Dáil Éireann debate -
Tuesday, 19 Dec 1995

Vol. 460 No. 2

Estimates, 1996: Statements.

Minister for Finance (Mr. Quinn)

Yesterday I published the 1996 Abridged Estimates Volume and the Summary Public Capital Programme. Deputies will be aware that it is the first major step in preparing the 1996 budget. I also announced the total level of current spending in 1996 which has been agreed by the Government and which will be detailed in the budget. This new policy initiative will make it possible to see the Abridged Estimates in their overall context.

This Government is committed in its programme of renewal to the prudent management of the economy, the improvement of essential public services and the maintenance of the social partnership. These Estimates, which outline the Government expenditure decisions for next year, clearly meet these objectives.

The Abridged Estimates follow exactly the same format and accounting conventions as in the past. It is clear from comments in the House and else-where that there is dissatisfaction with this methodology because it gives some flexibility in the way in which figures can validly and correctly be presented.

The suggestion has been made that we should move from the present cash-based system of Government accounting to an accruals-based system.

Work is already under way to improve Government accounts and to assess the feasibility of having accrual accounting. The 1994 Appropriation Account was expended to provide additional information of an accrual nature, and more will be done for the 1995 and 1996 accounts. A pilot project in the Department of Transport, Energy and Communications aims to assess the feasibility of accrual accounting.

The constitutional requirement of the Government to prepare Estimates of Receipts and Estimates of Expenditure for each financial year, which is met by the pre-budget White Paper, always has been on a cash basis. Consistent with this, the departmental Estimates voted by the Dáil have been prepared on the same basis.

We cannot then decide overnight to change to an accruals-based system. If we did decide to move, there would be a great deal of costly, time-consuming work to be done.

I am prepared to consider the case for further movement towards accrual accounting. The appropriate committee of the Dáil might, I suspect, consider the matter. Accrual accounts are not simple, and are open to interpretation. A glance at the accounts of any major company will show this. Neither are they free from elements where judgment is involved, such as how much should be set aside to meet future contingencies.

My essential point is this: I am not interested in creative accounting, we should aim to agree on the figures and the way they are computed. Our debate should be on the policy choices involved in managing the public finances, not on the ways the figures are put together.

This Government deliberately set itself very demanding targets for restricting the growth in public expenditure over the period of its programme. These targets required that firm action be taken to arrest the pattern of significant real increases in public expenditure which had developed since 1990. The Government has ensured that the 1996 Estimates reflect the policy set out in the Government programme. Reaching final agreement on the departmental spending allocations for next year was a long and complex process. The 1996 Estimates demonstrate that expenditure is clearly under control.

The trend in real increases in gross non-capital supply services in recent years has been as follows: 1991 over 1990, 6.5 per cent; 1992 over 1991, 6.6 per cent; 1993 over 1992, 6.2 per cent; 1994 over 1993, 4.8 per cent and 1995 over 1994, 3.5 per cent.

These figures are derived from the outturn for gross non-capital supply services for each year, brought to 1990 prices by the use of the consumer price index. The figure of 3.5 per cent for the real increase between 1994 and 1995 is based on my Department's present forecast of the 1995 outturn less the £140 million additional spending on equal treatment decided by the Government after the budget. The 1995 deflator used was 2.5 per cent.

This pattern of very fast growth in real spending in the early 1990s was the context in which the Government adopted an average 2 per cent real increase as a policy objective for 1996 and 1997. That policy objective has served the Government well as a lever in achieving a significant downward shift in the trend in real expenditure in 1996. As a consequence, expenditure growth in both 1995 and 1996 will be much lower than the trend between 1990 and 1994.

The 1996 Abridged Estimates Volume shows an increase in gross current supply services spending of only 2 per cent in nominal terms over the 1995 Estimates as adjusted by the Supplementary Estimates which have been passed by the Dáil this year.

I stated previously in this House that the calculation of the increase in spending in 1966 for the purposes of the Government's 2 per cent real target would exclude from the 1995 base the additional £140 million which was provided after this year's budget for equal treatment payments. This, of course, made the attainment of the 2 per cent policy objective next year more stringent in its effects on other programmes. After excluding the £140 million from the 1995 total the increase in gross current spending provided for in the 1996 Abridged Estimates Volume is 3 per cent in normal terms.

The definitive measure of the increase in current expenditure in 1996 will not be available until budget-day when the increase in 1996 post-budget current spending over the 1995 provisional outturn will be known; but the best measure of that increase that can be made at this point in time is as follows. The Government has decided that gross current supply services expenditure, post-budget shall be no higher than £12.087 million. That represents an increase of 3.9 per cent in nominal terms, or 1.6 per cent in real terms over the 1995 total figures in the Abridged Volume, after excluding the £140 million equal treatment payments. If the £60 million hepatitis C moneys voted this year were also excluded from the 1995 base the real increase would become 2.1 per cent.

It is quite probable that the 1995 outturn will be lower than the amount voted this year by the Dáil, due to savings in departmental spending which may emerge by year-end.

My Department's best estimate of the outturn for 1995 is £11.7 billion or £11.56 billion after deducting £140 million for equal treatment payments. This would imply a real increase, post-budget, of 2.25 per cent. If hepatitis C is excluded from the 1995 base the figure would be 2.8 per cent. These figures represent the best measure of the underlying trend in expenditure.

In calculating the real level of expenditure increase in 1996 we use an inflation rate which is forecast at 2.25 per cent. If inflation is higher, the real increase in public expenditure will be correspondingly lower. These figures of 2.25 per cent or 2.8 per cent should be compared with 6.5 per cent in 1991, 6.6 per cent in 1992, 6.2 per cent in 1993, 4.8 per cent in 1994 and 3.5 per cent in 1995.

The most important budget figure is not the increase in spending but the general Government deficit, as defined for Maastricht purposes. The Government has decided that the deficit in 1996 will be maintained comfortably within the Maastricht guidelines.

This Government recognise the importance of public capital spending for the development of the economy. We have decided on 1996 allocations for the programme which are up 14 per cent on those for 1995, the figure for the Exchequer element being 8 per cent and for the non-Exchequer element being 31 per cent. The picture by sector is as follows. The biggest increase, 21 per cent, is for sectoral economic investment. The allocation for industry is up by 25 per cent, and that for tourism by 30 per cent. These figures reflect the priority the Government gives to job creation. Allocations for productive infrastructure are also increased significantly, by 18 per cent overall. The allocation for social infrastructure is held close to its 1995 level.

The 1996 inflator for capital investment is forecast at 4.2 per cent. With a 14 per cent increase in the total allocation, the public capital programme is set to increase in real terms in 1996 by almost 9 per cent. This should support economic activity, employment and the building industry. I am glad to acknowledge the welcome the building industry has given to the publication of the Estimates in today's newspapers.

The 1996 Estimates include provision of £4.8 billion for the Exchequer pay and pensions bill, an increase of £160 million over the 1995 Estimate. As I indicated in my Budget Statements earlier this year, we will have to adhere strictly to the cost parameters of the Programme for Competitiveness and Work pay agreement in both the public and private sectors if we are to achieve our overall economic and employment targets. The 1996 Estimates include provision for pay increases of £97 million for public servants in accordance with the Programme for Competitiveness and Work pay agreement. These include the carryover cost of 1995 increases at £38 million as well as general round increases of 1.5 per cent from 1 June 1996 at £41 million, and 1.5 per cent from 1 October 1996 at £18 million. Provision has also been made for the implementation of restructured increases under the local bargaining clause of the Programme for Competitiveness and Work pay agreement as it applies in the public service. It is vital that such negotiations will result in settlements which will give value for money by improving the quality, efficiency and effectiveness of services to the public.

The size of the public service and its cost is a matter on which public concern has been expressed in recent years. Many of the tasks undertaken by Government — particularly in the areas of Health, Education and security — are by their nature staff-intensive.

Public service numbers have been creeping up in recent years and the Government has felt compelled to take measures in all parts of the public service to control that rate of growth. These measures are not, and cannot be, identical in all public service organisations given differences in their operating environments and the control mechanisms which apply to them.

The Government acted earlier this year to contain the growth in numbers in the biggest areas, Health and Education. Departments are being instructed to ensure that they pursue numbers policies throughout the public service. These should fully reflect the financial allocations for 1996 determined by the Government and published in the Estimates and should also comply with existing Government decisions on numbers policies in particular areas.

In the area over whose numbers the Government has the most individual and direct control — the Civil Service — the introduction of administrative budgets had the effect of releasing the controls which traditionally applied to the recruitment of staff with resultant increases in staff of over 3,000 since 1991.

At the start of the year the number serving had reached 28,370 — a figure the Government was prepared to live with. By June of this year, it had become apparent that the tempo of increase had changed dramatically. At that date, some 29,162 civil servants, 792 more than in January, were serving and it was evident that if that trend persisted, numbers would have reached 29,500 by end-1995.

The Government decided that the growth of the Civil Service had to be curtailed and took certain limited steps which it hoped would dispose of the problem. Despite this and some normal shedding of seasonal staff, at 30 September the numbers had increased by another 80.

The Government has now decided to reverse to some degree the growth which has taken place in the early part of this year. This will be effected during 1996 by leaving two out of three vacanies unfilled and allowing only temporary increases to deal with some limited once-off tasks. The reduction which will be thus effected during 1996 will be relatively small — 300 posts out of a Civil Service strength of 29,400.

There are three points which should be emphasised in this context: the control arrangements we have instituted for the Civil Service differ in method rather than effect from those being applied in other parts of the public service; while recruitment will be allowed for specific limited work requirements such as the EU Presidency, staff will, as they become free, be absorbed into other priority areas; recruitment for the limited purposes I have mentioned will continue during 1996 and at the end of that year the number of continuing posts will still exceed that which obtained at the start of 1995.

I am aware that previous restrictions on filling vacancies were applied in a somewhat mechanical way and that those measures were seen at times as bearing unfairly on the lower levels of the Civil Service. Steps have been taken on this occasion to avoid these problems. I am delegating to Heads of Departments the authority to decide which post in any sequence of three is filled but have made it clear that such delegation will be revoked if it is not exercised equitably as between various categories of staff.

This growth in numbers has revealed deficiencies in the administrative budget system in terms of controlling overall Civil Service numbers. The Government intends, as part of its programme for public service reform and the development of the strategic management initiative, to devise arrangements which will guard against similar expansion in the future. It is hoped that developments on this front in the coming year will allow the restrictions now announced to be limited in duration.

The central goal of economic and budgetary policy has been to enhance the economy's capacity to achieve the maximum possible rate of sustainable growth in employment and output. All our actions in the economic sphere are directed to that end.

It is now clear that economic growth this year will again be very strong following on last year's exceptional performance when GNP grew by some 7 per cent.

The composition of growth is in some ways as important as its magnitude and here, too, the news is most encouraging. Growth is well balanced with both the domestic economy and exports contributing strongly. Consumption has been buoyant this year and last, especially in areas such as new car purchases, reflecting much improved confidence among consumers. Investment has been even stronger as businesses have expanded capacity in response to low nominal interest rates and generally favourable demand conditions.

Our export performance continues to be exceptional, as our good competitive position and our success in attracting investment helps us gain market share. For instance, the latest figures show that, in the first six months of the year, merchandise exports were one-fifth higher than in the first half of 1994.

Because growth has been both robust and well balanced, employment has responded strongly. My Department estimates that over the two year period 1994-95, employment increased by over 80,000. In fact, the increase in employment in the year to mid-April last of 49,000 was the highest ever recorded in the labour force survey.

Normally, one might worry that the very strong increase in economic activity would give rise to an upsurge in inflation or perhaps a deterioration in the balance of payments. Far from it — inflation has remained extremely moderate at under 2.5 per cent in each of the last two years, which is below the average of our EU partners. This has been confirmed by the CSO figures published an hour ago which show average inflation for 1995 at 2.5 per cent. Our balance of payments was in surplus to the tune of £2 billion last year and the expectation is that this will be exceeded this year.

Looking ahead, I believe that the conditions are right for a continuation of this strong performance into 1996. Confidence among consumers and investors remains high, interest rates are low and international economic prospects look fairly good. There is no sign yet of the current growth phase running out of steam. So I expect another year of strong economic growth although somewhat slower than the exceptional rates of this year and last. Growth again should be well balanced so that a further strong increase in employment is in prospect.

This Oireachtas will not be well served by a contradictory and confusing debate about interpretation of numbers and systems of accountancy. I have already made my position clear on this issue. I believe that we should agree what new form, if any, of national method of accounts we wish to adopt. I suggest that the appropriate committees be asked to examine that question. I expect Deputy McCreevy will agree and respond to that in his contribution.

In the meantime, I must abide by and utilise the existing system prescribed in law and under the Constitution in the best way possible. I also believe that I, as Minister for Finance, should be direct and open with the Oireachtas. That is exactly how I have acted since taking up this office one year ago and I have demonstrated it again here today.

The performance of the economy over the last year shows clearly that this Government has a coherent and effective set of economic policies. It is committed to reducing the rate of increase in public expenditure and will continue to keep the public finances under control.

The publications which we are debating demonstrate the Government's commitment to this policy through a significant tightening of expenditure management in 1996 relative to the pattern of the last five years.

We have achieved this objective while honouring our commitments to the Programme for Competitiveness and Work and maintaining or improving essential public services for the people. Significantly, it is the only Government in the European Union that will be able to achieve this in 1996.

Mr. S. Ryan

Has the Progressive Democrats Party an interest in this debate? Not one of them is present. There was much hot air about this meeting.

Mr. McCreevy

I agree with the person who said there are lies, demned lies and statistics. I do not think the person was an accountant. During my contribution on the budget last year, which was my first as spokesperson on Finance, I referred to the method of accounting used for the national accounts and explored the matter further in questions I tabled. I acknowledge that the Minister has responded in a positive fashion. I agree it would be a good idea for committees to examine this matter in detail and see what method should be used in the future although I recognise the difficulties that could arise. I stated last year in that contribution that there were probably no more than six people who could decipher the national accounts. Although I am a practising chartered accountant I did not feel qualified to do so despite the fact that I might have more expertise than other Members in this area. It is very complicated.

No matter what Minister is in office my good friends in the Department of Finance have used figures to justify his or her political outlook. I have no quibble with that. The Minister referred to the accrual method of accounting adopted by other countries. We should consider that. When I finish my contribution, I will attend a luncheon and speak to a body of accountants on that aspect. There is no need to use the accrual method of accounting in presenting the Estimates. The minimum required of the manager of a company is to compare like with like and make informed decisions based on accurate information.

Since my school days I have known that most people are afraid of those who have a dexterity with figures. The pupil who is best at maths is normally looked up to by other pupils, even though he or she may not be a good speller. I have always liked playing around with figures. However, many people, including the majority of the electorate, are confused by them and some Members are more conversant in other matters. I agree with the Minister that we should concentrate on policy issues but we cannot do so unless we agree the base about which we are speaking. The figures being thrown around by the Minister do not compare like with like and I ask him to reflect on this over the Christmas period.

Last week I referred to creative accounting in respect of the £60 million set aside for those infected with hepatitis C, on which there was a long and heated debate. At the end of last week the Supplementary Estimates were passed giving rise to further confusion. In the Estimates yesterday a further £26 million was included in the 1995 figures in respect of the pension liability of the prevesting deeds for An Post, Telecom Éireann and the Irish Aviation Authority and I noted this before the Minister made his speech.

Mr. Quinn

I would expect nothing less of the Deputy. It was clearly signalled in the accounts.

Mr. McCreevy

The Minister will recall that I examined this particular aspect last year. The Department of Finance has now decided to transfer this figure to the Central Fund account. If one compares like with like this will affect the Estimates. When my party leader. Deputy Ahern, was Minister for Finance, in 1994 and 1995 the Department of Finance advised that this figure had to be included in the Estimates and could not be dealt with in the Central Fund account. It is not correct to say, as was said yesterday, that this is due to a new agreement between the trustees of the fund and the Government. As the Minister is well aware since our time in Government, this liability has been outstanding for some time and the Government had no option but to pay its legal liability. As a result of the Pensions Act 1991, the trustees of the fund could no longer act as trustees and fulfil their fiduciary obligations and members of the last Government should know that.

The Central Fund account generally includes our contribution to the EU, debt services and, for reasons unknown to me, the salaries of the Judiciary. To place the pension liabilities of An Post in this fund is extraordinary, apart from its effect of approximately 2.5 per cent on the Estimates. Have liabilities started to accrue for the unfunded State public sector pensions? The amount of liability is known since 1984 and has been increasing since then. Why not include all types of accrued liability in that account? This is another example of creative accounting.

We are not comparing like with like and Members should not claim otherwise. The Minister is an open and transparent person. I do not like saying that because when politicians say that about a Minister they usually follow it by a statement that will hurt him or her. The Minister is being badly served by his advisers in regard to these figures which are changing by the hour. He would be well advised to examine the matter over the Christmas period. It will be his credibility that will be damaged most.

This creative accounting did not start last week. The first example of it happened on budget day and that was not highlighted by me, a journalist or an independent commentator. The former Taoiseach, Dr. Garret FitzGerald, highlighted the matter in an article published on 25 March, 1995 which does not pay great tribute to Fianna Fáil when in government in the early eighties. The record will show that I opposed this nonsense at that time also. In that article Dr. FitzGerald is quoted as stating:

The Programme for Renewal published by the parties forming the present Government committed them to a strict limit on current Exchequer spending. This limit was expressed in terms of increases in current supply service expenditure. This is reasonable because the remainder of public spending through the Central Fund more or less controls itself: it consists mainly of national debt service payments and our annual contribution to the European Union, although it also includes some £35 to £40 million for items such as judicial salaries and certain pensions.

The article goes on to state:

In this year's "Principal Features of the Budget", published immediately after the end of the Budget speech, there is a table that provides details of percentage increases in public spending. This table shows "Gross Current Expenditure" of £11,536 million as being 5.8 per cent higher than last year — which at first sight might be read as suggesting that the Government had held the increase in spending within its 6 per cent target figure. However, this "Gross Current Expenditure" figure includes Central Fund spending in addition to the current supply service expenditure to which the Government's 6 per cent target relates.

The article states further:

I do not recall having seen this gross figure previously used in budgetary material: hitherto that documentation has always employed net supply service expenditure — i.e., spending after deduction of these "Appropriations in Aid".

In the absence of any indication to the contrary, the Government's 6 per cent target has been universally understood to relate to increases in net current supply service spending, and the fact is that the budget increase in this net supply service spending figure is substantially greater than the 5.8 per cent figure published in the body of the Budget Table of year-to-year spending changes.

Dr. FitzGerald made a number of other points in that article but I will conclude with this quotation which raps not only the Minister and this Government but also my own party for what it did in the late 1970s and 1980s. It states: "The best thing the Government could do now would be to bury quietly this unhappy — and I believe uncharacteristic — piece of creative accounting which is much too reminiscent of some of Fianna Fáil's budgetary manoeuvres of the early 1980s".

This debate on the figures started then, it continued with regard to the £60 million and proceeded again yesterday. Politicians and journalists have become totally confused between net and gross figures and we are now at the stage where the Minister's credibility will be called into question if we continue in this way.

The Minister did not compare like with like in the statement he made yesterday which he repeated today with the addition of a sentence. In his statement yesterday, the Minister gave the percentages with regard to the trend in real increases in gross non-capital supply services in recent years and he outlined those percentages again today. The Minister is returning to the gross figure which I will prove later has never been used before, not even in his own Department.

There is a definite error, which the Minister will have to correct, in the 1995 over 1994 figure. He gave a figure of 3.5 per cent which he said represented the real increase in gross non-capital supply services but it was never used on that basis before either in this House or in the Department of Finance and I intend to prove it. That figure is wrong.

The Minister made exactly the same statement today with the addition of a sentence to cover the error. Perhaps the Minister is not aware of this but I am telling him now that that figure represents a serious error. The Minister purports to show a decline in the real increase in gross non-capital supply services expenditure in 1995 to 3.5 per cent over the previous year. The Book of Estimates he published yesterday does not show that. It shows an increase of 7.1 per cent in 1994 over 1993 and 8.1 per cent in 1995 over 1994. That translates into a real increase of approximately 4.8 per cent in 1994, as the Minister said, and approximately 5.5 per cent in 1995 — the Minister said it was 3.5 per cent.

Even if the Minister is right in his forecast that the 1995 spending figure will be approximately £74 million lower than the 1996 Book of Estimates, it still leaves an increase of approximately 5 per cent. It is not legitimate to further deduct the additional £140 million in equality payments which the Government decided to include in this year's accounts. In his statement yesterday the Minister was trying to paint a fraudulent picture of a slow down in the real increase in public expenditure, however measured, but in his statement today the Minister uses the same words and gives the same tables but concludes with the following statement: "The figure of 3.5 per cent for the real increase for 1994-95 is based on my Department's present forecast of a 1995 outturn less than £140 million additional spending on equal treatment decided by the Government after the budget".

I have known the Minister a long time and I respect him. I know he is open and transparent but he is throwing around figures and definitions which do not add up. Yesterday's statement by the Minister was a serious error. It has been corrected in his statement today but nobody will notice it. Switching around figures from current to net is designed to cause confusion. We must agree the basis on which these figures are being put forward and that has absolutely nothing to do with accruals accounting. I advise the Minister not to use figures which he may not understand at times or on which he may not have been briefed. If he continues to do that he will bring his own credibility and that of the national accounts business into disrepute.

An article in yesterday's Irish Independent was headed “Fools Paradise Being Created If Overspending Spree Continues”. I am on public record both inside and outside this House over many years as saying that the type of daft economics we engaged in here for a long time would not work. It was subsequently proved that it did not work. We are now going down the same road again.

We are experiencing major economic growth as a result of prudent financial management and responsible decisionmaking which people sometimes did not like. We had to impose sacrifices on ordinary poor people. People took that medicine in the period 1987-90 on the clear understanding they would not have to go through it again.

Many things in life do not upset me greatly. I have gone through too much both personally and politically but over many years I have believed we must be straight with the Irish people. We are expected to conduct governmental affairs in a responsible manner. It cost me dearly for a long time in political terms for holding true to that but we are now in a climate of flittering away the growth derived from hard won achievements at a time when the maximum EU funding is benefiting the economy to the Department of Finance's estimate of 2.7 per cent in terms of GNP. We are throwing all that away for the price of nothing.

The Minister should refer to a booklet, "Economic Statistics", which does not recognise the gross base to which he has referred. Table 58 of this well known booklet proves that what I am telling the Minister is correct. I advise him to deal with this matter in the way any prudent Minister for Finance, not recognising his political difficulties, would do.

Mr. M. McDowell

The Book of Estimates published yesterday makes depressing reading for anybody interested in the sound management of this country's finances. Most attention is focused on spending growth for 1996 and whether the Government would breach its self-imposed ceiling of 2 per cent. We now know that it will and I will come back to the extent to which it will in a moment.

Last night we had the unedifying spectacle of the Minister for Finance stating that the figure by which the real growth in public spending may increase in 1996 may be 2.3 per cent, 2.8 per cent or some figure in between.

Mr. Quinn

I did not say that.

Mr. M. McDowell

That was the message that came across.

Mr. Quinn

I said it was either 2.25 per cent or 2.8 per cent depending on the way one wished to interpret it. I did not say what the Deputy has claimed.

Mr. M. McDowell

The real message the Minister wanted to get across last night is that if the Comptroller and Auditor General rules that the hepatitis C payments properly belong in 1996 rather than 1995, he will then say the figure is 2.8 per cent. If he succeeds, however, in persuading the Comptroller and Auditor General that the gimmick involving the special account being established was legitimate, he will be able to contain it to nearer the 2 per cent limit. I will now address that point in more detail.

A committee of this House considered the Supplementary Estimate for Health. The speech which accompanied its presentation stated this money would be spent in 1996. In order to massage the figures and to reduce the extent by which the Government's public spending targets would be exceeded in 1996, a decision was made to establish a special account in 1995 and to notionally pay a sum of £60 million into this fund.

However, the tribunal, established in the last 48 hours, is one which cannot legally, within its terms of reference, spend a halfpenny of the money which has been voted to it. If anybody cares to study these terms of reference, it will be clear they specifically provide that applicants must use an application form obtained from the secretary to the tribunal. The tribunal does not yet have an office or telephone number, and a post office box was given as the place from which the application forms should be sought. Following submission of an application, and six weeks in advance of any hearing applicants will have to provide all the proper medical evidence regarding their claim in report form. This means it is impossible for any of the unfortunate women who contracted hepatitis C to receive any money in 1995. It was clear when the Appropriations Bill and Supplementary Estimate was presented to the House, it would be impossible, within the remit of the terms of reference of the tribunal for any of the moneys voted to that purpose in 1995 to be expended in 1995. In addition, money is not provided for in the Estimates for expenditure under that heading in 1996. It is not as if the first £60 million of a flow of moneys which would go on over a number of years, was voted in 1995. In the public accounts for 1995, an expenditure of £65 million is shown going into the special account of this tribunal, while nothing is shown as being provided for the tribunal in 1996.

The more I studied this issue, the more convinced I became that if we have an income and expenditure system of accounts, rather than an accrual system, on any fair reading of the scheme, the moneys recently voted by the House are for expenditures in 1996 and do not fall to be regarded as part of public expenditure for 1995. When he studies the situation, the Comptroller and Auditor General will see that, whether or not a special account was created, the purpose for the Vote in question is one which was not a matured liability within the meaning of the 1866 Act. The Minister should, therefore, appreciate that it is likely that the Comptroller and Auditor General will judge that these funds properly belong to 1996.

I see no plausible reason for the transfer of pension fund liabilities for the Exchequer to the central fund. It was purposely done to massage the figures in 1995 and 1996.

The article by the former Taoiseach, Dr. Garret FitzGerald, has been quoted regarding the significance of the difference between gross and net supply services expenditure. Having looked at all the expenditures, a deduction is made from the gross figure to get the net figure. The deduction is in respect of Appropriations-in-aid and PRSI receipts. It follows, therefore, that the greater the return the Government receives in any financial year from PRSI receipts, the greater will be the deduction from the gross figure and the greater will be the difference between the two. The consequence is that it suited the Government last year to go for the gross figure, and it will suit it again to do so this year, because a further £100 million will be added to the sum by which the gross figure is reduced to produce the net figure.

However, the crunch issue here is net non capital supply services expenditure. In 1995 this was £9.213 billion, whereas in 1994 it was £8.344 billion. This represents an increase of 10.4 per cent. These are the true figures and they mean there was a net increase in public spending over one year of 10.4 per cent at a time when the rate of inflation was 2.5 per cent.

The arguments raised here with regard to net and gross figures ignore the point that the difference between the two is largely made up for by PRSI. If PRSI increases, the difference between the two widens. What we are dealing with here, therefore, is where PRSI, which I consider to be a tax, is taken into the calculation in determining net current supply services expenditure.

In relying on the gross figures, the Government is effectively taking a piggy back on an automatic increase in tax represented by increased PRSI contributions. It can be argued — doubtless the Minister will argue — that a buoyant economy will use more in PRSI, and if more people are at work they will give more by way of PRSI contributions to the Exchequer. I concede this point and agree this is an automatic consequence of an improvement in the numbers of those in work and their earnings range. However, by the same token, the average person is concerned with the net figure and the extent to which we are living beyond our means, and it appears that in 1995 as opposed to 1994, there was a 10.4 per cent increase during a period when the rate of inflation was 2.4 per cent.

Accusations have been made about the performance of other Governments. I am not here to deal with this. I was not in Government and I hold no brief for any past Administration. I am here to talk about what this country must do for the future. In this context, it is unacceptable that a 10.4 per cent increase in public spending should have occurred last year.

I am also driven to the conclusion that there will be a further significant increase in public expenditure next year. If the Government was to deal fairly and properly with the equality payments, the hepatitis C payments and the telecommunications pensions payments, it would be clear that it has come nowhere near corresponding with the target it set itself for growth in real terms in public spending.

One commentator asked today what was the significance of the difference between 2 and 3 per cent as it was only 1 per cent? In planning the finances for next year, the Government had committed itself publicly to allow public expenditure to grow by a certain amount. The difference between 2 per cent and 3 per cent in this context is that, for every £2 it promised the electorate it would allow public sector spending to increase by, it now advises that it will have to increase this by an extra £1. This is 50 per cent worse in terms of control than was otherwise promised.

On the issue of public service pay, it is true the Programme for Competitiveness and Work committed the Government to certain expenditures. However, the Government could and should have made a greater effort to consult the social partners and secure their agreement to a variation of this programme. It would have been fair to do this on the basis that if the economy is growing, the social partners, especially the public sector trade unions, which we are dealing with here, should have been willing to revisit the Programme for Competitiveness and Work figures and adopt a fair approach to them bearing in mind the differentials that exist between the capacity of average industrial workers in the private sector to increase their remuneration compared with those in the public sector.

Mr. Quinn

We tried that with the lawyers at the beef tribunal with regard to the overruns, without much success.

Mr. M. McDowell

Recently the Attorney General had the good sense to ask the lawyers in one long running case to reduce their fees. They agreed to do so and reduced them by a figure which the Attorney General immediately accepted. In relation to the beef tribunal, was the matter vigorously pursued at the time and why was it not possible to achieve a similar result?

The local bargaining provisions in the Programme for Competitiveness and Work could be the subject matter of flexibility. Does the Minister not have any leverage over his friends in the public sector unions to procure a decent result in relation to their use?

In relation to the policy on public service numbers, it is good that there has finally been an acknowledgement that the efforts made by the former Minister for Finance, Ray MacSharry, to reduce the numbers have been set at naught. This means that the £140 million he effectively borrowed from the Central Bank to finance the package through the stratagem of receiving advance profits might as well have been thrown on the economic bonfire for all the effect it had. It is not simply an historic loss of £140 million, it also means that each year there is an interest charge of between £10 million and £14 million arising from that extra borrowing. It is an ongoing tragedy that there was not sufficient willingness on the part of successive Governments to maintain the tough approach adopted by Ray MacSharry between 1987 and 1989.

I have often wondered why the 1989 general election produced an apparent relaxation of public expenditure control. I remember distinctly — I cannot remember the exact date, but it was within weeks of the formation of the Progressive Democrats-Fianna Fáil Coalition Government — reading an item in the Sunday Business Post to the effect that the need for controls had evaporated and that there would be no further cutbacks. This leak had to come from an authoritative source — it was attributed to a nameless Fianna Fáil source — but it was unfortunate language to use.

I do not want to be disruptive or churlish, but Fianna Fáil, which had done the right thing by the country between 1987 and 1989, foolishly went to the electorate looking for an endorsement of its policies and an overall majority, failed to obtain it and suffered what was for it at the time the calamity of having to form a Coalition Government with another party to retain power. Collectively, the view was that it was not worth the candle to hold a hard line on public spending.

Things have moved on since then. We are all aware that the electorate will not clap on the back those who take a tough line on public expenditure in an uncritical fashion, that they will not thank a Government for cutting loose and running prematurely for a general election based on its good performance in office. By the same token we are all convinced that if there had been less relaxation of the policies which succeeded so well between 1987 and 1989 in the control of public spending, we would now be in a far better position.

I agree with Deputy McCreevy in particular that EU transfer payments seem to be considered an integral part of the economy, but they are not a permanent part. We receive transfer payments of the order of £2 billion each year which, in large measure, are temporary in two respects. We cannot expect the Common Agricultural Policy to persist indefinitely in its present form and, in relation to the funds to be made available under the Maastricht Treaty — the £8 billion we were supposed to receive — this sum will never be repeated in proportionate terms, regardless of the way we negotiate when the programme period expires.

Now is the time when things are going well to prepare for the period when we will not be in receipt of these top-up sums from the European Union; to put in place tax and competition laws and laws relating to our infrastructure and enterprise culture in general; to put changes into effect which will stand us in good stead when there is a downturn in the economic cycle and when our relative position and entitlements to transfer payments within Europe worsens, as they certainly will.

In the next general election the people should concentrate on the issue of how they want the country run between 1997 and 2001. It would not be correct for an outgoing Government to negotiate a renewal of the Programme for Competitiveness and Work with the social partners in circumstances where it may not be responsible for its implementation. The economic and social debate should centre on that issue. For that purpose it is essential that the country should concentrate on the issues of public sector pay, pay policy in general and how expenditure policies will fit into an overall strategy to turn the country around.

The figures published yesterday by the Minister are not a fair and accurate indication of the true picture. Even on a year on year basis where it does not matter in which year any particular expenditures fall, by reason of the various devices adopted by the Government to massage the figures to make them look good, the public accounting process has been besmirched. I am not moralising in that respect, but its credibility has been badly affected.

The Minister should now agree to include the payments to hepatitis C sufferers as part of the 1996 public accounting programme and give up the pretence that he will come within 0.1 per cent of the figure of 2 per cent for the real value of public expenditure growth next year. By the same token, in coming clean on that issue, he should make a pledge that there will not be a rake of Supplementary Estimates, that there will be no further slippage, that he will go to the social partners and ensure, on the subject of public sector pay, that the local bargaining clauses will not be used to further worsen the Exchequer's position during 1996.

If we were to receive such commitments, some of the original sin attaching to him by virtue of the documents submitted as part of the budgetary process would be washed away. If we were assured that he really means it this time as opposed to last year when he could not deliver on his commitments, there would be some improvement, but for the moment I must retain a profound degree of scepticism.

Minister of State at the Department of Finance (Mr. Coveney)

I welcome this opportunity to address the House on the 1996 Estimates published yesterday. While this is a debate on the Estimates, it is a debate which examines a fundamental element of this Government's management of the public finances and the economy. Public expenditure plays a very important part in the Government's overall budgetary and economic strategy and it is vital that sound and coherent policies on expenditure are followed if overall economic performance is to be maximised.

It is important to put today's debate on the 1996 Estimates in proper context. Ireland's strong fiscal performance at present owes a great deal to the strict control and indeed reduction of departmental spending achieved during the late 1980s. During the 1970s and early 1980s the Irish public finances deteriorated to the point that, by the mid-1980s it was recognised that the position had become so critical that drastic measures were required to deal with the problem. The corrective measures introduced at that time were built on a national and cross party consensus that the public finances were on an unsustainable course that could only be resolved by reducing the level of public expenditure. The corrective action taken at the time succeeded in significantly slowing down the rate of growth in current public expenditure with consequent marked reductions in the Exchequer borrowing requirement — falling from 12.1 per cent of GNP in 1986 to 1.9 per cent in 1990.

Since 1990 public expenditure has expanded too rapidly. Current spending increased by an average 6 per cent faster than inflation generally in the five years to 1994. The level of departmental spending could not be allowed to continue to increase in this way. Sooner or later our buoyant economic performance will move into the period of slack growth that is an inevitable part of the economic cycle. We must build enough resilience into the public finances to be able to deal with that prospect when it arrives. We cannot expect EU transfers to remain at their present levels into the next century, so at this stage we must ensure not only that these resources are spent to best effect now, but also that we will have the capacity to maintain infrastructural investment at an appropriate level in the future.

Also, importantly, we must secure our continuing compliance with the Maastricht fiscal criteria to maintain our options vis-á-vis EMU. I am satisfied that the spending Estimates published yesterday will ensure that the 1996 budget meets that objective.

Recognising the key importance of keeping public expenditure at moderate levels, the policy programme agreed among the three Government parties in December 1994 contained a policy objective to strictly constrain the growth of current spending in the years 1995-97. The Government has ensured that the 1996 Estimates reflect that policy objective. Expenditure growth in 1995 and 1996 will be significantly lower than the trend between 1990 and 1994 which in real terms was as follows; 1991 over 1990 by 6.5 per cent, 1992 over 1991 by 6.6 per cent, 1993 over 1992 by 6.2 per cent, 1994 over 1993 by 4.8 per cent, 1995 over 1994 by 3.5 per cent. It is important that this point is not over-looked and that the trend is continued. The 1996 Estimates will build on the progress achieved this year and further underline this Government's commitment to maintaining strict control over public expenditure.

The target of a 2 per cent real increase in supply spending might, at first sight, appear to give good room for manoeuvre. However, this is not the case. A detailed examination of the matter reveals that the target is well below the rate of increase in recent years. It has been difficult to hold spending in line with that target when account is taken of the full extent of the level of built-in committed expenditure which must be provided for in 1996. the cost of pay increases under the Programme for Competitiveness and Work— both general and local bargaining — and by way of incremental pay scale progression with the social welfare carryover costs, absorbed a large part of the maximum increase targeted. There are other commitments from this and previous years, almost all of which exert upward pressure on spending.

Notwithstanding these difficulties, the Government has succeeded in holding the increase in spending very close to the target set out in the Government's programme. Last June, the Government began the process of expenditure adjustment through decisions designed to curb the growth in the numbers engaged in the public sector. This is important given the size of the Exchequer pay and pension bill amounting in 1995 to approximately £4.6 billion or just over half of total net current Departmental spending.

In 1995, for example, provisions for pay were 6 per cent up on 1994. Numbers or volume increases accounted for the bulk of that increase. This has become a matter of concern to the Government. Accordingly, in our examination of spending plans for 1996, we have given special consideration to ways and means of curtailing the recent high level of growth of public service numbers.

Allocations for 1996 to Government Departments and agencies have been determined prudently by reference to overall Government policy for managing the services concerned. The Government has provided the resources to enable essential social programmes to be maintained and, to a prudent degree, improved. On public service numbers in social spending areas of the public service such as Health and Education, which are also highly manpower-intensive, small increases in overall manpower complements were agreed during this summer. In the light of recent growth of numbers in the Civil Service, we have found it necessary to underpin tight allocations to administrative budgets by a further policy of numbers curtailment. Full details of this were announced by the Minister for Finance.

This more restrictive approach to public expenditure generally will enable us to maintain the commitment of the Government, given in the Minister for Finance's budget speech earlier this year, to honouring the Programme for Competitiveness and Work pay increases to public servants while also enabling us to channel at least some of the fruits of economic growth into reductions in taxation rather than ever higher public spending.

The 1996 estimates process which is now completed has necessitated taking difficult decisions to scale back expenditure programmes and high expectations. However, I assure Members that the process of expenditure adjustment involved is being managed in a balanced and socially-conscious way. Certainly, not all expectations will be fulfilled, but it is important that we maintain an overall perspective on the problem and recognise the benefits which will accrue to us from a continued disciplined approach to managing the public finances which will provide the cornerstone for future growth and economic activity.

I wish to comment on some of the statements made by Members of the Opposition, in particular, Deputy McCreevy's reference in recent days to the Estimates which he described as a fudge. It is interesting that in a recent article in Business and Finance his leader, Deputy Ahern, stated: “we have gone through every area in every Department, we are not going to highlight those in advance and open up a hornet's nest.” I say to those who allege that these Estimates are a fudge by the Government that that must have been one of the greatest fudges of all time. It is not credible for a party that was so recently in power to allege that it has done everything but is not prepared to tell anyone what it will do. This is not a sustainable argument.

Deputies McCreevy and McDowell accused the Government of creative accounting and have used even stronger language. In his statement earlier the Minister said he was not interested in creative accounting and neither am I. I have worked closely with him on these Estimates and the suggestion that we were engaged in some kind of fudge or creative accounting is untrue. The only items to which the Opposition can point were specifically highlighted by the Minister in his statement yesterday when the Estimates were published.

In relation to those Estimates Davy Stockbrokers, this morning, said: "The Minister's statement was refreshingly honest and there was no attempt to fudge the figures or to guide readers towards a misleading interpretation of them".

Opposition spokespersons for Fianna Fáil and the Progressive Democrats continue to allege that expenditure in 1995 will be 12 per cent up on 1994. I invite them to look at the figures. The Minister said the expected outturn for 1995, in gross non-capital supply services, is £11.7 billion. This represents an increase of 6.1 per cent over 1994, including the £60 million provided for hepatitis C, though excluding the £140 million cost of accelerating equal treatment payments. In real terms that is an increase of 3.5 per cent. Next year the increase will be substantialy lower than that.

When Opposition parties make such allegations it is reasonble to compare what they say with the performance of those parties in Government. The figures I have already given for expenditure levels in the early 1990s, while Fianna Fáil and the Progressive Democrats were in Government, speak louder than words. Any judgement of which party is better able to manage the public finances, based on the records, would clearly indicate this Government is better at controlling and maintaining control of public expenditure.

Miss de Valera

I wish to share my time with Deputy John O'Donoghue.

Acting Chairman (Mr. Browne Carlow-Kilkenny)

Is that agreed? Agreed.

Miss de Valera

Since taking office this Government has pursued "Fagin" economics, based on the premise that you have to pick a pocket or two. This policy of dishonesty and deceit has extended to the Book of Estimates. This time last year we were promised a new era of openness, transparency and accountability. In fairness, the Government has delivered in part on its promise. It has been open and transparent in the dishonest way it has handled the nation's finances. There is no point going into the Christmas season with great expectations when the economy is in the hands of the unbelievables.

The Book of Estimates, published yesterday, is nothing more than a con trick. It is yet another lie from this Government. In an attempt to give the impression it is meeting its spending targets, the Government has once again engaged in false accounting. One would have thought it has learned its lesson last week when it was caught fiddling the books. This week it has continued the practice of dishonesty and deception. It has presented a Book of Estimates which is clearly false.

For this rainbow coalition, the publication of the Estimates is the start of a spending spree. The figures presented yesterday count for nothing. We have only to look at what happened in the current year to prove my point. We had firm commitments in January 1995 that public spending would be maintained at 6 per cent but the real increase is now close to 13 per cent. This is five times the rate of inflation and the highest increase since 1978, the year when Government finances began to go seriously wrong.

While the Government is acting dishonestly and deviously in its accounting practices and the presentation of its financial figures, it is also storing up troubles. There is a very simple economic rule, which does not require a PhD in economics to understand, that overspending in good times only brings severe pain when the economic cycle changes. Only tight control on spending can bring the tax deductions that the economy requires.

The Department of Arts, Culture and the Gaeltacht has clearly lost out in the Estimates. I will deal, first, with the allocation for Teilifís na Gaeilge. Nobody has any doubt about the sincerity of the Minister and his commitment to establishing Teilifís na Gaeilge. However, one has to question his clout at the Cabinet table. On 26 January 1995 the Minister issued a press release stating the Government had decided that the Exchequer would contribute to Teilifís na Gaeilge £10 million towards the runnings costs in 1996. The statement goes on: "in 1997 and thereafter the Exchequer will contribute £10 million per annum towards the running costs of the new station". That statement gave the impression the Minister had succeeded in getting the Government's decision to have Teilifís na Gaeilge funded by the Exchequer each year.

It is clear from the Book of Estimates that the Government is not honouring that commitment. Teilifís na Gaeilge will get £10 million for its current expenditure next year but almost £7 million of this will be provided from RTE's capped advertising fund, not from the Exchequer. The Minister has fudged the issue. He still has not got a firm commitment from the Government to meet his statement of January 1995. There is no structure to have the new Irish television station funded on an ongoing basis. One has to ask how he failed when he had the support of the two Opposition parties, Fianna Fáil and the Progressive Democrats, on this issue. The Minister has made himself Mr. Teilifís na Gaeilge. He put great store on his image as the man who had delivered Teilifís na Gaeilge which had been initiated by my colleague, Deputy Máire Geoghegan-Quinn. He has been subjected to severe criticism in some sections of the print media and one wonders if he is now running scared.

The Minister has failed on the three years' arts plan and has once again reneged on a firm commitment. With great fanfare and hype he announced the arts plan which had a price tag of £26 million to be spent from 1995 to 1997. There is already a shortfall of £3 million in the current year. We now learn that the duration of the plan is being extended by two years to 1999. Every time I raised this issue in the Dáil in the past year I was fobbed off by the Minister who said he was having discussions with his colleague, the Minister for Finance. I got a similar reply three weeks ago during Question Time. When I specifically asked if he was suggesting a review of the timescale for the arts plan he replied: "I certainly am not." What has happened in the past three weeks? Was the Minister unable to persuade his Labour Party colleague, the Minister for Finance, Deputy Ruairi Quinn, of the importance of the Arts? If he has failed to convince his own party colleague, his influence at the Cabinet table has obviously been eroded. This does not augur well for the development of arts for the remainder of this decade. It is clear this Government does not care about the arts and the Minister has been politically neutered. People in the arts world are speaking of a climate of fear where patronage and funding issues have been increasingly linked to dangerously personalised clientelism. Will we see the same in relation to heritage?

The Minister has control of spending of the cultural tourism funds from the Operational Programme for tourism. Many local authorities, community based projects and private business concerns depend on these funds for development. Will the super ministry of this Minister deal with all these applications in an open, transparent and fair way or will 50 per cent of the budget go to Galway and the rest to those who enjoy the Minister's favour and who have not dared to question or criticise?

The chairman of the Heritage Council has drawn attention to the fact that its current budget deficit is less than the purse for the Collins-Eubank fight in Millstreet. Will the Heritage Council be taken seriously? Will it be allowed to make its mark? Will it be allowed to be imaginative and progressive or will it have to make do with the crumbs left over from the cultural and arts table, once the causes dear to the Minister's heart have been taken care of? Those working in the arts are calling for an end to the era of aspirations, flowery speeches and clientelism.

Mr. O'Donoghue

It appears that at long last the roulette wheel has stopped at the Minister for Finance. I wondered when that would happen. It appears it is his turn to spin a few yarns. This type of story-spinning is not new to those of us who have been tracking the publicity, programmes, proposals and promises made by the Minister for Justice. Deputy Owen, since the start of the year. It appears the Minister for Finance and Justice are locked in deadly combat to win the doubtful accolade of the Jonathan Swift of the rainbow coalition Government.

One year later I am still surprised at the manner and extent to which an entire way of life, namely the era during which it was safe to walk the streets, has been let disappear over the horizon by the incompetence of the very people whose role it is to protect it. That is no fable. It is time the Minister for Justice ignored her own and the Government's fables and recognised the truth. Without argument, the Minister for Justice has single-handedly masterminded the painting of the Department of Justice into a bolt-hole from which she continues to operate as little more than a support agency for the hardened criminal who is terrorising people in cities and towns, including the young and extremely vulnerable elderly people. The new motto for the Minister for Justice and the rainbow coalition should be "if the facts do not fit the theory change the facts or fudge".

While the Minister surrounds herself with a continuous flow of promises, publicity and false dawns, we on this side of the House have done the business during the past year. During a year marked by constant and consistent inactivity by the Minister for Justice Fianna Fáil produced a myriad of essential Bills to tackle crime. It is bad enough that the Minister did not produce any proposals but what is worse is that she knocked ours merely because they were not hers. She must urgently confront the hard fact that inadequate laws, inadequate levels of policing, an inefficient court system and insufficient prison places, allied to an absence of political will to make worthwhile changes, amounts to a lethal cocktail which benefits nobody but the criminals in our society.

No single issue has demonstrated the lack of political will of the Government more than the inspired fiasco surrounding the construction of the prisons at Castlerea and Mountjoy. Only this morning we learned there was a fire in a padded cell in Mountjoy Prison where a prisoner was being detained for his own protection. This disastrous occurrence must be a final indictment of the role played by the Minister for Justice and her Government colleagues in protecting all citizens, including those held in prisons. If the Minister believes she can lightly dismiss the fire in Mountjoy she would be foolish to ignore the latest crime statistics published yesterday. She should stop running from the crime problem, give up her ostrich policy and raise herself from the engulfing sands.

Crime is on the increase and the figures prove it. Far from confronting the reality the Minister and the Government continue to prevaricate and stumable along. Instead of introducing legislative measures to tackle the crime scourge the Minister refuses to take any action.

This inaction, particularly on the prisons issue, is clearly demonstrated in the 1996 Estimates. The estimate for prison buildings and equipment has fallen from £15.14 million to £14.64 million, a reduction of 3 per cent. In contrast, incidental expenses — whatever they are — in the Minister's office have risen by 108 per cent. Compensation within the prison services jumped from £520,000 to £750,000, a massive increase of 44 per cent. What lies behind this increase? The provision for criminal legal aid has been increased by 43 per cent. Does this mean the Government has finally capitulated and expects a massive increase in crime in 1996? Even though the Courts and Court Officers Bill, 1995, has just been rushed through the Dáil absolutely no provision has been made for any of the changes arising from it. In the courts system salaries and wages have fallen by 1 per cent while the provision for courthouses has fallen by 2 per cent. The ultimate indictment of the Minister and the Government must surely be that while administration costs in the Minister's Department for 1996 will rise substantially, provision for essential services including the Garda Síochána, the prisons and the courts either remains static or is reduced. This appears to be the extent of the priority the Government attaches to the rise in the crime level. Jonathan Swift at his most imaginative would not have believed this.

I am not advocating an increase in public expenditure but given that there were 101,000 indictable crimes in 1994, indications that the situation will be worse this year and next, and that £56 million was stolen in 1994, an increase of approximately 20 per cent on the 1993 figure, it would not have been to much to expect this rainbow coalition Government to prioritise its spending in order to recognise problems in society with a view to resolving them. Sadly, it appears the Government's priority is not crime or any other issue of great importance to the public but rather the political one of sticking together to the death irrespective of how it affects the community.

Minister for Health (Mr. Noonan, Limerick East)

The 1996 Health Estimate clearly reflects the Government's concern that the needs of the health service are accorded the highest priority in the allocation of resources within the overall financial constraints. The health services face new challenge in the 1990s and the further implementation of the health provisions in the programme for Government will enable significant progress to be made in meeting these challenges.

The 1996 net Health Vote of £2,145 million will ensure that the existing level of service is maintained and progress can be made with the development of the acute hospital, primary care and community based services. Funding is also being provided to fully implement the remaining sections of the Child Care Act. Following are the principal services which will benefit from the additional funds, both capital and revenue, made available by the Government and from efficiency savings achieved by health agencies: acute hospital services, £19 million; child care, £13 million; services for persons with mental handicap, £10 million; development of nursing education, £8.3 million; care of the elderly, £4.5 million; psychiatric, £4 million; general practice development, £3.6 million; physicial disability, £3.4 million; dental and ophthalmic, £3.3 million; immunisation programme, £2 million; family planning and pregnancy counselling, £1.6 million and drug abuse and AIDS, £1.6 million. I wish to outline some of the details of these developments.

The Estimates includes provision for a further investment of £5 million in a full year in the child care services. In addition, £8 million is being made available to meet the costs in 1996 of the services initiated in 1995. This will bring to a total of £35 million the additional investment made in these services since the publication of the report of the Kilkenny incest investigation. It gives effect to commitments made by the Government to make available the necessary funding to implement the Child Care Act.

Sixty-one of the 79 sections of the Act are now in force. These include important new provisions which strengthen the powers of the health boards, the Garda and the courts to intervene and protect children who are being abused or neglected or who are otherwise at risk. The remaining 18 sections of the Act will be implemented before the end of 1996. These provide for the supervision of pre-school services, including creches and nurseries and the introduction of a new system of registration and inspection of children's residential centres. The Minister of State, Deputy Currie, who has special responsibility for child care will oversee the preparation of a detailed child care action plan for 1996 based on the additional funding now being provided for the child care services and a further announcement on this will be made in due course.

The provision of £4.5 million development funding for the elderly will facilitate progress in two important areas of their care, namely the establishment of specialist units in general hospitals for example in Tralee and Cavan and Monaghan, and the improvement of community services by the provision of extra community ward teams plus a new community nursing unit in Dublin and improving some community nursing facilities in the rest of the country. On the capital side it will be possible to make progress on the building programme which I announced earlier this year to provide a number of new community nursing units for the elderly plus the replacement of old, unsatisfactory accommodation.

The provision of additional developmental funding of £4 million for mental health services will enable the continuation of progress towards the establishment of a modern psychiatric service. The development funds will provide community psychiatric resources which are complementing the commissioning of new acute psychiatric units attached to general hospitals and which will replace large institutional facilities. We are now making very good progress in the provision of acute pyschiatric units at general hospitals and I am confident that we can complete the agreed development programme in the next few years.

Additional funding of £10 million is being provided in 1996 to continue the development of services to persons with a mental handicap. The emphasis in 1996 will be to expand the support services required to assist persons with a mental handicap to continue to reside in their own communities and to support both them and their families. The additional services to be provided will include over 60 extra respite care-residential places; over 260 new day care places; the continued expansion of the home support services; and new and improved training centres.

While much has been achieved in recent years with the substantial additional funding provided, I am aware that there are still many unmet needs. The provision of additional funding in 1996 is in line with the Government's commitment to continue this expansion, as resources allow, to meet the needs of those who are still without services, and to fund essential improvements in existing services. The Minister of State, Deputy O'Shea who has special responsibility for mental handicap in my Department will continue to improve progressively the available services.

A total of £3.4 million is being made available to continue the development of services for people with a physical or sensory disability. The funding will enable health boards and voluntary organisations to strengthen support services to people with disabilities living in the community, to provide additional residential and respite places for the severely disabled and to provide new and improved training centres for rehabilitation.

In total, an additional £8.3 million has been provided in 1996 for developments under way in nursing education. This is part of a major programme which must be undertaken to honour in full the commitments made to develop nursing education and training. It is vital to the maintenance of the deserved reputation which nursing enjoys as a key part of the health services.

In addition to funding the completion of commitments to bring our present training regime in line with standards prevailing elsewhere in Europe, a number of specific developments will be funded in 1996.

In pre-registration nurse education and training, 1996 will see significant progress on the extension of the new training model piloted in 1994 and extended to a number of further sites last year. A number of schools of nursing have now been identified for startups of the new programme in 1996 and discussions are under way with them on the various arrangements involved. This development marks a major advancement for the nursing profession.

In tandem with this, a very substantial investment will be made in meeting on-going education needs and to develop new educational opportunities for existing registered nurses throughout the services.

The investments involved will pay rich dividends in the longer term for nurses and for the overall standards of the service they deliver.

Over the past three years an action programme to address the problem of excessive waiting times for in-patient treatment has been under way. A total of £38 million has been committed to this programme since 1993. This funding has greatly improved waiting times for elective surgery with substantial progress being made towards the national targets of bringing waiting times for surgery to less than 12 months for adults and less than six months for children. A further £7 million has been provided in the 1996 Health Estimate to allow work in reducing waiting times to continue. Once more, the initiative will focus on those specialities where waiting times exceed the national target waiting times of six months for children and 12 months for adults and, as in 1995, funding will be provided in the context of the 1996 initiative to tackle the problem of waiting times at out-patients. I am determined, that as in previous years, the funding available is put to the best use possible and my Department will be entering into negotiations with health agencies on the allocation of the waiting list funds early in the new year.

Additional funding of £500,000 is being provided in 1996 to meet the start-up costs of phase 1 of the breast screening programme. This brings to £1.1 million the total sum committed to the programme. It is my intention that the first phase of the programme will commence as soon as possible and will cover the Eastern, North-Eastern and Midland Health Board areas. It will target 120,000 women in the age cohort 50 to 64 which represents 50 per cent of the national target population.

The emphasis must be on putting in place a programme which achieves the highest standards of quality at all levels. A provision of £1.5 million has been allocated for accident and emergency services this winter. The additional funding for accident and emergency services will be used to relieve the pressure on the six acute hospitals in Dublin through inter alia, the provision of more sub-acute beds for the elderly and the young chronically disabled.

Additional provision is also being made in the 1996 Estimate for a wide range of services developments currently taking place in the acute hospital sector. These developments will help ensure that high standards of service are available throughout the country and that access to treatment is available to all based on medical need.

Among the services for which additional resources are being made in 1996 are: the cochlear implantation at Beaumont Hospital. This service will enable additional people to receive this service in Ireland rather than having to travel abroad. The service is designed to provide hearing for people who are profoundly deaf; St. Luke's Hospital is being developed as the national centre of excellence in the provision of cancer services. The project will see a complete upgrading of the hospital and the provision of state of the art radiotherapy equipment. Total capital investment is estimated at £12 million; the new palliative care unit at St. Francis Hospice, Raheny; an enhanced service for cystic fibrosis patients; the further development of orthopaedic services at Letterkenny and Blanchardstown hospitals which will result in additional patients being seen more quickly at clinics there and a new cardiology service at Limerick Regional Hospital. This new service will be provided for the mid-western region and will reduce substantially the need for patients to travel outside their own health board area.

Substantial funding was provided in 1995 for the development of a range of specialities within the North-Eastern Health Board region including geriatrics, anaesthetics, surgery neonatology, and paediatrics. Additional funding of £1.06 million is being provided in 1996 in respect of the 16 consultant posts and support staff approved in 1995. Commissioning of the new bone marrow transplant facility at St. James's will also be undertaken during 1996.

Enhancements to the service available in many other specialities, including rheumatology, ophthalmology, ENT surgery, vascular surgery, nephrology and anaesthetic services are also taking place in various hospitals around the country to further improve access to these services.

Since the publication of the review of the ambulance service in 1993 a programme has been under way to address the most pressing needs in the ambulance service. I am pleased to announce that a further £750,000 will be provided in 1996 to continue the important developments which have been taking place in this area.

The funding will provide for the continuation of the fleet upgrading programme, the further development of integrated command and control centres and the provision of an improved level of training for ambulance personnel.

As part of the implementation of the health strategy, health boards will continue to develop the role of the general practitioner in providing a high quality primary care service which is accessible to patients. Resources are being provided in 1996 through the general practice development fund and the indicative drug target scheme to enable health board general practice units to continue with the process of implementing the objectives of the health strategy by the reorganisation of general practice through the encouragement of improved links between doctors and the improvement of out of hours cover and rotas; improvement of practice premises, the provision of better equipment and the employment of more support staff so that more services can be provided for patients at general practice level; expansion of services for specific patient groups; and establishment of paramedical and other support services.

Additional funding is being made available in 1996 for dental and ophthalmic services. This will allow for the continued implementation of the dental health action plan which commenced in November 1994. I am glad that as a result of the introduction of the dental treatment services scheme waiting lists for adult medical card holders aged 65 years and over have been eliminated.

During 1995 my Department allocated funding to health boards for the purpose of reducing the waiting lists of adult medical card holders who required sight testing and spectacles. As a result of this initiative 15,000 people were offered sight tests. I will be making further funds available to health boards in 1996 to make further inroads on the waiting list for such services.

The level of HIV-AIDS in the community continues to increase, albeit at a slower rate than heretofore and we must continue to develop services to provide for those unfortunate enough to contract the disease. A total of 1,589 people have now tested positive for HIV and 491 have developed AIDS. The level of funding being made available during 1996 will allow for the continued development of these services.

Increased funding will be provided to health boards and, in addition, my Department will continue to support the large number of voluntary agencies who play such a vital role in complementing the work of the statutory services in the HIV-AIDS area.

The growth in the number of those misusing drugs is a cause for concern. The recent report from the Health Research Board relating to numbers treated for drug misuse in the Dublin area during 1994 painted a worrying and indeed in some ways a sad picture. It indicated that a typical drug misuser is a young male, misusing opiates, with a low level of education who is unemployed and likely to be living in the inner city.

The Eastern Health Board, which has the statutory responsibility to provide services for drug misusers in Dublin, will continue during 1996 with the development of a comprehensive range of services to respond in an effective manner to this growing problem. A key element of the board's response will be the provision of community drug treatment centres in areas of greatest need. The development of such facilities will, of course, be dependent on the goodwill and co-operation of local communities. I have directed the Eastern Health Board to ensure there is full consultation with local communities and that such consultations are undertaken with the utmost sensitivity.

The House will be pleased that following negotiations with the Irish Medical Organisation the primary childhood immunisation programme will be delivered through general practitioners. The process of implementation will commence immediately. I have set aside a sum of £2 million to cover the cost of the scheme in 1996.

Deputies will recall commitments made earlier this year in the area of pregnancy counselling and family planning. In 1995 I provided £300,000 in this area and I am pleased to inform the House that I am providing an additional £400,000 in 1996. Funding will continue to be made through the voluntary agencies. I intend to continue with the steps taken last year to provide a comprehensive family planning service, for which £700,000 was provided to the health boards. This process will continue. A further increase of £1.2 million is being provided to the health boards in 1996 to ensure there is a range of family planning services throughout the country.

I am sure many Deputies would like attention to be paid to the capital programme. The Estimate in this area is £110 million, and increase of £13 million on the 1995 outturn. That will ensure the completion of Tallaght Hospital in 1997. Funding will also be provided for Ardkeen Hospital, Waterford, Mullingar, Limerick, the Mercy Hospital, Cork. St. Luke's-St. Anne's hospitals, Dublin, and the Dublin Dental Hospital. In addition, I will continue with the multi-annual programme to improve community and welfare services, including additional health centres and facilities for mental handicap, physical disability, mental health, the elderly and child care services. I am confident that a significant improvement in facilities will be made as a result of the capital allocation.

In drawing up the 1996 Estimate for the health services the Government made every effort, within the financial constraints obtaining, to provide the best possible standard of health service and to direct additional resources to areas of special need. The health services management has a special role to play in ensuring that the large proportion of national resources spent on health is used wisely and effectively. Strict control of health spending and an emphasis on greater value for money and more accountable management will continue to form key elements of health policy.

I would like to place on record my appreciation, and that of the Government of the professionalism, dedication and commitment of the health service staff throughout the country who continue to provide services of the highest standard, responsive to the needs of all who depend on our health services.

Mr. Martin

I welcome the opportunity to contribute to the Estimates debate. It is regrettable and unacceptable that the Minister for Education did not see fit to publish, prior to publication of the White Paper on Education, the cost framework drawn up by the Department of Finance outlining the cost implications of proposals in the White Paper. Such information should be readily available to Members and the public. That framework indicates the mountain that must be climbed in terms of implementation of many of the recommendations in the White Paper. It would enable us to identify priorities in the education area, leading to a targeted strategic approach to the implementation of proposals in the White Paper.

The Minister has refused to publish these costings, which represent an enormous sum of money — some people believe the figure could be as high as £1 billion — probably because it would undermine the credibility of the White Paper. However, I do not take that view. Their publication could act as a catalyst for a more widespread debate on the future of education. If the final figures were released it would allow us to draw up our own five year strategic plan and outline possible achievements in order of priority.

The Estimates illustrate a lack of priority on the part of the Minister for Education in that money is targeted in the wrong direction. The most disadvantaged in society are forgotten. A clear example is that there is no increase for capital building and equipment costs for secure units for children in care. This raises clear doubts about the Government's capacity, for example, to develop Oberstown girls' centre, to provide a separate industrial school facility for girls and to provide additional reformatory places for seriously disruptive girls, as promised earlier in the year. The Minister for Education must also clarify whether she will be in a position to provide additional places for boys at Lusk and for male offenders in the grounds of Finglas children's centre.

Last year on almost a weekly basis judges condemned the Government for lack of places in these centres — in many cases there was no place to which judges could send young children. These children desperately require attention and care in terms of health and education. They are the children at greatest risk in society and very often they are forgotten because they do not carry political clout of electoral strength. It is an indictment of the Government, particularly the Minister for Education, that there has been no increase in the capital provision under this heading. It clearly illustrates a lack of priority in this area. There is no meaningful increase in regard to special education.

There is much anger in the community about lack of progress in the implementation of the recommendations of the Special Education Review Committee report published in 1993. Last evening I attended a meeting in Cork where many parents gave vent to their anger towards public representatives of all political parties. I receive complaints from parents on a daily basis about inadequate transport facilities, lack of equipment and lack of escorts on school buses for children with special needs. I am appalled we have not got to grips with this matter. There is lack of confidence in the political system to respond to the needs in this area. There is no meaningful provision in the Estimates in this regard. It is regrettable and unacceptable that parents must pursue through the courts the rights of their children to a decent education. At present in Cork three sets of parents are bringing their case to the courts to secure a basic education for their children.

The Estimates will not result in an expansion of ethos. We all realise the importance of the vocational training opportunities scheme in facilitating a return to work for the long-term unemployed. Last year when there was a cut-back of 1,000 places in this scheme the Department of Social Welfare took up some of the slack under its second level and third level allowance, and I suspect that will happen again next year. It is regrettable that we are beginning to see the gradual erosion of that scheme, which was the most successful strategy adopted by the State to help the long-term unemployed return to work and education generally.

As against that, I have identified those most disadvantaged and in need of greatest resources. Yet the Minister seems intent on squandering a large amount of resources on the establishment of bureaucratic structures. In the Estimate £350,000 has been provided for the establishment of regional education boards.

Less than a month ago in a parliamentary question I asked the Minister how much the establishment of such boards would cost and she replied that she did not know; she was not in a position to give a precise figure. Yet one month later a figure of £350,000 has been included for that purpose. The relevant legislation will not be taken in this House until April next and allowing for the normal process through both Houses, the drawing up of regulations and so on, it will be late autumn at the earliest before the boards are established. In the meantime there will be many problems the Minister must resolve in regard to vocational education committees. The figure of £350,000 represents the tip of the iceberg in terms of the capacity of these boards to absorb valuable, scarce public resources. At a time of scarce resources I question the Minister's perseverance in establishing those boards.

I want to send a clear signal that on returning to Government Fianna Fáil will abolish those boards. I am satisfied their task could be undertaken without additional resources, under existing arrangements or by encouraging local partnership without the need to set up bureaucratic monstrosities fully staffed, with fairly large geographic remits. In her reply to my question a month ago the Minister was unclear as how she would staff these boards, which services would be relocated and so on.

A sum of £200,000 is being provided for the establishment of the famous school accommodation commission, equally unnecessary, whose remit will be to rationalise the vocational education committees. How many vocational education committees are there? Why must we spend £200,000 to appoint a commission to decide how many vocational education committees should be abolished or how many should be amalgamated? It is a crazy waste of money. We elect politicians and appoint Ministers to run the country, to take political decisions. It is not right to establish commission after commission to enable Ministers hide behind them and avoid having to take political decisions. It shows a lack of courage on the part of the Minister and failure to take her political responsibilities seriously.

On "Morning Ireland" on Monday last it was hinted that this commission will also investigate the amalgamation and or closure of schools in rural Iraland. I warn the Minister to be very careful before going down that road. She will not get away with establishing a commission to do her dirty work and close small, particularly primary, schools in rural areas. That would be a retrograde step, an incorrect response to their problems and one we will contest very forcibly.

The Minister should also clarify where and how the £1 million provided for gender equality projects is to be spent. I seriously question that allocation and need greater detail about the Minister's proposals. Given the lack of funding in the special education area, in adult education, educating young offenders and VTOS, just to mention a few, that level of expenditure on gender equality cannot be justified and represents an expensive way for the Minister to show she means business, that she wants to pursue a particular agenda.

If we want to improve the position of women in our society, the most meaningful, genuine way to do so within the education field is through the provision of additional resources to our community pre-school groups that do not and never have received one penny from the Department. It is recognised by everybody, including the Commission on the Status of Women, that the provision of proper pre-school facilities is extremely important in enabling women to re-enter the workplace. The expenditure of £1 million in order to pursue the issue of gender equality is a very questionable if not totally unacceptable use of resources given the other priorities.

Given all the complaints I have received in relation to special education and the other education matters I mentioned, it certainly would not be a priority of mine. While gender equality should permeate all sectors of our education system, fundamentally it is a question of attitude and approach. If we really want to do something effective and genuine, there are other areas in the overall educational sphere where that can be done.

Since 1996 has been designated European Year for Life Long Learning, it is incomprehensible and in bad taste that the Minister should reduce the allocation for that year to organisations providing adult education by 10 per cent. More and more people are availing of this education and the Minister's treatment of them is nothing less than insulting. The amount involved is not huge, yet the Minister has sent out the wrong signals to those providing adult education.

The allocation to the primary education substance abuse programme is too little too late. The Minister suggested an expenditure of £200,000 over the next three years, during which period we shall probably have a general election. Substance abuse has been ignored by the Minister, yet it constitutes the single greatest threat to out young people today. We urgently need a proper social, education and health programme in our primary and secondary schools.

There is no clear, philosophical direction in this Estimate. Many of the Minister's policies are socially regressive. There is no planned approach, in particular, no recognition that a greater proportion of the education budget should be re-diverted to the pre-school and primary sectors. We should always remember that the greater the amount spent in the early education and development of the child, the better the eventual rewards for the child and society.

The Minister's decision not to provide maintenance grants for PLC students is appalling. The Minister has provided in excess of £40 million solely for under-graduate students but nothing for maintenance grants for PLC, mature, evening or part-time students. That is not equality in education and the Minister stands condemned on that score also.

Minister for the Environment (Mr. Howlin)

I am delighted to be able to comment on the published Estimates for 1996 so quickly after the publication of the Book of Estimates.

The 1996 net estimate for my Department exceeds £950 million. Gross expenditure, including the share which is financed from non-Exchequer resources, will come to over £1,150 million. About 2 per cent of this — an acceptable amount — or just less than £24 million, is devoted to the Department's running costs; the balance is paid to local authorities, and to a much lesser extent to voluntary groups and individuals, to finance essential services and investment programmes. Although current expenditure by my Department in 1996 will be well within the limits set by the Government earlier this year, the provision made for capital expenditure on economic, social and environmental infrastructure is up by 7 per cent; I am particularly pleased that this includes a special provision of £40 million for the restoration programme for non-national roads to which we committed ourselves as a Government last July.

Roads, water and waste water services and housing are the principal infrastructural programmes with which I am concerned. Each of these programmes serves the needs of society in different ways. Our improved road network is helping to offset the effects of our peripherality; it allows exporters to compete more effectively; and it plays a vital role in maintaining the fabric of rural life. Water and waste water services underpin industrial and other development, as well as protecting and enhancing our environment. Social housing caters for the needs of the less fortunate in society — those for whom private housing is beyond their means. In short, these services have a profound inpact, in one way or another, on the daily lives of all our people, and significant levels of spending on them are fully justified. I can say, unreservedly, that the 1996 Estimate for my Department will enable real progress to be made in all of these areas, and will finance some worthwhile new initiatives.

About 90 per cent of the funds provided directly through the Estimate will flow to local authorities in grants and subsidies. This constitutes a considerable proportion of overall local authority spending on essential infrastructural, environmental, amenity and community services. A by-product of this is the provision of direct employment for almost 30,000 people, and the underpinning of many thousands of other jobs in the private sector, especially in the construction industry. It is essential that these resources are spent effectively, and that the maximum return is derived from them. In this respect, the development of the internal audit function in both my Department and local authorities, as well as increasing emphasis on value for money by the Comptroller and Auditor General and the Local Government Audit Service, is starting to produce results.

The housing sector is forging ahead rapidly. The indications are that 1995 will see the highest level of new house building in the history of the State. After years of decline in the late 1980s and early 1990s, the local authority housing programme has been expanded significantly and is now making a satisfactory contribution to this historic overall output.

Despite the public expenditure constraints, it has been possible to provide substantial resources in 1996 for the local authority and voluntary housing programmes, for the shared ownership and other social housing schemes, and particularly for the special housing needs of both elderly persons and the homeless. In all, the overall housing capital provision for 1996 comes to just under £360 million.

The year 1996 will see social housing output continue at a high level. In the policy document A Government of Renewal we committed ourselves to increase social housing starts to 7,000 annually, and we will reach this target next year. Allowing for casual vacancies, this will enable us to meet the social housing needs of 10,000 households during 1996.

In the last few years, the local authority housing programme has been built up from the low of the early 1990s. In turn, this required very substantial growth in the provisions for local authority housing in 1993, 1994 and 1995. Now that we have reached a sustainable and appropriate level, these large increases do not need to be repeated next year. For 1996, the overall provision for the programme is set at about £158 million — broadly the same as in 1995 — which is sufficient to sustain output at slightly above 3,900 starts next year, allowing for a small number carried over from 1995. This is almost three times the number of starts in 1992.

The voluntary housing sector continues to play an important role in responding to social housing needs, particularly the special needs of the elderly and the homeless. The 1996 provision for the capital assistance scheme has, therefore, been increased by 3 per cent to £15.5 million, while the capital provision of these levels of resources should see the production of about 1,200 additional voluntary housing units in 1996.

The development of our road network will continue to be a priority in 1996. Exchequer funding for all roads will exceed £373 million. This level of investment continues the pattern of increases in recent years and is a further clear indication of this Government's commitment to developing road infrastructure and to protecting past investment by ensuring an adequate programme of on-going maintenance.

In 1996 over £222 million will be provided by the Exchequer to the National Roads Authority for the improvement and maintenance of national roads. A total of almost £200 million will be available for improvement works along with £23 million for maintenance and management of the network. This level of investment will enable the authority to continue the vital work of providing a safe and efficient network of national roads. It is our intention that the 6 per cent of roads which comprise the national road network will, in time, not only bear the hallmark of quality and consistency which will compare favourably with the best international practice but will also meet the highest standards in terms of safety.

An additional allocation of £20 million was provided in July this year to launch a special restoration programme on regional and county roads. This was the first step in honouring our commitment in this respect and getting to grips with the very real problems which beset our non-national road network. All indications are that the money has been spent productively and well. It will have financed completion, by the end of this year, of over 950 additional road improvement schemes on regional and county roads with over 1,500 kilometres of road benefiting.

My intention now is to press ahead with the ten-year restoration programme and to build on the good work that has been carried out in 1995. This programme does not come cheap; its implementation will only be possible with very significant increases in the Estimates provision for non-national roads. In fact, the 1996 provision will be over £146 million, which represents an increase of 16 per cent on the total allocation for non-national roads in 1995. The 1995 allocation was, in turn, 15 per cent greater than the 1994 figure.

That is a measure of the improvements that have been brought about since I came into the Custom House. The total non-national roads grants will have increased from £77.3 million in 1993 to over £146 million in 1996, an increase of almost 90 per cent.

I am determined to get the maximum return from this investment, and for this reason arrangements for the ten-year programme, including measures for ensuring efficiency, effectiveness and value for money are being finalised at present. We will also have to put systems in place to ensure that the additional State funds do not displace local resources; instead, local authorities must make every effort to increase the level of their own resources committed to this work, so that the maximum benefit can be achieved for local communities in the shortest possible time.

The capital provision for public water and sewerage schemes for 1996 is a record at almost £122 million. It reflects the Government's continuing commitment to sustainable development and compliance with EU directives on drinking water quality and waste water treatment.

The allocation for major schemes for next year is some £115 million and this includes about £75 million for Cohesion Fund Schemes. This fund is by far the most important financial instrument for schemes from which an environmental benefit will accrue. To date, the Commission has approved 35 water and sewerage projects, and the value of the work committed or approved is currently estimated at £370 million. Among the major projects at construction are sewerage schemes at Dun Laoghaire, Clonmel, Wexford, Killarney and Enniscorthy, and water supply schemes at Ballyjamesduff, Dún Laoghaire, Leixlip, Roundwood and Templemore.

Mr. Cowen

Clara?

Mr. Howlin

The Deputy will be glad to know the money was provided for Clara recently, and that is a very welcome scheme.

Mr. Cowen

Thanks for the courtesy of telling me.

Mr. Howlin

Our mutual colleague, Deputy Pat Gallagher, will ensure that all the good people of Clara and the county are notified.

Mr. Cowen

That was a good try but it did not work.

Mr. Howlin

A special feature of the water and waste water services programme in recent years has been capital provision from the Exchequer for schemes which directly assist employment creation. This complements the specific focus of the Cohesion Fund on schemes with a direct environmental dimension. My Department and local authorities liaise with the industrial development agencies and employment generating schemes are identified and advanced quickly. Water supply schemes at Buncrana and at Macroom are being funded at present. This element of the overall 1996 provision has been increased from about £3.5 million to almost £12 million. This will cater for the requirements of these schemes and some new starts next year. I expect also to be able to provide significant funds in 1996 for small water services schemes with a maximum value of £75,000. These schemes are important in rural areas, and help us to comply with the requirements of EU Directives on drinking water quality.

A notable feature of the Estimate for 1996 is a provision of £6.5 million in co-financed expenditure under the EU PEACE Initiative in support of the peace process. As we look forward to a second successive peaceful Christmas on this island, we must do all we can to nurture the peace process, and to ensure it becomes, literally, a way of life.

One part of our efforts must focus on addressing the economic and social problems of the areas affected. The EU PEACE Initiative aims to assist in this process on both sides of the Border. In 1996, expenditure co-financed by Structural Funds will be channelled through my Department's Vote for the regeneration of urban and rural areas in the Border counties, and for improvement of cross-Border and associated roads. As far as possible, priorities for assistance will be determined locally. This is entirely appropriate and in keeping with the spirit of the programme as a whole.

Since I became Minister for the Environment just over a year ago, I have made it my business to visit local authorities to learn at first hand their aspirations and concerns. In the course of these visits, I have often been struck by the thought that more could be done to bring home to people the value of the services provided by local authorities. Of course, the benefits of some services, in the form of new roads or houses, are self-evident. In other cases, local communities may take for granted essential infrastructure services simply because these are not visible — waste water services are a good example. For the future, I urge local authorities to take a more active role in bringing home to people an awareness of the very valuable work they undertake.

For my part, as we approach the close of another year, I put on record my appreciation of the dedication and commitment of so many elected members and officials of local authorities. As the Minister responsible for the local government sector, it is my job to secure adequate resources for the range of infrastructural, environmental and social services which it is their responsibility to provide. I believe and am confident that the 1996 Estimate for my Department does that, and will make a real and lasting contribution both to local authorities and to the needs of the people they serve.

Mr. Cowen

I wish to share time with Deputy Joe Walsh. We see the relish with which Ministers like to spend everyone else's money. The economic growth achieved gives rise to a temptation to spend money to a greater extent. The Government is particularly prone to giving in to that temptation. When the economic cycle changes we will not have made prudent financial arrangements to enable us face hardships in the future. The Government's political imperative is to give out as much good news as it can before it faces the electorate. We can expect a similar trend next year.

It is interesting to hear Government Members in office for the first or second time say how radical they are and how fresh is their thinking — they will change the system if given the opportunity. However, looking through the Book of Estimates all we see are higgledy-piggledy arrangements, up 2 per cent down 3 per cent, which is basically a "steady as she goes" approach. The Government failed to recognise the need to make hard choices and it illbefits those who put themselves forward as radicals to produce such a Book of Estimates.

The Minister for Agriculture, Food and Forestry failed to obtain the necessary resources at Cabinet. One would not think his Department has responsibility for 40 per cent of output and exports. The Minister's poor performance is reflected in the Estimates. There is a glaring failure to properly fund structural schemes — the on-farm investment scheme, control of farmyard pollution and dairy hygiene scheme, and so on. As farmers face the second phase of CAP reform and greater competition in agriculture, more of them will go to the wall unless investments are made and the grant schemes meet the demand for them. Dairying is four times more profitable than any other sector. In the next five or six years 2,000 to 3,000 small dairy farmers will go out of business each year. As a result of Government policy, its failure to allow for adequate on-farm investment and meet the requirements of the EU dairy directive by the end of this decade, 15,000 dairy farmers will go to the wall.

According to Teagasc and other advisory services 20,000 farmers need that investment now if they are to say in business. On-farm investment schemes critical for the future viability of up to 50,000 farmers are grossly underfunded. Policy favours the commercial farmer but the 50,000 small to medium sized farmers will be under threat.

The Estimates do not address what will be a serious problem. Under the REPS scheme £41.5 million is available. This scheme is supposed to provide an alternative income to farmers who did not invest intensively in stock or buildings. Some 9,200 farmers received an average payment of £3,500 this year, that is £32.2 million. Next year only £41.5 million is provided for even though the Department state 14,000 people are due to avail of the scheme. Farmers demand these vital schemes. Farmers reinvest 40 per cent of their net income and we fail to provide grant aid schemes to enable them compete in the future.

This debate affords me an opportunity to deal with the debacle witnessed in Brussels yesterday and today. Fianna Fáil demanded a debate on the sheep issue in Private Members' Time to highlight the need for a top up ewe premium of £8 for sheep farmers. Not alone did the Minister not deliver on this, but he failed to get the matter on the agenda for the Council of Ministers meeting although he claimed Commissioner Fischler understood the problem he would get a hearing in Brussels and he would deliver on the matter before the end of the year. The blueeyed boy of the Coalition Government, the darling of rural Ireland failed to even get a discussion in Europe on the sheep crises despite his claim last February that this was his priority. He was successful in getting an extension of the rural world premium worth only £5.5 million and affecting a mere 9,700 farmers which was already on the cards. There are 38,884 farmers in disadvantaged areas who will not get anything despite their income crises and the fact that thousands of farmers marched the streets of this city three times in recent months. The president of the IFA designated yesterday as a disaster day for Irish farmers. When Deputy Walsh was Minister he achieved a £6 top-up premium in 1992 but this Minister failed to deliver.

Beef prices are under serious threat but the Minister claims he can do nothing for beef farmers until January because of his concentration on the sheep issue. If what we see today is the result of his concentration on the sheep issue, beef farmers need not look forward to a prosperous New Year. In the coming months many people will witness the results of the rhetoric that has been emanating from the Minister's Department in the past 12 months.

Mr. J. Walsh

I thank my colleague, Deputy Cowen, for sharing his time with me. This year's Estimates debate is clouded with dishonesty. While in terms of the overall Estimate the amount of money being used by way of sleight of hand is relatively small, it highlights the lengths to which this rainbow coalition will go to cook the books. Questions were raised about the £60 million and the more recent £27 million but I am sure additional anomalies to glid the lily will come to notice when people have time to digest the figures over Christmas. This is regrettable at a time when the economy is booming, when we are reaping the benefits of the sound financial management and prudent economics of recent years and the successful negotiations in Brussels that resulted in a flow of Structural Funds that will not last forever. Recent poor negotiating tactics has put the country at a major disadvantage. Ministers are treated with derision and are not achieving the results of previous years. Not alone will the Structural Funds dry up but export refunds, price reviews and the review of the Common Agricultural Policy herald black clouds for the future and the chaotic attitude of this Government to financial management leave us in a poor state to face the next century.

The Minister for Social Welfare, who is very vocal when speaking to an audience inside or outside the House, is illequipped to negotiate matters behind the closed doors of the Cabinet. When that door was closed the unfortunate people who depended on him to make a case for them were left high and dry. They are the poorest of the poor.

This year will be known as the year of the miserly 2.5 per cent increase, the worst performance by a Minister for Social Welfare in 30 years. If that were not bad enough this year's budget figures were based on an unemployment rate of 266,000, even though there was little hope of retaining it at that figure and at the end of the year it was necessary to introduce a mini-budget to meet the shortfall. A Supplementary Estimate providing for £36.5 million was introduced because Ministers could not operate within their budgets — bad financial management. There were excess in the Vote, such as £18.7 million for unemployment services, due to the increase in the number on the on the Live Register. A total of 12,000 additional people are now on the dole without any hope of obtaining employment, even through the left, in particular, in Government claimed it would make a difference. It made a difference of putting an additional 12,000 people on the dole queue, as a result of which a mini budget had to be introduced.

We were also told in the budget that there would be relief for the hard pressed PRSI employees and in the mini budget we were told this Supplementary Estimate would not have been needed if there were no Christmas bonus. In other words, an additional £15 million was extracted from those who go out to work, many of whom are on low pay. This is the muddled economics and poor management we have witnessed in the past year.

The estimates debate is a useful time to reflect on what happened in the past year. Negotiations in Europe are no better than those at home. In recent years we have been successful in obtaining funding under the EU poverty programmes. However, the Minister failed to get a single penny under the Fourth EU Poverty Programme which is worth £10 million to us. Many worthwhile projects were initiated under the previous three programmes which were successfully negotiated by the then Minister for Social Welfare, Deputy Woods. When negotiations were taking place on the Fourth EU Poverty Programme press releases were issued, especially on Sunday nights, stating that we were tantalisingly close to obtaining funding under the programme, but as we approach the end of the year we have not received a single penny.

The Minister for Social Welfare is unsuccessful in negotiating behind closed doors where the arrogance of office comes into play. W. B. Yeats stated that an aged man is but a paltry thing and that this is not a country for old men. If he were alive today he would claim it was not a country for old women either. This is not a pleasant country for the old. It is regrettable that approximately 250,000 of our population will face a cold Christmas because of the increase of 22 pence per day they were allocated in this year's budget.

There was a saving under a number of headings this year. In particular, there was a saving under the family income supplement, which is so beneficial to the very low income earners, of £1.5 million. That £1.5 million was confiscated from those unfortunate people by this left wing Minister for Social Welfare. It is stated that the saving is due mainly to the number of recipients being lower than anticipated. It was lower than anticipated, of course, because the threshold was not increased this year having been increased every year for the past five or six years. That is a shame.

As an absolute minimum I look forward to the recommended main rates of the Commission on Social Welfare being paid to the old, the sick and the disabled in the coming year. It is the least that could be done when one considers that approximately £100 million was pilfered from the pockets of the less well off and social welfare recipients in 1995.

Minister of State at the Department of Foreign Affairs (Ms Burton)

In all the claims and counter claims associated with this Book of Estimates, one thing stands out — the share of national wealth, of GNP, taken up by Government spending will be less in 1996 than in 1995. Similarly, the share taken this year is less than last year. For both years this share is less than that consumed by the Government of 1991 and 1992, a Government made up of the Fianna Fáil and Progressive Democrats parties who come here today in a sham pretence that they have a better way, mysteriously known to them now but beyond their understanding when they held office a few short years ago.

It is a mark of the Opposition's inability to find any flaws in the Government's performance that it is reduced to concentrating almost entirely on presentation rather than content. There is substantial agreement that the public spending accounting methods leave a lot to be desired but it is somewhat ridiculous to discuss £12 billion of public spending as if it were an entrant for an advertising award.

Deputy McCreevy and I studied accountancy together for several years. Accounting practice is not — or at least should not be — a black art intelligible only to the initiated. As an accountant I must say, however, that Government accounting practices are incompatible with any ordinary understanding of accounting in the world of business. My colleague, the Minister for Finance, Deputy Quinn, has set out to produce the most honest Book of Estimates ever published, perhaps because he is not an accountant, whereas the previous Minister for Finance was an accountants. Perhaps it is for non accountants to point out the deficiencies.

For the first time ever, the Book of Estimates contains the final statement of proposed expenditure rather than the first offers that made previous examples of Books of Estimates such a travesty and which bore no relation to the actual situation proposed for budget day. Of course, rounds of horsetrading occured between the time of the publishing of the Book of Estimates and budget day. That will not happen this year because of the Minister's forthrightedness and he should be congratulated for that.

The language of Government accounting must be made intelligible; it is simply not acceptable that only the more senior officials of the Department of Finance appear to be the initiates of the public accounting process. I once taught a course in Africa on Government accounting and having done so I believe it would give anyone who has experienced it the desire to improve the quality of that information in a way that is intelligible to accountants in the commercial sector or anybody who has reason to transact business with Government.

Just as it is ridiculous to overly concentrate on presentation, it is equally ridiculous to castigate the Minister for Finance for making an assessment within a range of possibilities when a more definite assesment is not yet possible. Do members of the Opposition want the Minister to pronounce ex cathedra that the outturn for 1995 will be a certain figure so that nobody will have to deal with a complex issue in a complex manner?

The sight of the Deputies opposite being confused would be amusing if it did not serve to underline their basic inability to understand not national spending figures but the concepts of openness and transparency in Government. The Minister for Finance is explaining matters as they are; he is accepting that he cannot foretell the future and he is being open and honest in his dealings with the people. He is not trying to pretend that he knows exactly what the 1995 outturn will be. Of course, he has a good idea but because of the way Government accounts have been prepared for many years it is not possible, as it often is in the commercial world, to foretell with detailed accuracy what the final outturn will be.

This Government is the first to subject itself to pre-determined spending limits; the 1996 increase in spending will be the lowest for many years. The Progressive Democrats, in spite of their pride in their alleged willingness to cut public spending, never committed themselves in advance to any spending limits and, in each year in which they were in Government, they presided over vastly greater increases than the increases for which they are castigating this Government today.

The final Exchequer borrowing limits will not be ready until budget day but there is no doubt they will be comfortably within the Maastricht guidelines and will most likely be down on the GNP share used up by borrowings. This is the internationally accepted acid test of fiscal prudence and this Government passes that test effortlessly.

As an accountant I know it is the public borrowing requirement that is watched most carefully by the financial markets. The Minister knows that too and he will keep rigidly to sound and strict discipline so that this figure continues to decline. All the relevant financial indicators — interest rates, the size of our reserves — reflect the confidence that exists in the markets in our capacity to pass those tests. No smokescreen created by the rhetoric opposite can dent this confidence because it reflects a performance that is much better than any result achieved by Deputies Ahern or O'Malley when they held office earlier in the decade.

Deputies can choose any test available — the numbers at work, the rate of inflation, interest rates to business and home owners, the public borrowing requirement as a share of GNP, Government spending as a share of GNP — compare these with the Fianna Fáil and Progressive Democrats years and the answer stands out loud and clear. By every yardstick, Minister Quinn beats them all and it makes them incredibly envious.

The Government is committed to controlling public spending. We are succeeding in this objective better than any other Government in recent years, but we are also succeeding in our other objectives. We are ensuring that the less well off in our society are catered for, we are maintaining and improving essential social services and we are expanding the child care services. Is anyone in the Opposition parties suggesting we should not do this? Of course, they are not explicitly suggesting this but their constant demands for further cuts in public expenditure will mean that we will have fewer child care workers, longer waiting lists in hospitals and fewer opportunities for unemployed people to get work experience and ultimately a job.

We need to spell this our clearly. Criticism of the overall level of public spending is not a presentational matter. It is a matter of the safety, health and education of every child in the country, a matter of the ability to get a hip replacement operation within a reasonable time frame and of caring for the dependent members of our society.

We have been told time and again that demands for better health and education services must wait until the national cake is big enough to meet the needs. In the past two years that cake has increased at a fantastic pace and it is only right that certain urgent social issues be tackled with this increased wealth. Child care is a case in point. Education spending is a social heading but it is a vital component of economic development. It is the sort of infrastructural investment which attracts firms like Intel just as other more conventionally described infrastructural investment does. Is the Opposition suggesting that this investment be reduced? Does Deputy Harney, for example, propose to argue against the expansion of the regional technical college in Tallaght because the State cannot afford improved access to higher education at a time of such economic growth?

Let us not be fooled into bland and impersonal statements about public spending as if it did not relate to real people. Let those who want a reduction in public spending tell us exactly where this reduction should occur. I do not want vague generalities about greater efficiency. They owe it to the people to tell them precisely which of them will be affected by such cuts. I want them to explain which school cannot have a resource teacher, which child cannot get dental services and which elderly person cannot have a home help. I want them to explain this precisely and accurately before they present themselves to the electorate.

Turning to my own area of responsibility, I am pleased to say that Irish overseas development assistance will show a substantial increase on the 1995 figure. This year we will spend £106 million, an additional £17 million, representing a 19 per cent increase. We are in a three-year cycle of commemoration of the great Famine, and it is appropriate that, in the context of this commemoration, our development budget should, for the first time, pass the £100 million mark and reach £106 million. The bulk of the budget, £77.2 million, has been allocated to the International Co-operation Vote, and an additional £28.5 million will be spent on overseas development assistance from central funds and other departmental Votes.

Development policy is, and should be, a very important part of foreign policy. I had an opportunity a fortnight ago to spend a short time in Ethiopia, a country which has just come through 20 years of war and where there is poverty on a scale that I had not experienced previously in any of the countries in Africa in which I lived or spent time. I was very impressed by the fact that, in the last year, Irish aid has been involved in building some 57 schools in a remote rural region. These are not fancy buildings but schools with concrete floors, tin roofs and mud walls. There is no single Irish-type school costing millions of pounds, rather these are basic education resource centres which are making, for the first time in the region of Sidama, 5,000 school places available where before there were almost none. As I went into school rooms in the region, teachers pointed to writing on the board which they said was the first writing in the Sidama language, their own language, to which Irish aid was contributing.

The increase in budget in the Irish aid programme will allow us to spend more money on co-operation with some of the poorest countries in sub-Saharan Africa in the basic areas of relieving poverty, investing in education, health, water, water reservoirs and in the whole area of the development of women. We will not be building large-scale Irish monuments or projects but will be spending the money on many people in a low key way. For example, we are helping to train midwives and traditional birth attenders in many countries, a vital area with regard to the health of the expectant mother, her safe delivery and her new born child. These are basic things which we as a country, given our history and the participation of our missionaries, can do effectively and well.

Next year we will also be contributing an increase of 10 per cent in emergency humanitarian assistance. This year most of the money for humanitarian assistance went to Rwanda and to Bosnia. At the peace conference last week we made a commitment to contribute £1 million to the rehabilitation of Bosnia and the former Yugoslavia after the war. In Rwanda we are spending a substantial amount of money assisting Irish NGOs, such as Goal, Concern, Trócaire and Refugee Trust in addition to assisting the Government there in basic rehabilitation.

We will also be spending next year a substantial amount of money in countries such as Angola, Mozambique, Vietnam and Cambodia on landmine clearance and recovery, helping people to use lands which have been rendered useless by the sowing of land mines over vast distances. This is something which Irish people have broadly supported.

I wish to pay tribute not just to the officials and staff in the Department of Foreign Affairs and the Irish technical assistance who work on the Irish aid programmes but also to the volunteers who work with APSO and the Irish voluntary agencies such as Concern, GOAL and Trócaire. While we sometimes think of Irish foreign affairs as being about ministerial conferences and large scale presentations, it is also about the work that Irish people do in many different corners of the world where there is abject poverty.

Next year, Ireland will hold the presidency of the EU. The continued increase in the Irish aid budget this year will allow us to speak with authority on development issues and to make a substantial contribution to the development of better links between the EU and the developing countries.

Mr. S. Brennan

I wish to share my time with Deputy Woods.

An Leas-Cheann Comhairle

That is in order.

Mr. S. Brennan

I wish to give one more example of how the Government has been manipulating the figures. It has already been caught once fiddling the books, and it is dishonest to present Estimates in this fashion. The Government has allowed its liability in respect of the telecommunication and postal workers' funds to disappear from the Estimates and is cloaking this change in a legislative provision contained in the Postal and Telecommunications Services Act, 1983, which has been cited because it suits the Government in this regard.

This change amounts to massaging the figures. The Government is removing the pension liability from the supply side of the Estimates figures and is instead paying it from the Central Fund. In doing so it makes the Estimates appear substantially better than they otherwise would be. Were the State's liability of £75 million this year in respect of the pension fund liability to remain in the Estimate for the Department of Transport, Energy and Communications, as it should, it would mean that, rather than the Department's Estimate being reduced by 17 per cent as presented to the House by the Minister for Finance, it would be increased by 32 per cent. In addition, overall Government spending would be significantly increased.

It is, therefore, politically dishonest to produce an Estimate to the House showing a 17 per cent decline in a Department's Estimate when we all know that the real situation is an increase of 32 per cent. This is why we on this side of the House repeat our charges that the figures have been deliberately massaged to make the situation appear better.

In the last two years, over £150 million had been provided by Government towards the postal and telecommunications pension funds. The Government's liability arises from the situation when the 30,000 civil servants transferred from the Civil Service to An Post and Telecom Éireann. At a meeting of the Committee of Public Accounts in April 1995, a Department of Finance official said that the Government's liability to the pension fund is capped at £461 million. The official went on to say that this required that annual payments in excess of £70 million be made to the pension fund. In 1994, £83 million was provided in the Estimates, while £24 million was provided in 1995. However, nothing is provided in the Estimates for 1996, although it is clear from the Department of Finance that £75 million must be paid. We know the money is coming from somewhere else and is taken out of the Estimates to make them look better. It is more of the funny money approach in presenting the Estimates to the House and it is dishonest to do it in this way.

The Minister for Transport, Energy and Communications remains addicted to consultants. While the estimated cost of his consultants is reduced by approximately £1 million, the sum allocated amounts to almost double the consultancy costs incurred in 1994. He has allocated almost £3.3 million in respect of consultants for Telecom Éireann's strategic alliance. This is additional to the £1.1 million provided for his own consultants. Already £650,000 has been spent even though an information memorandum has not been forwarded to the five companies which have expressed an interest in the alliance. This needs to be explained to the House.

The Minister has a tendency to overpay consultants. A sum of £353,000 was paid in the selection of the consortium to receive the mobile phone contract even though a small number of applications was received. The overrun on consultancy costs is horrific.

Provision has been made for the expenditure of £250,000 on a new regulatory telecommunications regime even though the necessary legislation has not been presented by the Minister who has not allowed discussion on the matter in the House. He has not signalled his views and is trying to conduct this business in secret. We know nothing about this proposal except that £250,000 is to be provided to fund it.

The funding provided to Shannon Airport for promotional measures has again been capped which will make it difficult for the airport to expand its operations. A sum of £54 million is to be made available to Aer Rianta for capital investment. This includes provision for the building of the first phase of a new passenger handling pier. This appears to signal that the proposed expansion of Baldonnel Airport will not be given the go-ahead.

As far as I can see no funding has been allocated for the new light rail system. Despite the public relations announcements last week, there will be no construction next year.

The Government is pursuing the wrong, and dangerous, financial strategy at a time of unprecedented growth. The extra revenue generated is being squandered instead of being used to reduce the national debt and taxes. Spending has increased this year at over five times the rate of inflation and we have no hope of avoiding a similar fate next year. The national debt continues to grow, we remain uncomfortably close to the ceiling set on current borrowing in the Maastricht Treaty and are miles off the required-debt GNP ratio.

Tax rates have been falling steadily over the past eight years, from 35 per cent to 27 per cent. Despite this the Minister for Finance has announced that there will be no further tax cuts. At a time of unprecedented growth of up to 7 per cent, this is highly irresponsible. In short, the Government is providing for expenditure to ensure political cohesion, leaving no margin for tax cuts, interest rate rises or any slow down in the economy or EU funding post-1999.

Budgeting for a deficit this year and next amounts to financial lunacy. When Minister for Finance in 1994, Deputy Bertie Ahern achieved the first current surplus in 25 years. As every student of economics must be aware, in times of high economic growth one must plan for a current surplus. Yet, the Government is planning to borrow more money. In times of recession it may be prudent to plan for a small deficit, but it amounts to financial lunacy to plan for a deficit in times of boom.

We will find ourselves, as a consequence, in an extremely vulnerable position. If interest rates increase or there is a slow down in tax revenues, growth and EU funding, we will again be plunged into a situation where the education, health and social welfare budgets will have to be cut — as happened in the past — to keep the deficit down. That is the reason the strategy being pursued by the Minister for Finance is wrong.

The "funny money" in the Estimate for the Department of Transport, Energy and Communications is an example. A sum of £75 million has been taken out and added to the national debt. That is a dishonest way to present the Estimate for that Department and amounts to nothing short of fiddling the books once again.

Dr. Woods

The Estimates are disappointing from the point of view of the Department of Equality and Law Reform. Overall, there has been a cut of 3 per cent in the Estimate for that Department. I wish to refer in particular to family mediation services, marriage counselling services, the Civil Legal Aid Board and, briefly, the divorce referendum.

There is no evidence to suggest that families will receive support. All the indications are that the Government has reneged on the promises made repeatedly by the Taoiseach and others prior to the divorce referendum to improve mediation, counselling and legal services in the event of a "yes" vote. Extra funding will not be provided next year.

The workload of the Civil Legal Aid Board will greatly increase in the second half of next year. No provision has been made for this. If we assume that the necessary divorce legislation will be passed by Easter, the board should begin to receive inquiries shortly thereafter and will have to make the necessary preparations and arrangements for the implementation of the legislation.

It can be safely said that 10,000 individuals are likely to apply for legal aid. At a minimum the board will need temporary or contract solicitors to cope. An additional £2 million to £3 million will be required in the second half of the year alone. I pressed the Government hard on this issue prior to the divorce referendum but as can now be seen it was dishonest. That is regrettable.

The harsh reality is that this year the number of unemployed increased by 12,000 per week on average as a direct result of the policies pursued by the Government. The Minister for Social Welfare has informed us that this trend is likely to continue. This is unacceptable. Provision has been made for a similar increase next year in the Estimates in which there is no joy for the unemployed, for whom the outlook is dismal. It is obvious that the Government has thrown in the towel.

We are witnessing the exposure of the three head Government which, for one year, continuted the work of its predecessor, but time is now running out. These are good times and we should use the available resources wisely. The Government did not want to publish the Estimates until the Dáil had risen. It delayed their publication and we now know the reasons. Under pressure from Democratic Left they attempted through obfuscation and deception to cook the books.

Proinsias De Rossa

That is a disgraceful statement.

Dr. Woods

They succeeded to such an extent the the Minister for Finance has confused himself with the outcome. Such an unclear position has never emerged before. Consequently, confidence in the Government's ability to handle the nation's finances is being eroded, which can only be bad for people. Already we have seen an overrun of £204 million on last year's figures. Current growth and the prospects for the economy are good, but the drift has begun. The Government cannot deal with the matters which should be dealt with as priorities because it is not managing its emerging internal conflicts. That is reflected in these Estimates.

The Minister of State, Deputy Burton, called for an understanding of the position of the Minister for Finance. We understand it, the people understand it, he is in an impossible position. He is trying to please three heads and it cannot be done. That is the understanding he requires and is indicated in the Estimates. The 2 per cent limit has been broken and it will be worse by the time the budget is introduced. I agree with the Minister of State, Deputy Burton, that the Minister for Finance deserves our sympathy, but the people will not thank the Government for what it is doing.

Mrs. Owen

The 1996 allocations in the group of six votes for Justice total £610.917 million, an increase of £21.341 million or 3.62 per cent over the 1995 Estimates. I want to highlight some areas in which I have made increases available. There is a major increase in the Department of Justice administrative vote mainly made up of an increase of 43 per cent in the provision for criminal legal aid. That increase also covers such areas as the Data Protection Commissioner, the Garda Complaints Board, the Criminal Injuries Compensation Tribunal and, for the first time, the Refugee Board which I hope will be set up when the related legislation passes through both Houses of the Oireachtas.

My achievements during the year cover the passing of the Transfer of Sentenced Persons Act, 1995, the Criminal Law Incest Proceedings Act, 1995 and the Courts and Court Officers Act, 1995. We are completing the Intoxicating Liquor Bill, 1995. The Refugee Bill is before the House and the Justice Drug Trafficking Bill and the Children's Bill are being drafted in the Attorney General's Office, having been approved by Government.

The House will be aware of a serious fire last night in the medical care unit of Mountjoy Prison which led to the evacuation of 52 inmates and the hospitalisation overnight of approximately a dozen inmates and prison staff. I am awaiting full reports from prison management and independent technical advisers on the incident and, therefore, I must confine my comments on the matter. As of now my information suggests that the main damage to the unit was fire related and smoke inhalation led to the hospitalisation of those individuals. I commend the prison staff, the fire and ambulance services and prison doctors who were called out to this emergency and responded speedily to this serious incident.

Regarding the Prisons Vote, £114.204 million is provided in my budget for prisons, places of detention and the probation and welfare service in 1996, representing a 2 per cent increase over the 1995 Estimates. The single largest provision is £74.33 million allocated for salaries, wages, allowances and training programmes. The other major provision is £14.640 million in the buildings area, which includes £11 million for prisons' capital building programme. It has never been the practice to itemise individual projects in the Estimates provision but I am pleased to assure the House that the capital expenditure provided for in 1996 will be spent on improving prison accommodation and providing more spaces.

I have announced a range of forthcoming measures to deal with the treatment of drug addicts in prison. I have approved the opening of a drug free facility at the 87 bed training unit at Mountjoy Prison. This will provide prisoners with a background of drug addiction who show the necessary commitment with a special designed instructed regime, including a therapy programme. The other elements will include detoxification and methadone treatment.

I am providing £26.8 million under the Courts Vote. The implementation of the Courts and Court Officers Bill will bring about a marked improvement in the services available to people in our courts in the coming and future years.

Minister for Social Welfare (Proinsias De Rossa)

I am pleased to contribute to this debate and to set out the basis for my Department's Estimate of expenditure in 1996.

The estimates of expenditure for my Department for 1996 amount to £2.514 billion. This represents an increase of £40 million or 2 per cent over the 1995 Estimate including the Supplementary Estimate passed by the House last week. When spending on social insurance fund benefits and pensions is taken into account, gross expenditure by my Department in 1996 will be increased by 4.6 per cent to £4.2 billion, exclusive of the extra money being provided next year to cover the cost of equal treatment payments.

It is important to note that the 1996 Estimate is based on the pre-Budget 1996 position and, therefore, does not provide for any additional social welfare spending that may arise in next January's budget. To put it another way, the amount shown in the Book of Estimates represents the estimated cost of providing in 1996 the same level of payments and services as were provided this year, without any provision being made for policy changes or improvements.

Social welfare payments — in their social insurance and social assistance aspects — are demand-led; the demand being set by factors such as demography and unemployment over which the Department of Social Welfare or the Government has limited control. To push for cutbacks — real reductions in the levels of payment to pensioners, the unemployed and families — is a nonsense in the context of substantial and continuing economic growth.

The Opposition would have us believe that the poorest sector of society should grin and bear it while everyone else shares the growth dividend. That approach is simply not on. However, it is dressed up — whether as monetarism, latter-day fiscal probity or victory for the coping classes — it is unacceptable that we should operate a two-tier society comprised of participants and the excluded. They were told by Fianna Fáil and the Progressive Democrats back in the 1980s that cuts would benefit them when things got better. Now that things are good, they are told that there must be more cuts because otherwise it will be tougher when things get bad.

In preparing the 1996 Estimates, the Government was faced with the difficult task of staying within self-imposed spending limits while still maintaining an equally important commitment to social solidarity and maintaining and developing social insurance, improving social protection and sharing the fruits of economic growth among all citizens.

This is the context in which all Departments were asked to scale down their expenditure plans for 1996. Clearly, this created a particular dilemma for my Department because 95 per cent of our expenditure consists of payments to individuals and families — the very people who, by and large, are in most need and at greatest risk of poverty in society.

While the Estimates procedure is bruising by nature, almost designed, one might think, to put Ministers against each other, the task of integrating economic and social policy objectives has won out. I am pleased that the Government has reached agreement without acrimony and has achieved a fair balance between its fiscal objectives and its social commitments.

The 1996 Estimates for my Department reflect this Government's strong commitment that the standard of living of those dependent on the social welfare system should be maintained. I am proud that this Government is determined to maintain the principle of social solidarity in our society, unlike the leader of Fianna Fáil, for example, who said recently that a 2 per cent increase in social welfare is too much.

Dr. Woods

He did not say that; that is not true.

Proinsias De Rossa

The argument that it should be social welfare households who must bear the brunt of achieving the European Monetary Union criteria is an utterly false one. There is no inconsistency between a strong commitment to social and economic equity and a strong prudential attitude towards the nation's housekeeping.

Dr. Woods

Will the Minister give the reference?

Proinsias De Rossa

It is not this Government which threw taxpayers money down the drain in subsidising dodgy non-Irish beef. It is not this Government who rubbed the noses of compliant taxpayers in the dust by introducing a tax amnesty which allowed the laundering of income from criminal activity.

Dr. Woods

On a point of order——

An Leas-Cheann Comhairle

I beg your pardon, the Deputy has asked for the source of the Minister's quotation.

Proinsias De Rossa

What quotation?

Dr. Woods

The Minister said that the leader of Fianna Fáil said that a 2 per cent increase in social welfare is too much.

Proinsias De Rossa

I will supply it to the Deputy.

Dr. Woods

Will the Minister provide it now, please?

Proinsias De Rossa

I will supply it when I get an opportunity. Yet we have to put up with near-hysteria about the decision of this Government to provide for the hepatitis C compensation payments.

It bears repeating that I, as both Minister for Social Welfare and as leader of Democratic Left, am totally committed to a prudent national budgetary strategy on public expenditure and borrowing. I believe that the principles of efficiency, value for money and curtailment of waste represent a sound approach in any context — whether we are talking about the Maastricht criteria or otherwise.

I turn now to the main constituent elements of my Department's Estimate for 1996. Social assistance payments comprise the biggest single item of expenditure in the Estimates and are funded totally by the Exchequer. They comprise a comprehensive range of means-tested payments to unemployed people, pensioners, widows, lone parents, carers, low-paid workers with families, those on supplementary welfare and child income support for all families. The total cost under this heading will be £2,360 million in 1996.

Social insurance benefits and pensions are paid out of the socialinsurance fund which in turn is funded by PRSI contributions from employers, employees and the self-employed. The Exchequer makes good the deficit which arises each year between income received by way of PRSI contributions and social insurance benefits and pensions paid out. That payment to the social insurance fund will amount of £27 million in 1996. Total expenditure on social insurance fund benefits and pensions next year will be of the order of £1,700 million.

Further provision in 1996 to meet the cost of arrears to married women under equal treatment legislation will amount to £55 million. Administration costs for my Department's schemes and services, as covered by the administrative budget agreement, will amount to £131 million in 1996 which accounts for 5 per cent of my Department's Estimate.

Mr. E. O'Keeffe

On a point of order, I want to refute categorically what the Minister for Social Welfare has attributed to the leader of Fianna Fáil——

An Leas-Cheann Comhairle

That is not a point of order, Deputy.

Mr. E. O'Keeffe

——that a 2 per cent increase in social welfare is too much. Deputy Ahern never said that.

An Leas-Cheann Comhairle

That matter has been dealt with, Deputy; I ask you to resume your seat. The Minister for Social Welfare is in possession.

Mr. E. O'Keeffe

The Minister is now ashamed. Side by side with the Labour Party he has ripped this country apart.

An Leas-Cheann Comhairle

Will the Deputy please resume his seat.

Proinsias De Rossa

Receipts into the social welfare Vote as appropriations-in-aid, which show up as a credit figure on the balance sheet, will amount to almost £59 million next year. The amount of the Estimate for 1996 does not reflect the full cost of social welfare spending in Ireland today. Total social welfare spending in 1996 is estimated at around £4.2 billion, exclusive of the £55 million being provided to cover the cost of equal treatment payments. Of the £4.2 billion, the Exchequer will contribute some £2.5 billion and the balance will be met mainly from employers, employees and the self employed by way of PRSI contributions.

It is appropriate to say a few brief words on the subject of the social insurance fund, which is the cornerstone of our social welfare system. The fund is essentially a tripartite contract, involving workers, employers and the State. It is a very positive force for social cohesion and solidarity in this country. On a practical level it provides vital protection for more than one million employees in times of illness, unemployment, bereavement, occupational accidents and on reaching pension age. Since 1988, it has also begun to provide pensions for 120,000 self-employed people and their survivors. From time to time, it has been suggested that the PRSI system is simply taxation by another name and that it should be subsumed into the general taxation system. I believe this to be a profoundly mistaken view.

The principle of social insurance is a cornerstone of every economy in the European Union. In most of these countries, our partners and competitors, the proportionate contribution by employees and employers is higher than in Ireland. The principles of not being worried sick about becoming sick and of adequate provision to ensure dignity in old age were hard won by the people of this country and are greatly cherished. As the demographic make-up of our population shifts towards older people we would be foolish in the extreme to erode the social insurance base.

I want to make it very clear that the Programme for Government commitment to the maintenance of the social insurance fund and to its future development in the interests of those who pay into it and those who draw benefits from it, is solid.

A few simple statistics will serve to demonstrate the critical nature of the services provided by my Department and the level of spending associated with them. We provide a weekly payment to around 800,000 people, which in turn benefits almost 1.5 million people when adult and child dependants are taken into account. We pay £2.9 million a day in payments to elderly and retired people, £3 million a day in payments to unemployed people——

Mr. E. O'Keeffe

In five years time the country will be bankrupt.

Proinsias De Rossa

——£1.4 million a day to the sick and disabled——

Mr. E. O'Keeffe

The country will be bankrupt in five years time.

An Leas-Cheann Comhairle

I ask the Deputy to restrain himself.

Proinsias De Rossa

——£3.6 million a day on family income support including widows, widowers, lone parents, carers, families getting child benefit, families at work on low pay and other miscellaneous allowance and the balance of £600,000 a day on administration costs.

I have already indicated that the increase in Exchequer expenditure in 1996 over 1995 is £40 million or 2 per cent of the Estimates. The factors contributing to that increase relate to the carry-over costs in 1996 of the 1995 budget improvements and the cost of higher numbers of recipients of payments in 1996. Those extra costs are partially offset by higher income from PRSI contributions expected in 1996 and the fact that there is a lower provision in 1996 for equal treatment payments. Also, the 1996 figures do not include the cost of a Christmas bonus which is traditionally decided upon late in the year in the light of available resources.

Child benefit is widely recognised as the most effective means of targeting poverty because those at most risk tend to be large families. In the vast majority of cases the payment is made to women and in many cases is the woman's only independent source of income. Research in this area shows clearly that women tend to spend more of their income on children and on household expenses than men. Specifically, in relation to child benefit, the research found that 90 per cent of the payment was spent either directly on the children or on general housekeeping expenses.

Mr. E. O'Keeffe

Where is the Tánaiste and the Labour Party members?

Proinsias De Rossa

Therefore, directing payments to women is more likely to benefit children. There is much easy talk in the media about a better targeting of child benefit. This is already a well targeted payment. Only 7 per cent of child benefit goes to families with incomes in excess of £25,000 per annum. The substantial child benefit increase also served to address the second fundamental objective in this year's budget, that is, facilitating employment. Since child benefit is a universal payment which is not taxed and not withdrawn if employment is taken up it does not act as a poverty trap or an unemployment trap or a disincentive to work. This is a further important rationale for channelling as much support as possible to families through that particular payment.

The question of supports for all families is an issue which loomed large this year. The lead up to the divorce referendum concentrated all our minds on how best to assist families in carrying out their role of supporting and developing their individual members. Earlier this year, with Government approval, I established a commission on the family and have asked it to make recommendations on how families can best be helped to carry out that role. In October of next year that commission will make its first report to me and I expect the proposals it makes will be a key formative influence in shaping future budgets.

The social welfare system in Ireland today strives to accommodate itself to the needs of citizens while operating within the resources available to it. The system is undoubtedly complex, but a simplified system would not necessarily allow us to meet the need or to focus resources on those groups most in need. The system has a wide range of income maintenance and support mechanisms to cover a variety of circumstances and I believe it operates well for the benefit of citizens of this country.

The year 1995 has been a remarkable one. Not only was it the first full year in office for the three-party Government of which I am proud to be a part — a Government which, for the first time, puts the needs of the socially and economically excluded, and of families, at the top of the political agenda.

Mr. E. O'Keeffe

Not for the first time.

Proinsias De Rossa

The year 1995 has also been the first full year of peace in Northern Ireland. Regrettably, however, that peace has been flawed. Just this morning another man was murdered in Northern Ireland.

Mr. E. O'Keeffe

The Minister should speak with his former leader.

Proinsias De Rossa

There is a widespread belief that the IRA was behind this and other killings and punishment beatings during the past year. Peace is being held hostage by a paramilitary logic; a logic which views the vigilante, the gun and the baseball bat as natural law enforcers, equal and indeed preferable to the legally constituted police force. This ambivalence towards the use of violence must end in Northern Ireland if we are to secure long lasting and permanent peace.

An Leas-Cheann Comhairle

That concludes statements on the Book of Estimates 1996. I understand the Taoiseach wishes to say a few words to the House.

The Taoiseach

During the past year we lost three of the best loved Members of the House, Deputies Johnny Fox, Brian Lenihan and Neil Blaney who was the longest serving Member of Dáil Éireann during my lifetime and probably ever.

On a happier note, I wish the staff, the Ceann Comhairle, the Leas-Cheann Comhairle, the members of the Army and Garda Síochána who guard the House and all Members a happy and restful Christmas. I hope Santa Claus will be generous to Members and show true discernment in his gifts to them. I hope Members will enjoy Christmas and have a prosperous new year.

Mr. B. Ahern

I join the Taoiseach in remembering our three former colleagues and the former Cathaoireach of the Seanad, Seán Fallon. I extend sincere sympathy to their families on their first Christmas without their loved ones.

I wish the Members of both Houses of the Oireachtas, the staff, journalists and others who spend much of their lives working here a happy Christmas. Given the money provided for his Department in the Estimates, if the Minister for Social Welfare dresses up as Santa Claus he will have a great time over Christmas.

The Taoiseach

He will not be on social welfare for a long time yet.

Mr. B. Ahern

We will wait and see what portion of the cake he gets when it is carved up — it may be a bit better than what he got earlier in the year. We will withdraw all the hostility for a while. I thank the Ceann Comhairle, the Leas-Cheann Comhairle and their staff for their assistance during the past year. Opposition parties have more reason to work with them than Government parties and they were always very courteous and helpful. On behalf of all Members on this side of the House I wish everyone a happy Christmas and a peaceful and healthy New Year.

Proinsias De Rossa

In terms of red garb I could qualify as Santa Claus. It will not be too long before I lose what little black is left in my beard.

Dr. Woods

Play up the red bit.

Proinsias De Rossa

I very much appreciate the good wishes of the Taoiseach and the leader of Fianna Fáil for the future budget for my Department. I wish my colleagues in the Fianna Fáil Party and other Opposition parties a happy Christmas. I hesitate to wish them a green Christmas as I got into trouble last year when I wished the Green Party a happy turkeyless and treeless Christmas. I did not intend to be hurtful — I thought it was the kind of day its members enjoyed — but it did not go down too well with them. I have a Christmas tree and I intend to get a turkey. I hope that as a result of the measures introduced by the Government during the past year many more people will have a Christmas tree and turkey this year and in future years.

The Dáil adjourned at 4.35 p.m. until 2.30 p.m. on Tuesday, 23 January 1996.