Seanad debates

Tuesday, 15 December 2015

Appropriation Bill 2015: Second and Subsequent Stages


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

11:30 am

Photo of Paddy BurkePaddy Burke (Cathaoirleach of Seanad; Fine Gael)
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I welcome the Minister of State, Deputy Harris, to the House.

Photo of Simon HarrisSimon Harris (Wicklow, Fine Gael)
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The Appropriation Bill 2015 is an essential element of financial housekeeping that, as Members of the Seanad are aware, must be concluded by both Houses of the Oireachtas this year. The Bill serves two primary purposes. First, it is necessary to authorise in law all the expenditure that has been undertaken in 2015 on the basis of the Estimates that already have been agreed during the year. The amounts included in section 1 and Schedule 1 to be appropriated for supply services all relate to amounts included in the Estimates set out in the Revised Estimates Volume 2015 of €41.7 billion in aggregate, as well as the Supplementary Estimates of €1.4 billion. Second, the passage of the Appropriation Bill 2015 is essential to provide a legal basis for all existing voted expenditure to continue into 2016 in the period before the Dáil votes on the 2016 Estimates.

Under the rolling multi-annual capital envelopes introduced in budget 2004, Departments may carry over from the current year to the following year unspent capital up to a maximum of 10% of voted capital. The multi-annual system is designed to improve the efficiency and effectiveness of the management by Departments and agencies of capital programmes and projects. It recognises the difficulties inherent in the planning and profiling of capital expenditure and acknowledges that capital projects may be subject to delay. The carryover facility allows for a portion of unspent moneys, which would have been lost to the capital programmes and projects concerned under the annual system of allocating capital, to be made available for spending on programme priorities in the subsequent year. The Appropriation Act determines definitively the capital amounts that may be carried over to the following year.The aggregate amount of proposed capital carryover is just under €112 million, which represents less than 3% of the total capital programme of €3.8 billion. The proposed amounts to be carried over by Vote are set out in Schedule 2 to the Bill. The 2016 Revised Estimates volume, to be published in the coming days, will set out detailed financial and key performance information for Departments and offices. In Part II of the Estimates, for each Vote availing of the capital carryover facility, a table will be included listing the amounts to be deferred by subhead.

The first payroll payments of 2016 are to be paid to staff and pensioners on 1 and 4 January 2016. Departments and offices must have the funds for these payments in their commercial bank accounts before the end of this year to ensure that staff and pensioners have access to their money by the due dates. In addition, An Post makes certain payments on an agency basis on behalf of the Department of Social Protection. To disburse payments to social welfare recipients in the first week of January 2016, An Post needs to be pre-funded before the end of 2015 to be in a position to convert electronic fund transfer payments from the Department of Social Protection into real cash and physically transfer it to its network of post offices throughout the country. These Exchequer pay and pension and social welfare payments will form part of the supply services for 2016 and, consequently, the funds to cover these costs will be included in amounts disbursed from the Central Fund to the Paymaster General's supply account as part of the 2016 supply issues and will come under moneys voted by the Dáil in 2016, in respect of which the usual processes and mechanisms for voted moneys in 2016 will apply. However, as the funds need to be available in the Paymaster General's supply account before the end of the year to facilitate timely payment, section 3 of the Appropriation Bill includes a specific provision to allow for an advance from the Central Fund to the Paymaster General's supply account of the appropriate amounts of money. Any amounts advanced to the supply account will be repaid to the Central Fund in January.

The signed Act is required by the Comptroller and Auditor General for clearance of the end-of-year issues from the Exchequer. Under Article 25.2.1° of the Constitution, the President may not sign a Bill earlier than the fifth day after the date upon which the Bill is presented to him. However, there is provision in Article 25.2.2° whereby, at the request of the Government and with the prior concurrence of Seanad Éireann, the President may sign a Bill on an earlier date. In view of the urgency of this Bill, the provision in Article 25.2.2° is sought and a motion to this effect is placed before the Seanad. Such an earlier signature motion has been sought in relation to the Appropriation Bill in previous years.

I remarked at the outset that the Appropriation Bill is an essential element of housekeeping which those of us in both Houses of the Oireachtas are required to undertake. The passing of the Bill will authorise in law all of the expenditure that has been undertaken in 2015 on the basis of the Estimates debate and voted on by the Dáil during the year. Of fundamental importance to those who depend on our essential public services, and to those on public sector pay, pensions and social welfare payments, the passage of the Appropriation Bill will allow the payments required to deliver these public services to continue into 2016 in the period before the Dáil approves the 2016 Estimates. I commend the Bill to the House.

Photo of Labhrás Ó MurchúLabhrás Ó Murchú (Fianna Fail)
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I welcome the Minister of State to the House and I compliment him on doing a fine job. Every time we have emergency situations he is certainly doing a good job. The big debates in this House over recent months were on issues such as health, law and order, legislation on burglaries, home care for the elderly and child care. Those are the big issues. We all appreciate that the books must be balanced, and it is very easy to get up on a soapbox and make a speech, but I do not think that is what it is about. However, there are areas that need to be examined as priorities. We did not expect the recent terrible flooding. I do not know how people are able to put up with that, and some of the stories are heartbreaking. Some of these people have been hit repeatedly and flooded on two or three occasions. Whatever is decided financially for the future, we have to deal with the flooding as an emergency in the same way that any other country would. I was very impressed to see the UK Prime Minister, David Cameron, lay aside the European rules during the UK's flooding events and order the rivers to be dredged. I know there is a fisheries element there which needs to be looked at. Compensation has to be realistic, because even though money has to be found quickly, €5,000 or any money like that is not going to be sufficient to repair the affected properties.

Regarding An Garda Síochána, I do not think there is any value in asking who closed this station or who closed that station. Burglary is a big issue at the moment.It is not an exaggeration to state that people are petrified in their homes. We all agree with Mr. Justice Hardiman that, apart from the theft of property involved, breaking into a person's home is an act of aggression. Having listened to all the arguments, I believe gardaí are still needed at local level. Neighbourhood Watch and so forth should also be funded.

On the issue of health, which was raised by several Senators, no right-thinking person would agree to allow someone to lie on a trolley for an excessive period. However, when we see a person of 80 or 90 years on a trolley it strikes at the heart of our compassion. I am not sure money is always the reason. There are vested interests in the health service and everyone involved in the system must be prepared to co-operate. If money is needed to ensure people are given proper care and maintain their dignity, it must be provided.

There is much to be said for providing assistance to allow elderly people to remain in their homes. I have never met an elderly person who wanted to move into a nursing home because this is invariably viewed as marking the end of their lives. There are some wonderful nursing homes and Senators will have seen how well they look after elderly people. If an elderly person can remain at home with a degree of independence, we must ensure resources are provided to support him or her to do so. The elderly have worked and paid taxes throughout their lives and their loved ones would like them to remain at home. Many supports, including in the area of security, are available to them. We should help elderly people who wish to remain at home and live mobile, independent lives.

The issue of children has been discussed in the Chamber on many occasions. Children are the most vulnerable group in society and we must help parents, whether they are single or married, in whatever way possible. All Senators will have heard stories about giving with one hand and taking away with the other. If we are genuinely concerned about the welfare of children and the opportunities afforded to them in life, we must provide them with assistance and support.

All of these issues form part of the budgetary process and it is not easy to prioritise one issue over another. The least well-off and most vulnerable must be given priority at all times. It is interesting that these are the people who very often do not have a voice. The well-off - I am not being anti-capitalist in this matter - are generally well able to make a case for themselves and often do well in budgets. We have to give the most vulnerable hope and show them that we respect them and want them to retain their dignity. We must also ensure they are always given priority when finances are being distributed. Has this been done? A significant degree of poverty persists. One need only consider the number of meals and other assistance provided to the poor. Many people are still going to bed hungry, while others cannot afford to heat their homes. Unfortunately, because we do not experience poverty ourselves, it often remains below the radar. The House should discuss the reality on the ground in a non-partisan manner. I would hate to have people trying to win votes out of people's problems and difficulties.

Some people are too proud to admit that they do not have a single euro to spend.One may blame the economy or world situation, but Ireland is a country that has been so good when people in other countries needed help. We are still good at that and we should continue it. However, I still think there is goodwill there. Funnily enough, I cannot talk for Fianna Fáil on this one. I would not say anything about pushing up tax a little if it would help those people because we cannot feel good ourselves - it is not good for our morale - when we see this is happening and we are unable to do anything. At the end of the day, it is only the legislators who can do this. We should be discussing specifics but we cannot really go into specifics at this time. However, I hope that any time we have funding to dispense we will always keep the vulnerable in society at the top of our priority list.

Photo of Tom ShehanTom Shehan (Fine Gael)
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I welcome the Minister of State to the House.

Effectively, the Appropriation Bill is an accounting exercise to balance the books and ensure that there is capital in place for issues or emergencies that may arise. The Comptroller and Auditor General has sought this and nobody wants to see Ministers go cap in hand. From my point of view, it is purely an accounting exercise. It is essential that any payments required to deliver public services will be continued. For that reason, I will be supporting it.

Photo of Sean BarrettSean Barrett (Independent)
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I welcome the Minister of State, Deputy Harris, back from Bandon, Skibbereen and the places where he was featuring. It was valuable for the Minister of State to be with people and hear from the shopkeepers themselves. We saw him on television going in and accumulating all of that information.

There are some interesting points in the Appropriation Bill. The Minister of State stated that the Supplementary Estimates of €1.4 billion is about 3.3% of the €41.7 billion that the Minister was spending. In the older days of the public finances, Supplementary Estimates were looked upon askance and regarded as something one should not do. I suppose we might get worried if it went much over 3.3%, but, in general, we learned the hard way how to run the public finances in Ireland. We do not wish to unlearn those lessons so there is a serious onus on those seeking Supplementary Estimates to justify what they entail.

The Minister of State mentioned that the carryover on capital projects is 3% of the value of those projects. That is a margin, but I suppose the danger would be if the Departments doing the spending begin to regard it as theirs and do not return to the Department of Finance. One must keep an eye on that aspect.

I welcome initiatives such as the Irish Government Economic and Evaluation Service which will put the evaluation of capital projects on an independent and sound basis as distinct from merely advocating projects and providing crude figures, such as that investment as a percentage of GDP is lower than it used to be. It is the case that GDP is lower than it used to be in the period when the public finances were getting into trouble but one must have sound prudent management of the public finances and proper appraisals of the projects involved. I would prefer those to be done independently and published well in advance so that they can be discussed in the Houses of the Oireachtas and elsewhere.

That brings me to the Comptroller and Auditor General, the value-for-money officer under the Constitution. That is a valuable post in seeking to keep the finances in order so that we do not get back into the troubles and problems of the past. The Comptroller and Auditor General deals with a €6.6 million budget and €5.9 million in appropriations-in-aid out of a €43.1 billion supply grant and the €3.1 billion carryover. It is an important post and I often think the Comptroller and Auditor General should be involved more. Sometimes he waits until what we need is the State Pathologist. Perhaps he should intervene earlier to state projects are going off the rail. The Comptroller and Auditor General did intervene, I think, with the agreement of all members of the Joint Committee on Transport and Communication, on the issue of the seven-digit non-sequential postal addresses.I have yet to receive any correspondence on that. We anticipated that it was unlikely to be a system that would catch on and it did cost us, as we pointed out, €38 million.

The other issue the Minister of State raised is the earlier signature motion. I have always felt that mechanism should be used sparingly. The President holds an honoured position under the Constitution and he or she deserves the full time necessary to read Bills. I appreciate that the Bill before us is different and I am not criticising what is being done here today. In general, however, there should be an amber light in the context of pushing the President to sign legislation before he or she has had a good chance to read it and, perhaps, to either point out some things which the Oireachtas might need to consider or refer it to the Council of State or the courts.

The current Oireachtas is nearing the end of its lifetime. This has been a period in which the public finances have been well managed and that is reflected in the accounts before the House today. I will certainly be supporting the Bill and I hope it sets the tone for the next Oireachtas to be equally careful in its stewardship of the national finances.

Photo of Aideen HaydenAideen Hayden (Labour)
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The usual practice before 2013 was that the Appropriation Bill went through without debate. I do not think there is any harm in giving us a couple of minutes to debate this Bill. While the Seanad is limited in terms of its domain over financial matters, there is nothing wrong with taking a look occasionally at some of the financial issues that come before Government. I agree with my colleague that the Bill is technical in nature. I would make two observations. One relates to the aggregate amount of the capital carryover which as the Minister of State said is €112 million, which represents less than 3% of the total capital programme of €3.8 billion. That is an incredibly low amount of money to carry over. Coming up to the end of the year, I hope Departments do not spend their time trying to hasten across the line certain projects, particularly as the limiting factor of time would have the potential to impact on cost. A larger amount of capital carryover would be more reflective of the realities relating to capital projects. In the context of overall Government expenditure in the region of €43 billion - including the €1.4 billion - we still have an incredibly small capital programme. I am aware we will be addressing that in the coming years but it is important to reflect on where we have come from in terms of the difficulties in repairing the country's economy and finances. We need to acknowledge that, from a capital perspective, we have taken a very significant hit in recent years in terms of the capital programme. As a Government, we have taken steps to address that but it will have to be a priority for this or any future Government in the years to come.

In the context of the purpose of the Bill, it is obviously a sensible measure designed to allow for a carryover into the early week of the new year, from 1 to 4 January 2016. I wonder whether our accounting measures could be adjusted in order that we are not obliged to put in place an Appropriation Bill to cover such a short period and having to go through the earlier signature motion and so forth. We have managed to change the tax date from, I think, 5 April back to 31 December and then to 31 October. Surely there must be a way of changing the way we set out appropriations where it is possible to have a residual sum carried over into the following year without the need to enact specific legislation on the matter.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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As there are no other contributors, I call on the Minister of State to respond.

Photo of Simon HarrisSimon Harris (Wicklow, Fine Gael)
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I thank all Senators for their constructive contributions to what is a technical item of legislation.To pick up where Senator Hayden left off, I agree that it is worth giving time to scrutinise this legislation because that would be a useful overview of where we find ourselves in terms of the public finances. Undoubtedly, the economic crisis had a profound impact on those finances. When the Government was elected, the budget deficit stood at 12.5% of GDP. This year, it is on track to be below 2%. General Government debt has reduced from a peak of 120% of GDP and is forecasted to decline to close to 90% in 2016. That is still much too high, but is back in the realm of the European average and is something that we can reduce further in the coming years.

Sustainable public finances are required if the Government is to provide the necessary infrastructure to encourage economic growth and job creation and deliver essential public services to our citizens. The fiscal adjustment implemented in order to exit the EU-IMF programme of support successfully and return sustainability to the public finances required significant tax increases and expenditure reductions. Gross voted expenditure was reduced from its peak of just over €63 billion in 2009 to €54 billion in 2014. In implementing expenditure reductions, the Government's priority was to ensure that a targeted approach was adopted in order to protect key public services and social supports to the greatest extent possible at a time of increasing demand. It is fair to say that budget 2015 marked a turning point in our recovery, when expenditure reductions were no longer required to meet our fiscal targets and we were in a position to provide targeted increases for front-line services.

Against a background of Exchequer tax receipts being almost €3 billion ahead of profile this year, additional funding has been made available through Supplementary Estimates of €1.4 billion to support key services and social supports. While the bulk of the additional revenue has gone to pay down debt, the key sectors of health, social protection and education have been prioritised. These are issues of importance to Senators on all sides of the House and account for more than 80% of gross current expenditure. The Government has protected core social welfare rates and, under budget 2016, the State pension will be increased by €3 per week. Though small, this is the first increase in the State pension since 2009. Our commitment to protecting society's most vulnerable is found in data published by EUROSTAT this year, which showed that Ireland's system of social transfers - the redistribution of wealth and income to those most in need - is among the most effective in Europe at reducing the risk of poverty.

Aside from social transfers, the Government's fundamental reforms to labour market activation represent a significant modernisation of Ireland's tackling of unemployment through a two-pronged approach. Pathways to Work ensures that the unemployed are given a chance to upskill and rejoin the workforce while the Action Plan for Jobs has directed its efforts towards boosting labour demand through key reforms. Unemployment has decreased from a peak of over 15% to below 9%. While that remains too high, it is moving in the right direction towards full employment, which must be our collective relentless pursuit. I am not just referring to headline full employment, but real full employment, in which we tackle issues like long-term unemployment and people with disabilities wanting to access the workforce but not being afforded the supports to do so. I challenge the next Oireachtas to do that.

One of the Government's first acts was to reverse the cut to the minimum wage. From January, the new statutory minimum wage will rise to €9.15 per hour. Our investment in the health sector has ensured that key front-line services have been maintained and will be enhanced further through initiatives such as extending free general practitioner, GP, care to children under six years of age, which is due to be extended next year to children under 12 years of age. The additional funding provided to health this year has allowed staffing levels within the sector to be increased by more than 3,700 in the first ten months of 2015, with this increase primarily and rightly concentrated in our hospitals. The amount to be allocated to health next year will bring funding back to pre-crisis levels, but I take Senator Ó Murchú's point that it is not all about funding and must be about continuing to reform. I welcome the initiative taken by the Irish Nurses and Midwives Organisation, INMO, today in deferring industrial action and considering a number of the proposals that it discussed at the Workplace Relations Commission, WRC, last night to address the important issues being experienced by front-line nurses in accident and emergency services on a daily basis.

Since the beginning of 2012, we have invested more than €1.25 billion in school buildings, sought to protect DEIS expenditure, which prioritises the educational needs of children and young people from disadvantaged areas, protected the pupil-teacher ratio and, in budget 2016, reduced the ratio from 28:1 to 27:1 at primary level and from 19:1 to 18.7:1 at second level. The allocation set out in next year's budget will provide for more than 2,260 new teaching posts, including 600 resource teachers. The expansion of the early childhood care and education, ECCE, programme announced in budget 2016 will provide a second free preschool year to 75,000 children and support children with special needs in accessing those preschool years.The social housing strategy aims to deliver 3,100 social housing units in 2016, with 3,000 units to be delivered in 2015. An additional 10,000 households will receive housing assistance payment in 2016.

I want to return to the issue raised by Senator Ó Murchú regarding the recent flooding. This issue is very close to my heart and to my ministerial responsibilities. The recent flooding has clearly highlighted the need for the Government to do exactly what it wants to do, which is to increase significantly our investment in flood risk management in this country. We cannot get away from the fact that we are seeing more and more severe weather events and we are likely to continue to see that. We are all aware of the consequences of climate change. Through our capital plan, we intend to spend more on flood relief in the next five years - €430 million - than has been spent in the last 20 years. That cannot be lost on people. While I very much welcome the generous remarks of Senator Ó Murchú, it is important that people do not play politics with this. People have gone through a very difficult few weeks. We have had a national weather crisis. We have seen over a month's worth of rainfall in 24 hours in parts of this country.

Yesterday, I met with the people in Bandon and Skibbereen. I met with people whose shops had been flooded again. This is a situation we all have to resolve, but we must also be honest with people. Major flood relief schemes take about five years to deliver. We have to get them right. There is only one chance. One cannot retrofit a flood relief scheme. We have to get the consensus of the community. One often has to try to acquire land or go through landowners' property. We have to go through procurement and planning. These are difficult procedures, but the important thing is that we get on with the job. We now have the funding scheme and we have the national policy, through CFRAM, where people can now see 300 areas in this country on cfram.iethat are at risk of flooding, and by this time next year we will have solutions and options to rectify those problems and to put flood relief schemes in place. It will take a significant amount of time to deliver this programme, but the OPW will move from delivering, on average, six flood relief schemes per year to 20 flood relief schemes per year. This is a major increase in capacity.

We have done exactly what Senator Ó Murchú has suggested. We have put in place supports for business, which is something we have not been able to do in the past. We have put in place supports for businesses that have been flooded and that do not have flood insurance. I heard very clearly from business owners in Bandon that they did not want a complicated, bureaucratic scheme wrapped up in red tape. They have been through enough and they want a simple scheme. We have put in place a Red Cross scheme. Claimants self-declare up to €5,000 worth of damage, we take them at their word, they get their form stamped by the local authority and they get payment before Christmas. There is a further €15,000 for each business that has experienced more significant damage. In the interest of the taxpayer, that is vouched and does take longer, but we can get initial payments of up to €5,000 to every business with up to 20 employees that has been flooded and does not have flood insurance.

As I have also made clear, the Government is examining the policy area of flood insurance, looking at what other countries do. Through an interdepartmental group on flooding, the Department of Finance is examining this and will report to Cabinet in the spring. Whoever is in Government in the spring will be faced with policy choices in this area. People are going to have to face up to these choices if we want to ensure we are proactive and not reactive to the issue of flooding.

I thank the emergency services, the Red Cross, the Civil Defence, the Garda, local authority workers and the communities that have worked day and night. We always hear, and rightly so, about the towns, the businesses and the homes that have been flooded, but I know from my briefings with the national emergency co-ordination committee that there are so many homes and businesses that were not flooded as a direct result of their heroic efforts. More than 700 members of our Defence Forces have been deployed and 20,000 sandbags were filled in County Clare alone. That is a testament to the inter-agency and community response to this crisis.

Senator Hayden is right that there is a balance to be struck between avoiding what used to happen in the past, before 2004, when at the end of the year Ministers would rush to spend because they had to get rid of the money or lose it into an apparent black hole, and spending the money required. They can now carry over that money. The sum of money Ministers have been given is an estimate of what they expect to spend this year, but there has been criticism - including of the OPW - when a Minister does not spend all his or her capital in one year. The prudent thing to do is to ensure that one can only spend the money when it is legally right to do so, when schemes are right. The capital carryover allows people to do that. I agree with Senator Hayden on the capital programme. I do not think anyone in Government would disagree. We could do with a larger capital programme, but we now have one. Cleverly, the Minister for Public Expenditure and Reform, Deputy Howlin, has built into that programme a review in 2017, so that if the country continues on this track - and that cannot be taken for granted - we will be able to look at further expanding the capital programme at that stage.

This Bill is important. While technical in nature, it will ensure that people on jobseeker's allowance, disability allowance, and the State pension, along with public servants such as nurses, gardaí and teachers, get paid, and that all other pay and pensions funded through voted money, along with pay to suppliers of goods and services across a range of SMEs, is provided.It is to authorise our supplementary expenditure and to approve the expenditure that is incurred during 2015. I commend the Bill to the House.

Question put and agreed to.

Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.