Stamp Out Waste

Fine Gael will adopt a 'Zero Waste' policy for the public finances.

For many years now economic growth has generated more than adequate tax revenue to fund emerging needs in our Public Services. Public expenditure has grown by 85% in just 5 years. In the case of Health it has almost trebled up by a staggering 185%. Spending per client in many areas of the Public Services is now at the upper end of the former 15 EU member states, but service delivery seldom matches that ranking. The priority in public expenditure now is to generate proper value for money from our much higher plateau of public spending. Attention to value for money has been lamentably absent under this Government.

It is time to introduce radical change to our financial procedures.

• Outcomes and performance indicators must become central to the approval of annual spending budgets. A failure to meet targets should trigger an independent review of the programme.



• Every Minister should be obliged to sign off a Compliance Statement that robust financial procedures are being observed by his Department.



• Annual cost estimates for different tax shelters should be presented along with performance indicators justifying their worth



• A Resource Fund should be set aside each year for new initiatives emerging from a programme of reform.



• A Draft Budget should be presented in October detailing both spending and tax proposals side by side, with 6 weeks consideration l before final adoption.

Some financial procedures have been allowed rust over in the past 5 years.

Even if we leave aside the crass decisions on the Punchestown Equine Centre, Electronic Voting, Stadium Campus Ireland,the Kenmare Marina… we have still witnessed a constant flow of dubious spending. Expensive new health units stand empty. Asylum facilities have been bought that were not fit for occupation. Medical cards for persons aged over 70 and pensions for persons with pre 1953 records, Proved to be 10 times more expensive than estimated by the Minister when he sought approval. Some of this may be put down to sharp political practice. However at a deeper level it exposes serious system failures that allow these decisions to occur unchecked.

The reaction of Minister Seamus Brennan to the findings of the Comptroller and Auditor General on the Roads Plan revealed just how cavalier are the attitudes to financial control. The Comptroller found that mis-estimation of the true cost of road projects added a staggering 60% amounting to €4,000m to the Minister’s original estimate. To paraphrase the Minister, his response was 'Everybody knows this is the way we do it. We start with gross underestimates and only when the Government has made an irreversible commitment does the full picture emerge'. There was no question of an apology or being ashamed.

It is time to have an NCT on the control systems on our public finances. They have suffered a remarkable number of spectacular breakdowns. Brakes seem to fail,particularly at election times. When things go wrong, it is the ordinary passenger who are put out to push, and the weakest are left to walk.

The problem is that Budget day has become a charade. The hype of budget day feeds short term opportunistic thinking. Rabbits are pulled out of the hat. Ill thought ideas shelter behind a veil of secrecy. Tax concessions are introduced on a whim without any evaluation. New initiatives are tacked on but spending programmes are never reformed. When money is tight, the bureaucracy is protected while frontline services suffer. Stealth taxes shore up folly. Spending is approved without any targets for the outcomes to be achieved. No one takes responsibility when a proposal turns out to have been ill conceived.

REFORM AGENDA

Parallel to new financial procedures, a Programme of Public Service Reform must become a central framework underpinning expenditure programmes. The system of benchmarking was supposed to herald a whole new era in relation to pay and performance in the public sector. However the Government totally undermined the potential of this new framework, first by concealing the basis of the awards, then by the abject failure to negotiate any reform

If benchmarking is to continue it must be placed at the heart of a new programme of public service reform. The evidence behind awards must be presented openly. It must be set within a framework where every agency assesses its work against best practice and initiates a programme of reform. To back this up,the estimates should create a Resources Fund which will be used to finance initiatives emerging from this improvement process and pay bonuses for success and achievement.

TAXATION

Low rates of corporation tax and income tax have helped deliver a more dynamic economy. These low rates have been compromised in the last number of years. Keeping headlines rates low while modest earners are pushed into the top rate and money is siphoned off in stealth taxes,is not a low tax regime. Loading on development levies, commercial rates, stamp duties,and service charges on to the most dynamic elements of our community is storing up problems for the future.

Ireland faces tough competitive conditions in the years ahead. We must remain committed to maintaining a low tax environment that is supportive to enterprise and initiative. The strong economic performance will permit further key reforms in our taxation regime if waste is curbed. We cannot continue to have over 50% of tax payers paying the top rate of tax. We should not be demanding a tax contribution on 10% of the income of persons on the minimum wage. Indexation each year of tax bands and thresholds is a legitimate expectation of taxpayers and it should be factored into each year’s budgetary projection.

With the electoral clock ticking, Ministers are once again turning their mind to how they can spend your money and mine to prop up their political ambitions. The spending in 2000-2 delivered no improvements. The promises turned to ashes. A repeat of that performance will not deliver the improvement in public services which our people need.

'Fine Gael will champion genuine reform to achieve Zero Waste'.

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