The Minister of State at the Department of Finance, Deputy Cullen, will make theopening statement. The spokespersons can also make statements. We will then proceed to a general discussion on the Estimates. I suggest that we proceed through the Votes in the order outlined in the timetable: Votes 2, 6 and 9 followed by the other Department of Finance group, Votes - Votes 1, 4, 7, 8, 11, 12, 15, 16 and 17. Is that agreed? Agreed.

I apologise on behalf of the Minister for Finance. As Members probably know, he is at a Government meeting and will be here as soon as the meeting concludes. I have been asked to attend on his behalf.

The purpose of my appearance before you today is to introduce the 2002 Estimates for the Department of Finance group of Votes, excluding Vote 10, the Office of Public Works, which was taken by me earlier. The group of Votes which we are considering today comprises 12 Votes amounting to almost €713 million in 2002. Some of the larger Votes included are the Vote for the Office of the Revenue Commissioners, at €287 million; the Vote for superannuation and retired allowances, at €189 million; the Vote for the Department of Finance, at € 118 million; and the Vote for the Houses of the Oireachtas and the European Parliament, at €77 million. The Department of Finance has already provided members of the committee with a background briefing on the Estimates which are before you for approval today. I look forward to having a constructive discussion with the committee and I will be glad to provide any additional information members require.

Before dealing with the Estimates for the individual Votes, I will make a few brief comments on the economy and the public finances. One of the major achievements of the Government has been to create an economic climate that has helped all aspects of our economy to flourish. We have achieved one of the best economic performances in the world in the past four years. The following figures demonstrate this. Taking the years 1998 to 2001 as a whole, the economy has grown, in GDP terms, at an annual average of 9.5%. Our debt-GDP ratio stood at 74% in 1996, before we came into office. At the end of 2001, it stood at about 36%, the second lowest in the EU. With regard to income tax, over the past five years we have made major changes to the benefit of income earners and the economy generally.

We have increased the incentive to work and the reward for work by reducing the overall burden of personal taxation. More than 300,000 jobs have been created and as a result unemployment has fallen from 10.3% to an estimated average of 4% for last year, the lowest yearly unemployment rate since comparable records began. Our economic policies will ensure that today's prosperity will continue to benefit everyone now and in the future. The national development plan provides for an unprecedented public investment of €57 billion while the programme for prosperity and fairness provides increases in net take-home pay of up to 25%, improving real living standards to the maximum extent.

There is no doubt that we are currently living in very uncertain economic times. Budget 2002 was based on a reasonable forecast for GDP growth this year of just under 4%. Obviously, this is much lower than in recent years. However, I am confident that Ireland is well placed to benefit from the upturn in the international economy which is anticipated through this year.

I am proud to say that we have provided the State with good and effective government and our time in office has seen the creation of an economic climate which has helped all areas of our economy to flourish. It is clear there cannot be progress in other areas without the benefit of a strong economy.

The 2002 Revised Estimates for Public Services, published on 28 February 2002, reflect changes in voted expenditure announced by the Minister for Finance in the budget as well as certain other adjustments to voted expenditure that arose thereafter.

On the basis of the Revised Estimates and a provision of €150 million for benchmarking, total net voted expenditure in 2002 will be €28,995 million - €23,379 million current and €5.615 million capital. This represents an increase of 14.4% over the projected outturn for 2001. Since coming into office in June 1997, the Government has provided significant additional resources for key economic and social priorities and for physical infrastructure. It has also provided for long-term sustainability through the creation of the national pensions reserve fund.

I should mention one last topic before I turn to the detail of my Department's Estimate for 2002, the changeover to the euro. The Euro Changeover Board of Ireland, which is under the aegis of my Department, carried out very extensive public information and advertising activities in preparation for the changeover. These activities included a range of materials and supports to meet the needs of low-awareness and special needs groups. The board also made extensive practical preparations in conjunction with a wide range of other organisations.

The changeover itself was implemented smoothly and efficiently. By the end of the first weekend, the bulk of cash transactions were taking place in euro and the changeover was virtually complete within a week. I offer my thanks and congratulations to all those involved, including the public at large, for making it so successful.

I now turn to two of the principal Votes in the Finance group of Estimates, starting with the Vote for my Department. The Estimate for my Department for 2002 amounts to €118 million, a net increase of €24 million over the 2001 outturn. The following are the major programme expenditures in my Department's Estimate for 2002. A provision of €8 million is made in subhead N - the change management fund. This is a central resource to assist all Departments to carry through the strategic management initiative, which is the basis for the reform of the public service.

A total of €19.4 million is provided to meet expenditure on EU co-funded programmes, including O1 - peace programme, O2 - Northern Ireland INTERREG, P - other community initiatives, J1 - Structural Funds technical assistance and other costs, and J2 - technical assistance costs of regional assemblies. In addition to the co-funded programmes, €1.5 million is provided in subhead O3 - Special EU Programmes Body.

A sum of €15.4 million is provided to support the transition of the Irish public service to an information society. This includes €10.4 million under subhead Q in respect of information society expenditure. The information society fund was introduced in 2000 as a central fund supporting projects identified under the Government's action plan for the information society. For 2002, a total of €55.9 million has been distributed across a number of Departments to support major projects in the areas of e-government, e-commerce, telecommunications infrastructure and Internet access and awareness initiatives. The €10.4 million allocated to my Department's Vote is a central fund focusing primarily on e-government projects. A further €5 million is provided under subhead S - e-procurement initiative - towards the first stage of the implementation of e-procurement in the Irish public sector.

An amount of €3.3 million for child care is included in subhead R - Civil Service child care initiative - which will fund the building of crèches for the children of people who work in Departments.

A sum of € 9.9 million is being provided under subhead E - Ordnance Survey Ireland, grant-in-aid. OSI was established as a body corporate under the Ordnance Survey Ireland Act, 2001, with effect from March 2002. An Exchequer contribution will continue to be paid to OSI, based on a service level agreement, as provided for under the 2001 legislation.

The net Estimate for the Office of the Revenue Commissioners is €286.8 million. This figure represents an increase of €28 million, or 11% on the 2001 outturn. The bulk of the Estimate, over €230 million, is for pay and allowances for more than 6,500 staff. Deputies may recall that the Minister for Finance approved substantial increases in the number of staff in the Revenue Commissioners, the cost of which is fully reflected in the Estimate.

The Revenue Commissioners have continued to make significant progress in putting their new organisational structure in place. The need for structural change was endorsed by the Department of Finance review of revenue which followed the Public Accounts Committee inquiry into DIRT and is a central component of Revenue's statement of strategy for 2001-03, which was approved by the Minister for Finance last year. The most recent advance has been the establishment of a new prosecutions division with a clear mandate to secure an increase in the number of convictions for serious cases of revenue fraud and tax evasion.

The programme of organisational change is designed to further strengthen Revenue's ability to collect taxes and duties in a fair and efficient manner. It will serve to consolidate the improvements that we have seen in recent years to the organisation's capacity for high quality client-oriented service, as well as enhancing the effectiveness of response to areas of non-compliance.

Also included in the 2002 Estimate is a provision for the Revenue on-line service - ROS. Since its inception in September 2002, ROS has provided Revenue's customers with a safe, secure and confidential electronic medium through which they can interact with the Revenue Commissioners. This Internet facility enables business users, including the self-employed and third party agents, to conduct business with the Revenue on-line. This includes the filing of tax returns, calculation and payment of liabilities and accessing their tax details 24 hours a day, seven days a week. The facility is free of charge, user friendly and compatible with all the major platforms that exist today.

The objective of ROS is to enable all Revenue customers to conduct their business electronically at a time and location that suits them best. The benefits of ROS include a speedier, more accurate and secure method of processing tax returns, a reduction in compliance costs and paper handling and an altogether more efficient service.

I commend the Estimates to the committee and thank members for their attention. I will of course endeavour to supply any further information members may require.

I protest at the Minister for Finance's absence from this meeting. I know that he is at a Cabinet meeting but it is the Government that orders business and this is the second time in a row that a Minister has been absent during a committee meeting. The Government has ordered that this meeting take place on a Tuesday morning in the full knowledge that the Minister would not be available to attend. This is not satisfactory. The Minister for Finance attends this committee only once a year to account for how he has run his Department and his absence is a bad example to other Ministers. One of the great gaps in our society which has been highlighted by the DIRT inquiry is in accountability. The Minister for Finance has accepted all the recommendations made by the DIRT inquiry and conceded the question of accountability, yet he is not here today to account for the actions of his Department.

I hope that he will be here shortly.

The meetings should be scheduled for times when the Minister can attend from the beginning. The Minister of State at the Department of Finance, Deputy Cullen, has just read a speech on his behalf. The Minister's absence from this meeting is symptomatic of a poor governmental attitude to the Oireachtas. I do not blame this Government in particular for such behaviour, but it raises the issue of the right of the Oireachtas to achieve full value for public money.

In the budget of 5 December 2001, the Minister for Finance announced a growth in expenditure of 12%. At the end of the year, this figure was revised to 14% by the Department of Finance. Today, it has been revised again to 14.4%. That 14.4% is in addition to a 22% increase in expenditure last year. Compounded, that figure is 39.6%. The Government is presiding over an increase in public expenditure of almost 40% in two years. If the income, or income plus surplus, amounted to 40%, this situation would be tenable, but income rose by only 4% last year. For the first two months of this year, income rose by just under 4%. The Government is presiding over a disastrous crisis which will remain hidden until after the general election. The alarm bells must be ringing, especially in the Department of Finance. The situation appears to be completely out of control.

A growth rate of 39.6%, as predicted by the Government, will probably be exceeded by the end of 2002, if the first two months are anything to go by. An alarming situation is developing. It should be remembered that in 1977 it only took one outrageous manifesto to destroy the economy for 20 years. By working together through the Tallaght strategy and the Celtic tiger, we were eventually able to produce a very strong, sound economy, which we still have, but here we go again. The reality of a 39% increase is that such money cannot be spent efficiently if it is to be spent so quickly. Instead of output, the only return for this will be inflation and waste. Value for money will go out the door.

With this growth in expenditure, we should see tangible improvements in society, but as a regular visitor to hospitals over the past few years, I have seen terrible problems, and the situation is becoming worse. I have seen overworked, depressed doctors and nurses and strained patients who cannot cope with delays on waiting lists. Widows are living on £96 per week and people earning €130 per week are being refused medical cards. Some 20% of children leaving primary school have learning difficulties because there is a lack of resources to help them. There are people surviving on a disability allowance of €90 who cannot afford to get a haircut or buy a pint. Disabled people are being denied personal assistants and therefore lead restricted lives. Where has the money gone? Where is it going? I am beginning to wonder whether there is a direct pipeline to the Cayman Islands.

The Minister should feel the disillusionment of people on the street. Where are our new motorways? Only 33 km of motorway has been built during the lifetime of the Government. There is traffic gridlock everywhere. Are deadlines or timetables ever met?

The Deputy should not make inaccurate statements. His statements are without fact.

Will the Minister tell me when is the deadline for Luas? How many years behind schedule is that project? Will he say how many years behind schedule the Kildare bypass is? If the Minister wants a long list, I will give him one. The reality is that, under the Government, deadlines are not met. The Government is spending money like it is going out of fashion. The problem is we will end up at the end of this year spending 39.6% more than at the beginning of last year. I would not mind if at the end of this we had the Bertie bowl, motorways and hospitals, with children getting assessments and schools repaired, but none of those things is done.

This is astonishing and it is time to start ringing the alarm bells about the economy. My party held a press conference yesterday in which we cited the great strengths of the economy and our pride in the achievements since 1985 when we got inflation down to 4%, achieved a balance of trade surplus for the first time, reformed the State sector and deregulated the airline industry. Inflation remained below 4% from 1986, when Garret FitzGerald's Government brought it down, until this Government came to power. The Government has allowed inflation to climb as high as 7%. That is not my greatest complaint as I concede that in the circumstances that was not too bad.

In 1997, 1998 and 1999 the Government managed the economy very well. Expenditure grew significantly and there were improvements, but income grew even more in those three years so we were able to drastically reduce our debt. Living standards were improved. In 2000, 2001 and 2002, however, all caution has been thrown to the wind. Let us assume the Government sticks to its targets for this year. By the end of 2002 we will have allowed expenditure to grow by €7.9 billion more than income has grown over these three years. To put this figure in context, 1% of €7.9 billion is €79 million. These are mega figures, yet there is nothing to show for the increased expenditure.

This is more than a party political debate, although there is such a dimension to it. I thought we had learned the lessons of profligate spending in the 1970s and early 1980s. I thought we matured as a democracy in 1987 when Deputy Dukes proposed the Tallaght strategy and Ray MacSharry accepted and delivered upon it. In the past three years, however, it has all gone wrong. It is a cardinal rule that if you continue to spend, the only way to pay for it is with more taxes and we know where that leads. We will depart the virtuous circle brought about by the Tallaght strategy in 1987 and re-enter the vicious circle of higher taxes and cutbacks of the period from 1977. This would depress an economy that has been the envy of the world up to recent months. Do not think it cannot happen. Just look at the state of Argentina, once a very rich country. Look what happened to Portugal for centuries - it has only begun to recover in the past decade. This is what is being risked by the reckless spending policies of the Government.

The Government tried to put the blame on foot and mouth disease and on the events of 11 September. These factors undoubtedly depressed levels of income but they had little or no impact on spending. Spending is the Government's fault alone. Spending is out of control and so is the Government.

We have been told by various Ministers that it is the objective of the Government to create a climate that helps all aspects of our economy. That is not the way thing have worked out. We must accept that we are a rich country. The figures indicate we are in the top ten in the world in terms of economic performance. Yet if you meet people on the street they are very annoyed and disturbed by the way the country has been allowed to develop by the Government.

Many of the more vulnerable people in our society have not benefited from the so-called Celtic tiger. We are told there is an abundance of money, and there have been plenty of plans and consultants reports, yet projects are not meeting their time goals in many areas. One issue that particularly affects people in the Dublin area is the scandalous state of public transport. People have great difficulty getting to work. One arm of Government says that particular areas will be targeted for redevelopment, housing and infrastructural improvements, yet at the same time another is not providing the necessary finance to ensure that people retain a quality of life and that if they move to the suburbs they can get to work in the morning without having to rise at ridiculous hours to beat traffic jams.

Child care facilities are non-existent. The public transport system requires upgrading in areas of my constituency such as Balbriggan, Skerries and Donabate where people literally cannot squeeze onto the trains in the morning. I spoke to a girl last week who was in early pregnancy and had fainted on two occasions in the previous fortnight while standing on trains. We are told by Iarnród Éireann that finance is required to provide for major infrastructural improvements between Connolly Station and Pearse Street Station. At the same time messages are sent out that the Government is providing finance for infrastructure. However, the budget figures highlight that the necessary finance is not available. That is a major defect.

It is suggested that we will look after the quality of people's lives and allow everyone to share the benefits of the Celtic tiger. What about people queuing to get into hospitals which are the subject of an industrial dispute because the staff have had enough? They have listened to promises over the years, but nothing has happened.

We all know of the problem in the housing market and that young couples cannot afford to buy a home. How will we provide affordable housing for young people? The Department of the Environment and Local Government has put restrictions in place whereby someone earning over £25,000 is not eligible for a shared ownership scheme or an affordable loan to buy a house. The Department of the Environment and Local Government suggests that the Department of Finance has imposed restrictions regarding those who cannot get a loan from a building society or a financial institution. These people may be earning €25,000, €28,000 or €30,000 individually or as couples and they may be over the limit. Where are they to go? They are in limbo. If they are lucky, they may be paying £200 a week in rent. It makes me smile to hear the Minister and the Minister of State extolling the benefits of the Celtic tiger and how we are going to share those with everyone. However, that is not the reality. People are disillusioned——

They are disillusioned with the Labour Party and Fine Gael. There is not much credibility in the Deputy's comments. That suits the Government and me fine.

If the Minister of State does not like what he is being told——

I do not mind it at all.

The Minister of State will hear the real story when he meets the people. The real story is that the past four years has been a period of lost opportunity. At a time of unprecedented growth, the Government has failed the country and it will get that message clearly in a few weeks.