó thaobh an Ghaeilge a bheith ar fáil ar an fón. Tá sé ag rá gur chóir go mbeadh gach rud ar fáil trí Ghaeilge when people ring any of the 500 or 600 semi-State companies, State companies and Departments, etc. Tá mé go mór i bhfabhar an mholta go mbeadh daoine in ann a gcuid oibre a dhéanamh le heagrais Stáit trí Ghaeilge. Cuirfidh sé isteach orm má chuirimid brú ar eagrais bheaga a gcuid gnó a chur ar fáil trí Ghaeilge. If somebody rings up the Rape Crisis Centre and expects to be able to do their business trí Ghaeilge, that is not an unreasonable expectation for somebody from the Gaeltacht. On the other hand, it is extraordinarily difficult for a small group like the Rape Crisis Centre to make that kind of service available. We need a balance in our approach to these things. There is too much zealotry ag baint le dul chun cinn pholasaithe Gaeilge na tíre seo. We need to be a little more careful in what we are doing.

Ó thaobh comhthéacs ilcultúrtha — the multicultural society — na tíre seo, ba mhaith liom go mbeadh seans againn cultúr agus teanga na tíre seo a chur ar fáil do na nua-Éireannaigh — the new Irish people — atá tagtha isteach ó thar lear. Ba chóir go mbeadh seans acu an teanga a fhoghlaim, go mbeadh spreagadh ann dóibh é a dhéanamh agus go mbeadh deontais ar fáil dóibh. It would be sensible to provide for orientation courses to help such people understand Irish history, background and culture.

Ba mhaith liom go mbeadh tuiscint againn ar cad ba chóir dúinn a dhéanamh leis an teanga i gcomhthéacs na hEorpa. Móran de na rudaí atá tarlaithe san Eoraip, is sórt political gimmickry atá i gceist to get recognition for the Irish language. I welcome what has been done in that regard. I will not replay my views on the Minister's decision to change the name of my home town from "Dingle — Daingean Uí Chúis" to "An Daingean", but I think that is the kind of nonsense that creates a split, a division and aggrevation. It achieves nothing — it does not get people speaking Irish — and turns people against the language. That is the kind of nonsense and political gimmickry we can do without ó thaobh dul chin cinn na teanga de.

I gcomhthéacs oideachais, ba chóir go mbeadh seans ag múinteóirí, go mórmhór, tréimhse a chaitheamh sna Gaeltachtaí chun an teanga a fhoghlaim, nó a athfhoghlaim, chun a bheith sáite i gcultúr, stair agus muintir na háite agus chun cultúr, teanga agus dearcadh muintir na nGaeltachtaí a thuiscint.

Tabharfaidh mé achoimre ar an deacracht a bhíonn ann i gcónaí ó thaobh pholasaithe Gaeilge de. Ó bunaíodh an Stáit, tá sé de nós agus de polasaí ag an Roinn Oideachais agus Éolaíochta, agus ag na Rialtais éagsúla, féachaint ar na Galltachtaí. They have always been far happier to get a few people in Dublin, or a few Northern Unionists, to speak a few words of Irish. They have always considered that to be a great success. We should be ag féachaint ar na Gaeltachtaí agus investing money in muintir na nGaeltachtaí so that we have the infrastruchtúr agus go mbeadh seans acu ó thaobh oideachais de, mar shampla. Bheadh sé ar fáil ag an mbunleibhéal, an dara leibhéal agus an tríú leibhéal agus adult education chomh maith trí Ghaeilge. Bheimis in ann an Ghaeilge a fhorbairt amach as na Gaeltachtaí mar gheall air sin, seachas an dearcadh faoi láthair sna polasaithe, ag díriú ar na Galltachtaí agus trying to develop it there. It will never work in that way.

Ó thaobh na h-ardteistiméireachta de, the leaving certificate, bheadh dhá scrúdú ann, two alternatives ó thaobh na Gaeilge sa leaving certificate. There would be one examination based on the language, so bheadh cumas teanga ann, spoken language, léamh agus scríobh an teanga, agus trí leibhéal ann, bun, gnáth agus ard. Bheadh seans ann do dhaoine scrúdú ardteistiméireachta a dhéanamh i labhairt agus scríobh na teanga. That would be one level and then another subject if people wanted to take it would be litríocht na Gaeilge, Irish literature, which would have labhairt agus scríobh na Gaeilge but would also have iniúchadh agus scrúdú ar litríocht agus filíocht na Gaeilge and all that goes with it, stair na litríochta agus filíochta agus mar sin. That would be a sensible way to go forward.

There should also be particular support, tacaíocht in oideachas ag an tríú leibhéal. Ansin bheimis praiticiúil. Tá áiteanna sa tír, cosúil leis an Díseart i nDaingean Uí Chúis nó Áras Uí Chadhain agus an t-ionad i mBaile Mhúirne which could immediately be available to allow people to participate i bhforbairt na Gaeilge agus gnéithe den teanga. These are a few of my ideas with regard to the approach to the Irish language which we need to consider.

The Minister of State, Deputy Parlon, has always struck me as being sensible on such issues. There has been much hypocrisy with regard to this issue. I love the Irish language and use it every day of my life. However, there is no Member of either House who is more critical than I of the Minister for Community, Rural and Gaeltacht Affairs for his political gimmickry, although I do not question his commitment. He has taken the wrong approach. We should be looking at the Gaeltachtaí and spreading out from there rather than looking at the Galltachtaí and trying to enforce Irish.

We need to bring people with us. There is genuine passive support for the Irish language but that will only last so long as we do not interfere with people. The idea of putting pressure on industry and large State organisations to carry out much of their business through Irish is a nice one but I would prefer to ask people to do it rather than force them. They will turn against Gaeilge if they are forced to consider the cost of installing an Irish answering service, putting somebody in place to deal with queries through Irish or installing a system to make certain documentation available as Gaeilge. We are at the tipping point. We should be clever in this regard.

The Minister did not refer in his speech to the green issue. The greens are going to save the world and the Government wants to get the green vote, yet the Minister does not refer to the issue. The greatest waste of money — I ask Senator Terry to add this to the fine list she outlined in her contribution — is the €217 million put aside in the budget for carbon credits. The most sickening aspect, apart from the waste of money, was that the Government cleverly presented it as a major, positive step for the environment that so much was being spent on carbon credits. It is a fine, for God's sake. We should be ashamed of ourselves. It has been put aside because we did not do what was necessary to meet our needs.

Tom Parlon (Laois-Offaly, Progressive Democrats)
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That is because we grew out of all proportion.

Joe O'Toole (Independent)
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I welcome yesterday's announcement by the Minister for Communications, Marine and Natural Resources with regard to bio-fuels. Yesterday's "Nine O'Clock News" headlines referred to Dún Laoghaire-Rathdown County Council's introduction of new regulations which are more demanding than the national regulations. I spoke on this issue in the House in the last session. In fact, Dún Laoghaire-Rathdown County Council is not the first but the second county council to do so because Fingal County Council was the first. Clare County Council and other county councils are also considering it.

Is this not a shame? Why does nobody think of asking why this is the case? If the Minister of State decided tomorrow morning that every house built in Ireland would have to have solar panels on the roof, we would save hundreds of millions of euro worth of carbon emissions in the next dozen years. At a cost of less than €500 per house, it is a simple way forward. I ask that it be done.

Eamon Scanlon (Fianna Fail)
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I welcome the Minister of State, Deputy Parlon, to the House. It is undoubted there is good news in what he has told the House. I welcome the increases for pensioners, especially the increase in the non-contributory old age pension. I am glad the Minister for Finance has announced that the trend which has developed in recent years will continue, and rightly so, for those who worked hard and raised families in difficult times.

I spoke today to a pensioner who worked all his life in this country but who finds himself on a half pension. He was two years short of achieving the contributory pension because he reached the age limit and was not allowed to pay more. Quite a few people are in the same position, mostly farming people. This man has relations in America, England, Scotland and elsewhere who are also being paid a half pension. As he is on a half pension, his wife is also paid a half pension. He feels very aggrieved. While I am not sure what can be done, the issue should be examined.

Tom Parlon (Laois-Offaly, Progressive Democrats)
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It is a genuine issue.

Eamon Scanlon (Fianna Fail)
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I welcome the increase under the national child care strategy, the training of 17,000 child carers and the increase to 8,000 special needs teachers. With regard to the agricultural fund of €6.8 billion, it should be pointed out that the Government is investing €4.7 billion of that sum. It is much needed. The IFA and farming representatives came before the Joint Committee on Agriculture and Food last week to discuss the prices being paid to farmers. Some 20 years ago, farmers were paid the same number of punts for sheep, cattle and beef as they are today in euro. Given the inflation over that period, farmers are being paid not much more than half of what they were paid 20 years ago. Subsidies have increased, which was necessary, but we must carefully monitor the operation of the fund or rural life will suffer.

We must recognise the improvements that have taken place to our roads, particularly in the past seven or eight years. I regularly use the N4, which now has a dual carriageway from Mullingar to Heuston Station. That is some change from a time when drivers had to pass through all the towns and villages and has taken 45 minutes off that part of the journey. I look forward to that road being continued with a "2 plus 1" road all the way to Sligo. The Dromad bypass project is under way at present. I am glad all of these projects are coming in ahead of target and on budget, which is to be welcomed.

The final stage of the N4 — the Castlebaldwin to Collooney project — is included in Transport 21. I want to ensure it remains a part of that plan and that the finance for it is in place. I also look forward to improvements on the N17 and on the road from Sligo to Enniskillen and Northern Ireland, the N16, on which there have been many accidents and some fatalities over recent years. It is important to keep our focus on these areas.

I was glad to read two weeks ago that new trains ordered are on the way and Mr. Kenny from Iarnród Éireann has announced the first of these will go to the Sligo line. This is welcome because the Sligo line has had the worst trains in the country for the past 20 years. Currently, the line has commuter carriages which are not suitable for three-hour journeys, particularly for elderly people travelling to and from Dublin. Hopefully, these new trains will be on our lines within the next two months.

I know it is not part of the Minister of State's remit, but the issue of social housing has cropped up frequently of late. Housing agencies, such as Respond, Clúid and Focus, are building houses that are assigned by local authorities. Several of my constituents have raised the matter of their tenancies of these houses with me, particularly those in houses built by Respond and Clúid. At the time these people were glad to get a house because their circumstances were difficult, but, as happens, their circumstances have improved. Rent for these houses is close to market value, which is fair enough. However, if these were council houses, the tenant could buy out the house when his or her circumstances improved, but that is not the case with a house built by one of the organisations I mentioned. This is an issue we must deal with sooner rather than later. I believe these people have a right to purchase, just as if they had moved into a council house. Some of these people went into these houses because the houses were available before a council house was, but now they find they cannot buy out the house. This is wrong and we must deal with the issue.

We have a good story to tell in the context of decentralisation. The Department of Community, Rural and Gaeltacht Affairs has rented an office in Tubbercurry, Sligo, while waiting to move to Knock about seven or eight miles away. Currently there are 74 people in the office in Tubbercurry. Criticism of decentralisation is wrong because decentralisation is an excellent idea, no doubt about it.

Martin Mansergh (Fianna Fail)
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Hear, hear.

Eamon Scanlon (Fianna Fail)
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The mistake made was the timing for the decentralisation programme was too ambitious, but decentralisation will work over a number of years. Each day I drive along the N4, I see that the new prison offices being built in Longford are almost completed. I constantly hear from constituents that they want to move out of Dublin. Therefore, I believe there will be a good take-up of the decentralisation option and people will be delighted when the programme has settled in. Those working in Tubbercurry are delighted to be there and would prefer to be out of a job than have to return to Dublin. There are good stories to tell about decentralisation and it should not be criticised so much.

The issue of the lands bought for the new prison at Thornton Hall at a cost of €30 million has also given rise to much criticism. In Sligo recently an eleven acre plot of land without any zoning was sold for €16 million. If the Minister got 150 acres in north County Dublin for €30 million, he got the bargain of the century. If the Government wanted to sell on that land, there would be significant profit in it. It was excellent value.

Tom Parlon (Laois-Offaly, Progressive Democrats)
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We could sell it in the morning.

Eamon Scanlon (Fianna Fail)
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I agree, and at treble what was paid for it.

Mary White (Fianna Fail)
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I welcome the Minister of State, Deputy Parlon, and his executives and I take this opportunity to wish him success in the general election. I know Deputy Parlon from his previous role as president of the IFA, where he did excellent work. I was on the board of Bord Bia at the time and met him in that time. The Deputy is a great asset to the Oireachtas and I mean that genuinely. I wish him the best of luck in the forthcoming election, which I heard may be on 17 or 18 May or the following week.

As Senator Mansergh elucidated so eloquently, Ireland's economy acts as a model for success and is the envy of countries all over the world. Our greatest achievement is that we have virtually no unemployment. We have had emigration since the time of the famine, but now people are coming here for work and Ireland is a haven for others seeking employment. The 400,000 new Irish will be our kith and kin and will intermarry here and become our blood relations in the next generation. The fact that we now provide jobs for other nationalities is for me the greatest accolade to our economy.

Roads infrastructure has been mentioned by other speakers. I travelled to Waterford yesterday and can only say the quicker we get the M9 delivered the better. We must work to have it delivered by 2010. The Green Party has argued against building motorways, but they are the safest way to travel because they have no junctions or crossroads. When people get used to the speed of the motorway, they are safer. I felt nervous initially on motorways, but they are safer. The existing road to Waterford is basically a country road so the sooner we get the motorway built, the easier it will be for communication with the rest of the country. It is a pleasure to travel across the country from east to west because the new roads are fantastic. The improvements that have been made in roads infrastructure are a great achievement. Despite what Senator Terry said, the roads network has improved tremendously.

Sheila Terry (Fine Gael)
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The roads are good, but I said Fianna Fáil has not delivered what it promised and did not give value for money. I must point out these failures.

Mary Henry (Independent)
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Senator White, without interruption.

Mary White (Fianna Fail)
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The Luas is profitable and was delivered on time and within the cost of the tendered plan, not the plan decided in 1996, which was different. I live in Dundrum and use the Luas frequently. It is always packed and it is a pleasure to have it available. The sooner we have similar successful projects throughout the country, the better.

Martin Mansergh (Fianna Fail)
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It is great value for money.

Mary White (Fianna Fail)
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Other large towns like Cork, Waterford and Limerick should develop similar public service transport. County councils should get on their bikes in that regard.

Sheila Terry (Fine Gael)
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I agree with that.

Mary White (Fianna Fail)
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I am delighted money has been allocated for 50,000 new child care places in the Estimates. It is important that child care providers are made aware of the plan and know where the places will be created. We cannot just put up the money for these places without a proper plan for its allocation. Different areas of the country have different needs with respect to the number of child care places required. We need a clear, transparent plan with regard to how the 50,000 places will be delivered and implemented. As a business person I know a plan is irrelevant unless it can be delivered and that implementation is far more important than the paper plan. One must be also able to deliver. The €1,000 child care supplement is of tremendous help to parents, but I propose that the Government increase that for every child under six to €1,250 in the 2008 budget and €1,500 in the 2009 budget. We must maintain the rate of progress and help parents with the cost of child care, which everyone knows is very expensive. Another area is our standard of living. Child care and ageism are the two main areas on which I concentrate as a Senator. Perhaps the Minister of State, Deputy Parlon, might persuade the Tánaiste, Deputy Harney, that mandatory retirement at the age of 65 must go, as I proposed in my document, A New Approach to Ageing and Ageism.

Tom Parlon (Laois-Offaly, Progressive Democrats)
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We have a new Tánaiste now, a gentleman.

Mary White (Fianna Fail)
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I always think of her ladyship as the Tánaiste.

As a result of my policy document, I have given talks around the country and had letters in the newspaper. I have been inundated with telephone calls and letters from people in a desperate state because they do not wish to retire at 65. An Irish Times MRBI poll last autumn indicated that 41% of those now aged 50 had no intention of retiring at 65. People are living much longer and are much healthier. They are absolutely capable of doing their jobs and are experienced workers. Why should they be jettisoned at 65? There are skills shortages in many areas of business and industry, and it is crazy to guillotine people the moment they turn 65.

I am on a mission during my time as a Senator, which I hope will continue after the next election, to change that, something I hope will happen within the next few months. It would take only minor legislative changes to scrap mandatory retirement. There would be great economic benefits to the country. I do not understand why the Minister for Finance, Deputy Cowen, is not agitating for such a reform, since, if people are still working and paying taxes, they are not necessarily drawing their pensions. It would be a win-win situation. We would keep experienced, skilled people in their jobs and continue to collect taxes, while payment of the old-age pension could be postponed until a person left employment.

Mandatory retirement should go, and we should introduce phased or gradual retirement in its place. I am not saying everyone should remain at work, but people should have the choice. I had to give up my job in the schools section of the Office of Public Works when I got married in 1969. My boss did everything to try to keep me. I was able to work in a semi-State organisation because I had a skill that was needed, but if I mention to people today that women had to give up their jobs when they got married, they do not understand, since they have forgotten that such a situation once obtained.

The discrimination whereby people aged 65 must give up their jobs is as serious as when women had to give up their jobs when they got married. Cases are before the courts in Spain and in England. Would it not be great if our Government took the initiative itself rather than waiting for a European directive as happened in 1973? The moment we joined the EU, all the married women were allowed to return to work. Senator Mansergh mentioned their great contribution to the economy. I will now lobby every Minister on mandatory retirement, since the situation is ridiculous.

Tom Parlon (Laois-Offaly, Progressive Democrats)
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The €300 pension will be a big disincentive.

Mary White (Fianna Fail)
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Senator Terry should acknowledge how well the economy has developed, something shown by the fact that the life expectancy of a 60 year old woman is now seven years longer than in 1935. That is evidence for how much living standards have increased. One policy decision that has been absolutely visionary has been to ban the smoking of cigarettes in public places. At the moment, Irish life expectancy is below the OECD average, but as the results take effect over time, it will no doubt rise above it. The country is fine.

Senators:

On that cheerful note, perhaps the Senator should conclude.

Terry Leyden (Fianna Fail)
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I welcome the Minister of State, Deputy Parlon, and his senior officials to the House.

This debate on the Appropriation Act 2006 is timely, since never before in recent years has there been such concentration on legislation and budgetary issues in the run-up to a general election. Nothing concentrates a politician's mind more than the electric chair or the date of the general election; both have a certain inevitability about them.

Sheila Terry (Fine Gael)
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Now that we know it is going to happen.

Terry Leyden (Fianna Fail)
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This case has certainly concentrated the mind of the leader of the Labour Party. In the words of the Minister for Finance, Deputy Cowen, there has been a conversion on the road to Damascus. Deputy Rabbitte was converted from Sinn Féin, the Workers' Party to Democratic Left, and now he is the leader of the Labour Party. He has therefore undergone three Damascene conversions, whereas St. Paul had only one.

Nothing is certain in this world except death and taxes, as Benjamin Franklin stated in 1789. Albert Einstein said that the most difficult thing in the world to understand is income tax. In the case of Deputy Rabbitte, one might quote George Bernard Shaw and state that "a government which robs Peter to pay Paul can always depend on the support of Paul".

Last Saturday's proposal from the Labour leader, the most unexpected source, came as a bolt from the blue. We had all expected the leader of the Progressive Democrats, who will address his party's annual gathering in Wexford next Saturday, to suggest further innovations regarding taxation in conjunction with the Fianna Fáil Party. Deputy Quinn has said that one cannot enjoy the same level of services as Finland, Portugal or Greece unless one has a similar level of taxation. That suggests a rise in taxation, but he also called for a reduction in taxes. He was not as active in that regard when he was Minister for Finance. Is that a coherent policy or just more empty promises?

In 1992 the top rate of tax was 48%, and the lower rate 26%. The former came down to 41% over the years, with a commitment in this year's Budget Statement to cut it to 40% next year, with a lower rate of 20%. There is no reason in the wide earthly world a new Administration of Fianna Fáil and the Progressive Democrats should not continue the success story of the past ten years with a consistent policy of reducing income tax. The electorate must decide whether it should trust the parties that delivered a reduction in income tax or a party that has opposed such reductions since its foundation. I hope a simple leaflet will be issued to every PAYE taxpayer when his or her P60 is sent out or any other information is conveyed to demonstrate the Government's proven record in that regard. What has happened can be tracked.

I welcome the opportunity to discuss the Act itself, but in a sense circumstances have directed me to highlight the situation regarding income tax, since we would not have been able to deliver this level of services without it. The Government increased income tax receipts over the years by having 2 million people at work, and that is a direct result of the Fianna Fáil and Progressive Democrats Administration. It is easy for a party which has not been in Government for more than ten years to give away money it does not have. It delivered high taxes consistently through any coalition Government of which it was a party. All of a sudden, because of the realisation of its dwindling support in the opinion polls and the unlikelihood of Opposition parties coming together to form a Government, it is trying to buy the electorate.

Ireland has in recent years achieved one of the best economic performances in the world, with economic growth since 1997 averaging 7% compared with the EU average of 1.5%. We now have the highest level of employment in the history of the State. I reiterate that 2 million people are employed. That is an enormous achievement.

When I was in Government in the mid-1980s, there was emigration, there were cutbacks and there was fiscal rectitude. All that was happening in a difficult period when I was in the then Department of Health. There were cutbacks in health and throughout the public sector to correct the economy, and we have got it correct. I, and every Member of this House who was a Member at that time, can take credit. Sacrifices were made, by the country as a whole and by individuals, but especially by politicians of Fianna Fáil who were supported at that time by the Tallaght strategy of the then Leader of the Opposition, former Deputy Alan Dukes, who was courageous enough to identify the position in which we were and who took an unselfish attitude for which he got little reward from his friends in the Fine Gael Party, who brought him down shortly afterwards.

We find ourselves in a position where the Government finances are very healthy. There is no question about that. Against this increased background of prosperity it is only right that the Government invest strongly in infrastructure, and it is investing 5% of gross national product in infrastructure — twice the European average.

In the 2007 budget the Government honoured its commitment to achieve a basic social welfare pension of €200 a week, that is, a rise of €18 a week. The Leader of the Progressive Democrats and Tánaiste, Deputy McDowell, has given a commitment that if he is returned to Government, with Fianna Fáil, the old age contributory pension would be increased to €300 during the five-year lifetime of the next Administration. I believe that commitment will be honoured. I await the discussions in the Fianna Fáil Party, where we are producing our own manifesto in this regard. Given that we achieved the €200 pension in the lifetime of this Government and we increased the pension to more than €200 in the last budget, I do not see anything too difficult to achieve in that commitment. Compare this with the meagre pension increase achieved by the rainbow Government in the bad old days, just £2.29 in 1995, when the then leader of the Democratic Left, former Deputy De Rossa, who is now a member of the Labour Party, was Minister for Social Welfare.

Tom Parlon (Laois-Offaly, Progressive Democrats)
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That was before the conversion.

Terry Leyden (Fianna Fail)
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Exactly, that was before the fall on the road to Damascus. The Government has returned €5 billion to the people in tax reductions since 1997. The national debt has more than halved. Some €1.7 billion that was previously spent on debt is now available for investment in services. In education, we have invested considerably in schools, etc.

I also would be concerned about Fine Gael's proposal in its last manifesto to raid the pension fund that we have built up for the future. Nobody, not even Deputy Rabbitte, has suggested raiding that fund to pay for whatever investment. That fund is untouchable and the Minister of State at the Department of Finance, Deputy Parlon, must ensure that we leave that fund building up. That fund, which is a tribute to the former Minister, Charlie McCreevy, has been continued by the Minister, Deputy Cowen.

I thank the House for the opportunity of speaking on this matter. We in the Fianna Fáil Party are responding in like fashion to the audacious statement by the leader of the Labour Party last Saturday. It has been exposed by the Minister for Finance as hypocritical, unworkable and unfeasible without overall policies. I cannot see why the Fianna Fáil-Progressive Democrats will not continue with meaningful, realisable and achievable tax reductions, and the people will respond in May when the general election occurs.

Sheila Terry (Fine Gael)
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The bottom line is the Labour Party stole their thunder and Senator Leyden is upset about it.

Tom Parlon (Laois-Offaly, Progressive Democrats)
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I have been listening with great interest to the debate and I want to address some of the points raised by Senators. Senator Terry strongly criticised the Government on failures and overruns, especially in the previous national development plan.

Sheila Terry (Fine Gael)
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Untrue.

Tom Parlon (Laois-Offaly, Progressive Democrats)
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Much has been said about different projects delivered under the previous national development plan. Frankly, many of these comments have been blown out of all proportion and are ill-informed. That is being polite about some of the comments. Taking the port tunnel as a case in point, the proper comparison to make is between the price at tender and the price at delivery. The tender price for the port tunnel was €580 million and the final cost was €750 million. Much of the difference between the two is due to the operation of the price variation clause, which captures construction inflation, and also the higher than anticipated land settlement costs. Taking the two issues into account, the final cost overrun is a more modest 6%. These are the facts of the matter.

In general terms, the experience of delivering infrastructure projects is positive and, as a number of Senators on this side of the House stated, increasing numbers of capital projects are being delivered, both on time and within budget. We are putting in place a range of measures to strengthen our focus on delivering projects on a value for money basis. The Government is well aware that there is more to public expenditure management and delivery of public services than making available the resources, as we have done. Good governance also requires that we ensure that the public gets good value for every euro spent. That is why the Government has put in place a comprehensive value for money framework that addresses every aspect of public expenditure, from the planning phase right through to implementation and delivery.

For example, in February 2005 the Department of Finance published new detailed capital appraisal guidelines to ensure that major capital projects are planned in a cost effective manner. In January 2006 the Department of Finance followed this up with a range of value for money requirements codified in a value for money, VFM, circular to all Departments. The new rules include the following requirements: an individual must be appointed as project manager for all major capital projects to monitor and manage progress; all projects costing more than €5 million must undergo a preliminary appraisal and a full detailed appraisal; all projects costing more than €30 million must undergo a full cost benefit analysis at detailed appraisal stage; all capital programmes with an annual value in excess of €50 million and of five years' duration or more must be evaluated at the beginning and mid-point of each five-year cycle unless otherwise agreed; for major information and communications technology projects an independent peer review process must be carried out at key decision points by an experienced team; and Departments and agencies must report progress on their capital programmes and major projects in their annual reports. The Department is certainly taking those issues seriously.

Senator O'Toole raised Irish language issues. To enlighten and remind him, the Official Languages Act 2003 was brought in by this Government, the first to bring in such legislation. We were the first Government to appoint an Irish language ombudsman. The Irish language has official working status in the EU and this took effect on 1 January 2007. Funding was introduced in 2006 for an advanced Irish language skills initiative and that is continuing into 2007. There has been investment of €132 million in Gaeltacht infrastructure schemes since 1997. An additional funding of €1 million was provided to assist organisations involved in language maintenance in the Gaeltacht, including a language planning initiative. In total, approximately €103 million is being made available in the 2007 Estimates for the Irish language and the development of the Gaeltacht.

Questions were raised about the sustainability of the national development plan and whether the country could afford it. I certainly heard some ill-informed criticisms from different quarters to the effect that public spending growth is not sustainable or that the national development plan is not affordable. The reality is quite different. Growth in current and capital public spending has been maintained at around 10%, on average, in the past five years, compared with an average annual gross national product, GNP, growth of around 9% in the same period. This level of increase has allowed for major improvements in public services, with tangible impacts in areas such as education, roads and public transport, and more resources are being allocated to strengthen front line public services such as health and justice. We have invested considerably in building our economic infrastructure in a way that supports the growth potential of our economy and the recent national development plan will provide a coherent framework for this strategic approach to resource allocation.

I do not feel I need to cover the subjects of health and child care, but more than 1,200 additional in-patient beds have been put in place since 2001. More than 50,000 patients have been treated under the National Treatment Purchase Fund and all persons aged 70 and over are now entitled to a medical card. In addition to significant improvements in the income guidelines for standard medical cards a general practitioner, GP, visit card is being introduced for certain low earners.

Reference was made to overruns and I think I have explained them fairly well.

A number of Senators raised the issue of stealth tax and it is important to point out that average tax rates have fallen for all categories of taxpayer since 1997 and all employees have seen their average rate of tax fall since 2002. People are earning more, paying proportionally less tax, there is greater equity in the tax system and a substantial number of people are paying no tax at all. Some 80% of people pay less than 20% of their wages in income tax and this year more than 750,000 people on low incomes will pay no tax, compared with fewer than 400,000 in 1997. There is now a statutory minimum wage and those earning the minimum wage are out of the tax net. I could go on in this manner with reference to a number of areas.

Reference was made to the Government's tax measures in support of the environment and Senator O'Toole referred to bio-fuels in this regard. The Finance Act 2004 provided for the introduction of a scheme for bio-fuels providing relief from excise duties. The number of applications made for relief under this pilot scheme indicated a strong interest in developing a bio-fuels industry in Ireland. Consequently, a provision was made in the Finance Act 2006 for a significantly expanded five year scheme on mineral oil tax relief, the scope of which extends to projects which are not of a pilot nature.

The scheme commenced in November 2006 and will provide for excise relief on up to 163 million litres of bio-fuel per annum, at a cost of more than €200 million over five years. When fully operational the scheme will result in CO2 savings of more than 250,000 tonnes, meet a target of 2% transport fuel market penetration by bio-fuels by 2008, help reduce our dependence on conventional fossil fuels and stimulate activity in the agricultural sector. As mentioned, the Minister for Agriculture and Food, Deputy Coughlan, made a significant announcement in this regard. These fiscal incentives were designed to kick start the domestic bio-fuel industry and the evidence suggests this is happening. Vehicle registration tax, VRT, relief for hybrid vehicles was introduced in January 2001.

Reference was made to the purchasing of carbon credits. The Government's approach is to meet our mission targets based on three fundamental areas. We will participate in the EU emissions trading scheme, a range of measures across the remainder of the economy and the purchase of State carbon credits. The purchase of carbon credits is just one element of a broader strategy aimed at meeting our ambitious targets of cutting greenhouse gases.

I have answered most of the questions raised and my colleagues on this side of the House have also dealt with them. The discussion this afternoon has illustrated that this Government has spearheaded a remarkable strengthening of Ireland's economic fortunes over its period in office. We have an economy that is, in many ways, the envy of Europe. With far-sighted initiatives such as Transport 21, the national spatial strategy and the national development plan the Government has demonstrated its vision for sustaining our economic development in the medium and long term.

Today's discussion has also shown that there is very little new or valid in the criticisms voiced. We all know the challenge is to ensure delivery of our commitments and value for money in the use of public funds. This is what the Government is determined to achieve and we have put in place structures and mechanisms to this end. I thank the Acting Chairman and Senators for the courtesy extended to me in the House today.