Tuesday, 22 November 2011
Infrastructure and Capital Investment: Statements, Questions and Answers
I am happy to be back in the Seanad again so soon. Last week, I presented the Government's capital spending programme for the next five years to Dáil Éireann, having announced it the previous Thursday. It was part of a series of important announcements leading up to budget day, which commenced with my colleague, the Minister for Finance, publishing the medium-term fiscal statement on 4 November, followed by my announcement of a series of reforms in the public sector on 17 November.
I welcome the opportunity to discuss the capital review with the Seanad today and hope that we can have a productive exchange of views. As in all other matters, I have a very open mind to views that are expressed. All decisions are difficult, especially in times of retrenchment, and I am aware that Members would like if more projects were proceeding. We regret having to delay projects but I am interested to hear the reflections of Senators on the programmes I have announced.
It is important to reiterate at the start of this debate that the capital allocations I have announced are based on what we can afford. It is not a wish list, although I am aware that others would like to expand them. In that context, we have prioritised the investments that are most needed. Other desirable projects have to be put on hold until the public finances have improved. The Government's priorities are clear and are evident in the plan - jobs, schools and health care. The plan is also based firmly on the fact that we are effectively at the end of a major phase of Exchequer funded capital investment. Over the past decade, some €70 billion was invested in infrastructure and the productive sector. Judged by a range of measures, the quality and quantity of the country's stock of infrastructure has been considerably augmented in the last decade.
The plan is grounded in the reality that we need to reduce spending, which is an inescapable reality. Thus, there has been a reduction in the quantum of expenditure over the medium term. This must be our priority. We must reduce our deficit, regain our national sovereignty and put ourselves in a position where we have more resources available again. We have had to make some stark choices. We must focus on key needs; hence, we have had to delay some projects that had been planned for some time.
However, one project that we are happily in a position to part-fund is the construction of the new children's hospital. When I say "part-fund" I mean that complete funding will be provided, but from two different sources. We will supplement this with some of the proceeds from a new licensing arrangement for the national lottery, which will involve an up-front payment in exchange for a longer term licence. Details of this proposal will be brought to the Government early in the new year. It is being worked out in detail at present and is obviously commercially sensitive. Subject to planning approval, it is expected that construction of the hospital will start in 2013 with initial enabling works to start next year. Without this innovative approach, it would have been a major challenge to find the necessary funding for this important national facility.
The capital investment report lays out the public capital programme allocations for the coming years. In addition, the Government is determined to maximise the use of all available resources to promote growth and job creation. We are pursuing a strategic investment strategy, bringing together a number of strands of non-traditional funding, through NewERA and the strategic investment fund. On the day of the announcement of the public capital programme, I announced that the strategic investment fund is now in a position to fund up to €1 billion investment in new and existing infrastructure assets primarily aimed at the commercial semi-State sector. This will be the first of a number of funds we intend to roll out under the umbrella of the strategic investment fund.
Where it makes sense and offers value for money, we will also be utilising public private partnerships, PPPs, to deliver public infrastructure alongside more traditional procurement. It must be stated that the private funding market for PPPs is currently very challenging. Bank credit is in short supply internationally and our sovereign debt situation presents its own difficulties. At my request, my officials are actively engaging with private institutional investors to see whether it might be possible to match our immediate funding requirements for projects with their long-term income stream needs. It does appear that there is an emerging interest in infrastructure investment among the pension fund industry, perhaps reflecting the volatility and poor returns from other forms of investment. A series of meetings is being organised with my Department to progress this matter. My officials are also in consultation with our European counterparts to explore best practice and similar initiatives undertaken in other jurisdictions. Indeed, I met last Thursday with representatives of the European Investment Bank, including its vice president, along with my colleague, the Minister, Deputy Noonan, to explore a variety of funding avenues that might prove possible.
The capital review represents the findings of a Government-wide review of infrastructure and capital investment policy led by my Department. While I have been up-front that the level of resources available to us does not match the investment of recent years, it remains the case that this plan sets out a significant tranche of investments over the next five years designed to facilitate economic growth and build on our social infrastructure.
Possible negative consequences of reduced capital spending are tempered by recent improvements in the economy's infrastructure, perhaps best illustrated by completion of the new motorway network. I should not say completion as there are a few little gaps I am aware of that need to be addressed. This has aided businesses through much faster travel times. It helps to boost tourism by easier and faster accessibility to the regions. With the critical road infrastructure gap largely addressed, a shift in emphasis towards other areas of infrastructure is now possible.
Despite very difficult budgetary parameters the capital investment programme for 2012 to 2016 will amount to just under €17 billion. In 2012, the allocation will be €3.9 billion, reducing to €3.3 billion in 2013 and stabilising at €3.2 billion in the following three years. As I have previously stated, the profile of capital spend will now see an increasing share of what is a scarce resource allocated to the important areas of jobs, schools and health care facilities.
Creating jobs remains a top priority for Government. A range of reforms of activation and training are in progress and this review commits major resources to the Department of Jobs, Enterprise and Innovation. While the need to address fiscal targets will require some reduction in funding to research and development, we are ensuring that our direct supports to industry will be maintained in excess of pre-recession levels when total capital expenditure was at its highest. In other words, although the overall envelope of capital expenditure has shrunk, the percentage directed to direct supports to industry will be greater.
This will enable the IDA to deliver on its Horizon 2020 strategy, targeting the creation of 105,000 new jobs and 640 investments in the years 2012 to 2014. Enterprise Ireland will continue to support the growth and development of Irish enterprises in world markets. Its science technology and innovation budgets will increase the number of high performance start-ups, supported to 95 in 2012, and includes a new fund of €10 million to attract new high performance start-ups.
While Science Foundation Ireland's, SFI, budget has been marginally reduced, 2012 will see SFI funded activities move into the applied research arena, which is something we were anxious to do. The €156 million allocation will enable Science Foundation Ireland to significantly enhance commercialisation opportunities emanating from SFI funded research, particularly through the enhancement of the Technology Innovation Development Award programme. A total of €27 million will be allocated for the programme for research in third level institutions and for research in the areas of energy, biosciences, arts, humanities, social sciences, medicine, pharmaceuticals, food and health.
Demographic pressures mean that we must provide for an additional 70,000 pupils in primary and secondary levels. I have, therefore, allocated €2.1 billion specifically for the delivery of an additional 40 schools - 20 at primary and 20 at post-primary level - and the expansion and-or renovation of a further 180 schools. This level of investment has squeezed out other possible investment in third level areas but we must prioritise and a sufficient number of school places for children has to come first.
In addition to investing in the national children's hospital, we will sustain capital investment in health care generally. The review maintains existing levels of health capital investment into the medium term - €390 million per year or €1,950 billion for the period 2012-2016. This investment will also allow for the replacement of the Central Mental Hospital, long promised but now to be delivered, and the continued rollout of the national project for radiation oncology ensuring we have full implementation of the national cancer strategy. We will also be assisting in our focus on primary health care as a key component of the Government's strategy to deliver local care and take pressure off the acute hospital sector.
In addition to the €5 billion already invested in improving water services in the past decade, environmental infrastructure continues to be a priority for Ireland. Consequently, alongside structural reforms to the water sector, water services investment will be a key focus of the capital programme I have published. From 2012 to 2016, over €1.6 billion of Exchequer resources will be committed to the water area. This will help ensure adequate capacity for economic development and meet pressing environmental targets.
I have allocated €500 million to the OPW and that includes funding for flood relief programmes in which, as recent events remind us, we need to invest significantly. In recent years the State has spent heavily to incentivise households and businesses to enhance energy efficiency. We will continue a level of support in the short term but given fiscal pressures, a transition to non-Exchequer based solutions involving energy suppliers is envisaged during the period of the plan.
As I have said, the motorway network may be practically complete but we are still allocating significant funding in the transport area. This will ensure the adequate maintenance of the national road network in order to protect the value of previous investments and target the improvement of specific road segments where there is a clear economic justification. On the public transport side, it has been necessary to put on hold some of the large scale projects that had been previously signalled.
-----so that we can afford to undertake such projects in the not too distant future. It is our firm resolve that we will put our economy in such a place that we will be able once again to make our own investment decisions and be free of the oversight of the troika which, unfortunately, is now brought in to overview-----
-----to ensure we can afford to undertake such projects in the not too distant future. Notwithstanding this, the transport allocation will include the commencement of the linkage of the two Luas lines, incorporating a line extending to Broombridge in north west Dublin, the railway safety programme that has been set out, replacement buses, and the upgrade of existing quality bus corridors will continue to be delivered.
It is worth pointing out that the smaller projects we are emphasising such as road maintenance projects, school building projects or school renovation projects tend to be significantly more labour intensive than the larger, grandiose engineering works that had been proposed.
Some €800 million will also be invested in programmes through the Department of Agriculture, Food and the Marine, bringing major economic and environmental benefits as that sector is important also to our economic recovery. It is important to note that the agrisector's contribution to the economy has been hugely resilient. They are leading the way on exports and the level of funding allocated will be a major help. Although there have been calls to continue with a high level of capital investment in order to stimulate economic activity, our priority at this time is to reduce the deficit. The bottom line is we are borrowing €18,000 million this year. Nobody will give us that money except the troika, and they will give it to us on their own terms and we need to reduce our deficit to 8.6% of GDP next year. That means increased taxation and cuts worth €3.8 billion. There is no gainsaying that. In this context, the public capital programme has to be scaled back. It is Darby O'Gill economics for anybody to suggest that we continue to spend regardless. However, I believe that we are providing for a level of funding that will not constrain the capacity of the economy to grow. This is the normal benchmark for deciding on the appropriate level of infrastructure investment. It is worth pointing out that in the years to 2016, average public capital spending will remain broadly in line with the European average, despite the tight fiscal constraints.
It now falls on this responsible Government to cure that terrible malaise.
We are continuing to fund a wide range of capital programmes and projects - €17 billion is still a very significant amount of money. The areas with an increased share of the overall capital allocation, compared with the last capital review in 2010, are education, health and enterprise, reflecting both my priorities and those of the Government.
The public is getting sick and tired of spin and more spin. The spin we are hearing from the Minister today is the same spin we heard with the publication of the jobs initiative. Following research by my colleague Deputy Michael McGrath, we find that the jobs initiative meant taking money off pensioners and putting it into an Exchequer black hole. Unfortunately, unemployment has increased throughout that time.
The Minister and his colleagues are now telling people that the Government is now committed to spending €700 million less per annum than what Fianna Fáil agreed with the troika last year. The Government is making its own decision in accordance with the economic sovereignty of this State. According to an article in the Irish Independent two weeks ago, it is deciding to make the cuts in capital expenditure to avoid the more difficult decisions on welfare and on other areas of current public expenditure.
The Government is cutting capital expenditure, which provides our one chance of creating jobs and getting people off welfare. Fianna Fáil has proposed a capital expenditure programme amounting to 3.5% of GDP. The Government's fudge of a programme contains some of our plans, but has no new plans of its own. In fact, the only project prioritised by the Government parties is the one project they opposed trenchantly in Opposition, which is the construction of the national children's hospital. How ironic that every other project they supported seems to have gone by the wayside while the project they cynically opposed is getting the go ahead. We are glad they have seen sense.
Last December, the Minister, Deputy Burton, stated that even with public finances under pressure, we need to invest in the delivery of the 21st century infrastructure networks that we need to enhance competitiveness and drive growth. That is exactly the opposite of what the Government is doing today. What has happened to change Government policy to such an extent that it is cutting €700 million from important infrastructure projects? It is most unusual for the Labour Party to cut capital spending. Labour Party Members boast about 40 new schools and 180 extensions to schools. By doing so, they are allegedly prioritising education. What about the summer works scheme that has been completely eliminated? What about minor works for schools that have been completely eliminated? What about the third level sector? That has been completely eliminated under the capital budget. Constructing 180 extensions to schools represents four to five schools on average per constituency. There are seven schools with two miles of my house that need an extension.
That is a fact. We had extra money in the kitty and if the Minister asked his colleagues, he would find out that there are another seven schools within two miles that have got extensions over the last two or three years. However, it is complete spin to say that health and education are being prioritised. The only health project that is going ahead is the part-funded national children's hospital, which the Government parties cynically and trenchantly opposed when in opposition and which delayed the project-----
What about the hospital in Navan? We were told by Fine Gael Deputies before the election that not only were they promising the delivery of a new regional hospital for the north east, but along with the Minister, Deputy Reilly, they had already met investors who were willing to put money into that project. Were we all told lies before the election?
This time last year the Labour Party and Fine Gael trenchantly opposed the budget, yet this year they are claiming credit for implementing it. We implemented it in the budget. What about the bank resolution legislation that enabled the Government to burn junior bondholders, which they trenchantly opposed this time last year in the Dáil?
Fine Gael Members have a habit of saying we are cutting X,Y and Z due to Fianna Fáil's deal with the troika. This non-stop mantra is getting tiresome and it adds nothing to political discourse in the country. Capital expenditure is one area where every ounce of responsibility for cuts, such as the Slane bypass in my own constituency and metro north in north Dublin, lies with Fine Gael Party and Labour Party Deputies and Senators. They are responsible for the 9,000 jobs that will be lost to the economy next year. I know some of those people who were waiting to see if metro north could get the go ahead so that they could continue in their jobs, and I am sure the Senators opposite know some of them too.
The Government has made much noise about the focus on health, education, jobs and enterprise, but the facts are that there is little or no reality to that. Some of the major projects in transport that are stalled or stopped include the Slane bypass, the A5 motorway, metro north, DART underground, the regional hospital in Navan, the prison at Thornton Hall - I understand there are plans for prisons at Army bases and I am investigating this, because it is not acceptable - and the relocation of the DIT to Grangegorman. This is sending out a signal to the world that we are not interested in third level education at a time when our university sector is under more pressure than ever.
Cutting capital spending is an easy option in a recession. It is what the Fine Gael Party and the Labour Party did in the 1980s. It is the wrong decision. Government backbenchers and Ministers were harking on about the need for stimulus in the economy when in opposition over the last few years, but when the opportunity arises to stimulate the economy through major infrastructure projects, they cut and cut because they do not want to take really tough decisions that we took and they opposed, even though they now claim credit for them.
My party is opposed to this spending programme. It goes much further than we were ever willing to go. It goes further than what the troika suggested we do. Let us nail this lie about the troika. Their representatives will tell anybody who has met them that they have no objection to whatever decisions this Government takes under its own economic sovereignty, provided the targets are reach. The Minister is agreeing with me. It was open to this Government to make its own decision on capital spending. It made its decision and we opposed it and the troika had no say over it, as long as the Government got to the bottom line, which we have to reach anyway.
Added to the hike in VAT being proposed in the budget and the failed jobs initiative, this is a deathly blow to the economy and something that all Government Members need to think long and hard about. When people complain to them about no hospitals and schools being built or repaired, they should tell them that these decisions were made to avoid other politically difficult decisions.
I welcome the Minister and I would like to congratulate him. When this programme was published last week, one would expect that there would be some kind of kick back. However, the majority of people, including myself, would think that as we are in recessionary times and we should expect the basic provision of services. We have to go back to the grassroots and our core job. Everybody understands we are in a recession, but they expect a good level of education for our children, a good health service and the right to feel safe in their homes.
Two of those issues have been addressed in this programme. How long has the national children's hospital been on the agenda, with Fianna Fáil in power for 14 of those years? It was before I ever came into public life.
I would have to think back to know how long it has been on the agenda. I must compliment the Minister and his Cabinet colleagues on the fact that this is now happening. Personally, I do not agree with the location of the site, but that is a different issue.
It is going ahead, and the general public will appreciate that the Government is doing what it set out to do and what it has a mandate to do, namely, to provide a national children's hospital. It must be applauded and I am delighted it is going ahead.
On the education side, there is no doubt that a lot of money was spent in schools. I feel sorry for Senator Byrne, who did not achieve much for his constituency while he was in power.
There are 40 new schools. I listened with great interest to the Minister, Deputy Quinn, when he outlined the demographics and so on. These will not be your two and three-teacher schools. Many of these national schools will be equipped for up to 700 children, while secondary schools will be even larger, to the best of my knowledge. This is to cater for the demographics.
As I outlined earlier, education, health and a feeling of safety in one's home are important. The latter is something which does not come under the heading of what we are discussing today, but we do need to protect our Garda force as much as we possibly can. They are the three main things that people expect. There is realism among the public about where we are, or rather, where we have been driven to, and they want the present Government to get us out of that and get us back on an even keel.
Regarding investment in infrastructure, I am glad the road network, mainly the motorway network, has been vastly improved over the years. Now the concentration will be on maintaining our primary and secondary road networks. I applaud that because the secondary road network was neglected in favour of the motorways. The important point here is access to the regions. I am from a very peripheral area in Kerry South and access to our region is not great. From Dublin to Cork and Dublin to Limerick the roads are excellent, but unfortunately the road from Cork via Macroom and Ballyvourney is in an awful state, which is hindering progress in our region. From the other side, there is a motorway to Mitchelstown, but access to Kerry via Mallow is not good enough. I would like to think that will not be forgotten about. While I applaud and welcome the intention to maintain the road infrastructure we have, access to the most peripheral areas should not be forgotten.
I welcome the children's hospital very much, and that is where the funding has gone. Primary health care effectively consists of looking after people in their homes rather than in hospital. There is a bit of a contradiction here when one considers the cutbacks in home help hours and so on. There should be a rejig in this regard.
Recently, the Minister's colleague, the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, announced the creation of 95 jobs in one of his imaginative schemes, but it was at a cost of about €2 million. Is that right? I always understood that investment in jobs and so on worked out at about €100,000 per job. This project works out at about €200,000 per job, or is that a misunderstanding on my part? If that is what the creation of jobs will cost, we have a hard road ahead of us.
I recently read that the Minister of State at the Department of Public Expenditure and Reform, Deputy Hayes, hopes to introduce reform of procurement procedures which will save up to €2 billion. Is this possible? If such savings can be made by changing the way the State does business, that is a proactive and positive measure.
The Minister mentioned investment in agriculture. This is the one industry that is providing a serious return at present. The goals set for Ireland in Food Harvest 2020, to do with food security and so on, have ensured that the graph is going only one way in agriculture. I commend the investment in agriculture because it will be more than returned to the Exchequer.
Public private partnerships have been used in many areas to provide services and facilities. One thing that really galls me is the issue of toll roads. These were built through public private partnerships, but the Government had to buy them back, and the amount it had to pay sickened me. I expect that more appropriate fiscal measures will be put in place to ensure we are not fleeced at the end of the line. Maybe that is how business was done by previous Administrations.
Tourism is a massive growth area. We already have 10% growth in this area, although this has dropped. The potential in tourism is phenomenal and we really need to grasp the opportunity. Recently I spoke to the Minister for Finance seeking €1.5 million for a tourism proposal, and he said that if I wanted it for capital, he does not have it and he does not expect to have it in the future. The Minister spoke in his presentation about means of obtaining funding, be it through private investment or public private partnerships, and said that pension funds and so on are where the real money is. I mentioned to the Minister for Finance the regeneration project that is currently under way in Limerick and said that this proposal, for €1 million or €1.5 million, would regenerate the whole of south Kerry, creating jobs and bringing massive inward investment. I hope that specific projects such as that will be no-brainers for the Government, as they will create jobs and bring employment into areas that are under pressure. I hope they will be considered in a sympathetic manner.
Overall, I compliment the Minister on the work he is doing. I am glad he has kept to the core delivery of services in health, education and job creation.
As always, I welcome the Minister to the House and I welcome what he is doing to try to restore the economic sovereignty of the country. I take as one of my themes a comment on page 9 of the infrastructural capital investment document that the Minister produced last week. It states: "There is a need to improve the quality and coverage of programme evaluations and it is all the more critical that individual investment projects are supported by rigorous and objective appraisals." This was a gap in the system and we need to set up and to have ready for when the economy revives proper capital investment appraisal in this country.
The Minister is preparing fiscal responsibility legislation. Proper capital appraisal should be a part of that when it is brought before us. Too many projects are allegedly analysed by the promoting agencies through public relations hand-outs. We need a strong central evaluation office. I will call it COPE, the central office of project evaluation. In his memorandum in April to the spending Ministers, the Minister suggested they carry out such an evaluation quickly before they are captured. The capture of so much of the public capital programme by the construction industry and the capture of all of Government by the banking industry three years ago did not serve this country well.
Capital is wealth set aside for the production of future wealth. It is no longer adequate to mention verbally some benefit and to suggest ipso facto a project should go ahead. All of this should be quantified to determine whether a project represents any return on the capital involved. We must carry out ex post cost benefit analyses as well to determine where the mistakes were made because the process involves learning for the future. The Minister's constituency colleague was here some time ago discussing the Central Statistics Office and its professionalism and independence were the two key factors he stressed. We need these in economic appraisal and evaluation as well. We are keen to know whether projects have come in on cost and whether there is any penalty when they do not because that is standard moral hazard problem. We want to know the shadow prices, test discount rates and the opportunity cost of projects. We want independence in these evaluations. We are keen to see measures that the Minister is bringing forward with regard to the registration of lobbyists. Too many of these projects arise from lobbying.
The proposed whistleblowing legislation is relevant as well. Often at gatherings of senior public servants I have been told that a certain person knew that a given project was no good but they did not write it down or tell us. This is a parliamentary democracy and if there are doubts about projects, they should be expressed. If the proposed whistleblowing legislation helps this, it will be valuable to us. Project appraisals should be published at least one year in advance and then the Parliament and those in public life and wider civil society should be allowed to come up with alternatives. Sometimes the alternatives are damned because they are chosen by the person who is promoting the main project.
One of the lessons from the independent Irish fiscal advisory council, a good model to follow, is that multipliers in Ireland are small. This is a small, open economy and one should not expect great stemming benefits. A project must be good in itself and not reliant on multipliers. I was pleased to learn that Edgar Morgenroth from the ESRI is helping the Department because he has an outstanding reputation and his expertise is needed.
I am concerned with some of the old-fashioned rules. The engineers promoting the Clontarf seafront project maintain they must spend the money in five weeks or it will be gone. If the money goes back to the Minister for Public Expenditure and Control, Deputy Brendan Howlin or the Minister for Finance, Deputy Michael Noonan to spend on something else, I have no objection. The question is whether it is a good project. That is an old engineering problem which has been around for some time.
I am a sceptic of public private partnerships. The convention centre is mentioned in the document. What will this cost and what will the annual losses amount to? Is it simply a case of hire purchase, an expensive way to buy anything? Capital is not free; it must be properly costed in projects. I look forward to some of these developments in the fiscal responsibility Act due to come before us.
Page 18 of the document to which I referred earlier refers to a business case but I am sceptical of this. Is this a case of a project not passing a cost benefit analysis and then subsequently someone else was asked to prepare a business case, whatever that is? We need tight definitions rather than a collection of clichés. With regard to the fiscal responsibility Act we are probably dealing with the fact that when the public capital programme was introduced in the 1940s it was done on a rather casual basis. However, it needs a strong legal basis on which it can be implemented.
I turn now to some of the correct decisions the Minister made last week and which I commend. There is always concern when a project is dropped such as the A3 road from Aughnacloy to Derry but there are two seriously underperforming toll booths on the M3 between Kells and Dublin and there is a requirement to compensate the partners involved. If there is evidence that the demand for something is not what we expected it would be when we planned the project then we should not continue to repeat the mistake. There are similar concerns with the Limerick to Cork motorway. The Limerick tunnel is costing us money and we must compensate the private partner because the demand has not materialised.
I was always sceptical about metro north. If one is on the east side of the city one can access the airport quickly from Sandymount, Blackrock, Dalkey and such places through the port tunnel and if one is on the west side, the M50 improvements mean one can also get to the airport quickly. I note there are 1,200 mostly empty parking spaces at the Dunboyne M3 Parkway area by the railway station. Any case for extending the railway from there to Navan must demonstrate whether there will be a pick-up in demand because it is not evident at the moment. Besides, Navan is already served from Drogheda by train and if people want this we should establish whether we can run a rail car on it.
Capital investment is not always a solution and sometimes it goes wrong and one must learn form these lessons. The DART underground was always a mysterious project. One can travel from Connolly Station to Heuston Station by LUAS and there is also a double-track railway line with concrete sleepers and electronic signalling that goes past Croke Park, Phibsborough, Cabra, under the Phoenix Park tunnel and into Heuston. We were asked as part of the DART underground project to build a third railway line between two railway stations in Dublin. It seems bizarre that the project ever advanced so far in the then Department of Transport.
Rail safety was mentioned. I hope the faults in the system that missed the Malahide viaduct collapse are remedied before we put in any more money. The Sea Scouts seemed to see it and, fortunately, the driver of the train who set off the alarm saw it as well but the people in charge of railway safety at the top level did not see it.
The Minister mentioned integrated ticketing. It appears that it will cost €60 million to persuade three State transport companies to accept each others tickets. This is a bizarre situation. In the Minister's constituency we gave money to Rosslare Europort and then someone took out the train tracks and located them half a mile away so that one must walk in the rain to get there. It is a good job we have wheelie suitcases. What was the purpose of the project to remove the train from a station which had been built with European money and our money? There have been many other strange capital projects. We built an investment project in Dún Laoghaire Port but we did not get any guarantee of its use and it is now idle for half the year because the company concerned has no wish to use it.
We must also develop industrial policy on a broader front. Some €4.7 billion is refereed to in the document but the concern is that since 2005 there has been a drop of approximately 50,000 people working in manufacturing. The public relations hand-outs that accompany industrial policy in Ireland should refer back to reality.
Brendan Drumm believes our health services are heavily institutionalised and other speakers have referred to this. I realise the Minister is bringing forward legislation to de-regulate the general practitioner lists so that perhaps some health care can be transferred, as recommended in many of the texts from hospitals, to the general practitioner and the community. I appreciate the Minister's enthusiasm for the new hospital he proposes but perhaps we have too much of a hospital fixation given that there are alternative ways to manage health care.
More strongly, many people in criminology welcome the decisions to put Thornton Hall on reserve. Alternatives to be considered include electronic tagging, the probation service, community service and restorative justice. There is no need for an edifice complex in capital expenditure dominated by the construction industry. I dislike using the cliché but if there are better or smarter ways of doing things then we should do them. The Minister made many correct decisions last week. We need to improve the context in which the correct decisions were made because I would be afraid once the Exchequer filled up the same people who were awarded projects on previous occasions would be back.
We need a strong professional, independent economic service in the public sector to do this. We need to learn the lessons from having to be bailed out by the IMF, the ECB and the EU. I wish the Minister every success in that endeavour.
Like other speakers I welcome the Minister to the House. It is clear to all of us that we are living in changed economic times. The clear priorities set by the capital programme are jobs, schools and health and doing the best we can with what we have. It sounds like a statement of the obvious, but we are where we are and it is what it is.
It is quite interesting that our colleagues on the other side of the House seem to have completely ignored the fact that the previous Government cut spending from its peak by at least 50% and cut it again in 2011.
I find old habits die hard. It is quite interesting that the Fianna Fáil Party is lecturing the Labour Party on our spending priorities.
This Government has maintained its commitment to the capital investment group and we will spend €17 billion over the next five years. It is not a small amount of money and compares favourably with the proportion of GNP spent by our European colleagues, some of which are a lot wealthier than this country.
I welcome the Minister asking the House for its ideas. I am delighted the Government has prioritised the future needs of children and young people. Our most recent census of population clearly indicated that we, unlike many of our European neighbours, have robust population growth, which alone will make the Irish economy more sustainable in the future by ensuring we have a balanced representation of younger earners to older people in society. The growth in population will have to be funded and we have to make a financial commitment to it. This programme goes some way to doing that.
I welcome the commitment of the Government to the national children's hospital. It is an absolute disgrace that in all the years of the Celtic tiger, when we were incentivising construction in every field in the country, we did not manage to build a state-of-the-art children's hospital. It is incredible that it falls to this Government, in the middle of the deepest recession this country has ever faced, to have to complete the task the Fianna Fáil Party did not manage to achieve in 14 years. It is an absolute disgrace.
I also welcome the significant commitment of the Government to build primary and second level educational infrastructure. I regret we do not have the money to do more but I take Government's point that we have to put money in at the bottom. It is to be hoped we will be better off in a couple of years time and be able to all back on some ongoing projects in our third level institutions.
I have a suggestion which relates to the mistakes of the past. We have a difficulty in this country, due to the excessive cost of housing in the decades to 2007, in that many people were forced to live in the outer suburban commuter belts. People found themselves living in places like Gorey, which is the Minister's constituency, where the infrastructure simply did not match the growth in population.
It is an excellent place.
It would be very tempting to start building many schools on greenfield sites but the reality is a lot of older urban areas have suffered from significant ageing population. Infrastructure and services are in place in areas which do not have children to fill schools. We need to go back to the drawing board to some extent, in terms of planning, rather than being driven by the immediate demand we are facing.
With regard to the proportion of the programme devoted to transport infrastructure, it is important to acknowledge that Ireland, due to the actions of the last Government, made major strides in the transport system. It is only logical that when we reach a point in time where we do not have to keep pushing money into the same road system, we are able to move on.
We should not be decrying the fact that we are cutting the transport budget, despite the fact it was decried in the national media. The transport infrastructure in Dublin has suffered through successive decades of Governments ignoring its issues. I would loved to have seen the DART interconnector. I disagree with Senator Barrett; we are probably one of the few capital cities in the world where one cannot arrive at an airport, get on a train, get into the centre of town and join an integrated rail structure.
I would also have loved to have seen metro north. Some of the poorest areas of this country are in the north of Dublin city and metro north would have brought some much needed jobs, despite not being the best return on capital investment in terms of employment. I am very sorry these projects are not proceeding. I welcome the Luas interconnector. It is one of three projects and I hope the Minister has a chance to revisit the other two.
I concur with Senator Barrett. We must ensure that projects which comes to selection processes have been robustly arrived at. Individual Departments conduct their own analysis on which projects should proceed but it is not clear to the ordinary man or woman on the street how decisions on particular projects were reached.
I am conscious that decisions were made by the last Government - I will use the Minister's constituency as an example - where money that was set aside for the N11 around the Beehive, a particularly dangerous section of road, was shelved in favour of the ring road around Waterford because it happened to be the pet project of a particular individual.
We have to move away from that type of system where particular Ministers, who were members of the Fianna Fáil Party, delivered public projects on the basis that they were not delivering for the people of Ireland but for particular constituencies.
The reform agenda for which the Minister is responsible provides a great opportunity to bring openness and transparency to these type of decisions. He recently announced the cancellation of most of the decentralisation programme, which is to be welcomed. It is nothing short of the truth that fortunes were made on foot of this policy by party faithful through land sales and general profiteering with no thought whatsoever as to why-----
Premiums for decentralisation were simply thrown out and scattered to the four winds. It was a bit like "The Late Late Show", where there was one for everyone in the audience.
I ask the Minister to dust off the Buchanan report. We have an opportunity to link clear national and regional policy with our infrastructure and capital investment programme. There needs to be a clear link between regional and national priorities and money spent. It should be spent in a transparent and costed fashion using principles of best practice. We need to arrive at a situation where every citizen, taxpayer and individual in the State can look at the decisions made and know exactly how and why they were arrived at.
I welcome the commitments to jobs and job creation in the capital programme. I suggest the funding that travels through the IDA and SFI be robustly assessed and targeted to achieve the maximum regional impact.
I ask the Minister to exercise some caution with regard to the housing capital programme. The current priorities have moved from traditional construction acquisitions policies and the buy and build model towards leased-based and revenue funded options. Local governments have a long and proud tradition as housing providers in this country. Although the current Government strategy is focused on moving current support anything away from the Department of Social Protection towards local authorities, there is a real danger that we will find ourselves in a crisis situation with regard to housing much more quickly than would anticipate.
We are currently relying on the overhang in the housing system but the reality is that we have almost 100,000 households on the housing waiting lists. We also have a defunct banking system which will not lend for housing purposes. We will very quickly find ourselves, given the level of housing needs, population growth and a defunct banking system, in a position where we will not be able to deal with housing need. I ask the Minister to keep that at the back of his mind in terms of our approach to housing.
I welcome the Minister's commitment to the Limerick regeneration project and his announcement that other regeneration projects will be strategically prioritised. I am well aware, as we all are, of the misery of the residents of Dolphin House, St. Michael's Estate, O'Deveney Gardens and other housing developments awaiting regeneration. These people were left entirely in the lurch by the last Government. The living conditions in these State housing projects is deplorable and a cause for shame. We must bear in mind the experience of those residents when considering future public private partnerships. Such arrangements are not the answer in every case.
I thank the Minister for seeking the views of the Seanad on this issue.
Sinn Féin tabled an amendment to the Order of Business this morning proposing that speakers be given five minutes each during this debate, but it was rejected. The group of Taoiseach's nominees does not have a single representative in the Chamber for the debate, yet we are not being given adequate opportunity to address the Minister.
I am making a point, which I am entitled to do. Senator Hayden referred to political patronage, giving as an example the stretch of the N11 which was not renovated as against the completion of the outer ring road in Waterford. The majority of funding for the latter came from the disposal of assets by Waterford City Council in conjunction with an additional investment by the council. The project was driven by the city manager and the council, not by any Minister, and the greater part of its funding came from local funds rather than central government. If we are talking about political patronage, we might consider the judges appointed by the Labour Party on account of their political connections. In addition, we had the disgraceful decision, to which the Leader has indicated his agreement, that the VEC headquarters be based in Wexford rather than Waterford.
I have several questions to put to the Minister. The domestic economy is on the floor, with 470,000 people out of work and more than 100,000 forced to emigrate. Electricians, plasterers, plumbers and builders are out of work, yet the Government is taking €700 million from capital investment. In Waterford, commitments were given in respect of a 50-bed community nursing unit on the grounds of St. Patrick's hospital and an oncology unit which would provide palliative care. Neither of these projects is included in the revised capital programme. Roads throughout the country are in a poor state of repair. Funding has been taken from local government.
We have tabled-----
While none of us is in agreement with the entirety of the programme, we must all recognise that there is little choice in the matter. This country is being funded by the EU and IMF. We are not where we want to be, and we must deal with that reality. We have to cut our cloth according to our measure, in a situation where our bills are being paid for by others.
I have always held the Minister in very high regard. The impressive manner in which he has compiled the capital programme has raised him further in my estimation.
I agree with Senator Sheahan's comments on the importance of maintaining connectivity to the regions and facilitating balanced regional development. We must ensure our limited resources are spent prudently, fairly and regionally, so that all citizens are given equal opportunity and access and different areas can perform to the best of their ability. In my own area, County Clare, a review of the future management and role of Shannon Airport is ongoing. We must ensure our airline hubs, including Shannon, which has an airway capable of taking jumbo jets, are operating to their potential. I look forward to that report.
The Minister indicated that €1.6 billion is committed to water services investment between 2012 and 2016. Under the greater Dublin strategic drainage scheme, it is envisaged that a monster sewage treatment plant will be constructed in north County Dublin, which is not required, at a cost of between €2.3 billion and €2.7 billion. I urge the Minister to re-evaluate that project, which does not stack up in terms of value for money. Localised plants are the way forward rather than a massive Ringsend II. I hope the issue has been raised at Cabinet by my constituency colleague, the Minister for Health, Deputy James Reilly.
As Senator Hayden said, people are gravely disappointed at the decision not to proceed with metro north, in respect of which firm commitments were given by the Government. The project would create 6,000 direct construction jobs and 37,000 jobs thereafter. In my view, the project has been cancelled rather than deferred, despite the commitment given by the Minister for Health before the election. The Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, gave a similar commitment when he told people in Swords that it was his number one priority and stated his "strong support" for the project in February 2011. The people of Dublin North do not believe him when he says the project is merely deferred.
I acknowledge the economic constraints under which the Government is operating, but many of the decisions that were taken - not all but many of them, particularly in the case of the metro north project - seem to neglect the needs of north Dublin. The decision to proceed with the connection of the Luas lines will see construction work taking place on the north side of the city for the benefit of people on the south side. Will the Minister confirm that the metro north project, on which vast sums have already been spent, will be reviewed in 2015? It will return money to the Exchequer and we could have 260 jobs immediately if the enabling works were allowed to proceed. The cancellation of the project is a grave disappointment to the people of my constituency.
I would genuinely like a different type of debate. I am open to all suggestions. However, shouting down other speakers and making political cases impresses nobody, either insider or outside the House. Nevertheless, I will answer the question put directly to me by Senator David Cullinane in respect of an issue that is entirely extraneous, namely, the decision as to whether the VEC site should go to Waterford or Wexford when the two were amalgamated. That decision was made objectively by the Department of Education and Skills. Wexford was chosen because its population base is larger than both Waterford city and county combined. There are double the number of schools in Wexford and the number of pupils is considerably greater-----
If the Senator continues to deny everyone speaking time, no one will be heard.
I do not think in parochial terms. I supported the concentration of services from my county into Waterford because the development of a regional cancer centre in a regional hospital in Waterford was the best solution, although the population of Wexford is larger. I supported the development of a regional airport in Waterford. Not everything has to go to Waterford. There are rational reasons for other things and people must be reasonable. The notion that one can kick up a fuss if one's own county does not get what it wants, is not what people want now from politics.
Senator Conway asked about the National Lottery proposal.
Yes, I understood the Senator's question. In regard to the lottery proposal, I was looking for innovative ways of getting new money. I would like at this point to make a general point if I may. This is important in the context of Fianna Fáil's contribution to the House thus far.
I understood Fianna Fáil embraced the objective of reaching a deficit of 8.6% of GDP next year.
That is immutable. The best analysis we have suggests we need to make adjustments of €3.8 billion to do that. The Government has decided that this amount should be made up as follows: €1.6 billion in additional taxes; and €2.2 billion in cuts, €1.45 billion of which will be in current and €0.75 billion will be in capital expenditure. It is a fair point if Fianna Fáil believes we should go deeper on the current side. In relation to the cuts on the current side, which will be announced on 6 December, 80% of all current expenditure is in the health, social welfare and education areas. There are no soft options there. We will get the same critique from people who will the end but will deny the means, which is a failed economic policy. We need to be honest with people; say it as it is and to map out the truth of what we want to do. None of these issues is hard.
If Fianna Fáil genuinely believes that we should have augmented the capital programme, not cut €750 million, but should instead have taken that amount from the current side, making deeper cuts in social welfare, education and health care, that is fine but they should put that on the table so that we can-----
-----is the reduction in 2012. Let us be honest with people. People are not fools. God knows they are carrying enough burden without being coded too.
Senator O'Brien made some constructive points. I would like to respond to the two specific questions he asked. The issue of the greater Dublin drainage scheme has been raised on a number of occasions by colleagues of the Senator representing the constituencies directly affected. I am giving an undertaking now to the Senator that I will have it investigated.
I previously Minister in the Department of the Environment, Heritage and Local Government. There is a propensity for engineers to have big schemes. They much prefer to build reservoirs than fix leaks. There is nothing sexy about fixing a hole but construction of a multi million euro dam and piping water for miles is a big event. I prefer to fix the leaks. I have given the Senator an undertaking that I will have the matter investigated.
In response to the Senator's direct and specific question in regard to whether metro north is deferred or cancelled, it is deferred. It remains a priority. It is hoped we can fix our economic finances quicker than anticipated and that international pressures will abate leaving us on a quicker path of recovery. If that happens I guarantee the Senator that metro north will be back on our agenda.
I welcome the Minister to the House. I also welcome the €3.9 billion of cuts in the capital programme given the circumstances we are in. It is necessary that spending be reduced by €12.4 billion over the next four years. As the Minister stated, hard political choices have to be made. This Government is and will continue to make those choices, not because it wants to but because it must. The postponement of certain projects will save €750 million, which would otherwise have to be made up through a reduction in services or taxation measures. It has been agreed that as unpleasant as it is this is the least disruptive choice for our economy and society. It will have the least impact on our public services, competitiveness, jobs and ultimately our economic recovery. It is not fair that Senator O'Brien has to listen to this. I often feel sorry for him but the legacy of the Government of which his party was part is shameful.
I placed a moratorium on my criticising Fianna Fáil. However, I must admit I am sometimes guilty of breaching it. It is difficult to be lectured by Fianna Fáil Members whose party when in government made no provision for the capital programmes it announced and to have to now listen to them say this Government's proposals are shameful.
Some years ago Fianna Fáil announced decentralisation, which was hailed as a stroke of genius. It now turns out to be a ball of smoke, hubris nonsense that must be confronted.
Perhaps the Minister will confirm the Government's commitment to providing funding for a substantial number of regeneration projects in urban areas, in particular Limerick, Ballymun and substantial parts of the northside of Cork city. Is flexibility built into the programmes to allow the transfer of money between programmes, where a particular programme does not appear viable and so on?
I welcome the Minister to the House and thank him for all the information he has given us. The Minister stated earlier that the creation of jobs remains a top priority of Government. I recall reading that the IDA stated it was worth its while spending €1 million to create one job. I know that in this regard the Government proposes spending €17 billion between 2012 and 2016. Perhaps the Minister will tell us the estimated cost per job?
I was interested to hear that there is now available in the US a website through which citizens can examine Government spending, in particular on capital projects. Would the Minister consider the introduction of such a website here? It would probably not be that expensive but it would give citizens an opportunity of learning about what the Government is spending or planning to do.
Great. I looking forward to viewing it.
Prior to the election, Fine Gael announced it would establish a national recovery bank and planned to do so within a few weeks of being in office. The proposed bank was based on the French system, which appears to work well. Is that proposal dead? Perhaps the Minister will tell us the position in regard to Fine Gael's plans for a national recovery bank?
I welcome the Minister to the House. I would like to make a small point which may appear trivial to some people but has been bothering me for some time. When campaigning for Government, the Labour Party promised better road signage for tourism purposes. However, this proposal appears completely off the scale in Kerry where every by-road is now adorned with about five signposts. That could not be good value for money. Only one signpost is required to inform people of the name or direction of a particular by-road. Surely this money would be better spent on maintenance of the roads. There are many signs which tell us where to go over a potholed road.
There are no sewerage schemes in place in many areas, one being my local townland from which effluent is flowing into the Killarney lakes and the Lough Leane catchment area. Before attacking rural Ireland in the context of septic tanks we need to take a look at our sewerage schemes in terms of the effluent flowing in our natural beauty spots in Killarney and other areas. The summer works scheme is an important scheme for schools and should not be abolished. Funding should be allocated to the summer works scheme. Last week a school in County Kerry with no students was being kept open by the principal sitting in the school. The school buildings are available and all that needs to be done is to refurbish them. If some schools are overcrowded it might be worth considering providing a bus service to take pupils to the empty schools that are sitting idle.
Senator Gilroy asked about the regeneration projects and I am very firmly committed to the regeneration projects. As regards flexibility, we will ensure that all the capital allocated is spent and will be moved within the budget areas if there is an incapacity or a difficulty. For example, I have indicated the very significant funding allocated to the national children's hospital. This project is subject to planning permission and I am very optimistic that such permission will be given but it is a process over which we have no control.
In reply to Senator Quinn, according to figures I have received from IDA Ireland the average cost per job created and sustained by IDA Ireland is €14,000. The estimate being thrown around by some of 9,000 jobs is based on 12 jobs created per €1 million invested but I think the reality is somewhat different from that. He asked about the website. I have created a website in my Department and I intend to have virtually all data contained there. I am inundated with parliamentary questions, freedom of information requests and so on. All public data on public expenditure should be in the public domain as soon as possible to the point of determination. I intend to show tenders on-line as soon as this can be physically done, the outcome of tenders, building projects, allocations to each line Department down to subhead level and the take-down of that. It is a complicated process but it has been commenced and it is my intention to provide real-time data on public expenditure, hopefully, on a world-model basis.
The Department's website will show how far advanced we are. I have also provided a facility for users to make suggestions on how it could be improved. I want to have as many services as possible on-line. To date there are more than 300 Government services accessible on-line as part of the e-government strategy. If any citizen wishes to suggest other services which are not yet on-line, we want to be able to take those ideas. It is a work in progress and we have a way to go.
The Senator referred to the national recovery bank. I am not certain whether he is referring to the Fine Gael NewERA proposal in advance of the general election. The Labour Party had a parallel proposal called the strategic investment bank. I have been in discussions with the National Asset Management Agency, with the National Pensions Reserve Fund and anybody else who will talk to me about how we can structure these things. The National Pensions Reserve Fund has provided €250 million in the past fortnight as seed capital being leveraged up through international financial partners to an initial fund of €1 billion to invest largely in the commercial semi-State sector. It is my ambition to have a number of such funds available for different sectoral investors so that investment in green technology and in other areas can be facilitated with seed capital on a commercial basis. This will be rolled out and the initial fund is up and running.
NewERA has been established. The process of transferring title to some of the State company assets into one holding company to better manage it is under way and legislation will be introduced in that regard in the not too distant future.
Senator Moloney asked about signage. That is a matter best directed to her local county council office. I do not micro-manage to the extent that I know the expenditure of its roads allocation and I suggest local councillors be asked that question. Similarly, as regards sewerage schemes - Senator Moloney says before we attack rural Ireland - the difficulty with regard to septic tanks is that the European Union has a propensity to prevent us from poisoning ourselves and since we do not mind poisoning our ground waters through sewerage schemes, the EU has to use legal action to prevent this. If we do not stop polluting our ground waters by means of septic tanks, we will be fined. I am afraid there is no escaping that logic now and that is the reason the Minister for the Environment, Community and Local Government is taking the action he is. As I indicated, I am allocating €1.6 billion of the capital programme to water and sanitation schemes and this is a sizeable allocation. As regards her observations on the schools summer works scheme, I know the Minister for Education and Skills, Deputy Ruairí Quinn, is very anxious to have a scheme and I would be very surprised if such a scheme were not in existence for next year.
Cuirim céad fáilte roimh an Aire. Ceann des na ceisteanna is mó atá árdaithe ag an tuarascáil maidir le ceist na Gaeilge is ea an cinneadh faoin Choimisinéar Teanga. Tá an Coimisinéar Teanga i bhfeidhm le seacht mbliana. Tá glactha leis go forleathan go bhfuil sé ag déanamh sár jab. Tá neamhspléachas an róil atá aige iontach tábhachtach. Tá sé lonnaithe ins an iarthar. Tá foireann beag ag obair aige a bhéas ag obair sa Stát Seirbhís is cuma céard a tharlóidh. Mar sin, ní thuigeann pobal na Gaeilge cén loighic atá taobh thiar den chinneadh seo, Oifig an Coimisinéara Teanga a chomhnascadh.
Tá ceist eile maidir leis an seachbhóthar amuigh, outer by-pass, i gcathair na Gaillimhe. Go bhfios dom, níl airgead curtha i leataobh le haghaidh tógail an tseachbhóthair amuigh. Tá an Rialtas ag leanacht leis an bpróiseas a bhaineann le cúrsaí dlí ina thaobh. An bhfuil sé i gceist leanacht ar aghaidh leis an Galway City Outer By-Pass, mar tá ceist na tráchta in nGaillimhe tarraingthe anuas agam go rí-mhinic anseo? Cén uair a bhfuil sé i gceist ag an Rialtas airgead a chur sa chiste do sin?
Maidir leis an N17, an nglacann an t-Aire leis nach ndéanann sé aon chiall a bheith ag cur dolaí ar an mbóthar sin mar go bhfuil sé léirithe, ó thaobh na dolaí atá ar bhóithre eile sa tír go bhfuil siad ag díbirt daoine des na mótarbhealaí seachas á mhealladh chucu agus nach bhfuil siad ag comhlíonadh an dualgais a leagadh orthu.
Ba mhaith liom aontú leis an Seanadóir Ó Clochartaigh maidir le hOifig an Choimisinéara Teanga, but I will not go further than that because I accept what the Minister has said.
As a prelude to my question, the Minister and I have spoken privately in the past about many of these issues, including the public service. I will not say we are ad idem but there would be very little between us as regards the surgery and what needed to be done. The Minister will know we have had a conversation and I remind him of it. I have four questions. I am disappointed with this document but I have been a critic of the Croke Park Agreement from the time my own party introduced it last year. I think it is a smokescreen for doing very little. The savings are very minuscule. A total of €2.5 million-----
On a point of order, the Senator is asking me a series of questions about a document which we are not debating here. I am happy to come back to the House to debate public service reform. The Senator has obviously prepared for a different issue. We are talking about the public capital programme.
I refer to the Thornton Hall project which has been deferred. There are major problems in Mountjoy Prison which still maintains the Dickensian practice of slopping out. There are also major difficulties in St. Patrick's Institution. What measures in the capital programme will address those problems? In addition, there may be major problems in regard to Garda numbers. A certain number of Garda sergeant and inspector positions, in particular, must be filled. The fleet, I understand-----
I dtosach báire, mar a dúirt mé cheana, ní bhaineann díospoireacht an lae inniu le Oifig an Choimisinéara Teanga. Beidh mé lán-sásta teacht ar ais agus an report eile a phlé, más mian le Seanadóirí.
The Galway outer city by-pass is not in the current programme. The issue of tolling on the N17 is something best put to the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar.
We have stated there are no significant new roads programmes to be commenced under this programme. We are looking at the possible prospect of leveraging additional public private partnership money and to that end I met last week with the vice president of the European Investment Bank, to advance the number 1 project on the roads public private partnership scheme, the N11. As Senator Hayden rightly noted, that was to have been in a previous time concluded when moneys were moved, shall we say. That is bundled with another project and I am seeking funding from the EIB, co-funded with an Irish bank, to carry out that project. If that mechanism proves successful I hope we may be able to look at other projects, not only in roads but in energy and other areas. The European Investment Bank is funding wind farming in the west, for example, and other projects. This is an area in which I am anxious to leverage any resources I can get. The first part of the funding is likely but I am not yet sure how much further we can go. Céim ar céim, maidir le rá.
Senator Walsh came a little between us in our discussions. I remember being quite shocked at the scale of the downsizing he originally wanted.
I can see that, over the period. I shall come back and debate these matters when we are debating the reform agenda. There is enough meat in that to keep us going for another debate.
I mentioned the N11 and my discussions with my good Greek friend, the vice president of the European Investment Bank, last week. Senator Cummins spoke about-----
There are no new major road budgets in the capital programme as published. Notwithstanding that, and in response to our colleague from Galway, I hope there may be leveraging of further funding, depending on presentation of same on a public private partnership basis. The first up for testing, as it were, is the N11 and the Arklow element thereof. There is another part, too, as there are two adjoining schemes which are to run at the same time.
The Newlands Cross works. These are two separate schemes but for scale purposes they were bundled together. I should not say so at this stage because it is somewhat premature but having had discussions I am reasonably optimistic about getting those ones over the line. If we do we might then look at other projects that can be approached from a similar perspective.
Thornton Hall is not going ahead within the parameters of this programme. However, I am conscious of the very fair points Senator Cummins made. We have allocated €24 million to upgrading existing prison facilities and to adding to those prisons. Senator Barrett also made a very fair point. We should explore other options. We imprison certain people now, in very recent times, whom we used not to imprison, for example, for non-payment of fines and so on. We need to be more discerning in the way we apply this policy and I know my ministerial colleague in justice, Deputy Shatter, will be looking at this.
As to the allied point on St. Patrick's Institution, the Minister for Children, Deputy Frances Fitzgerald, has had long discussions with me on that issue and I am very confident we will be able to address it during the coming year.
On a point of order, the Order of Business is that statements followed by questions and answers was to take place between 3.30 p.m. and 5.30 p.m. A number of Senators expressed an interest in speaking a second time. Is the Leader moving an amendment to the Order of Business to cut short this debate and prevent speakers from returning to this subject?
It is helpful to go back to some of the initial comments. Senator Sheahan spoke about access in terms of the completion of the national road network. There are certain related areas, including, I must admit, County Wexford. The EU route 1, with which some of us who have been around for a certain period are familiar, was originally intended to connect Larne in the North through the port of Rosslare, to the Continent and, ultimately, to Moscow. That sounds a tad Skibbereen Eagle-like, to say we were on the road to Moscow. I would settle for Larne to Rosslare. Unfortunately, that road, while largely built, is not completed. We need the missing component part in Wicklow, the Enniscorthy by-pass and the last leg into the port of Rosslare to be finished. This will not be done within the timeframe of this programme. In all truth, it is unlikely it will be completed in its entirety in the timeframe of the next programme. That is something we need to work on.
I am conscious of such areas, and others in County Kerry and one concerning which a vociferous argument was made in the other House, namely, the A5 in the North. The latter is an important project. I suppose it was a bit unusual for the previous Government to commit our funds to build a road that was largely to be constructed in Northern Ireland. There is a commitment to the people of the north west as well. The Derry-Donegal axis is an important one for the all-Ireland economy. At a time when we are not proceeding with road projects in general, we unfortunately do not have the £400 million we committed to give.
I have given a political commitment, which has been publicly reiterated by the Taoiseach, to the project. I have met my Northern counterpart, Sammy Wilson, on a number of occasions, most recently yesterday at the North-South Ministerial Council in Armagh. I had another bilateral meeting with him last Friday as part of the general North-South Ministerial Council. I met him in Dublin before I made the announcement so that he would be clear on its implications. We will explore how the road might be completed. I am glad to have had an opportunity to mention this matter. It is important for the people of Donegal and the north west in general to know we have not abandoned the project. We have given an indicative figure. We will put £25 million into the budget line in 2015 and 2016. We will work on how we can assist in doing that.
Senator Sheahan also spoke about the cost of job creation. I gave the indicative figures. IDA Ireland has told me that each job costs €14,000 to create. The important issue of procurement was also raised by the Senator. My colleague, the Minister of State, Deputy Brian Hayes, has done a great deal of work on this as part of the other work we are doing. I suggest that it might be worth the time of the Seanad, if has an opportunity to do so, to invite the Minister of State to go through the various layers of general procurement policy. The House could discuss how best practice operates and how we can comply with the European tendering regime while ensuring, as far as practicable, that-----
The House might give some thought to it. Other countries seem to be able to ensure significant projects are devised in a way that results in successful tenderers coming from their own locales. The Minister of State, Deputy Hayes, might usefully address the House on the matter.
I fundamentally agree with what Senator Sheahan said about public private partnerships. Senator Barrett said he is not enamoured by the notion of public private partnerships. I used to be strongly opposed to them, but I am now a sceptical supporter of them. I support them because we have no other option when we are looking for money. We need them. The value for money issue must be borne in mind. We cannot be mugged on them, to be blunt. We need to make haste slowly. If there is a clear business case, if it makes sense and if it represents value for money, it could be a way of getting capital. I am very taken by Senator Barrett's clear and important announcement that capital is not free. There is a notion that we can go ahead with everything. There is a cost to it.
Senator Barrett's contribution is worthy of mention. Vigorous appraisal is an important part of everything we do. We started to deal with the general budgetary preparations this year in a way that no other Government has done. We set out the comprehensive review of expenditure. We have had a series of announcements. The medium-term fiscal plan was published by the Minister for Finance, Deputy Noonan earlier this month. The capital plan we are debating now was published on 10 November last. That was followed by the reform agenda, which is a meaty programme. Some people can be dismissive of it. I hope that does not happen. I am reminded of the original point I made, which is that we are collectively in the general business of making things better.
Senator Walsh's intervention negates the very point I am making. We should try to be constructive. Even if the Senator had a point about what happened last year and the year before, I do not think people give a monkey's about it. They want people to be constructive and to get us out of this crisis. We are in a perilous economic spot. We can do our own evaluation of how we got here, but that is for another day. If people have constructive ideas for mapping our way out of this crisis, we will see if we can address them. I will be open to that. I can do the ground hurling as well as anybody else. If anybody wants to be partisan and play that game, I can do that as well.
It is sad that this happens when we try to address things on the basis of trying to engage. That is fine. That is well and good. We will restore this economy with or without the help of those who destroyed it. We will restore it. If that is the way they want to play it-----
I will respond to Senator Barrett's point about the need for proper evaluation. I was about to speak about the budget line. I hope we can construct the budget preparation in a different way, with a little more openness in terms of ideas and a collective debate on them. I have spoken at the economic management council about the possibility of doing this. We will see how it works. It will not work if it is partisan all the time. Perhaps it will not work. Perhaps we are not yet sufficiently politically mature to be able to do that. I do not know. We will see.
I would like to speak about the value for money issue with regard to all budget lines. Senator Barrett rightly referred to the cost-benefit analysis. We are publishing details of a range of reforms that are aimed at achieving best value for money. Many of them are embedded in the programme. I propose to make presentations on the reform agenda, including the value for money issues, at both the Joint Committee on Finance, Public Expenditure and Reform and the Committee of Public Accounts. I will see how we can do that. I would welcome any inputs into that.
I do not want to take up too much time in case any more Senators have yet to contribute. Senator Hayden spoke about the shift in population, which is an important issue. She mentioned the need for transparency and robust evaluation. Many people have commented on that general theme, which I strongly support.
I strongly agree with what has been said about decentralisation. Perhaps we are all too quiet. Wexford was supposed to gain a decentralised Department of State. Clearly it will not now be the Aireacht in the traditional sense because that is to remain in Dublin. Objectively, the decentralisation project caused significant disruption to the totality of the public service at a time when it needed to be focused as never before. There was a notion that the Department of the Environment, Community and Local Government would move to Wexford and 300 people would relocate. Of course, those 300 people would not all have been staff of the Department. They would have come from a dozen Departments and agencies of State. The collective memory and the operational capacity were not only lost but sundered for a while. Parts of Departments have been realigned as part of the restructuring of Departments. The Department of Public Expenditure and Reform is a brand new Department. There are bits of Departments all over the shop. Many of the so-called "advance parties" are in isolation. This huge issue needs to be solved. We have made determinations. We hope that will be done.
I assure Senator Quinn that I am determined to put as much data on procurement and expenditure as possible on the website of the Department of Public Expenditure and Reform. I would welcome any observations he might have in that regard.
That is what some Members of this House have done. I refer the Minister to Sinn Féin's pre-budget submission, which refers to a stimulus plan of €7 billion over three years. It has been supported by the Irish Congress of Trade Unions, which is calling for something similar. Sinn Féin wants an additional 150 State-run crèches to be established and 100 schools to be built, which would cost €300 million.
I am asking the Minister whether he agrees that investment is what is most needed by the domestic economy in this country. We have seen in the past that the policy of taking money out of the economy by cancelling capital projects and taking money from the pockets of low-paid workers clearly does not work. If there is €5.3 billion in the National Pensions Reserve Fund, it should be invested in this State and in people to get plumbers, architects, builders, plasterers and bricklayers back to work. This is not just coming from my party. As I said, last night in Waterford - I should not mention Waterford in case I might upset the Minister again - I attended the Irish Congress of Trade Unions regional launch of its pre-budget proposals. It also calls for a stimulus and investment package, as do many economists.
I accept the Government must pick up the pieces of what was left by the previous Government but what we need most is investment. Even at the end of the lifetime of this Government and even if all its policies are realised, and I do not believe they will be, the Minister for Finance has stated that there will still be up to 370,000 people out of work. That is clearly unacceptable to my party, to the Irish Congress of Trade Unions and to many other people.
I agree with the Minister's sentiments on decentralisation. This is a country in which one is only four or five hours away from anywhere. Therefore, decentralisation, in particular the last tranche of it, was flawed.
I spoke to the Minister privately about the swimming pool project announced a month or six weeks ago. It was impractical for many counties to take advantage of the funding. I did not see anything specific in the capital programme in regard to swimming pools for 2012 but I know from speaking to the Minister that the Government is favourably disposed to looking at this. It would be a way of sustaining employment, particularly in rural areas.
In terms of the e-tendering process for projects worth more than €50,000, is there any scope to raise that figure to €250,000 before one must go through the e-tendering process? I hate to shout about the green jersey but this is a time of crisis and if we are to try to secure employment and if Irish companies are to have any opportunity, e-tendering is probably counterproductive from our point of view. I realise we have certain EU obligations but is there any scope to up the figure substantially?
I agree with the Minister in regard to procurement. There is a need for us to jobs proof everything decided across all policy areas because jobs should be the number 2 issue. The number 1 issue, which will best assist jobs, is restoring consumer confidence.
The partisan politics, in particular in the Dáil, which occurred over the past three years, were an absolute shame. It did not occur in other countries, such as Sweden and Portugal, which had issues in the 1990s and now. I agree with what the Minister said but it rings a bit hollow coming from those who, over the past three years, did not put the national interest ahead of their own self-interest and party interest.
I refer to the macro issue of cutting capital expenditure by €750 million. It is much easier to do that than to cut current expenditure. The worst may still be to come. I refer to what is happening in the eurozone. Will it survive? That is highly questionable. Will the European Union survive? It probably will. What will happen in China? I refer to the US where they cannot reach agreement on budget figures, again for partisan political reasons. It means we are very exposed as an open economy dependent on our exports. We have an export-driven economy. If that is dented and unless we get consumer growth, which will be very difficult to achieve, we face dire difficulties. The one thing capital expenditure does is it creates jobs in the short term but above all, it improves our competitiveness in the medium term. That argument and debate needs to take place.
The structural weaknesses mentioned-----
I agree totally with the Minister on decentralisation. Where there is an already decentralised office - there are a number of them - and a large amount of unutilised office space, is there any way the Minister can encourage his colleagues to ensure staff who are scattered elsewhere in the same town or region move to the one place?
I am a strong advocate for the agri-food sector. The Minister talked about it being one of the areas which has been very resilient. Some €800 million has been allocated for the next five years. I discovered the figure this year was €269 million. If we are going to reduce it to that, it is a reduction of 37%. This is the very area in which we should invest. Have those sums been done correctly?
Mental health is an area in which I have a particular interest as I have worked in the area for many years. I welcome the proposal to rebuild the Central Mental Hospital. I have one or two concerns in regard to the allocation of funding to A Vision for Change. Decisions made in other policy areas may well negate the best of intentions here. Do the Minister and his Department intend to actively pursue contradictory objectives in other Departments' areas with a view to achieving the objectives in one area?
Restoring the public finances is the best way to aid growth, as has been said by the OECD, the World Economic Forum and any other economic advices we have. We must restore economic fortunes. We are borrowing €18 billion this year. Some €15 billion is for day-to-day expenses and €3 billion is for the banks. We are paying our gardaí, teachers, nurses and ourselves from that borrowed money and there is only one source for it, which is the troika. Nobody else will give us money.
If we are to restore our economic fortunes, we need to cut our cloth according to our measure. That means we must reduce that €15 billion we are borrowing to a normal 3% of GDP. That is our target by 2015. That is what we are bound to do under the stability pact up to which we have signed and what this Government is going to do. To do that, we will have to cut expenditure. We have said that this year we will cut capital expenditure by €750 million and current expenditure by €1.45 billion, which is twice as much. The notion that Senator Walsh-----