Brendan Howlin (Wexford, Labour)
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I am very glad to be back visiting this important Chamber. In the current fiscal and economic context, the Government's task is not an easy one. We must reduce public expenditure while maintaining the public services on which many citizens rely. This is at a time when demand for those services is greater than ever, due to the economic downturn and demographic factors. As we continue our efforts in this regard, we are acutely aware that nobody has the monopoly on good ideas and solutions. I would like to thank the Seanad for giving me the opportunity to update the House on public expenditure and reform issues and I look forward to hearing Members' views and answering any questions they have.

I met the Committee of Public Accounts in a similar context last month and will meet the Oireachtas Joint Committee on Finance, Public Expenditure and Reform next week. Ours is a reforming Government. It is prepared to take the hard decisions, not merely to reduce expenditure, but also to build a sustainable public service for the future. The Government has embarked on the most ambitious and comprehensive programme of reform in the history of the State. No previous Government has taken on the scale and breadth of reform we are now driving. Our task is considerable, but given the situation the Government inherited, change is our only option. It is an essential part of the overall strategic response to the challenges we continue to face.

On its establishment last year, I stated that my Department had three key priorities: achieving the Government's fiscal targets; delivering public service reform; and supporting the Government's political reform agenda. There is increasing evidence that our public finances are showing signs of improvement after a number of very difficult years. All quantitative fiscal targets set under the terms of the EU-IMF programme, including the 2011 annual deficit target, have been met. The Exchequer figures for the first ten months of this year confirm that we are on track as we aim to further reduce the deficit in our public finances. Exchequer tax receipts are up both year-on-year and ahead of current profile. Overall, tax receipts grew last year for the first time since 2007. The improvement in the public finances has come about as a result of the difficult decisions that have been taken to reduce expenditure and increase revenue, and also through the return to economic growth in 2011 for the first time since 2007.

The budgetary adjustment process will present very large challenges to meet the firm commitment to reduce the deficit to below 3% of GDP by 2015. This will require difficult choices to be made in all areas of public expenditure and to ensure that we remain on a credible path of budgetary adjustment. The public service pay and pensions bill, at 35% of spending, will need to make a substantial contribution to meeting this fiscal challenge. I have been clear in my ongoing dealings with public sector unions that, notwithstanding progress under Croke Park, difficult challenges lie ahead to reduce our spending in 2013 and beyond. There is no doubt that additional productivity and cost extraction measures that were not envisaged under the current Croke Park deal will be required to ensure that the Government meets these commitments.

However, there is also awareness at both political and official levels that restoring the public finances to sustainability cannot come from consolidation alone. For example, the new five-year capital framework, published last year, sets out a significant tranche of Exchequer investment of ¤17 billion out to 2016, and is designed to address critical infrastructure deficits, aid economic growth and provide much needed social infrastructure. In order to complement the Exchequer capital framework, I announced a new Government stimulus initiative in July. This initiative, a package of ¤2.25 billion, is largely predicated on the use of non-Exchequer sources of funding to support the first phase of a new PPP programme of projects in key areas of infrastructure. There will also be investment through the Exchequer which will be funded from some of the proceeds from the sale of State assets and the new arrangement for the national lottery licence, which will help fund the recently announced children's hospital.

The comprehensive review of expenditure, published last December, introduced a range of expenditure reforms to improve the budgetary process and enhance transparency and accountability. As part of this process, a Bill to provide for medium-term expenditure management through the provision of multi-annual aggregate Government expenditure ceilings and the multi-annual ministerial expenditure ceilings was published in September. This will facilitate the implementation into legislation of the medium-term expenditure framework and is one of our commitments under the EU IMF programme. This new approach will set fixed and binding current expenditure ceilings for each ministerial Vote group over a rolling three-year period and makes clear, well in advance, the level of savings that need to be planned for in each Department, to ensure that the allocations are adhered to year after year.

Economic growth will be a key contributor to recovery and in designing economic and budgetary policy we must be mindful of this. Moving towards a balanced budgetary position is a necessity but it is not sufficient, in itself, for restoring the economy to sustainable growth and for securing our re-entry to the international financial markets to source our own financing. With the need for strategic and balanced fiscal consolidation in mind, the Government is currently finalising the detailed measures underpinning the 2013 budget, which will be announced on Wednesday, 5 December.

The synergy between fiscal consolidation and reform is clear. Reform can deliver real cost savings and efficiencies, particularly in the medium and longer terms. At the same time, we must reform to allow us to continue to deliver public services in an environment of reduced budgets and staff numbers. As I have said previously, reform is a key part of the overall strategic response to the crisis. In this context, we are undertaking the most comprehensive reform of the public service since the State was founded. We must work harder and with more flexibility than ever before and continue to do better with less. The Government's ambitious public service reform plan was published in November last year. Since then, effective structures to implement the plan have been put in place within my Department and across the public service. The Cabinet committee on public service reform is driving the reform agenda at political level. In particular, I am working closely with my colleague, Deputy Brian Hayes, the Minister of State with responsibility for public service reform, whose efforts and work I commend to the House.

I established the reform and delivery office in my Department to drive and oversee the implementation of comprehensive change across the system and recruited an external, experienced individual from the private sector, who has considerable experience of change management, to lead that office. In September, I published a statement on the progress being made in the implementation of the plan. I would like to give the House a flavour of just some of the key areas of progress to date. Public service staff numbers have been reduced to around 291,000, a reduction of some 29,000 from the 2008 peak of 320,000. This is well within our year end ceiling of 294,400. We plan to go further to reduce this number to 282,500 by the end of 2014.

We are implementing a radical reform of the way in which public procurement is organised. An external review published in September estimates that these reforms could yield potential savings in the range of ¤250 to ¤600 million annually. This will involve the integration of procurement policy, strategy and operations, greater aggregation of purchasing, better spend analytics, and many other actions to transform our procurement model. The reforms will take place over a three-year rolling period. A chief procurement officer will shortly be appointed to lead this work, following an open competition.

As part of a wider shared services strategy, in May, we approved the establishment of a human resource shared service centre for the Civil Service. It is estimated that this will reduce human resource headcount by 17% and costs by 26% with annual net savings of ¤12.5 million. The first Departments will transition to this shared service in the first quarter of 2013. We have accelerated our plan for a pensions administration shared service and will integrate this with the human resources shared service. We are developing a business case for a payroll shared service and commencing a baseline exercise for a banking and financial management shared service. All of the work duplicated in human resource management, payroll, pensions administration across 16 and sometimes up to 40 different centres, will be consolidated into either one single centre or a small number of centres.

In July, we agreed a range of actions aimed at achieving a focused and integrated approach to external service delivery of non-core processes, namely, outsourcing. A shortlist of potential major projects for priority implementation is being prepared and plans are being developed by the four main sectors of education, health, justice and local government. In addition, all proposed new services across the public service will first be tested for their suitability for external service delivery before any approval to provide the service internally will be granted. We want the public service to do what it is best at doing and not replicate services which would be better purchased from outside. In April, we published the e-government strategy for 2012 to 2015, which builds on Ireland's strong recent performance in this area. We have also published a cloud computing strategy - Ireland is among the first countries in the world to do so - and have set out plans for significant further data centre consolidation.

The senior public service has been established to promote a more integrated public service and to strengthen its senior management and leadership capacity. Significant reforms to the performance management and development system in the Civil Service have been agreed and will ensure the more effective management of performance. We have launched the irelandstat.govwebsite, a pilot whole-of-government level performance measurement website which will allow the public to see how Ireland is performing across a range of indicators. I urge Senators to look at that website and provide feedback on same while it is in pilot phase and before it goes live. Progress is also being made on the Government's agency rationalisation programme. This year, 47 out of the 48 measures set out in the public service reform plan will be completed on a legislative or an administrative basis, resulting in the rationalisation of 101 bodies. In addition, critical reviews of other identified rationalisation projects are being progressed. We have introduced a range of expenditure reforms to change the processes involved in allocating and assessing public expenditure to improve transparency and decision making. These are just some examples of the progress we have achieved in under one year, as set out in the published report. Along with the comprehensive suite of cross-cutting reforms, the reform and delivery office in my Department is also working with other Departments and sectors to drive the implementation of their own bespoke reform plans.

I would now like to turn to the Croke Park agreement which is, regrettably, much maligned and often misunderstood. It is an essential element in enabling the comprehensive reforms that I have outlined - and more besides - that are taking place across the system. More importantly, the agreement is supporting the continued delivery of public services where staff numbers and budgets have been significantly reduced. In that context, I would point to what is happening in other countries right now. This week there is a national strike in Greece and last weekend there was a national strike of all public servants in Spain. The impact of such strikes, not only on the people who depend on public services but also on external investors' perceptions of countries, is significant. All of this change happening in a climate of industrial peace in the public service. The value of this is frequently overlooked in the public discourse about the Croke Park agreement. As well as facilitating real change, I argue that the industrial peace and stability being delivered by the agreement is a valuable asset in terms of helping to restore our international reputation and our attractiveness as a location for would-be investors.

I do not propose to provide an exhaustive account of all that is being achieved under the agreement but I wish to stress that it is the Government's view that the agreement is working and is delivering on its objectives. Real savings are being achieved in the Exchequer pay bill under this agreement. Over the period 2009 to 2015, the Exchequer pay bill is on target to be reduced by ¤3.8 billion, or ¤3.3 billion net of expected increases in public service pension costs.

The ¤500 million in additional pension costs for the people leaving has been factored in because these are people who have paid pension contributions for their whole working lives, up to 40 years or more.

While discussing the pay bill, we should recall that those working in the public service have already had two pay reductions, totalling, on average, 14% by way of the pension-related deduction and a further cut in pay introduced in 2010. Salaries at the highest level have been reduced by up to 30% and capped at ¤200,000, still, I accept, a significant sum of money. We have also reduced salaries for new entrants to the public service by a further 10%.

The Croke Park agreement has been and continues to be instrumental in facilitating reductions in expenditure. Reports published by the implementation body show that, overall, almost ¤1.5 billion in pay and non-pay savings have been facilitated in the first two years of the agreement. As I have noted, the reductions in the pay bill have been driven by reductions in staff numbers throughout the public service, down by approximately 29,000 on the peak number. More than 17,000 staff have left the public service in first two years of the agreement, yet services have been maintained by and large and, in some cases, improved.

Members will recall the fears expressed earlier this year about the impact on public services of the expected retirement of 8,000 public servants. They proved to be completely unfounded. I may have mentioned in the House already that I remember when one news organisation asked me to be on stand-by on the night at the end of February as if, like the fears about the Y2K millennium bug, everything would stop. That was because of the hype which had been built up, but we have had an orderly co-operative change and people are working harder and doing more, which should be acknowledged. By and large, public servants are doing a good deal more. Not everyone has bought into the change, but a significant proportion of public servants are working harder and delivering more. The departure of such a large number of staff was managed successfully by management, staff and unions, with no interruption to services, a point worth recording. The redeployment provisions of the agreement have been critical to ensure remaining staff resources are allocated to front-line areas where the need is greatest. Some staff have moved 40 km from base without compensation or demur to meet gaps created by those who had retired.

The first comprehensive review of allowances paid to public servants has shown that what was created over decades will take time to resolve and that the disaggregation of allowances from core pay is not a simple task. This is something the discussions at the Committee of Public Accounts is unveiling on a daily basis. What some see as a simplistic process can be complicated. This is something that is being and will continue to be addressed. The Croke Park agreement allows public service employers to put challenging issues on the table and secure agreement in a time-bound process. Two examples include the agreed standardisation of annual leave and paid sick leave arrangements. For the first time we have applied public service-wide standards for different public service employees. We did not have to apply the most generous allowances in the system to achieve this, which would have been the only solution in the past. In fact, for most public servants, the new sick leave arrangements will mean that the maximum amount of paid sick leave to which they will be entitled will be halved, with an even greater cut for some. If we had achieved the halving of sick leave entitlements after a protracted strike and a major public battle which would have been the norm in the past, it would have been regarded as a great achievement. However, if one does it quietly through negotiation, it is taken as the norm. We should understand what is being delivered. Some people want conflict. I am not afraid of conflict, but if I can avoid it and can deliver systems without it, I am certainly in favour of taking that route. I expect the next steps to be undertaken in the allowances review will also be facilitated by the mechanism set out in the Croke Park agreement.

All of this is welcome progress, but we understand we have a way to travel in restoring order to the public finances. The framework provided by the Croke Park agreement will continue to play an important role in the process. However, we need to ramp up the scale and pace of delivery under which the agreement is advancing. The Taoiseach and I met the implementation body last month to discuss this issue. On foot of that engagement, revised action plans are being prepared urgently at sectoral level in conjunction with the unions. They will set out proposals for extracting further cost savings and advancing key reforms. The objective is to ensure we get the most out of the agreement in the period ahead. It is my intention to publish the revised action plans when they are completed.

In tandem, real progress is being made on the Government's ambitious programme of political and legislative reform aimed at enhancing openness, transparency and accountability. I commend the great work done in this House in that regard. Last week the Ombudsman (Amendment) Bill was signed into law by the President. This legislation will result in the most significant expansion in the jurisdiction of the Ombudsman in 30 years since the original legislation established the Ombudsman was passed. Following Government approval earlier in the year, the legal drafting of the Protected Disclosures in the Public Interest Bill, the so-called whistleblowers Bill, is well advanced by the Office of the Parliamentary Counsel to the Government. I held discussions with the Parliamentary Counsel today because I have a raft of Bills which I am trying to push along. She is looking for additional staff and we have promised the, but we need to have a quid pro quo. I should not be admitting to all of this, but I am keen to get the whistleblowers Bill published and I am confident it will be published next year.

David Norris (Independent)
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That is very welcome. Well done.

Brendan Howlin (Wexford, Labour)
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The legislation is complex because whistleblowing is very important, but we need to have an overarching public and private framework to ensure persons who bring information on wrongdoing are fully protected.

David Norris (Independent)
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We must ensure it covers journalists in their own profession. That is most important.

Brendan Howlin (Wexford, Labour)
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I am looking forward to the debate on that proposal and keen for the legislation to be as comprehensive as possible. We have received good feedback on the draft published and it is regarded as being among the best drafted anywhere. I am keen for us to be a model in this regard.

Fiach MacConghail (Independent)
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Well done.

Brendan Howlin (Wexford, Labour)
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Government approval for the drafting of the Bill to reform the existing freedom of information legislation and extend freedom of information provisions to all public bodies was secured at the end of July when I brought my proposals to the Government. The general scheme has been published on my Department's website and submitted to the Office of the Parliamentary Counsel for legal drafting. Following publication of the final report of the Mahon tribunal, I decided to examine how the existing legislative framework for ethics could be reformed to develop a single comprehensive legislative framework grounded on clear and comprehensive principles. Rather than try to amend what is in place, I propose a more ambitious task of recasting the ethics legislation having regard to the work of all the tribunals and all that we have learned to make it a model of best practice. This work is ongoing in the political and governmental reform unit in my Department. This will involve, among other things, consolidation of existing legislation and amalgamation of other relevant legislation into a single framework, while examining the position in other jurisdiction to establish best practice. I have no wish to reinvent the wheel.

Last week I announced Government approval for the priority drafting of a Bill to provide a comprehensive statutory framework for Oireachtas inquiries on matters of significant public importance. For example, the Bill will enable the holding of inquiries into the banking crisis. I have written to the Chairman of the Joint Committee on Finance and Public Expenditure and we have submitted the heads of the Bill to the committee. It is and will continue to be my practice to submit the heads of a Bill to the relevant Oireachtas committee to get its observations before I move to drafting. I have asked the committee to provide observations and understand it will try to work to an agenda that will enable me to have the Bill drafted before year end. I realise this is ambitious, but that is what I wish to do.

A general scheme of the Bill on lobbying is being prepared by my Department and it is intended to bring the scheme to the Government as soon as possible. The issue of lobbying is extraordinarily complicated because lobbying is a genuine activity and every citizen is entitled to lobby. The trick is to create a legal framework such that lobbying will be done in a transparent, overt way, not in the Galway tent or analogous bodies.

Martin Conway (Fine Gael)
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It is the people's business.

Brendan Howlin (Wexford, Labour)
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The people's business should be done in public; people have a right to know who is influencing public policy and making decisions in that regard. We held an interesting seminar when I published the Bills earlier this year and there was a good dialogue. I realise that many lobby groups, including the IFA and others, have concerns. Those engaged in legitimate lobbying should have nothing to fear; it is those who engage in unknown lobbying that influences public policy behind closed doors or whisper into the ears of Ministers we wish to get at. I look forward to the debate on that issue also. Taken together, these measures represent the most fundamental reform platform and significant advancement in the pursuit of transparency and accountability in a long time.

My overall message is that good progress is being made on reducing public expenditure and restoring Ireland to economic health. Similarly, we are progressing well on the implementation of our ambitious programmes for public service and political reform. However, the pace of implementation in every area needs to be stepped up. Big challenges face us. Public servants will have to be part of the solutions to those challenges. I am confident they will be and that they will step up to the mark as they have done in the past. We have the foundations in place, and we must push on with implementing the reform programme. We must achieve our fiscal requirements and reform the structures of the State in a way that enables us to build a positive environment for enterprise and employment, for job creation and growth. We must also ensure we build a society that takes care of the vulnerable and provides equal opportunities for growth and development for all citizens. This will not be easy task but the Government is committed to reform, which is why we have created a bespoke Department for reform. We are committed to rebuilding our country in the coming years. I look forward to hearing the views of the House and responding to the concerns, observations and questions of Members.

Thomas Byrne (Fianna Fail)
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Gabhaim buíochas don Aire toisc go bhfuil sé i gcónaí sa Teach seo. Ní bhíonn sé ró-fhada as an áit seo agus tá sé tábhachtach go mbíonn sé istigh anseo sa Seanad. The latest Exchequer figures show that the deficit for the first ten months of the year was ¤14 billion, compared with ¤22 billion for the same period last year. While I acknowledge that the Government is reducing the deficit, the Minister claims to be reducing public expenditure, but in my view there is a difference. It is a fact that current public expenditure is increasing this year over last year. Capital programmes and the deficit have been cut. It is a matter of serious concern. We are increasing our spending for various reasons. The main reason for the decline in the deficit is that the Government did not put more cash into the banks this year and we can defer the payment of the promissory note. The tax returns for October are disappointing, with revenue at 11.4% below target, the third month out of four in which tax revenues have been below profile. The current expenditure is ¤424 million over budget, even in an environment in which that current expenditure is increasing. Health expenditure is ¤336 million over budget and social protection expenditure is ¤451 million over budget. These are the main drivers of the overspend. The Government has failed to implement measures promised in the budget to control health spending in particular, and it was rapped on the knuckles by the troika in this regard.

The November outturn will have a significant bearing on whether the Government meets its fiscal targets for this year. It will affect the coming budget and its impact on citizens. Capital spending is used to develop national infrastructure such as roads, hospitals and schools, as well as energy, communications and recreation infrastructure. At the end of October there was an underspend of ¤336 million in the capital budget. This is ¤336 million that the Minister has refused to spend or has not spent, which will cost jobs. This comes on top of the severe reductions in capital expenditure which the Minister put forward as part of last year's budget and which were greater than the capital expenditure reductions forecast by the troika and contained in the IMF agreement. The Minister says he is tied down by the troika or that he is obliged to follow the memorandum of understanding, yet he was able to renegotiate a reduction in capital expenditure because he did not want to take the decisions on the current side. Capital expenditure is decreasing while current expenditure is increasing above the target. This is having a detrimental and damaging effect on the economy. The Government is literally starving the domestic economy of much needed spending.

The Minister says the Croke Park agreement is much maligned and misunderstood. The Minister should reflect on the Labour Party's time in opposition, when it took a neutral approach to the Croke Park agreement when it was being negotiated by the then Government. The Minister might look to the gang of eight in the Fine Gael Party who malign and, as the Minister says, misrepresent the Croke Park agreement in the media on a regular basis. The Government needs to look at itself on this matter.

The success or otherwise of the agreement will be measured by a simple criterion: how much money will be saved in the Exchequer pay bill. Much of the savings achieved to date have been from measures introduced by the previous Government. The hallmark has been endless prevarication. The Minister referred to the issue of sick leave. That seemed to be an achievement. However, while some of the changes were to be introduced administratively - I do not know whether this happened - legislation was to be brought forward to deal with the other aspect of the sick leave issue. The Minister has not said when this legislation will be published.

The real situation with regard to the economy is that GDP was flat in the second quarter, while the general debt increased. It is now over 100% - I suppose that is a projection - and there are fewer people at work. The Government is not doing enough to reverse those sad economic trends; it is cutting capital expenditure and increasing current expenditure. I disagree with the pension levy because this measure destroys job creation. The Government should reverse the cuts to home insulation grants.

The Slane bypass in my constituency would cost only a fraction of the cut in the capital spend the Minister has put in place above and beyond what was agreed with the troika. There is much hand-wringing about not having enough money, with people saying that Fianna Fáil did this and that. The reality is that the Government cut the capital budget significantly above and beyond what is detailed in the troika agreement, with the result that major safety projects such as the Slane bypass cannot go ahead. I agree there were planning issues. The county council is currently looking at the planning issues, but the Government has not committed any funding because of the cuts in capital expenditure, while allowing current expenditure to increase all the time.

We welcome some of the progress on the reform agenda. The Government talks a good game about openness, transparency and accountability, but I must mention today's Supreme Court judgment. As a supporter of the "Yes" campaign I am pleased with that judgment because it is essential that the Government operates within the rules and spends its money within the rules of the Constitution. I hope the judgment acts as a marker on Government arrogance. The Government has taken things for granted.

David Norris (Independent)
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Will the Senator take part in the debate tonight?

Thomas Byrne (Fianna Fail)
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I look forward to it. I will mention this briefly because it concerns the spending of money. It is important that the children of Ireland are not let down by an arrogant Government which refused to look at the basic principles of the Constitution-----

John Gilroy (Labour)
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The Senator should stop grandstanding.

Thomas Byrne (Fianna Fail)
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The Supreme Court did not have to say what it said today in its judgment.

John Gilroy (Labour)
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The Senator should stop saying what the Supreme Court did not say.

Paul Coghlan (Fine Gael)
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There will be an opportunity to discuss that matter later.

Thomas Byrne (Fianna Fail)
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We look forward to more reform, including political reform. There was supposed to be all kinds of reform of the Dáil and the Seanad but it has not happened. The programme for Government promised that the Dáil would continue to sit during the Hallowe'en break. It stated that the Hallowe'en break would no longer be taken. Why was this promise put into the programme only to be ignored, as if it meant nothing? Surely that programme for Government is a solemn commitment between two parties in the interests of the people and the country. It seems that if something is inconvenient it can be moved away. The talk is there but I am not sure about the walk. Although we understand the difficulty for the Government, we believe more progress needs to be made. I welcome some of the measures proposed by the Minister. However, there are significant challenges and it is right that we raise these issues. There is too much talk of everything going fine. We hope everything is going fine but we must point out what is wrong.

Martin Conway (Fine Gael)
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Cuirim fáilte roimh an Aire sa Teach. It was an innovative approach in the programme for Government to effectively divide the responsibilities of the Department of Finance, placing specific responsibility for public sector reform and expenditure at the level of a full Cabinet Ministry. That set the framework for the commitment of the Government to public sector reform.

As an aside with regard to the Hallowe'en break, it is interesting to note that the Houses of the Oireachtas are sitting the bones of 50% extra compared to sittings under the previous Government. There was a time when this House closed down in the second or third week of June and did not return until the last week of September.

David Norris (Independent)
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Trying to make up on golfing hours, as I remember. There was a touch of Hallowe'en about that.

Paul Coghlan (Fine Gael)
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Order, please. Senator Conway to continue, without interruption.

Martin Conway (Fine Gael)
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To be fair to all parties concerned and put it bluntly, it is a little silly to be nitpicking about Hallowe'en.

I commend the Minister for his contribution, in which he provided a comprehensive review of what was happening in the context of public expenditure reform. We are dealing with a crisis and it is always worth bearing in mind that Ireland is operating within the confines of a programme. We do not have economic independence at present and we are not our own paymaster. Unfortunately, we are operating at the behest of others. The Government has responsibility for getting the country's house in order in respect of a crisis it did not create. Fine Gael and the Labour Party were obliged to do this when they were in government in the 1980s and 1990s and they will do so again in the interests of the people.

There has been a great deal of discussion about the Croke Park agreement. There are elements of it with which everyone has an issue. However, is anyone in a position to offer an alternative to it which would ensure industrial peace? Despite the difficulties we are experiencing, there has been an unprecedented period of industrial peace which is essential in ensuring competitiveness and efficient performance. We are enjoying such a period which is largely down to the Croke Park agreement.

I commend the Minister and the Taoiseach for meeting the implementation body recently and encouraging the various stakeholders to fast-track reform. Such reform is happening and a great deal of work is being done in various Departments and agencies in order to ensure the pace of such reform will be accelerated. As the Minister rightly pointed out, it is estimated that by 2015 the ball-park figure for public sector pay savings will be ¤3.5 billion. That will be a significant achievement. As stated, it is being facilitated by the fact that we are in an extended period of industrial peace. As a country, we must do our business differently and ensure the money we expend on behalf of the people is spent wisely.

I commend various Government Ministers for the initiatives they have taken. Most recently, the Minister for the Environment, Community and Local Government Reform announced significant local government reform. As a result of what he is doing, in the region of ¤400 million in cost savings will be made at local government level. In addition, there will be a reduction of 700 in the number of town and county councillors. As a result, local government is going to work effectively on behalf of the people. The Minister is responsible for what is the most significant reform of local government in the history of the State, for which he must be commended. If he does nothing else during his five years in office other than spearheading the reform to which I refer, he will still have achieved a great deal. Local government has not been working. One of the Minister's predecessors introduced the Better Local Government legislation in 2002. In my humble opinion, that legislation was bad for local government because it created an entire layer of middle management operatives and directors of services within local authorities which cost too much and were not effective.

Under the old system of local government, there was a county manager, a county secretary, a head of finance and a county engineer who ran the county councils. Town councils were run by town clerks and their assistants. I live in County Clare and in my local authority there are between seven and ten people at director of service level. They are each paid in excess of ¤100,000 per annum, while the county manager is paid ¤150,000. I have no intention of impugning their integrity and I am sure they are doing an exceptionally good job in difficult circumstances. However, one must ask the question as to whether we require that level of bureaucracy within local authorities. The Minister for the Environment, Community and Local Government and his Government colleagues are determined that this matter will be dealt with and redundancy packages will be offered to between 500 and 600 senior local authority officials. In addition, the number of regional authorities is going to be reduced from eight to three. This means that there will be three effective regional authorities which will be based in populated areas but which will take a broad regional approach. They will do the same work as that being done by the eight existing authorities. They will be effective and efficient in their operation. These are some of the changes, alterations and improvements taking place at local government level.

Senator Thomas Byrne referred to Seanad reform. The Taoiseach is committed to holding a constitutional referendum on the future of this House in the latter part of 2013.

David Norris (Independent)
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The referendum will be on its abolition.

Martin Conway (Fine Gael)
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A constitutional referendum will be held and the people will have their say. If they are of the view that there is a future for a reformed Seanad, I am sure this will be reflected in the way in which they vote. It will be the responsibility of those who believe in the Seanad to campaign for its retention.

David Norris (Independent)
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It will be a stark question that will be put to the people and it will not encompass the idea of a reformed Seanad.

Martin Conway (Fine Gael)
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I look forward to the debate on the matter. As it stands, the Seanad is not working.

David Norris (Independent)
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It is partially working.

Martin Conway (Fine Gael)
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Nobody can state Seanad Éireann is working to maximum effect. There have been numerous reports on Seanad reform, but none of them has been implemented. What is going to happen is that the issue is going to be forced in the latter part of next year.

David Norris (Independent)
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Those reports were voted down by successive Governments.

Martin Conway (Fine Gael)
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The Seanad will have its day in the sun in the same way the referendum on children's rights is having its day. I have no doubt that the good people of Ireland will almost unanimously endorse the constitutional amendment.

The Government is doing an extraordinarily good job in extremely difficult circumstances., but there is a long way to go. A great deal has been achieved, but much more will be achieved as we move forward. I wish the Minister and his colleagues in government well in their difficult task.

Fiach MacConghail (Independent)
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Cuirim fáilte roimh an Aire. The Minister is the right man for this job, particularly as his is a Department designed to facilitate change management. I congratulate him on the commitment and energy he has displayed and the achievements to which he referred during his extremely impressive presentation. I am an Independent Senator-----

Jim Walsh (Fianna Fail)
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No, the Senator is not independent.

David Norris (Independent)
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Yes, he is and so am I.

Fiach MacConghail (Independent)
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I wish to pose a couple of questions on the Minister's contribution and then move to more specific matters.

It is interesting that the medium-term expenditure framework to which we are committed under the EU-IMF programme caters for fixed and binding current expenditure ceilings over a three-year period. Can this be seen as a positive development in the context of multi-annual budgeting? If it is such a development, will the savings that will accrue be rolled over? I am aware, from the agencies with which I deal, of the importance of factoring this in. If this is a positive, the Minister should accentuate it because it means that for Departments, the glass is half full rather than half empty. This will allow for more creativity, innovation and strategic thinking in a climate where resources have been reduced.

I acknowledge the establishment of the procurement programme and look forward to the appointment of the procurement officer. I also look forward to the reforms relating to whistleblowing and lobbying. These reforms are exciting, particularly as they are important in making the connection between the State, its citizens and the Government much more transparent.

I wish to comment on performance indicators. Such indicators are part of a natural, ordinary, day-to-day process which we must all undergo. My performance indicator is whether the plays, etc., I put on receive good reviews and whether the theatre is full. The Minister's performance indicator is whether he gains re-election when he goes before the people. It is welcome that performance indicators are going to play such an integrated role in the context of the public service.

There are two issues I wish to raise. The first relates to the public sector reform plan and, in particular, the Government's agency rationalisation programme. The second relates to the leader's allowance given to Independent Senators and Deputies under the Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Act, 2001. I will deal with the latter issue first.

Will the Minister indicate whether he plans to amend the Act to which I refer in order that all Independent Members of the Oireachtas will have a statutory responsibility to provide detailed accounts of all donations and public funding they receive on an annual basis?

We asked the Minister, Deputy Hogan, for this to be included in a previous Act and he said it came within the remit of the Minister's Department.

Between 25 February 2011 and the end of December of that year a total of ¤656,134 was paid out to Independent Members of both Houses. I am one such Senator. I receive a monthly stipend of ¤1,948 and use it well to do research and support my work as a parliamentarian. I am not suggesting cutting it but I know the Minister has spoken publicly about clarifying the functions of this funding and said that it should be vouched. I would like to hear his view on that issue.

On Hallowe'en night, the Minister issued the Government decision on the rationalisation of State agencies. It is important to state I have no issue with the spirit of what he wants to achieve and I applaud him for the gains he is making and the leadership he is showing. One of his stated ambitions is to create a less crowded administrative landscape, resulting in greater democratic accountability, less duplication of effort and clear lines of responsibility for the citizen. Under the aegis of the Minister for Arts, Heritage and Gaeltacht, Deputy Deenihan, and his Department a significant number of agencies and national cultural institutions have been under review. I will not go into all of them; suffice to say that the intention to rationalise them cuts across some of those institutions' very existence and independence. As the Minister has reported, considerable success in achieving increased efficiencies and shared services has been made. These include the Irish Museum of Modern Art, the Crawford Art Gallery and the National Gallery of Ireland. The process of consultation and co-operation between the Department and these cultural institutions has had a positive outcome and resulted in savings. I also note that the Heritage Council will not be abolished or merged into the Department of Arts, Heritage and the Gaeltacht. That is great news and I thank the Minister for it.

That brings me to the Government decision on the abolition of the boards of the National Library of Ireland and the National Museum of Ireland. I know of the Minister's active involvement and interest in arts and culture. His valuable support of the Wexford Festival Opera is to be recognised. There is a strong and vibrant arts community in Wexford, not least stemming from the arts centre, as well as internationally well regarded writers such as Billy Roche, Colm Tóibín, Eoin Colfer and John Banville. I know the Minister met some of my colleagues involved in the National Campaign for the Arts recently. They were heartened and motivated by his interest in their area, for which I thank him. What I am concerned about is the lack of any public evidence as to what the cost savings or increased efficiencies might be from abolishing the boards of these two august and important national cultural institutions, replacing them with one joint advisory council and bringing both of those institutions under the remit of the Department of Arts, Heritage and the Gaeltacht. I am concerned about employees' being moved from public servant status to civil servant status and the lack of a governance or board structure to protect those institutions' operational, strategic and programme autonomy. I have no issue with board members' not being paid, as is the case for the board of the Abbey Theatre, but to have one board - or rather, an advisory council, which is of lower status - in charge of two completely different organisations and remits is troubling. Why are two independent statutory cultural institutions being absorbed into the Department of Arts, Heritage and the Gaeltacht? The only reason is to save money.

Will the Minister publish, if possible, the cost-saving facts and figures that led the Government to make a decision to abolish those boards? Both institutions bookmark this very building, Leinster House. I have no doubt that just as savings were achieved in respect of the Irish Museum of Modern Art in Kilmainham, the National Gallery of Ireland in Clare Street and the Crawford Art Gallery in Cork, our neighbours can find ways of saving money on security, storage, their finance departments and their human resources units while maintaining their statutory independence and protecting their programme independence. What is proposed is a dismantling of the National Cultural Institutions Act 1997 for no apparent published gain. As the Minister will know, it was the current President Michael D. Higgins, the Republic's first Minister with responsibility for culture, who sponsored and introduced this historic Act. On 27 June of this year in this House, the Minister, Deputy Deenihan, said to me and other Members: "Dismantling the National Cultural Institutions Act 1997 was never in my plan, nor was impinging on the arm's length principle."

I am happy to support the Minister in his drive for efficiencies and humbly request that he reconsider the dismantling of the National Cultural Institutions Act. I ask him not to introduce amendments to that Act and not to waste the time of the Seanad trying to argue the case in this respect, in order that we can protect two vitally important national cultural institutions. Yes, we should save money, but we should protect their independence.

Aideen Hayden (Labour)
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I welcome the Minister to the House. I support the comments of my colleague Senator Mac Conghail. There is a tendency among all Departments, whether it is intentional, to centralise power unto themselves. It is a bit like sucking everything back into the mothership. When it comes to matters of culture, in particular, and matters in which independence of mind and creativity are involved, we need to be careful about removing independence from cultural institutions.

The Minister has a difficult portfolio. Like my colleagues, I thought his speech, which set out the achievements his Department has had since it was set up, was very good. I went through the programme for Government before I came here this evening and it was quite impressive to be able to tick so many of the boxes. A number of points are worth bearing in mind. Any government will be judged on the reform in which it engages - more, perhaps, than on any other single item. This is despite the fact that the media seems to be more concerned about the Croke Park agreement. I did a media search on this and was surprised by the amount of material that splurged forth, in comparison with the amount of material that came out on the reform agenda. I found the level of what is nothing short of vilification of some of our public servants in the media - although not by all of the media, I hasten to add - quite worrying. There is a certain attitude among some parts of the media that the public servants of this country are fair game. It is an issue about which I have significant concern. That attitude is reflected in the morale of some of our public servants. People forget that in spite of all the difficulties this country is facing, we do not face the difficulties of Greece or some of our other European partners. We are not facing into the winter worrying about whether we will have power shortages and so on. It is easy to forget that a period of industrial unrest could overturn an awful lot of the good work that has been done in this country. Some of the commentators on the Croke Park agreement and on the public servants of this country should pause before they conduct some of the conversations they tend to have about our public servants.

One concern I have relates to the changes in allowances for entrants to certain professions - although I can understand the reason for them - compared to the allowances and pay scales granted to those already in the profession. For example, in the teaching profession there are significant differences between the salaries earned by new entrants and those earned by those who are already within the profession. I know the reasons behind that, but I am concerned that we may create a two-tier public service - a pre-recession and a post-recession public service. I am conscious of some studies done prior to the current recession that showed we do not have an excessive number of pubic servants and that the cost of the public service when compared to those of other OECD countries was, surprisingly, not excessive. As a Government, we have significant cuts to make, but it is important not to undervalue the contribution of public servants and to be careful as we move forward that we do not create a two-tier public service.

Much has been made in the media of allowances for public servants.

It was said that it was a bit of a quick solution from the previous Government to not deal with the difficulties around lower paid public servants.

I am reminded of perhaps a rather unpopular debate that took place in the British media around the expenses of politicians. The entire debate centred on such and such a politician building a moat around his castle in the middle of nowhere, and someone else who was supporting three luxury apartments in a prestigious development in London. What did not come across is that the reason all the abuse was happening was that there was not an adequate system of allowances within the UK political system. The allowance system we have today was put in place because previous Governments ? we all know who they are ? were unwilling to face the issue of lower pay among certain grades of public servant. It was easier to give an outdoor allowance, uniform allowance or one for walking around in the playground than to evaluate the real difficulty of low-paid public workers. The Department is dealing with the issue. I accept it will be a difficult obstacle to overcome.

A certain amount has been said about the significant successes of the Croke Park agreement.

Jim Walsh (Fianna Fail)
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What are they?

Aideen Hayden (Labour)
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From my experience of being involved with the public service, some of the difficulties that have been overcome have been around the changes in work practices rather than savings in the number of public servants who are no longer within the system. It is very easy to gloss over the kind of work practice changes the Minister outlined on rostering and holidays. However, there are wider issues to consider in the public service, such as shared services. Ten years ago the idea that a Department or other public service body would share a service was completely anathema. Each individual body was a separate fiefdom or kingdom. We have had a significant change of attitude within the public service and that cannot be underestimated.

I know I am up against the clock. It is amazing how time flies in this House. One issue I wish to bring to the Minister?s attention in the remaining time relates to tendering for public contracts. It has come to my attention that a lot of middle range companies have been pushed out of tendering processes for State contracts because they do not carry sufficient amounts of professional indemnity insurance, for example, or other types of insurance. It is a matter of concern to me and to a number of other people to whom I have spoken that we have what are, in effect, restrictive practices which ensure that only the top and largest companies are able to tender for public contracts. I urge the Minister to examine the matter.

The second issue on which I would like an update relates to the accountability of public servants. Under the programme for Government we committed to improve the accountability of public servants, in particular to changing the recruitment practices for public servants to ensure that the best and brightest from outside the public service are brought within it. If the Minister has time I would like him to deal with the issue.

Sean Barrett (Independent)
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I welcome the Minister and thank him for his speech. As was the case with the discussion on the Ombudsman (Amendment) Act 2012, I assure him of the support of this side of the House for his vital reform agenda.

The Minister referred to sick leave arrangements. ISME provided information to the effect that three days per year are lost in small enterprises and six in medium enterprises compared with 12 days in the public sector. It used the statistics to criticise the Minister?s colleague, the Minister for Social Protection, Deputy Joan Burton. I agree with the point made by the Minister that tackling the sick pay problem is important. I also fully support him on lobbying. I will return to the issue in due course.

Such reform as the Minister is undertaking is an international task. An interesting book was written on the subject last year by Vito Tanzi from the IMF and the University of Cambridge. Many countries are facing debt-to-GDP ratios of 120%. The issue with which the Minister is dealing has an international dimension, from which I hope he derives support. He could give lectures as well as receive them because we have allowed Government expenditure and an entitlement culture to get out of control in many areas. Tanzi mentioned that strongly. When one adds up the entitlements and they exceed the tax capacity of the country and its capacity to borrow and the country is required to go broke, we must examine the culture. The matter was addressed a long time ago by a previous Government in the publication, A Better Way to Plan the Nation?s Finances. I welcome the Minister?s reforms, including the Fiscal Responsibility Bill and other legislation which was enacted last year. We look forward to the imminent Bill sponsored by the Minister coming to the House.

We must examine our instruments and targets. For example, which health programmes make people healthier and which poverty alleviation programmes score well on the alleviation of poverty. The Department has a crucial role to play in that regard. Departments grow up as independent republics with the object of maximising their own budgets. When we add up all the maximised budgets it is more than this country can afford, which is part of the restructuring of the entire operation we must now attempt. That is what the Dáil and Seanad were elected to do. It is difficult. The second half of a marathon is always much more trying than the first half.

We have a bureaucracy problem. According to an bord snip the higher echelons of the public service grew by 17%. That was three to four times higher than the increase in the number of public servants as a whole. That is the scandal that results from bureaucrats maximising their budgets.

The previous occupant of the chair in which the Minister is sitting was the Nobel Prize winner in economics.

Brendan Howlin (Wexford, Labour)
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I am humbled.

Sean Barrett (Independent)
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The Minister is following a distinguished tradition. I refer to Professor Christopher Pissarides from Cyprus and the London School of Economics. He had interesting ideas. We must send the Minister the transcript of what he said on labour market interventions. He suggested that social welfare payments should be accompanied by something other than just money. Possible options are half-time jobs or trying to slot those people into jobs to cover maternity leave. He suggested that just giving people money and leaving it to them to solve the problem will not work.

I stress those two issues because health and social welfare are the two spending Departments and we need new thinking in them. There has been a welcome in this House for the Minister, Deputy Reilly?s goal of abolishing the HSE and substituting competing health insurance companies. It is a huge task to accomplish within three years. I worry about some of the legislation that still embodies old thinking. It seems that the new health insurance legislation is designed to protect VHI rather than to promote genuine efficiencies in the health service. In the Milliman report on VHI it is outlined that a treatment takes 11.6 days in this country compared to best international practice of 3.7 days. That is ¤1,000 a night to either the health insurance companies or the Department of Health to keep people in hospital for far longer than is necessary.

Reference was made to the McLaughlin report by Senator Conway. It did show that there are too many directors of service, county managers and layers of management. There is a problem in many sectors of education as well. I refer to people being taken out of the classroom which is what they were recruited to do. Giving them managerial titles and relieving them of teaching duties is not a good idea.

We must compare all the alternatives in order to reach our targets. We must tackle the interest groups. The most scandalous example of that was the control by the banks over the economy on 30 September 2008. That is the most blatant example relative to GDP which took ¤64 billion out of this country. An interesting article was written by two retired civil servants from the Department of Transport, Tourism and Sport, Pat Mangan and John Lumsden, on the need for a devil?s advocate or contrarian culture within Departments to challenge programmes and not to just close ranks and promote them.

Rent seeking, regulatory capture and lobbying were features of the economy that got us into the situation we have described. One of the other points mentioned by Tanzi is the complexity of a tax system and the existence of tax loopholes.

There is no major difference from the point of view of Parliament between tax evasion and tax avoidance other than that tax avoidance has a large numbers of lawyers and accountants involved. It takes vast amounts of money out of the Exchequer, distorts the efficiency of the economy because increasingly more so-called entrepreneurship is spent on tax avoidance, and undermines the public sector. If we had a simple tax system from which there were no deductions and allowances but one simply pays one's tax it would be an immense step forward.

Is there a case for integrating the means testing process into the Revenue Commissioners rather than having a myriad of agencies involved? We should try to simplify the art of taking money from people with above average incomes and give it to those on lower incomes.

The Minister's legislation on lobbying will be important, and I would not back off on it. Lobbying for any purpose is an attempt by people to get their hands on Exchequer moneys. They will always believe the causes are worthwhile but when the Exchequer is empty we have to look askance at some of that behaviour. Has too much time been spent by Irish agriculture on lobbying and not enough time paying attention to consumers? They get the chance to pay attention to consumers when the milk quotas end. The construction industry started off as a highly successful lobbyist and ended up as the producer of the most expensive houses and the most rapid house price rise one would find anywhere. It is a pity it did not concentrate on running its day to day business and leave people in the Galway tent and those in other places alone.

Could we hear from the Comptroller and Auditor General before disasters occur? Could he tip off the Minister when his research indicates that if something does not happen in an area we will have inquiries by Deputy John McGuinness and company who will try to investigate after the event? We should not wait for the disaster to occur. We should have an advance warning system, and the Minister's Department and the Comptroller and Auditor General might link up on that.

There is a huge job of reform to be done in this area and to extend Senator Byrne's Hallowe'en metaphor, the more of it, the merrier. We need this reform, and it must be fundamental. The control of lobbyists and regulatory capture is an international problem. It is a huge expense to taxpayers, and we do not have the money.

Kathryn Reilly (Sinn Fein)
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I welcome the Minister to the House again. In terms of public sector reform I will focus on the issue of public sector pay and pensions. The Minister knows well how Sinn Féin feels about this issue having listened to my colleague in the Dáil, Deputy Mary Lou McDonald. We believe there is a need to reform the public sector pension system but we disagree fundamentally on the way it must be done. It should be done by capping those on the higher end of the scale. Former Ministers and senior civil servants are receiving shamefully high annual pension payments and an elected MEP is still in receipt of a ministerial pension of over ¤70,000. One of the former leaders of Fine Gael receives a pension of ¤95,000 plus a salary for his role in the IBRC. A former Labour Party leader receives an annual pension of ¤120,000 as well as his fee as a public interest director in AIB. A former Secretary General in the Department of the Taoiseach gets a pension of ¤142,000, yet the majority of public sector pensions are ¤30,000 a year or less.

Despite the promise of some sort of democratic revolution there is still a circle of people at the top of the public sector when it comes to pay and pension entitlements. The Taoiseach recently told the Dáil that there is a legal impediment to introducing a levy to recoup some of the super pension payments paid from the public purse. Can we see some of that legal advice on the reason for that, given what he told the Dáil recently?

The Government has introduced a levy on public sector pensions over ¤100,000. If introduced, Sinn Féin's Financial Emergency Measures in the Public Interest (Amendment) Bill 2012 would increase public service pension levy rates for retired public servants in receipt of excessive pensions. We believe that cutting the income of lower middle income workers in the public sector is unfair and it is not economically guided in the right direction. Will the Government quality proof the forthcoming budget? The Minister might discuss that when replying.

Sinn Féin introduced two Bills earlier this year, a Bill that would appeal Article 70 of the local government superannuation consolidation scheme, and the Financial Emergency Measures in the Public Interest (Amendment) Bill mentioned earlier. That would give legal effect to a number of specific demands regarding public sector pay, pensions and allowances. I will not go into the detail of them as my time is limited but those legislative measures are the approach we believe should be taken on pay and pensions. The Government should cut from the top, share the burden, and create a more sustainable and fair system.

Brendan Howlin (Wexford, Labour)
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I thank Members for the opportunity to participate in this debate. I genuinely like to come to the Seanad because the Members hold structured debates that are often less boisterous than those in the other House. I will deal with a number of points made.

On the point made by Senator Byrne - tá sé imithe-----

Fiach MacConghail (Independent)
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As láthair.

Brendan Howlin (Wexford, Labour)
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I am sure he is somewhere doing useful work for the State. He made some general points to which I want to refer. He rightly said that the general deficit this year is ¤14 billion. The comparable figure last year was ¤22 billion. He also said-----

Jim Walsh (Fianna Fail)
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That is not comparable. The bank debt.

Pat O'Neill (Fine Gael)
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The Minister to reply, please. Senator Walsh had his time.

Brendan Howlin (Wexford, Labour)
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He had a long explanation for that, which I will explain in due course, but I know the Senator is much better at speaking than listening in regard to these matters. We have had form in this matter in our interactions in Wexford County Council-----

Pat O'Neill (Fine Gael)
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I understand. That is why I am watching carefully.

Brendan Howlin (Wexford, Labour)
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-----but I will be clear in regard to it. I will give the House the exact figure. The underlying spending position at the end of October, which are the most recent figures we published, when adjusted for the shortfall on PRSI receipts as I explained at the beginning of the year, was a shortfall of ¤289 million. Social welfare is paid from the social welfare insurance and because social welfare receipts were down, and PRSI receipts are an appropriation-in-aid, they are replaced by a voted sum, therefore, there is no additional expenditure. Instead of paying it through PRSI it is paid through taxation. Most people would believe both PRSI and general taxation are one and the same but it is an accounting issue. A total of ¤289 million of the expenditure on social welfare is explained by that and I will explain that repeatedly for those who want to hear it. The commutative underspend in October is ¤200 million. Net voted expenditure to mid-October was ¤88 million over profile, that is ¤88 million out of the billions of euro we spend, ¤424 million of net current expenditure offset by the ¤336 million underspend on capital. That was the point Senator Byrne was making.

It is my intention to keep as much control as I can on expenditure. There are real pressures. We have real pressure points in the health and social welfare areas. In the education area we have real pressure points in terms of demographic. We have remarkable control of expenditure in a diminishing profile on the basis of the figures I just outlined.

I welcome Senator Byrne back to the Chamber. The Senator said we were rapped on the knuckles by the troika. I assure the Deputy no such thing happened. The leader of the management group from the troika, István Székely from the European Commission, said that he had never worked on a better programme, never dealt with more compliance, never dealt with people in more control than those in Ireland, and that we were a model for that. All 160 very difficult legislative commitments to fiscal management were achieved. That is a simple fact, and we should acknowledge it. None of these are easy, and I commend the Irish people in that regard.

In terms of the underspend on the capital, I am not putting any breaks on the capital expenditure. That is the way it is panning out. Specifically, there is some underspend in the water services division in the Department of the Environment, Community and Local Government.

I have asked for that to be accelerated because I want spend on the capital side as it is important. It is not the totality of expenditure on the capital side. To address that issue, Members will recall I announced a stimulus package of ¤2.25 billion earlier this year. We are working towards that, hoping that contracts for the first grouping of schools will be available shortly. We are driving ahead with all these agenda items to augment as best we can the very scarce capital resources we have. I am in direct discussions with the European Investment Bank and private sector investment to supplement and leverage the income we are going to get for the sale of State assets next year.

Senator Byrne and others referred to the Croke Park agreement. In my judgment it is working and I welcome the Senator?s support for it. Last year we had the first growth of gross domestic product in four years. While this year?s growth will be less than the 1.2% expected, probably at 0.8%, we are unique in the European Union in having growth. As an open trading country, we are extraordinarily vulnerable to the economic climate of our trading partners. We hope there will be further growth with the tangible growth now seen in the US market.

If the most egregious failure we have in the reform agenda is the Oireachtas not sitting during the Hallowe'en break, I consider my job well done. My Fine Gael colleague instanced the local government reform package. What I am doing is part of the set while other Ministers have their own reform agendas. The local government reform agenda is a case in point. It is ambitious, ground-breaking and will be good. It will rebalance power between the elected and the administrative in local authorities. The Minister for Education and Skills, Deputy Quinn, has halved the number of vocational education committees and consolidated them. None of these programmes is easy. One point I have noticed since taking office is that we are very resistant to change and we love the status quo. Everyone advocates change for someone else but there is something intrinsically valuable in what we do that cannot be changed.

Fiach MacConghail (Independent)
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We encourage change. We change all the time.

Brendan Howlin (Wexford, Labour)
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There is a programme for Government commitment to ask the people to make the choice on Seanad abolition. I look forward to the debate on it as the people are wise in these matters. As they have rejected and accepted constitutional proposals in the past, we need to make our case, whatever our perspective on this is. It is good that we have to make our case.

I ask anyone who comes into me with their hand out looking for money, if they are essential. I do not ask them if they are doing a good job and are a successful support for the State. Instead, can we do without them? That is the criteria we have to apply.

Senator Mac Conghail asked about the medium-term expenditure framework. The idea is to have a multi-annual framework which we have already introduced on the capital side. It used to annoy me no end-----

Fiach MacConghail (Independent)
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Unspent capital at the end of the year.

Brendan Howlin (Wexford, Labour)
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-------that we always spent money at the end of the year rather than send it back because the budget would be cut the following year. Computers, for example, would be just bought for the sake of it.

Fiach MacConghail (Independent)
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Will it be on the current as well as the capital side?

Maurice Cummins (Fine Gael)
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The Minister to continue, without interruption.

Brendan Howlin (Wexford, Labour)
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Yes, I will be doing the same with the current side. It will be a three-year horizon. With the new Estimates process I am producing, it will not simply be the case of there is the voted amount for this purpose but what is the expected outcome for that. It will not simply take account of whether the money was spent but what was got for it. That level of accountability will be very useful to the Committee of Public Accounts and the Comptroller and Auditor General.

We have published the three-year framework of expenditure in both capital and current as well as the comprehensive review of expenditure. All the policy instruments to reduce expenditure are in the public domain. I have written to the Chairmen of every sectoral committee to the effect that they should be involved in this process of deciding spending. It should not be a budget day announcement. People need to be involved in discussing the various options and consequences of budgetary measures. It is very difficult to change the culture and getting the Opposition to be part of finding a solution. I would be exactly the same if I were in opposition asking why I should be part of finding the solution because the hard decisions are for someone else. If one wants to argue for Parliament having the authority, then it must exercise the powers it has.

Jim Walsh (Fianna Fail)
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Like the Minister did when he was in opposition.

Maurice Cummins (Fine Gael)
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The Minister to continue, without interruption. He should not invite comment either.

Brendan Howlin (Wexford, Labour)
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I just said I would be the same.

David Norris (Independent)
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The Minister did say that. I heard it.

Brendan Howlin (Wexford, Labour)
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Partisanship is so visceral in some that they cannot hear or understand it.

On agency rationalisation, the Government does not want to do damage to any agency that is important. On the merger of the National Archives and Irish Manuscripts Commission into the National Library, in order to achieve the greatest possible savings and efficiencies, it was decided that these rationalisation measures would be best implemented by deploying the existing National Archives governance model to the National Library and the National Museum. This will be put into effect on an administrative basis pending enactment of enabling legislation. The idea is to get the best synergies we have. Anything we do in the area of change can be undone if it is not working. It is hard work to bring agencies together. There is a view that if we keep our heads down, they will not come at us. We need to get those synergies and revitalisation. The overall savings in this process are small. As I indicated in the published programme last year, it would only come to ¤20 million.

Fiach MacConghail (Independent)
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I welcome that but it is the notion-----

Maurice Cummins (Fine Gael)
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We cannot have exchanges when the Minister is responding.

Brendan Howlin (Wexford, Labour)
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I have spoken to the Minister for Arts, Heritage and the Gaeltacht, Deputy Deenihan, who is passionately supportive of the institutions in question and we will see how it plays out. If further changes are necessary, we will deal with that in due course. There are people still saying, ?Burn the quangos?. The bulk of these non-governmental organisations, however, are the agencies such as IDA Ireland, the Environmental Protection Agency and Bord Iascaigh Mhara, essential agencies which should be independent of line Departments as they are oversight agencies or agencies that sell Ireland. That is why when we drill down, the number of those we can actually do away with it is small. That is why the savings are not significant.

I am reviewing the leaders? allowance in so far as it is paid to political parties. I heard a debate in the other House on this recently. When Fine Gael and the Labour Party were last in government, we were determined to break the link between business and politics. One can see how intrusive that is in the political system in the United States when during the last presidential election the candidates spent $6 billion and when one has super packs funding political parties to a vulgar extent.

While we have not got to that level, we did have significant business interaction with politics. There was a perception that it went all the way to business influencing policy.

Thomas Byrne (Fianna Fail)
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Like with mobile telephony.

Brendan Howlin (Wexford, Labour)
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There were such perceptions in all areas and I am not excusing any of them. I brought forward the electoral Act when I was Minister for the Environment to cap expenditure at national elections and have transparency in the making of donations. The quid pro quo was that one needed political systems to operate; therefore, there needed to be a State-funded political system within limits. However, it is now being argued that we should do away with State funding. Where would that leave us? Would it mean external funding only for those who could afford it?

David Norris (Independent)
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A State-funded political system would need to be equal in terms of provision, however.

Brendan Howlin (Wexford, Labour)
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The moneys given to political parties are vouched for and audited, but those given to Independents are not. That is an anomaly that needs to be addressed.

Fiach MacConghail (Independent)
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This House voted against it by the way.

Maurice Cummins (Fine Gael)
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We cannot have exchanges. The Minister is responding to the questions raised by Members.

Brendan Howlin (Wexford, Labour)
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There is an extraordinary media focus on the Croke Park agreement, as well as a parliamentary focus, judging from the parliamentary questions I am asked about it. Of the tens of billions of euro of public expenditure with which I am dealing, the amount of energy and effort put into the allowances issue, with a target saving of ¤75 million, is out of all proportion to the value. It is ongoing with an inquiry into allowances. While it is all simple to understand on the face of it, again, it is another case of drilling down and discovering it is not so easy. Is taking ¤34 a year in a footwear allowance from a service officer going to make or break the public service?

Thomas Byrne (Fianna Fail)
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It would not break it and it would be wrong to do so.

Brendan Howlin (Wexford, Labour)
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It has become extraordinary. To disaggregate decades of side and cross-referenced deals is tortuous, as the Committee of Public Accounts is now discovering. For many public servants, pay was built up with allowances. One cannot turn around and say because one is paid through an allowance, one does not get a big chunk of pay, but if one is paid through a sectorial agreement, one does. We are working on this issue. My officials have done extraordinary work on it, for which I commend them.

Senator Aideen Hayden raised the matter of differences in pay for new entrants. People speak of two tiers in teachers? pay scales, yet there have always been different levels owing to incremental pay scales. We have taken away an allowance for having the qualification they needed in the first place. It is an anomaly that a teacher received an allowance for having a basic degree when one could not get the job without it.

Aideen Hayden (Labour)
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However, one could have in previous years.

Brendan Howlin (Wexford, Labour)
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To compensate, we abolished the first three increments. The starting pay of a teacher is ¤32,000. When compared to the starting pay of other graduate entrants in other professions, it is not a bad rate. Added to this, those affected most by the downturn are those who bought a house during the boom who are up to their oxters in debt that will never be redeemed, not new entrants looking to buy a house now. The former are the ones with crucifying mortgages on houses which are worth half of what they paid for them and often are unsuited to their family circumstances. The 35 to 45 year old category is the one on which we need to focus.

I have asked for a mechanism to be put in place to remove difficulties for small and medium-sized enterprises involved in public procurement processes. With recruitment, when I took office, one of my first actions was to change the top level appointments committee, TLAC, which met with some resistance. There is now a majority of non-civil servants, with an external chairman and every interview board has an external majority. By the way, the TLAC is very willing to discuss its work with the Seanad.

Senator Sean D. Barrett spoke about the control of public expenditure and the entitlement culture. I understand this, but it is extremely difficult to square the circle. We are cutting money, reducing numbers and providing more services for more people because of demand. There are more medical cards, more children in school and more elderly persons, but we are providing services with fewer resources. Squaring that circle and keeping industrial peace are a challenge. The focus will be on outcomes.

Maurice Cummins (Fine Gael)
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Five Members have indicated they want to ask supplementary questions. Will the Minister be brief in summing up?

Brendan Howlin (Wexford, Labour)
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On the structure of the Civil Service, there is a simplistic view that there are so many chiefs and not enough Indians. There is a complexity to the public service. When I was in the Department of Health years ago, we actually did not have a proper child support system in place. Now, we have specialists who interview children in Garda stations.

Senator Kathryn Reilly spoke about public service reform and pensions. There is a simplistic view that we can simply levy pensioners over a certain level. I examined the issue and wanted to bring forward financial emergency measures in the public interest, FEMPI-style legislation to take back a significant proportion of the pensions of individuals, particularly those who may not have performed as well they should have in recent times and left with large pensions. I brought it forward and top-sliced 20% - Sinn Féin stated we should only top-slice 10% - for pensioners with pensions over ¤100,000. I needed the legislation to be robust. I am not interested in tokenism that will have me down in the High Court with the legislation falling. First, the measure must be related to the financial emergency and, therefore, have sufficient take to justify it. Second, it must have reasonably broad application. One cannot simply say A and B must pay extra. This is careful and delicate work, to which we need to bring fairness. I can assure the Senator that I will work might and main to ensure the budget is fair.

Two minutes should be more than sufficient to ask a question. I will call Senator O'Neill first, and then Senators Walsh and Gilroy. We will take those first three.

Pat O'Neill (Fine Gael)
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I compliment the Minister, Deputy Howlin. I knew he was a doer and in his short time in the Department, we have seen the changes, reforms and savings he has achieved.

I have issues with the moratorium in recruitment in the public service, especially in local government. In consultation with his colleagues, the Minister for Social Protection, Deputy Joan Burton, and the Minister for Education and Skills, Deputy Quinn, would he consider providing a community employment scheme to help local authorities provide outdoor services in the context of the disproportionate amount of local authority outdoor staff who have retired under the Croke Park agreement and other agreements? Outdoor services are what citizens see as their service from the local authority. Staff sit in offices and provide services to the local community, but it is the outdoor staff who are seen working on the ground giving the service.

Since the downturn in the economy, one of the biggest changes has been in the construction sector, with apprenticeships for young people. Years ago, local authorities used to take on apprentices. I ask the Minister, in conjunction with the Minister for Education and Skills, Deputy Quinn, consider providing on a cost-neutral basis for each local authority to be given a mandate to take on apprentices in order that young people could be trained, whether as plumbers, carpenters or block-layers, because there is no training available for them.

Jim Walsh (Fianna Fail)
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Does the Minister agree that gross public expenditure only reduced by less than 3% between 2008 and 2012? Does he agree that capital expenditure during the same period has reduced by almost 50% or ¤4.3 billion? Does he agree that, based on Department of Finance figures, there have been between 43,000 and 75,000 job losses as a consequence of the reduction in the capital expenditure, which is a softer political option? What happened to benchmarking?

Maurice Cummins (Fine Gael)
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One question was what was agreed.

Jim Walsh (Fianna Fail)
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The late Deputy Brian Lenihan, as Minister, introduced benchmarking in October 2010. It was to be based on counterparts in EU countries. What has happened to that?

On pensions, is it sustainable-----

Maurice Cummins (Fine Gael)
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One question per Senator was what was ordered on the Order of Business. I ask for the next question from Senator Gilroy.

Jim Walsh (Fianna Fail)
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I will continue.

Maurice Cummins (Fine Gael)
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The Senator will not continue.

Jim Walsh (Fianna Fail)
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Does the Minister agree that public service pensions are unsustainable?

Maurice Cummins (Fine Gael)
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I ask the Senator to resume his seat.

Jim Walsh (Fianna Fail)
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Are there actuarial projections being done in that regard?

Maurice Cummins (Fine Gael)
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I ask the Senator to resume his seat.

Jim Walsh (Fianna Fail)
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Can I ask whether the Minister has done anything-----

Maurice Cummins (Fine Gael)
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I call Senator Gilroy.

Jim Walsh (Fianna Fail)
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----- with regard to considering moving pensions to defined contribution schemes as distinct from defined benefit schemes?

Maurice Cummins (Fine Gael)
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The Senator is disrupting the House by not obeying the Chair-----

Jim Walsh (Fianna Fail)
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Could I ask about new recruits?

Maurice Cummins (Fine Gael)
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-----which is now par for the course.

Jim Walsh (Fianna Fail)
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Staff are being recruited on a 30% lower salary. What is the position on those staff?

Maurice Cummins (Fine Gael)
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Will the Senator, please, resume his seat?

Jim Walsh (Fianna Fail)
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Are the new salaries appropriate for the positions? Does the Minister agree that if we do not proceed with that-----

Maurice Cummins (Fine Gael)
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I ask Senator Gilroy to propose that the sitting be suspended for three minutes.

John Gilroy (Labour)
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I propose that the sitting be suspended for three minutes.

Maurice Cummins (Fine Gael)
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To restore order, the sitting is suspended for three minutes. Is that agreed? Agreed.

Paddy Burke (Fine Gael)
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A number of Senators wish to comment. They are Senators John Gilroy, David Norris and Lorraine Higgins.

John Gilroy (Labour)
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I welcome the Minister for Public Expenditure and Reform, Deputy Brendan Howlin. The less said about the last contribution the better.

Paddy Burke (Fine Gael)
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That is another matter.

John Gilroy (Labour)
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If such behaviour was to continue, it would make a good reason to abolish the House.

Jim Walsh (Fianna Fail)
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May I raise a point of order?

Paddy Burke (Fine Gael)
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Yes.

Jim Walsh (Fianna Fail)
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I am the one Member here who has consistently asked for the Minister to come to the House to talk about fundamental issues that concern the people.

Paddy Burke (Fine Gael)
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That is not a point of order. Will the Senator, please, resume his seat?

Jim Walsh (Fianna Fail)
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It is a sad reflection on Fine Gael and the Labour Party that they try to muzzle the Opposition. That is not the way democracy works.

Paddy Burke (Fine Gael)
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I ask the Senator to resume his seat. He knows what Standing Orders mean.

John Gilroy (Labour)
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If memory serves me correctly, the last time the Minister was in the House the Senator made the same disgraceful outburst.

Jim Walsh (Fianna Fail)
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I ask the Senator to withdraw that comment. His statement is not true.

Paddy Burke (Fine Gael)
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Will the Senator, please, resume his seat?

Jim Walsh (Fianna Fail)
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I ask Senator John Gilroy to withdraw his comment and ask the Cathaoirlech to ask him to do so.

Paddy Burke (Fine Gael)
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Does Senator John Gilroy have a question for the Minister?

John Gilroy (Labour)
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Yes, I do. The legislative caseload he has introduced, with all of his other work, is transformative. It is refreshing to see a Gordian knot-type approach being taken to reform. It contrasts with the St. Augustine approach that characterised the previous Administration when it was already ready to take action but only after one more report had been produced. The Minister has introduced a legislative framework for whistleblowers and the Ombudsman and the issues of freedom of information, ethics and lobbying. It is truly transformative. When will these five pieces of legislation be introduced in the House? What is the timeframe for their introduction?

David Norris (Independent)
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I only wish to make one point to the Minister. Let us have equality. I have listened to Members who have very good jobs and admitted to double-jobbing, yet they accept expenses from the Houses of the Oireachtas. Personal pleas have been made. I have given 40 years of public service and continually put my money where my mouth is. I did it when I sued the State on the question of homosexuality. I did it when I started the James Joyce Centre which kick-started the entire restoration of North Great Georges Street and the north inner city. I did it with the Hirschfeld Centre in Temple Bar. I did it every time I stood for election. I did it when I stood for the Presidency, but I am nearly wiped out financially at the age of 70. I have no savings left and I am in debt to the bank. I have listened to Senators saying we should scrap the allowances. I saw colleagues in both Houses leave politics because they were cute enough to see what was coming and took whatever money they could. I am close to getting out of this House while there is a few bob left to be earned and before I am an old man in order to pay off my debts. If the Minister is serious about reform, he should examine the presidential election campaign during which I raised a matter. Time and again Governments have tabled motions and then when I claim-----

Paddy Burke (Fine Gael)
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As the Senator knows, the Presidency is above politics.

David Norris (Independent)
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I want to finish my point.

Paddy Burke (Fine Gael)
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Does the Senator have a question for the Minister?

David Norris (Independent)
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Political parties are given a huge advantage in economic terms, particularly in presidential elections. They receive three times the amount in allowances in terms of donations made. The cost of goods and services is written-off which allows them to print election material and their posters can be put up all over the place. Therefore, the ordinary citizen is disadvantaged in the most extraordinary way and a Senator is expected to work for nothing. I heard one person in the other House say he wanted to have the names of 12 people put forward, by random selection, to decide on what we should be paid. That is ridiculous. I have never heard anything like it. He also asked us to be patient.

Paddy Burke (Fine Gael)
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The Senator is out of time.

David Norris (Independent)
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I shall finish on this point. When he was asked for his views, he said he had spent too little time in the House. He forgot to mention that he had been in the House for 30 years. Imagine the pension he will receive for that.

Lorraine Higgins (Labour)
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I want to mention an issue that affects my constituents in Galway East, not me, Garda vetting and the delays in the system. In my home town of Athenry there are 63 students undertaking child care, healthcare, nursing and social studies and post-leaving certificate courses, PLCs, at Athenry vocational school. In the next few weeks they are expected to gain work experience, but they cannot do so owing to a delay in vetting. This also delays their entry into the marketplace and some work placements have been withdrawn. It is not just a problem in Athenry but is replicated across the country. It is an indictment of the vetting system. Perhaps the Minister might reform and streamline the process in order that there would no longer be a duplication of applications.

Paddy Burke (Fine Gael)
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The topic is more suited to an Adjournment debate.

Lorraine Higgins (Labour)
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I have made the suggestion about Garda clearance because we are debating the issues of public expenditure and reform. I need Garda clearance if I want to work in the healthcare or child care industry, but I must make a separate application if I want to coach a camogie team. There is replication. I suggest the Minister and the Minister for Justice and Equality introduce a card system to validate individuals and prevent repetition in the system.

Paschal Mooney (Fianna Fail)
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I was not aware that Senator Lorraine Higgins was going to raise the issue of Garda vetting. As chairman of the Leitrim County Childcare Committee, I endorse everything she has said. Some months ago the relevant Minister announced that he had reduced the period of delay to six weeks. I am sad to relate to the House that it has now gone back up to three months.

Brendan Howlin (Wexford, Labour)
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The Senator is correct.

Paschal Mooney (Fianna Fail)
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My main question is child care related and also about public expenditure. In the past few days two elements of child care have come to my attention at board level. The first will be familiar to Senators. It is the one year free pre-school child care scheme for children under four years. The Government proposes to introduce a limit insisting on a minimum of eight eligible children in a facility as a cost-saving measure. It is all about money.

Brendan Howlin (Wexford, Labour)
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Everything is about money.

Paschal Mooney (Fianna Fail)
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The Minister sits at the Cabinet table. How can he endorse the proposal? It is another blow to rural Ireland. In County Leitrim six of the 30 service providers will lose out.

My second point concerns another area of public expenditure. In the same area special needs children who receive a subvention for attending child care facilities will have their funding cut-off at 15 years. The Minister is presiding over these decisions.

Paddy Burke (Fine Gael)
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The Minister has only three minutes left.

Paschal Mooney (Fianna Fail)
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How can he justify hitting the vulnerable? Will he ensure that when the budget is debated next month at the Cabinet table, he will act, on the basis that he has always attempted to act, by seeking fairness and equity, particularly for those who are disadvantaged?

Brendan Howlin (Wexford, Labour)
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I will try to deal with the points made in the two and half minutes that remain.

Senator Pat O'Neill asked a question about recruiting. Many staff are being recruited to the public service, particularly in the education sector, to fill gaps, but I want to avoid agency work, particularly in the health service. The Senator specifically mentioned outdoor staff in the local authority sphere and made valid points. I know that the Minister for Social Protection has views on the matter, too. There must be a balance struck because one cannot replace local government workers with people from community employment schemes because of union issues and so on. I heard what the Senator said in this regard and his comments are valid.

Most of Senator Jim Walsh's questions were about expenditure, including the level of expenditure and capital expenditure. All of his questions will be answered if he accesses the departmental website.

Senator John Gilroy asked about reform and the legislative framework. The first piece of legislation will be on committees of inquiries. I hope to publish it during the session, but that will be hard to do, as it depends on how quickly it is dealt with by the Joint Committee on Finance, Public Expenditure and Reform. I have spoken to its Chairman and there is cross-party support for the legislation.

I pay tribute to Senator David Norris's record which is exemplary in terms of the issues he has spent a lifetime advancing. Ireland, generally, would be a worse and less equal place without his sterling contribution to public affairs and public life. I regret that he finds himself in such a position - I do not think anybody expects to be enriched by such a contribution - but to be impoverished is unacceptable. I am mindful, however, of his very strong and well made points.

Senator Lorraine Higgins asked questions on Garda vetting, but they are matters for the Department of Justice and Equality. The same applies to Senator Paschal Mooney's questions. Everything comes within the remit of my Department, but I cannot be the Minister responsible for everybody else's Department. As Senators can see from my portfolio, I am responsible for enough.

Jim Walsh (Fianna Fail)
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The Minister did not answer one question. I know the reason is that he is unable to answer questions.

Paddy Burke (Fine Gael)
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When is it proposed to sit again?

Maurice Cummins (Fine Gael)
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We still have to debate the motion.