asked the Minister for Economic Planning and Development if his attention has been drawn to a newspaper report (details supplied) that real incomes will decline as a result of the Government's 7 per cent pay policy; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Government's Pay Policy.
3.
The newspaper article referred to by the Deputy examines the trend in take home pay in the period end-February to end-November, 1979. The author concludes that, for a single person earning £70 a week, the increase in take-home pay during that period would be 8.39 per cent, while the corresponding increase for a married man with two children earning £90 per week would be 9.34 per cent. Latest estimates of movements in the consumer price index during the period mid-February to mid-November 1979 suggest that the increase will be of the order of 7 per cent during the period. Quite apart from the substantial increase in real incomes enjoyed by the workforce in 1978, therefore, the Government's pay policy will enable workers to enjoy a modest increase in real incomes during the period in which the policy will be in force.
Given the deterioration in the economic outlook due to both the higher cost and restricted supply of oil as well as the damage caused by industrial disputes, there is little scope for any real improvement in incomes this year for those already at work. The best that can be hoped for in growth terms, this year, would be a rise of about 5 per cent. Higher oil prices will absorb 1 to 2 per cent of this, representing a transfer of income abroad which cannot be compensated, a further 2 per cent would be accounted for by the incomes of those newly employed—here the aim would be to at least match last year's rise—this would leave at best somewhere between 1 to 2 per cent for improving incomes of those at work, and even this would not be possible unless there is maximum co-operation from all sections.
The Minister quoted figures relating to February-November with the CPI at 7 per cent and I should like to know why he did that? The 7 per cent referred to in the proposed pay agreement related to only six months.
That is correct.
The other relates to nine months and I should like to know why the Minister did not use comparable sets of figures over a comparable period of time?
I did so because the question was put down to draw my attention to a newspaper article, the details of which were supplied, which claimed that there would be a reduction in real income as a result of the Government's proposed 7 per cent pay rise. My reply dealt with the period covered by the newspaper article in question. I did not choose that period; it was chosen by the author of the article.
Is the Minister aware that the Minister for Finance last week used a figure of 11.5 per cent as an inflation rate for the year?
That was for a 12-month period.
Yes, from November to November.
That is correct. The Minister for Finance was answering on my behalf because I was absent elsewhere. That estimate was put forward by my Department.
Does the Minister's reply not indicate that the budgetary and economic policies of the Government in the short term are in a shambles?
They have collapsed.
The Deputy is trying to indulge in some extravagant comments. I thought Deputies were entitled to ask supplementary questions but not make irrelevant comments.
Pardon me, professor. It appears that the Chair is now being lectured by the professor.
The Deputy could do with a few lectures.
Is it not a fact that the inflation rate for this year is now running into double figures? Is that not an utter break in the economic policy stated by the Minister for Finance in the budget earlier this year?
That does not arise on the question.
Will the Minister answer my question?
Has it not now been firmly established by the Government that the country can no longer tolerate a Government who ignore the economic indicators? The Government's economic policies have collapsed and they no longer have a mandate to govern.
I will answer the Deputy's questions here or outside the House.
The professor has become very quiet.