Thursday, 19 December 2013
Appropriation Bill 2013: Second and Subsequent Stages
As colleagues will be aware, the main purpose of the Bill is to give statutory effect and authority to the Estimates approved by the Dáil this year. It also forms the basis for the statement of authorised issues, which sets out the amounts authorised to issue from the Exchequer from the beginning of 2014. The Bill also provides for the capital carryover from 2013 to 2014, which is listed by Vote. It also provides for repayable advances from the Central Fund to the Paymaster General's supply account to facilitate payment by electronic funds transfer, EFT, of particular liabilities on 2 January 2014. I commend the Bill to the House.
I express my deep appreciation to the Leader for setting the important precedent of debating this Bill. He will understand that none of us expected him to grant our request, but I am grateful to him. It is the Seanad's only opportunity this year to debate the expending of public money. The Estimates are solely in the purview of the Dáil, and rightly so. I presume the Appropriation Bill is a certified money Bill.
The Seanad has a limited function in this matter, but it is important we scrutinise it. For future years, I suggest the Seanad examine certain aspects of spending ahead of the debate. This year, we are particularly concerned about the amount of money granted to the health budget and whether we have achieved the best value for money. Indeed, the Committee of Public Accounts is debating that matter now.
The amount of money being agreed for all services provided by the Government is €47.5 billion. As the Bill could be described as a cheque, it is important that it not go undebated. In future, the Seanad could examine those aspects of spending that do not get the headlines. I would not criticise the Committee of Public Accounts for much, but one criticism is that it seems to take on those issues that are popular with the media. In fairness, those issues are usually important and need to be discussed, but other important issues of spending also need to be discussed.
The Seanad, in terms of its purview and approval of the Appropriation Bill, could discuss in detail what is being spent and identify areas where there is waste, although not as a rival of the Committee of Public Accounts in terms of its powers in this area. There are many areas in respect of which there are inefficiencies in terms of spend, although I accept that the Government is trying to reduce these inefficiencies, in particular in the area of procurement of services and spend on capital projects.
On the deferred surrender, as I understand it this is money not spent this year that can be spent next year. In regard to the €132.5 million capital surrender, can the Minister of State confirm if this relates to capital expenditure on roads that could have been but were not built this year? If so, that is a pity. Spend of that €132.5 million would have given a large boost to the economy during the year and might, perhaps, have resulted in the creation of some jobs.
Despite that this debate has taken place at short notice, Fianna Fáil will not, if a vote is called, support either side. I do not believe there is any credibility to be gained by voting against this Bill because the vast majority of the money has been already spent. We should look in the future to the Committee on Procedure and Privileges in terms of how best we deal with this matter given the precedent now set by the Leader, for which I am grateful to him.
I thank the Minister of State for coming to the House at short notice to address the Bill. As explained by the Minister of State, this Bill, in terms of content and purpose, is technical in nature. I urge all Members of the House to support it. I again thank the Minister of State for bringing the Bill before the Seanad and assure him of our support for it.
I echo Senator Byrne's sentiments of our debt to the Leader for organising this debate and the instant appearance here of the Minister of State. He is always very helpful to this House and his appearance here at short notice is a startling illustration of this.
Part of the reform agenda must be that we remain vigilant of our public finances. Post exit the bailout we must plan our affairs to ensure we do not end up in difficulties again. Had there been time to do so I would have located my dog-eared copy of John Bruton's publication, A Better Way to Plan the Nation's Finances, which he wrote during a period of crisis when he was attempting to get our finances in order. In regard to inviting people to the Seanad to address us, this issue was tackled in the most interesting reforms proposed by him at that time.
As stated by Senator Byrne, we need effective measures of accountability. While up to now accountability has been mostly good in that not much has been stolen from the Exchequer, there is always concern in regard to whether money is being spent in the most efficient manner possible. While the Comptroller and Auditor General does tremendous work in this area, issues are always identified after the event. Perhaps the Oireachtas could be alerted by way of an early warning system from the Comptroller and Auditor General of areas in respect of which things are starting to go wrong. The Committee of Public Accounts has been chaired by many distinguished people in recent years. I understand it was chaired for some time by Deputy Noonan, the current Minister for Finance. Deputy John McGuinness is not behind the door in dealing with issues. While that committee also provides an extremely valuable public service, it might be better if we were not made aware of issues post event.
Former President Carter attempted to introduce programmed budgeting which included more reviews, appraisals and analyses. The process lasted for only a couple of years. The obstacles it encountered were those faced by current bureaucracies, namely, people do not like having their outputs questioned, in particular by politicians. There was also concern that the additional layer of analysts would add to the budget. Given most countries now have debt-GDP levels which are unacceptable, we need to ensure value for money. Traditionally, much of the attention in terms of public finances was on the taxation side, with little attention on asking the fundamental questions we now have to ask, including whether the health service or chunks of it makes anybody any healthier. There is also a problem in the context of Departments acting as independent republics and preventing the Department of Finance having a say in how they are doing. Newspapers, rather than report on what a Department is spending money on, frequently report X Minister as being a really good Minister because he gets more money from the Department of Finance for his Department. Traditional speeches on the opening up a new bridge and so on would be to the effect that a particular Government spent more on bridges than did all other Governments combined. However, what is never considered is whether the target of that Government in terms of the construction of more bridges and roads than any previous Government was a pointless exercise. We need to examine our bureaucracy and to scrutinise how allocations are made. I wonder if the case can be made for a government economic service to address these issues, including whether Departments should be allowed to operate as independent republics, such that when all the Estimates are totalled the Department of Finance is on budget day harassed in terms of increases in taxes or borrowings to finance them.
The Bill provides for spend of astonishing amounts of money, including €740 million under Vote 32. On days when there is little legislation before the Seanad, we could have a discussion on particular items related to this spend, at which time we might come up with ideas that would be useful to the Minister of State in the context of his reporting back to the Department of Finance. The amounts being provided in terms of magnitude are astonishing. It was once said that to divert attention in capital appraisal from the big items one should include an item on the bicycle shed, which item would be the focus of discussion by everybody while millions of expenditure went through on the nod. I am sure that is not a model we would want to apply in this Parliament.
In the recent past, we have had, necessarily, to reduce capital expenditure. It was pointed out by an bord snip nua that because of what happened in the past number of years GDP in 2014 will be approximately 40% less than projected. Therefore, one should not invest in a capital programme for GDP that will be lower than anticipated. More importantly, this allows us to put in place criteria, which I believe should be published in advance, in regard to capital investments, including any alternatives. This will allow us to consider which projects are worthwhile. We now have an opportunity to put capital investment appraisal on a new footing at breathing space from the actual expenditures.
I appreciate the short notice at which the Minister of State has come to the House to deal with this important legislation. In the context of the future role of the Seanad, we could, perhaps, as stated by Senator Byrne, make this a precedent and have discussions here on the large amounts of money provided for in this legislation. We are happy to assist the Minister in any way we can in ensuring value for money is achieved. I again thank the Minister of State for coming here at short notice and the Leader for allowing this debate.
Like other speakers, I thank the Minister of State for coming to the House at short notice. I also thank the Leader for acceding to Senator Byrne's reasonable request, which perhaps will set a precedent for future years.
While the powers of the Seanad in respect of financial matters are limited, this Bill is more interesting than it appears on first reading. Senator Byrne referred earlier to the amount of capital moneys being deferred to the 2014 budget. Unlike the Senator I am surprised by the small amounts being carried over-----
-----given that the overall appropriation amount for supply of services is almost €44 billion.
In the past Departments had a tradition of handing out the remaining moneys like snuff at a wake. Moneys were not being properly spent because they were trying to get it out the door before the end of the year.
I agree with the comments made on the headline figures, some of which surprised me. Just like the tool shed, bicycle shed or whatever shed Senator Barrett mentioned, I was not aware we had a secret service.
I am also surprised that the Property Registration Authority is being voted some €32 million. I would like to see a cost-benefit analysis on the amounts being spent on each of these subheads against the amounts of money being taken in. Similarly it would be quite interesting to see a cost-benefit analysis on the Revenue Commissioners which cost us almost €323 million.
As the Leader said, this is a technical Bill to all intents and purposes, but there is value in bringing it before the House for comment and scrutiny. It was a good move and I appreciate the Minister of State coming in at such short notice to take it.
It has been stated that this is an unprecedented step and a new initiative. The Appropriation Bill was discussed in this House in my early years in the House, as the Acting Chairman well knows. It was discussed for a considerable length of time and all Members were allowed to participate. It gave a good opportunity to contribute in general on the expenditure of moneys. I believe we should go back to that. The closing of business in both of these Houses over the past three years has been nothing short of regrettable. The Government came into power with an agenda of openness and transparency.
I believe the Government should institute that particular ethos in these Houses. I would like to say certain things on this Bill and it is wrong that I, as a Member of the House, should be deprived from doing that. It is symptomatic of how debates in this House have been closed. It was a remarkable decision in view of the way debate has been curtailed in this House and the Lower House. I am only interested in what is happening in this House.
As a point of information, traditionally the Bill was always passed prior to the Christmas recess but then a motion, to which I believe the Senator is referring, was debated subsequently and all Members of the House were able to make a contribution. That was the practice. That will be a matter for the Leader to reflect on.
I call the Minister of State.
I confirm the Acting Chairman's view. I have been around these Houses for a few years and that is exactly what happened traditionally. The Bill was passed but remained on the Order Paper of both Houses for a period of time so that people could debate it. I agree with Senator Walsh and others. I congratulate the Senators who sought a debate on this matter today. I was in the Dáil yesterday for all Stages of this Bill and no one turned up. It is good to debate these issues.
I also agree with Senator Byrne's remark. While, obviously, the work of the Committee of Public Accounts is of crucial importance, there is a wider remit for both Houses and committees of both Houses to scrutinise vast sums of money that are voted upon by both Houses of the Oireachtas each year. From the perspective of the Minister for Public Expenditure and Reform, Deputy Howlin, and the Minister for Finance, Deputy Noonan, any space that can be found to scrutinise public expenditure is welcome. We congratulate the Senators on demanding a debate today and ensuring that the Bill, which is a technical Bill, is debated. In my first five years here, we traditionally had that debate and it would be good to have it in future.
Senator Byrne asked about deferred surrender. That is the €132.6 million in savings on the capital side. The carryover into 2013 from last year was €107 million, so it is slightly ahead of last year, but it is broadly neutral because in each given year there will always be an amount to be carried over on capital expenditure. We do not want a glut of expenditure between October and December simply for the purposes of having the expenditure. That does not provide good value for money. So in every year provision is always made to allow capital expenditure on key projects to take place the following year so that we get a spread of expenditure rather than putting pressure on the system to spend money willy-nilly in November or December every year. That is exactly what we are doing. The €132.6 million is a small amount in the global sense, but it is an important amount because it demands much greater rigour in terms of those projects that need to be funded by central government funds.
Senators Hayden, Cummins and Barrett spoke on the issue of vigilance. Some of the reforms we have introduced since coming into office have shone a light on public expenditure that did not exist previously. The most fundamental change was the separation of the Department of Public Expenditure and Reform from the old Department of Finance. The objective was to have the Departments spending the money allied to the reform of the process. It has been positive having two separate Departments, one on the financial side and the other on the expenditure side.
As Senators will be aware, we have introduced multiannual financial frameworks. Departments now have expenditure profiles over a three or four-year period and must live within those envelopes. That gives certainty to the Departments and their agencies. It also gives the Departments some latitude in how that expenditure is to be used.
On the other point Senator Barrett raised, we have now established a cost-benefit unit in the Department of Public Expenditure and Reform. Every item of public expenditure goes through the Department of Public Expenditure and Reform. Some people might regard it as a bit to Stalinist in its approach. I am sure some of my ministerial colleagues have a view of the Department of Public Expenditure and Reform which is all-embracing. However, we now have a very rigorous cost-benefit analysis system. A cost-benefit analysis signed off by the Department of Public Expenditure and Reform forms part of any memorandum a Cabinet Minister will bring to Government. Part of that is a rigorous economic analysis of the patterns of expenditure.
Traditionally only three Departments had output statements outlining the output for the money they were given. We are now rolling this out to every Department. I am not sure if we are there yet, but we are certainly in the process of getting every Department to produce an output statement. This means that each of the relevant Oireachtas committees can now assess expenditure patterns and ask considerably more questions about the expenditure profiles - a point Senator Byrne mentioned. It will take some time for committee members to get into the frame of mind to look for output on the expenditure we are proposing. It will also put more pressure on Ministers to defend why they are spending the amounts being spent on particular schemes.
Those are four reforms we have introduced. Can we do more? Of course we can. We are in a deficit position. Next year we will spend €53 billion and take in €44 on the tax side. Therefore it is inevitable that we need to keep a very firm view on public expenditure. It will take some time before we come into an absolute surplus - although next year we will have a primary surplus when the cost of the national debt is stripped out. The intention of the Government in the publication of the medium-term economic review we announced earlier this week was to have a budget surplus by 2018. Given the chasm of public expenditure to tax in recent years, that is an ambitious but valid target for us to attain.
I very much welcome the debate. I have no difficulty in coming back to the House next year to have a fuller debate on the various subheads Senators might wish to raise.
I commend Senators on seeking this debate and having at least some public scrutiny of what effectively is a technical Bill.