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Dáil
‹ Leaders’ Questions.

Breakdown of €440 million savings package

Summary

Eamon Gilmore challenges the Government to clarify whether its announced savings total €440 million this year and more than €1 billion next year, and demands details of affected projects. The Taoiseach explains that the package includes efficiency, payroll, administrative and deferred-capital savings, including €140 million in deferred capital expenditure, and promises a full breakdown during the forthcoming debate.

John O'Donoghue An Ceann Comhairle Fianna Fáil

I call on Deputy Gilmore, without interruption.

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It is becoming increasingly clear that the so-called package which was announced with great fanfare by the Government yesterday, is only a very small picture of what it has in store for the people in the coming months. It would appear that yesterday's announcement was packaged for public relations purposes. It contained a number of high profile items such as ministerial pay and a reduction in public relations' budgets. I believe this was the tenth occasion on which the Government announced it would cut the cost of tribunals.

Yesterday, when I asked the Taoiseach how much the 3% cut in payroll would come to, he said it amounted to €250 million between now and the end of 2009. That leaves €1.25 billion to be made up as regards the cuts the Government is planning. The detail of the announcements made yesterday is a long way from that €1.25 billion. Already we see a drip-drip effect starting to take place. Deputy Kenny referred to the fair deal package for people in nursing homes, which has now been put on hold. This means that people in nursing homes and their families are being asked to bear the burden as regards the state of the public finances. We are told that more cuts will be announced next week by the HSE. There has been a cut in €45 million in real terms in overseas development aid, and there is speculation today that some 5,000 jobs are to go in the public service.

Instead of having this type of drip-drip feed of sneaky cuts and stealth taxes emerging during the summer months, will the Taoiseach give the House the full picture as regards what the Government intends, before the Dáil goes into recess? I want to ask him again, because he did not answer yesterday, what is in the package to address the needs of people suffering most from the downturn in the economy. These are the people who are losing their jobs. Some 54,000 people have lost their jobs in the last year. Since 2 May, when Deputy Cowen became Taoiseach, more than 25,000 people have lost their jobs. That is nearly 600 for every working day he has been Taoiseach. Those people are entitled to know what the Government is going to do to get them back to work and secure their future — as well as the future of the many other people who are worried they will lose their jobs in the months ahead.

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As I said yesterday, the Government, on the basis of the mid-year Exchequer returns, decided to bring forward a package totalling €440 million for the remainder of this year, which would have a full year impact of more than €1 billion, not €1.25 billion..

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It is €1 billion, plus €440 million, minus €200 million.

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No, that is not the position. Let us be clear. There is no need for any confusion.

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All right, so tell us.

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The €440 million package is the outcome of decisions made yesterday for the remainder of this year, which will have a full year, 2009, impact estimated by the Department of Finance of over €1 billion.

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That is €1.44 billion.

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No, it is not.

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Between now and the end of the year——

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John O'Donoghue An Ceann Comhairle Fianna Fáil

The Taoiseach should be allowed to finish. The question has been asked and should be answered.

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We are talking about this financial year and next. The €440 million relates to this financial year. Next year it will have a full year effect of over €1 billion. That is the situation.

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What about next year?

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So €1 billion plus €440 million is not €1.44 billion.

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John O'Donoghue An Ceann Comhairle Fianna Fáil

Deputy Burton cannot intervene at all.

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Allow me to finish.

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Get a blackboard and write it out.

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John O'Donoghue An Ceann Comhairle Fianna Fáil

The Deputy is completely out of order.

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If that is going to be the level of debate here, we can forget about it. In the context of our mid-year Exchequer returns, we have made these decisions. This is our initial reaction to the situation. We are saying that in the context of the Estimates for 2009 further decisions may be required to make sure that we have a sustainable public finance position going forward. That would be determined by information as it emerges during the course of the year. It is necessary for the Government to do whatever is required to make sure we work within the Stability and Growth Pact principles that have been set out, which is the basis of our membership of the euro currency. We have seen a deterioration of €3 billion in our tax revenues this year. That means we must work within the spending limits we have set ourselves to underline confidence in ourselves going forward and to devise a strategy next year that will be sufficient to be sustainable going forward. That is the position.

I made it clear yesterday that this is a process by which the Government is tailoring its response in an effort to meet the requirements of the situation as it emerges. That is no suggestion of anything else to the contrary. It involves some efficiencies, administrative savings, the reallocation of existing allocations from some Departments to others, which now require more money because of the increased unemployment that was mentioned, and working within the overall spending limits we have set ourselves. That is what we are trying to do.

We are also examining the position for 2009. We are putting out the information as we have it on what we are trying to do. We are not suggesting that this process is now finito, that this is the end and that all Members can sit back until next February. We have to manage this serious situation, and we intend to do that. We intend to discharge our duties in government and bring to the attention of the House, as I have done, through the course of the debate on this issue today and tomorrow, whatever information Ministers are required to bring forward; that will be brought forward and detailed to the House. That is the way I want this to be, that is the way it should be and that is the way it will be. There is no question of anything to the contrary. We are bringing forward to the House the decisions that were made and finalised by Government at 2 p.m. yesterday, which were then announced and on which we will have a debate for two days. That is a fairer reflection of the Government’s intentions than what has been suggested from the benches opposite.

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I am simply trying to get clarity on what exactly the Government has decided. I understand what the Taoiseach has said. Cuts of €440 million will be made between now and the end of 2008 and cuts of €1 billion, or €1.44 billion to be exact, will be made in 2009. From that figure will be taken €250 million for the payroll reduction which will leave cuts of €1.2 billion, the details of which we have not got. That is the first problem. We have some of the details, the decision on ministerial pay increases, a review of tribunal costs and various bits and pieces of information. Information has begun to be leaked about the postponement of the Fair Deal scheme and all of that, but we do not have the detail of where the €1.2 billion cuts will bite between now and the end of 2009. That is problem one and we need an answer to that.

Second, the Taoiseach has said that this process will be revisited a second time in 2009. Therefore, it is clear this morning that the round of €1.4 billion cuts is the opening shot and round two is to come in 2009 or perhaps in the context of the Estimates and budget. Where will the Taoiseach secure cuts of €1.2 billion, outside of the payroll reductions, between now and the end of 2009? They can only come from cutting jobs, services or increasing taxes or charges or whatever.

The Taoiseach also needs to tell us exactly what is in his mind for round two. Are the cuts of €1.4 billion announced yesterday simply the opening shot of a two or three phase round of cuts in services and expenditure that the Government has in mind over the course of the next 15 months?

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It is clear that in regard to the remainder of this year we are involved in efficiency savings of €240 million, securing other savings in PR and consultancy expenditure of approximately €20 million and payroll savings of €10 million beginning this year. The remaining savings of €360 million will come from efficiency savings and deferred capital programmes. That accounts for the €440 million savings.

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The cuts will be in capital costs — I knew it.

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Yes, of course, capital will play a part. If the suggestion is that I should take the savings all from current spending, the Deputies are effectively suggesting that day to day savings should be even deeper.

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What projects will be affected?

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Will the Taoiseach tell us what projects will be affected?

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These will be brought forward——

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What schools will be affected?

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It is not a question of schools being affected.

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What is it a question of?

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Allow me to speak and I will explain the position.

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The Taoiseach will not tell us anything. He is as good as his predecessor in that respect.

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John O'Donoghue An Ceann Comhairle Fianna Fáil

Allow the Taoiseach to finish.

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In regard to the OPW, we are talking about a figure of €75 million.

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Various projects.

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We want them listed on a sheet of paper.

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A debate on this issue will take place in the House over two days during which everything will be laid out.

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We want a list of the projects concerned.

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If the Deputies want to have that debate in two minutes rather than during the nine hours they demanded, that is a bit unreasonable.

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Give us a list of the projects.

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John O'Donoghue An Ceann Comhairle Fianna Fáil

Allow the Taoiseach to finish.

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We will outline to the House in full all the issues making up the figure of €440 million. We have no problem doing that. That is the purpose of the debate from the Government's point of view. Any suggestion to the contrary by the Opposition is ridiculous. We will set out our position during the course of this debate. I have explained to the Deputies that the figure of €440 million includes €140 million in deferred capital expenditure, there is also €300 million on the current side, €240 million of which relates to efficiency savings, and there is another €60 million from other savings, administrative and otherwise.

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The Taoiseach has now given us three different figures.

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No, that is the €440 million, they are not different figures.

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Deputy Gilmore has been trying to suggest that they are different figures, it is the same figure, €440 million, divided as I have outlined, and the Ministers will set this out in detail during the course of the debate.

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