Speech by An Tánaiste and Minister for Enterprise, Trade and Employment, Mary Harney, TD, at the Dáil debates on Estimates 2004

19^th November 2003

The Estimates provide for over €40bn in public spending next year. That's well over €10,000 for every man, woman and child in the country.

This €40bn is provided by the hard work of the Irish people. The government's first job is to manage and invest public money wisely on their behalf.

That means delivering the public services they expect. It means getting value for public money. It means spending money within a sustainable social and economic strategy.

With these Estimates, we have set priorities with limited and precious public resources.

We are maintaining overall public spending in line with our capacity to pay and economic growth.

At 5 per cent growth pre-Budget, we are increasing public spending at a moderate rate that will not put a strain on jobs and the economy.

We are maintaining steady progress within the speed limits for our economy. We are neither braking hard nor accelerating dangerously.

Our economic progress means we can still grow public spending at twice the average expected for European countries next year. For example, general government spending in France is expected to increase at 2.7%, Germany at 1.5%, Finland at 3.5% and Britain at 5.5%.

To grow public spending in line with our economic ability to pay puts the focus on the policies to achieve our economic potential.

We have shown in recent years that economic performance is the engine of social justice, of public resources and of sustainable public services.

We will continue to give priority to policies and actions that maximize our economic growth potential, including investment, competition, and low taxes.

Priority areas

In the Estimates, we have prioritised investment in our social and economic future in the areas of health, education and infrastructure. Each of these investments will build a sustainable and successful society and economy.

Our social commitment will be sustained next year by further increases in social welfare to be finalised on Budget day.

Our €340m investment in research and development (across Science Foundation Ireland, health research and Teagasc) will also deliver long-term rewards.

Health

Next year, we will spend €10bn on health.

Our health spending is up 43 per cent in the three years since 2001, the most recent year for OECD statistics. No other European country has increased health spending at this rate. In France, for example, the government indicated that there were `particularly steep increases' in 2001 and 2002 in health spending of 4 per cent at constant prices.

We are a young population and we are devoting a lot of resources already to health.

We're making the investment. We've brought forward the reform package. Now it's time for action and results.

The government is totally determined to implement the health reforms that put patients first. It will be step by step, beginning now, over the coming years, backed by sustained political will.

I am also confident that the 100,000 people working in health can, and will, deliver results.

Pay and pensions

In relation to the full public service, we are providing for a considerable increase of €1.1bn for pay and pensions.

The government will meet our side of the bargain under Benchmarking and Sustaining Progress.

Now it's for every part of the public sector to step up to the plate and deliver the returns on this investment of scarce public resources.

We are making provision for 50 per cent of the benchmarking award, amounting to €305 million. This is one sixth of the overall increase in public spending next year. Let us be clear about it and not exaggerate it.

There are 1.8 million people at work in Ireland. 300,000 of them are eligible for benchmarking increases. To be fair, the results must be seen by all 4 million of us in our country.

In every area of economic life, we demand more value for our money. Our jobs and our prosperity depend on delivering higher valued added products and services. Countries work very hard to achieve productivity improvements of 3 per cent. It's not easy. It's not achieved by trivial changes. It takes hard work, innovation and a willingness to embrace substantial change as a normal part of working life.

This applies also to the public sector, even though it is more difficult to measure productivity here.

The public is entitled to see significant and continuous change in our public services in return for the generous benchmarking awards.

The benchmarking awards were not agreed by the government in the hope of substantial change, but rather, in return for substantial and continuous change.

Unlike some others, I believe the public service can meet this challenge next year and the years ahead.

Departmental Vote

I turn now to my departmental responsibilities as Minister for Enterprise, Trade and Employment.

The estimate under Vote 34 for 2004 is €1.124 billion. This is an overall increase of 3% over 2003.

Clearly, within the overall increase, the government has taken decisions on increases and reductions, based on economic and social priorities. In relation to Community Employment, the Government has decided, in the context of the Estimates, that there will be no further reduction in the number of places to be supported under the Community Employment Scheme next year. The number of places to be supported next year will not drop below the end 2003 target of 20,000.

The total allocation for Employment Schemes in 2004 has been fixed at €351m, which will support up to 25,000 places across three employment schemes, Community Employment, Job Initiative and the Social Economy programme.

FÁS is being given some flexibility in the management of this financial allocation to maximise progression to the labour market while at the same time facilitating the support of Community Services.

The commitment to fund a continuing pool of up to 25,000 places across the three schemes brings clarity not only to the levels of activity which will be supported but will enable FÁS to give effect to the Government's clear commitment to support of local community services.

And on a broader level, funding for FAS training and integration programmes will increase by 3.8% next year.

Our industrial promotion strategy is now augmented by a significant increase in funding for research and development. This is a critical part of our economic strategy going forward. We are very clear that Ireland will compete in the future on the basis of higher value added activities. These, in turn, are based on leading edge research and development, the foundation of what we call a `knowledge economy'.

Overall spending on science & technology will increase by 36 per cent over 2003 levels. We have increased the budget for Science Foundation Ireland by €53 million to bring it up to €201 million. This will fund the ambitious research programme it is putting in place now. It is an investment in jobs and knowledge for the future. Enterprise Ireland will also see a significant increase in the monies available to it to support innovation and R&D within indigenous industry. Funding to promote greater awareness of science, particularly among young people, is also being increased.

The Estimates also provide for some modest reductions in funding of industry grants through the development agencies.

This is appropriate, given the changing nature of our employment profile, our increased emphasis on R&D, and the reduced need for traditional grant supports for industry.

We will still, however, be providing over €138 million in grants to industry through the IDA, Enterprise Ireland and Shannon Development. This investment in international and indigenous industry remains high by international standards.

I am confident our ability to attract the sort of international investment will be fully supported by the €82 million grant budget for IDA Ireland.

And I am confident that indigenous industry will continue to find the support it needs from State agencies.

The Estimates also provide funding to facilitate the establishment on a statutory basis of the Personal Injuries Assessment Board. The government has now published the PIAB Bill.

I expect that, with the support of the Oireachtas, the Board to be up and running early in 2004. Once fully operational, the PIAB will be funded on an on-going basis by fees levied on respondents and it is the intention that exchequer funding will not be required beyond 2004.

I am fully confident the Board will be deliver excellent value for money. It will be effective in processing the claims of injured parties as well as keeping insurance costs down.

The funding now provided for 2004 will ensure that the Board is adequately resourced to fulfil its statutory functions immediately the Bill is passed through the Oireachtas.

Overseas Aid

Finally, away from the Vote of my department, I would commend to the House the government's decision to increase overseas aid again, this year by €25m, to bring it to €399m. The people around the world who receive the benefit of our aid will be see real additional help from Ireland.

Some people see our aid budget as a luxury when spending is being controlled elsewhere.

I believe it fits with the values and wishes of the Irish people. We are staying true to our commitment to helping the poorest people of the world.

I commend the Estimates to the House.

ENDS/ETE 1161