Estimates launch: The Minister for Finance, Mr McCreevy, sought to distance himself from the increases in Government charges yesterday by saying that increases in health, motor-tax, education and passport fees were matters for the Ministers concerned to explain.
After making swingeing cuts in the allocations for consultancy services used in many Departments and State institutions, Mr McCreevy also said that Ministers and officials in charge of public bodies should take their own decisions.
Mr McCreevy refused at his briefing yesterday to specify what direct charges to the public would be increased and said: "Ministers have to make their own decision about what they want to do".
Asked whether such increases would make life more difficult for the marginalised, Mr McCreevy said the €91 million raised by the charges was a "very, very small" figure in the context of the overall voted expenditure of €40 billion.
Referring to the cuts in allocations for consultants, Mr McCreevy said there should be a level of expertise in a public service of 280,000 staff.
But while Mr McCreevy did not fully agree with a suggestion that the public service was too quick to hire consultants, the second secretary general at his Department, Mr David Doyle, said he agreed with that.
Publishing Budget estimates that put the increase in voted expenditure next year at 5 per cent, he said that social welfare and any other increases to be published in the Budget would bring the overall growth in voted expenditure towards 7 per cent. This is the same rate of increase as in the current year.
But while Mr McCreevy indicated that only modest increases would be possible in coming years, he said that the Government could secure "strong rewards" from its strategy within a couple of years.
He said: "Spending growth must remain at a sustainable level over the medium term. This means future public spending increases will have to be kept very close to this year's level." The rate of increase in expenditure had to be in line with the Government's capacity to raise revenue, but the rate of growth in voted expenditure this year was still more than twice the EU average.
He said the Government's approach to the Estimates was dictated by continued moderation in the rate of economic growth.
"Consolidation in the public finances is required so that the Irish economy will be good shape to take advantage of the now expected improvement in the international economy," the Minister said. Noting that some €1.1 billion of the €1.9 billion increase in voted expenditure would be spent on the benchmarking, Sustaining Progress and other pay awards, Mr McCreevy said the Government was committed to honouring the benchmarking award.
However, the payments would not be made if the productivity conditions sought by the verification groups were not met.
On infrastructure, Mr McCreevy said the public would soon see more benefits from the Government's investments in the road and Luas networks.
The Government hoped to introduce a five-year financial envelope guaranteeing a set level of capital expenditure in major Departments. While such expenditure depended on the capacity of the Government to raise revenue, the system would give greater clarity to Ministers.
Mr Doyle said the Government wanted to conclude "fixed-price" contracts, asking whether private-sector companies would enter agreements where the final price was not known.
Mr McCreevy said the Government accepted the call by the Economic and Social Research Institute to prioritise the National Development Plan. However, it did not accept a recommendation to reduce supports to industry, marketing and fisheries development.
