Ceisteanna—Questions. Oral Answers. - Price Stability.

39.

asked the Minister for Finance if he has any proposals for price stability in this country, as rising prices can produce undesirable inflationary conditions; if he is aware that living costs have outpaced social welfare payments; and what plans he has for a prices and incomes policy which is so urgently required.

As price increases are caused by a number of factors, many of which— such as the higher cost of imports— are not within our power to control, absolute price stability cannot be ensured by the Government. If, for example, pay increases beyond the growth of national productivity are negotiated, price increases are, in practice, inevitable. The Government's objective must be to keep price increases within the limit of unavoidable cost increases and, for this reason, they have recently extended the provisions of the Prices Stabilisation Order to 6 April, 1970. Applications for price increases will be critically scrutinised by the Department of Industry and Commerce to see that firms have done everything possible, including bearing some of their higher costs out of profits, to keep increases to a minimum.

It is quite incorrect to say that living costs have outpaced social welfare payments. As was indicated in the Budget Statement, the increases in those payments in recent years have been far in excess of the rise in the Consumer Price Index and have substantially raised the real value of those benefits.

In regard to a prices and incomes policy, the Government are pressing ahead, on the lines indicated in Chapter 12 of the Third Programme, with their examination of the problems of achieving an effective policy. In addition, the National Industrial Economic Council are currently considering the matter. The Deputy will also be aware that the Minister for Labour and I have recently resumed our general discussions on the current economic situation with the Federated Union of Employers and the Irish Congress of Trade Unions.

Is the Minister aware that in the last week of May and the first fortnight of June of this year he was very much concerned about rising prices and the cost of living? Is he now in a position to do something practical about this? Why not take the necessary steps at least to control the cost of living so as to prevent hardship to workers and to others as a result of the continuous rise in prices?

I would imagine if any Government in the world could find a solution to this problem they would be very happy to put it into effect but so far I am afraid the problem of keeping inflation completely under control has eluded the wisest economists and administrators.

Even yourself.

If anyone has a chance of doing it it is probably myself.

Does the Minister not consider it dishonest to convey to the people that he was concerned about keeping down the cost of living and when he obtained the votes and resumed office he did nothing about it?

We did not secure office on the basis of keeping down the cost of living. If the Deputy would like me to elaborate the various policy reasons why we secured such a wonderful overall majority I would be very happy to do it. Does the Deputy wish me to do that?