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Dáil Éireann debate -
Wednesday, 27 Oct 1982

Vol. 338 No. 1

Return to Writ: Galway East. - National Economic Plan: Motion.

I move:

That Dáil Éireann takes note of the Government White Paper The Way Forward.

This is one of the most important debates which any of us have seen in this House. It would not have been unreasonable to hope that it would take place above party-political divisions because of the urgent need for us to assess calmly our economic situation and to identify the course of action we must follow to secure our future and achieve our economic and social potential. I regret that the main Opposition party have decided that the debate will take place along party-political lines. I believe this is a mistake on their part and that the country would have been better served by their deciding to discuss the plan put forward by the Government strictly on economic and fiscal grounds.

The purpose of the debate is for the House — and the nation we represent — to face the reality that unless we achieve the rates of output and sales of goods and services outlined in this plan we cannot eventually support on this island our growing population at reasonable and improving standards of living. This is the central message of this plan. Let there be no mistake about that proposition.

Bigger and richer economies than ours are now struggling with unprecedented levels of unemployment, budget and balance of payments deficits. But our situation and dilemma are in many respects worse than theirs.

I must ask for silence. I cannot hear myself speak.

Quiet, please.

Output per person here is only half the Community average and some of our Community partners have three times our income per person. Even they, with all their accumulated economic strength, find they have not the resources to meet the ravages of this current recession and maintain existing levels of welfare and health services as unemployment mounts.

But our fundamental problem is not just that our limited resources constrain our actions. Our fundamental problem is that our population is growing at four times the Community average and our labour force at twice the Community average. Some would argue, in fact, that the labour force may even grow faster.

That population and labour force growth is what this plan and this debate are about. How do we now provide for a population and a labour force which are growing faster than they were in the years before the Great Famine in 1847? We welcome gladly the growth of our population and the virtual disappearance of the emigration which depleted and disrupted family and community life for more than a century-and-a-half, but this House and the nation must accept that ensuring the employment and welfare of the rising population and labour force imposes on us a need for both strict disciplines and exceptional effort.

The plan outlines these disciplines and the framework inside which that exceptional effort must be put forward.

When this debate has ended, I hope the House will be able to agree on the message that must be put fairly and honestly before the Irish people. I hope we will agree to tell them that this plan — its disciplines and development proposals — and incorporating any constructive suggestions for improvement suggested during the debate, represents the only way forward out of our present difficulties. We would fail in our first responsibility as an independent and sovereign people if we did not establish how our affairs can be successfully and progressively managed.

We are trying to make our way in an international sea of recession. When we look around Europe we see there numbing rates of unemployment. The whole picture shouts the message that unless we can achieve, by our efforts and our discipline, the output and productivity which the plan shows to be necessary we will not halt and reverse our own national unemployment trend.

I expect that there are those who in this debate will say we cannot achieve such rates of output and productivity. To say that, however, is tantamount to saying that we are a people without the determination, the ability and the intelligence to support ourselves at the same standards as other small countries have done. That I cannot accept.

The plan was prepared, as the Government promised from the outset, as an objective assessment and analysis of our problems and prospects. It is based firmly on the skilled advice of all relevant Government Departments, including in particular the Department of Finance and of the Central Bank and independent economic experts. Whatever other criticisms have been levelled against it so far, there has been no serious difference about the analysis of our situation which the plan sets out and I doubt if any will emerge in this debate either. It is, therefore, not a political document in any narrow sense. It is a candid appraisal of our existing situation and leads on, from that appraisal, to give a composite integrated programme of action that must be undertaken on the basis of that analysis. I believe that it cannot be seriously suggested in any quarter that this is a political document or a manifesto of any kind. The unpalatable and unpopular nature of the prescription it puts forward debunks any such suggestion. This plan is what it sets out to be — a programme of national recovery and, just as the Government accepted the fundamental correctness and unassailable logic of the advice they received and on which the plan is based, I am satisfied that the Irish people will equally recognise that this plan outlines the tough and difficult, but the only way forward, and will accept it as such.

Since we became an independent and sovereign people in this part of the island, we have had to face crisis and danger on a number of occasions. When the security and welfare of our people were at risk in the past the people rose to meet the danger and overcome it. I am confident that, if the issue is not confused, if this debate follows an honest course, then the Irish people, seeing clearly what is at stake, will respond magnificently. Without the firm implementation of the strategy of this plan, our economy will decline and our unemployment will mount to a level which we will no longer be able to sustain by taxation and social welfare.

This is not a pleasant or popular message for any Government to give. But let me make it quite clear at the outset of this debate that, no matter what the difficulty, the Government's determination and resolve to give effect to this plan is unshakeable.

We have shown this determination and resolve since we came into office.

We fought off a determined attempt by the Opposition to amend the Finance Bill and to impose some hundreds of millions of extra cost on the Exchequer at this time of crisis in the public finances.

In July, we took a series of far-reaching measures to reduce public expenditure in order to bring it back into line with the expenditure targets of the budget. We have negotiated draft proposals with representatives of the Public Services Committee of the Irish Congress of Trade Unions on public service pay. We are hopeful that our proposals, which are the limit the Exchequer can afford, will be accepted as such by the public service generally. There is now widespread recognition of the need to limit the increasing cost to the Exchequer of the total amount of the public service pay bill if balance is to be restored to the public finances.

We will, following this debate, present to the House the Estimates and the Public Capital Programme for 1983 which will give effect to the commitments made in the plan relating to the public finances.

The debates on this plan and on the 1983 Estimates and Public Capital Programme will give every party and Member of this House the opportunity to discuss the real choices which now face us if we are to rectify the unsustainable imbalances in our internal and external finances and get back into a sound position from which progress is possible.

It will not be sufficient on this occasion to express dissatisfaction with this or that figure or to complain about some reduction or doubt some forecast. Our knowledge of the workings of our economy is too far advanced now for anyone to dispute a figure or a fact without putting forward their own figures and forecasts and explaining what the consequences of their programme will be in employment, unemployment and welfare generally.

Our problems are too great and our prospects too daunting for anyone who thinks they have an alternative acceptable course of action to what this plan contains not to put it forward for debate here and now.

The Government have said repeatedly that we would welcome a constructive debate on this plan and would welcome, in particular, any practicable suggestions for improvement in its content or implementation.

The debate, however, to be constructive and honest must, in the view of the Government, face squarely the central issue. That issue is what rates of growth and productivity are necessary and what sales at home and abroad are necessary if we are to provide our rising population with the prospect of jobs in their own country. There is no room for equivocation here, the increase in our population and our labour force are definitely established. The level of economic output needed to absorb it is calculated and set out in detail in the plan. It is put forward as such, as a calculation of what must be achieved if unemployment is to be got under control. Whatever way we twist and turn the figures or whatever way we analyse the issues, whether as politicians, economists, journalists, leader-writers, employers, or employees we come face to face with that fact which confronts us implacably: we will have to make exceptional efforts to improve our competitiveness and to increase our output and sales of goods and services if we are to support our population at adequate and acceptable standards. I do not believe the plan calculations of the effort required, or, in other words, the extent of the challenge facing our people, can be controverted; but if there are those who think so we will, of course, listen. On the other hand there will be those who will say, indeed are already saying, that we cannot or will not make the effort.

Let the commentators who are saying this — trying to sell us short as a nation — let them go on and say what limited efforts they think we are capable of and what will be the results in unemployment and emigration. They can and should make their defeatist calculations and let us have the results.

The plan tells the Irish people the truth about their situation. This House at the end of this debate must do the same. There can be no shirking or avoiding our democratic responsibility to the nation as a whole to set before them a definite analysis of our economic situation and prospects and the requirements and efforts which are needed. I am confident that if after our days of debate the Irish people fully understand the reality of our economic situation they will undertake the great national effort needed to get us back on the road of progress.

I am glad to say that the services of the European Commission were very helpful to us in the elaboration of the plan, particularly in adopting assumptions about Community and international economic developments and in establishing the general strategy of the plan. I am very glad also to say that we have already had an endorsement by the Commission of the guidelines and strategy of the plan and of the correctness of the basic conditions which the actions outlined in the plan are designed to create.

Deputies

Hear, hear.

The Community, and the other international assumptions underlying the plan are, therefore, the best assumptions that can be made in this uncertain and anxious time as regards the world economy. They assume basically a slow, not spectacular, recovery in demand, a continued moderation in international inflation and stable exchange rate developments. The assumptions are neither unduly optimistic nor pessimistic. They represent responsible moderate assessments now being made by international agencies.

If international events turn out in practice to be more favourable than we are now advised, this will bring us greater economic gains sooner. If, on the other hand, the international developments deteriorate unexpectedly, we will encounter greater difficulties than the plan now envisages.

I should like to outline the essential features of the plan and the reasoning and objectives from which they derive. The plan has two main intentions — to correct fundamental weaknesses in our economic and financial structure and to initiate developmental plans in enlarging our economic capacity, improving its efficiency and output and pushing our economic potential to the highest possible level of realisation in the light of our population needs.

The Government, for their part, have accepted under the plan the heavy responsibility of bringing better balance into the public finances, perhaps at this stage the most difficult part of the whole undertaking. Governments here for ten years have managed our public finances on the basis of substantial current budget deficits financed by borrowing. Governments from all parties have adopted this course. Deficit financing is of course a standard tool of fiscal policy to counter cyclical forces in an economy. Almost without exception, every Government in the western world has resorted to deficit financing in recent years and are all now faced with the painful adjustment to the fact that it is only a temporary solution. Efforts of successive Governments in recent years to reduce and eliminate our budget deficits have been thwarted by recession. This year we have taken firm measures to control public expenditure. Had it not been for the unexpected fall off in revenue — the first such decline in recent years — the budget deficit would be substantially down on last year.

I wish here to reject categorically any suggestion that the public finances have been mismanaged this year. At the beginning of the year estimates of both receipts and expenditure were prepared in the normal way by the experts in the appropriate Departments. These estimates were accepted by this Government and the outgoing Government. As the year proceeded, considerable divergences emerged. In the earlier part of the year these divergences appeared on the expenditure side. The Government moved firmly in July to correct this discrepancy and as a result of the action taken at that time there is every likelihood that the actual outturn on the expenditure side will be fairly well on target with, or even below, the original estimates.

This represents a major achievement in financial management and in normal circumstances would have resulted in the figure projected for the current budget deficit being adhered to. However, as we moved into the latter half of the year a fairly substantial shortfall in receipts began to manifest itself. While the exact cause of this decline is not clear, my own view is that it, more than anything else, reflects the deepening of the recession and a reduction in the general level of economic activity and consumer spending.

The likely outcome, therefore, is that despite the strict curtailment of expenditure to projected levels, because of this decline in revenues we may finish the year with a budget deficit of somewhat over £900 million, a much larger deficit than budgeted for. That is a factual outline of the course the public finances have taken this year. I doubt that this factual outline will prevent that particularly hostile section of the public media from continuing to talk about "mismanagement of the finances"; but I would hope that in the more responsible section it will be acknowledged as the reality, because it is an important factor in our calculations for next year and it has an important bearing on our current discussion.

It should not, therefore, be misrepresented in the way that it has been as being the result of mismanagement rather than the actual fiscal development that it represents. If we are to have an honest debate on next year's situation, this reality must be acknowledged because of the important implications it has for next year's finances. The extent of the borrowing required to meet these yearly deficits and the burden it placed on our income have now made it urgently necessary to act firmly to reduce and eliminate the budget deficit over a reasonably short period.

There is room for disagreement about the period within which the deficit should be phased out, but the majority of responsible economic opinion favours phasing it out at least by 1986. The Labour Party opt for a longer period because of the dangers of an excessive deflationary effect from what they would regard as too rapid an elimination of the deficit. Their proposed phasing would add another £500 million to Exchequer borrowing for current purposes. Having considered everything, we still stay with 1986 as the correct objective.

The Exchequer borrowing requirement has to be reduced progressively to a level which we can fund and service within the capacity of our economic output. We prefer to do this by phasing out the current budget deficit so that we can increase our borrowing for capital purposes substantially over the period of the plan.

All parties are, therefore, agreed on the need to phase out the current budget deficit. The real differences will presumably emerge in discussing how to do it.

The plan stipulates that the deficit must be eliminated mainly by reduction in net expenditure. I am sure that there is no one in this House who will argue that further massive increases in taxation to replace borrowing are the solution. We have made clear in the plan that we intend over the period of the plan to reduce the burden of taxation as a percentage of GNP. By comparison with our wealthier Community partners that percentage is, and will still be, high and represents a heavy charge on our household budgets and the competitive side of economic output.

However, we will improve the equity and shift the burden of taxation. The PAYE sector will be asked to contribute less and within that sector we will improve the equity and progressivity of taxation. We look to capital profits and business profits, both in agriculture and outside it, to contribute substantially more. In all, we expect during the period of the plan to have reduced the PAYE contribution by about £100 million and increased the contribution from other taxation by about £400 million.

This will represent a major change particularly as regards the PAYE sector. The average PAYE employee has seen over the past ten years his real increase in income cut in half by income taxation.

The necessity to phase out the budget deficit and the increase in the Exchequer pay bill next year due to carry-over from 1982 will require some additional taxation but the main attack on the deficit will be by reducing expenditure.

An essential element of our proposals to reduce the deficit is the setting of a strict limit on the increase in the Exchequer pay bill. This limit is based on the limited capacity of the Exchequer. It will be on average 5 per cent for the years up to and including 1986 but 1983 will inevitably contain a substantial carry-over from 1982. In 1982 itself the pay bill will have actually increased by over 15 per cent, even after taking into account the Government's proposals to reduce that bill.

I would point out that at present the bill for public sector pay amounts to one half of the Exchequer expenditure, excluding debt service. It cannot continue to grow by 20 to 25 per cent as it has in recent years. The curtailment of the pay bill, inevitable in view of the limited resources of our economy, will be facilitated by the falling trend in inflation which is now at an underlying rate of less than 10 per cent. We cannot tax or borrow more to increase employment in the public service. There has been a rapid increase in the public service in recent years — an increase of some 50,000 since 1975 alone. The central civil service, the non-commercial State bodies, the Defence Forces, the Garda, the local authorities, the educational system and the health boards have all contributed to this increase. The public service in that wide sense now employs almost one-quarter of our total employment or about 260,000 persons.

We propose under the plan to effect between 1983 and 1986 a net reduction of 4,000 in that considerable body of employees paid from the Exchequer. Already in 1982 some 2,000 vacancies in the civil service have been left unfilled and there have been similar restrictions in operation in other areas. It can be argued that the reductions we propose are not large enough given the state of the public finances. We may, in fact, do better as we pursue the various further investigations we announced in the plan.

A special task force is being established to examine the administrative structures and expenditure programmes of the local authorities and the health boards who between them will spend this year nearly £2 billion in current expenditure alone. No such expert investigation has ever been carried out and we owe it to the taxpayer and the ratepayer now to see to it that every pound spent by these bodies is efficiently and justifiably spent. These bodies have expanded and developed over recent decades on an ad hoc basis and I doubt if there is a Deputy in the House who could not supply us with instances of public complaint in regard to wasteful expenditures, inefficiency and so on. I am convinced that we will find waste, overlapping and duplication and that many procedures, services, systems and processes cannot continue to be justified in our present situation.

We also propose to take a new look at procedures and working methods and practices in the civil service. The Government consider that this is the area, where essential gains in efficiency can be quickly made, that should now be scrutinised instead of the attention that had been given for so long — without much success — to far-reaching changes in the structure of the civil service.

We also propose to reduce non-pay Exchequre expenditure by some 5 per cent in volume between 1982 and 1986. This requires difficult decisions for a community accustomed for some time now to the steady expansion and improvement of public services. Current central Government expenditure as a percentage of GNP has grown from little over 20 per cent in 1960 to nearly 50 per cent in 1982. This rate of increase just cannot continue and must be reversed.

The 1983 Estimates will incorporate the reductions we propose to make in 1983 and the measures involved will be spelled out in detail to this House. We will be very glad to hear the views of Deputies on the reductions we propose for 1983 and on any alternatives that they are prepared to recommend. Since the main Opposition parties now agree with us on the progressive elimination of the budget deficit, we will be glad to have either their broad approval of the reductions we propose or the alternatives they wish to suggest. The time for avoiding these unpleasant issues has passed. Political debate on the economy has entered a new era from the date this plan was published. Parties and Deputies must now say clearly and openly what expenditures they will reduce and what expenditures they will maintain or increase. Agreement on phasing out the budget deficit makes this mandatory on all of us.

We also propose to increase existing and introduce new charges for public services for those who can and should pay for them. We have reached a new point in the development of our public services. We cannot continue to provide free to all, irrespective of income, many of the public services we have developed to date on that principle. The alternatives are to do that or to discontinue the services. This poses very difficult problems of social equity and justice. Free services, irrespective of income, are not a fundamental part of the social philosophy appropriate to our small economy. The plan states very clearly that we must now look at our main social services in the new situation where all accept that there is a new limitation on our resources. Our purpose must be to ensure that these limited resources are used with the greatest care and compassion to protect the standards of the disadvantaged sector, those on lower incomes or in need, and not dissipated to those who do not need them.

We propose, therefore, in the context of permanent economic and social planning arrangements, to review social policies and services within the parameters established by the plan. I understand that the National Economic and Social Council are anxious that such a review be made as soon as possible of our social policies and services and I assure them that this will be done.

In speaking of social welfare, I must emphasise that the plan responds expressly and directly to the growing resentment throughout the working community that our social welfare system is being defrauded by abuse and unjustified recourse to it. There can hardly be a person in the country who is not aware of these abuses, the most common of which is the unjustifiable drawing of unemployment benefit or assistance or disability benefit.

One of the most frequent abuses of the system is deliberate recourse to short-time working because under present regulations relating to benefit and tax, a person can receive more that way than if he were whole-time at work. We will be introducing legislative proposals in this session to deter that abuse.

We will also introduce other changes in the social welfare system, which are set out in the plan, to deter abuse and unjustified recourse to welfare payments.

We will also improve the administrative arrangements to ensure that the placement services of the National manpower Service are used to the fullest extent to place persons on the live register in employment or to establish that they are not interested in being employed.

One of the reasons the current budget deficit should be phased out as soon as practicable is that it enables borrowing to be devoted to its proper purpose — improving the capital stock of the economy as the basis for increased sustainable employment through greater growth, productivity and efficiency.

We propose, therefore, to expand over the period of the plan the Public Capital Programme by an annual average of 3 per cent in volume. In 1983, which is the year in which we must start to reverse the recent trends in our public finances and economy, we must regrettably envisage a fall in that programme so as to bring down the total Exchequer borrowing requirement. But, thereafter, it will increase as borrowing resources are released from current needs to meet the heavy investment requirements of an economy at our stage of development.

I have argued and acted consistently in Government in support of heavily investing in increasing productive capacity, improving infrastructural efficiency and meeting our irreducible needs for social capital. As a result, we now have one of the highest investment ratios in the western world.

The plan aims to increase further our volume of investment while restraining the share of GNP we will borrow for that programme. There are prudent limits on the extent to which we should continue to borrow, particularly when our volume of investment will be exceptionally high and any funds borrowed by the Exchequer give rise to servicing charges which must be met from the current budget. When, however, the objective of phasing out the current budget deficit is achieved, we do not exclude the possibility, if circumstances are favourable, of increasing further in the last years of the plan the share of GNP we will commit to investment through the Public Capital Programme.

We assume, however, that long before that, private investment will commence to make a greater contribution than it does now, stimulated by an economic environment of lower prices and costs, lower interest rates and growing demand at home and abroad.

The priorities in our public investment will be for productive capacity and economic infrastructure. Without these priorities, our economy will not grow in output and efficiency. We must also continue to make substantial investment in social capital because of our population growth. We cannot continue to increase social capital expenditure as a whole but we will maintain it. In housing, favourable developments under the plan, particularly in interest rates, will strengthen the contribution that the private building sector can make to housing our people.

One of the heaviest burdens on our economy in recent years has been the unprecedented high level of interest rates. This has placed heavy costs on farmers and businesses, severely impeded housing and generally adversely affected the entire economy. We cannot be entirely independent of international interest rates which have also been at exceptionally high levels. But the level of the Exchequer borrowing, as reflected in the deficits in our balance of payments, has put upward pressure on our interest rates. The strategy to reduce the Exchequer borrowing requirement and the external deficit will reinforce the downward trend now dominating our interest rates.

The Government have both encouraged and facilitated the very recent reductions in interest and mortgage rates including the further reductions of up to 2 per cent announced today in interest rates. The downward trend has also been assisted by the beneficial effect on the financial markets of the evident determination of this Government since they came into office to improve the condition of the public finances.

We propose under the plan to consider, in consultation with the Central Bank and other relevant interests, the functioning of our financial institutions. The financial sector has grown considerably in size, sophistication and complexity in the past 20 years or so. An appraisal will be timely now that we know from this plan the large expansion in output that is necessary if we are to provide for our population.

A major function of the financial market is to encourage the savings from which our investment can spring. It should be a major concern of our financial system to examine how higher levels of savings can be stimulated and subsequently channeled into priority investment which will sustain permanent growth and employment. There is a need, therefore, to review the workings of our financial markets to ensure that they are adequately organised and adapted for the purposes of a modern economy growing in accordance with clear economic and social priorities.

Our interest rates have, of course, been high partly due to the high rates of inflation we experienced at the height of the recession. International inflation is now moderating. Our import price increase is now only one-third what it was a year ago. The Government's economic and budgetary strategy has been to reinforce that trend. The mid-August consumer price index was only 2.1 per cent up for the quarter, the lowest for four years. The official forecast for the mid-November index — with all the reserve such forecasts must have — is for an increase of much the same size. Our underlying rate of inflation at present is, therefore, probably under 10 per cent as compared with an estimated 17 per cent for this year as a whole and 21 per cent last year.

This is a dramatic change which makes many developments possible which could not be contemplated when our inflation rate was twice what it is now. The downward trend in interest rates will be helped by this fall in inflation. It will lower costs throughout the economy and ease the pressure on household budgets. Above all it will enable us to accept more moderate developments in incomes than were possible when inflation was at its recessionary peak.

The trends in wages and salaries are the most important domestic determinant of prices and costs in our economy since non-agricultural wages and salaries amount to about 60 per cent of our GNP. What we pay ourselves determines, therefore, what we have to charge for the goods and services we produce. Our wages and salaries have risen annually in recent years by from 16 per cent to 20 per cent. This was related to our high rate of inflation. Our trade union leaders and their members have shown clearly their readiness to recognise the reality of our unemployment situation and of the contribution which moderate pay increases can now make to remedying it.

In our the recent negotiations with representatives of the Public Services Committee of the Irish Congress of Trade Unions, on the draft proposals for public sector pay, the same moderate responsible approach was evident. We are fortunate that we have such a trade union movement able to balance fairly the interests of their members and the interests of the community as a whole.

It is this which makes me confident that the curtailment of increases in the Exchequer pay bill until 1986 will be understood by trade unionists particularly against the background of the falling inflation during that period. The curtailment we are forced to impose will not create a fall in standards of living to the extent some commentators have suggested. There will be a very substantial carry-over from 1982 into 1983 public sector pay in a period when inflation will be running at levels about half what they were a year ago and still falling.

A central feature of our pay policy, however, is that the Exchequer pay bill provision envisaged must cover special as well as general pay increases. We question fundamentally the economic justification, in the circumstances of our economy, for many special pay increases based on relativities.

As regards pay in the private sector, this is clearly a matter for free collective bargaining between employers and employees. What we have done in the plan is to propose an average annual unit wage-cost competitive gain in our economy as the only basis on which we can hope to produce and sell enough goods and services to employ and support our growing population. This unit wage-cost competitive gain can be obtained by a combination of wage and productivity increases.

Clearly 1983 will be a transitional year because of the heavy carry-over of pay increases from 1982. But unless we begin next year to establish a pattern of unit wage-cost which gives us an average annual gain of about 4 per cent over our trading competitors our capacity to compete in markets at home and abroad will contract. I know that price is not the only determinant of success in the market place. But for the bulk of our products, we cannot get into the market unless the price is competitive.

If we can get our prices right, the measures under the plan to develop our indigenous industrial capacity in a new co-ordinated comprehensive and selective programme will bring the results we have specified. In addition, overseas manufacturing and service industry investment will increase once it is clear that our costs are gaining competitively on those other countries now seeking the same overseas investment.

There cannot be a Deputy in this House who does not concede the common sense of what this plan proposes for an economy which is so largely dependent on exports. The main domestic determinant of our costs and prices is wage-costs since wages and salaries amount to nearly two-thirds of GNP. Import prices are now rising by about 7 per cent; this reflects the falling trends in wage-costs in other countries to whom we are trying to sell. We must now moderate our income expectations to reflect our need, at a time of falling inflation, to improve our wage-cost competitiveness.

I hope that this will be one of the main messages that will come from this debate. Otherwise, many now in employment may not retain their jobs and the prospects of our being able to employ and support our population will greatly diminish. If we succeed, as I am confident we will, because of the stark truths which this plan contains, in developing moderate and competitive trends in wages and salaries, the Government will take all the action open to them under their existing powers and will examine the need for further powers to ensure that the same moderate and competitive trends apply generally. The powers in prices legislation will be central to the actions of the Government in this matter.

The present hard lesson must be learned that our economy cannot survive if we pay ourselves incomes which we can no longer afford and which the purchasers of our goods are clearly not prepared to pay us.

Growing cost competitiveness will give us the essential foundation on which to expand our output and sales of goods and products on the home and overseas markets. The rates of expansion in output and exports which we could achieve are set out in the plan. These are high rates and represent a major challenge to our enterprise and ability. They are not far above the best rates we have achieved in the past when our industrial capacity was lower and our experience and skill less. We have at present only one quarter of one per cent of world trade. The expansion forecast in our export markets during the period of the plan provides the opportunity to do better than we have in the past.

Even in the depressed export markets since 1979 and with falling cost competitiveness, our manufactured exports have grown annually by about 11 per cent in volume. We can be confident, therefore, of our ability to achieve over the period of the plan an average annual growth in our exports of 12.25 per cent, particularly with the increased output of agriculture. Already in this year of depressed demand we are likely to achieve a volume growth of about 7.5 per cent in our exports.

Also, our output calculations take into account the impact of the determined measures we will take to exploit our hitherto neglected opportunity to supply the home market. We have identified a potential annual home market of £600 million in industrial goods and components, and £250 million in building products which can be met by domestic production. In the domestic market for consumer goods we have lost heavily in our market share — an estimated £400 million in 1980 alone, the latest year for which we have such an estimate. This trend must be reversed and greater cost competitiveness will be the key to that process of reversal.

We will supplement in industrial production the growing cost competitiveness by a new radical direction and co-ordination of State aids to the expansion of our domestic industrial capacity. In future, under the overall direction of a more active industrial development policy by the Department of Industry and Energy, the State agencies concerned with industrial development will undertake in a co-ordinated way a sector by sector and company by company expansion of our industrial capacity. State aids will be combined in the case of each sector and enterprise in a co-ordinated development plan. Aid will be concentrated on enterprises which have a viable and realistic corporate development strategy.

The National Enterprise Agency will supplement the efforts of the private sector in this intensified development programme. Adequate funding will be provided to enable it to engage in all viable projects it identifies, whether alone or in partnership with private enterprise.

The work of the tripartite sectoral development committee will provide essential additional guidance on the sectors and sub-sectors of industry where growth can best be achieved.

Strict criteria of performance will apply to State aids in future. They will not be continued or renewed if the performance of the enterprise in meeting its development objectives is not satisfactory.

The co-ordination of marketing with other State aids is central to the new programme. We must now ensure that marketing at home as well as abroad is greatly improved. We know that much of the loss of the home market to imports is due to lack of adequate and persistent marketing by our own manufacturers. The sectoral development committee are completing a study of our deficiencies in marketing and preparing a programme of action which will be vigorously implemented.

In agriculture we look also for exceptional efforts in output and exports. This I am confident we can get on the basis of the new economic environment we will create through the plan for the farm industry of lower costs, a falling inflation rate and lower interest rates. High input costs, inflation and interest rates have damaged the viability of farming in recent years. We can now look forward to a period under the plan when the viability of farming can be restored.

A four-year development plan for agriculture, prepared by the Minister for Agriculture in conjunction with the main farming organisations, will be published shortly. It will provide for the practical development measures to expand output, productivity and exports in agriculture in the new favourable economic and fiscal climate created by the plan.

In this sector also State aids will be more closely related than in the past to performance. Too much of past investment in farming did not achieve the development envisaged. In future, farmers, financial institutions and Government alike must all be satisfied that aid and investment is geared to practical development objectives.

A major objective in our industrial and agricultural development under the plan will be to ensure that State investment in research, development and advisory services is having practical effect in improving our technology and productivity. We must ensure that this expenditure is deployed in a practical and effective way to provide directly to industry and agriculture the technological and innovative advice it needs.

The considerable technological and scientific skills available in our higher educational institutes must be better deployed in practical advice and assistance to the productive sectors and enterprises throughout the country. This will be part of the new co-ordinated approach to State aids to industry where gaps have grown between industrial development, marketing aids, management development and technological transformation which must now be closed in a concerted effort to bring about the rates of economic expansion our population growth requires.

The plan brings out very clearly that job losses in existing firms is one of our major economic weaknesses. These job losses are due to many causes: loss of cost-competitiveness, declining demand, bad management, poor technology, inadequate marketing. Some level of job losses is inevitable even when economic conditions are generally favourable. But we cannot afford to lose jobs if there is a viable future for the enterprise.

The efforts of the State rescue agencies are now directed to seeking to assist at an early stage firms in difficulties but which have viable prospects. Too often the State rescue agencies are called in when it is too late. We will make all the necessary resources available to these agencies to enable them assist enterprises which they are satisfied have a future. The skills and abilities of these agencies are widely appreciated. I would ask the financial institutions, who very often are aware first when a company are in difficulties, to suggest to such companies as early as possible to approach the State rescue agencies to give them an opportunity in good time to see if they can justifiably help maintain the enterprise and its employment. The financial institutions themselves should, of course, do all they can to assist such companies out of their difficulties.

Under the plan, therefore, the growing cost-competitiveness will be combined with radical sectoral development measures to achieve the output and sales objectives specified in the plan. These objectives can be achieved. If they are not, we must resign ourselves to the fact that we do not have the enterprise and capacity to employ and support our population.

The plan is honest in outlining what our requirements in employment are. There can be nobody in the country, after this plan, who is under any illusion about what a formidable challenge to us is the scale of our employment needs.

We do not conceal how great that challenge is. We admit frankly and honestly that unemployment will continue to grow into 1984 but we expect that, under the policies and measures contained in the plan, the rate of growth will be slow by comparison with recent years.

We can slow, halt and reverse that trend only by achieving the objectives set out in this plan. If we are fully successful we will succed only in 1985 in starting to reduce unemployment. If we do that, we will have by then established the conditions under which unemployment could rapidly fall as we outpace in employment the growth in our labour force.

This is not the sort of outlook any of us gladly accept. But it is the stern reality we must face based on the best technical advice available. It is clear that these projections are accepted by all commentators as accurately describing our dilemma as a people.

I would be very happy if in the course of this debate Deputies can suggest a lesser range of objectives which will enable us to provide the employment we need. That is what this debate is for. We will be very glad to hear and accept less onerous objectives if they can achieve the same results. We do not want to return to a national community debilitated by emigration. We now have the same population that we had in the 1890's. Let us clearly in this debate identify what the employment objectives must be to support that population and let us then work together in harmony and unity to achieve those objectives.

I am very heartened by the response the plan has already evoked. The support it has received from the European Commission has a special significance because of the contribution the European Community makes to our economic welfare.

We intend to enter into discussions with the Commission about the practical possibilities that exist for new efforts by the Community to assist us achieve the objectives of the plan. These objectives are already in accordance with the convergence objectives of the Treaty of Rome and, therefore, warrant new initiatives by the Commission.

Farming organisations have indicated broad support for the plan. The Confederation of Irish Industries and the Federated Union of Employers have also supported its content and its objectives while recognising the exceptional efforts it will demand.

The Irish Congress of Trade Unions, who are now considering the plan, will find in it much that reflects the views they expressed in the consultations we had with them. We have no doubt that they will note in the plan its overriding concern to create conditions in which employment can increase. This we know to be the overriding concern also of congress.

We will, now that we have published the plan, resume with the social partners the consultations we had in its preparation so that we can establish how best we can work together to achieve the objectives of the plan.

I should like to mention a criticism that has been made to the effect that we have adopted the monetarist terminology of saying there is no alternative. We do not say that. In fact the plan outlines in considerable detail what the alternative is — 300,000 unemployed by 1987, a current budget deficit in that year of £3 billion, total Exchequer borrowing of £5 billion. The plan points out what the frightening alternative is if the corrective course of action outlined in the plan is not accepted now as economic policy and followed through by determined implementation.

Another criticism is that the projected rates of growth, improvements in competitiveness and so on are not attainable. My first reply to this criticism is that the plan clearly states they are not guarantees, but it certainly claims that they are attainable. We have the best economic advice available to us to the effect that if the discipline of the plan is accepted by the whole community then the targets set out in the plan can be realised. The international framework inside which the plan is to operate is the best assessment available to us from the most reliable international economic agencies.

The plan is an integrated one. The figures and the projections dovetail into each other. No one element can be isolated as unrealistic and out of line with the general framework and strategy. It may be valid for sideline commentators to say that the targets and projections will not be attained but it is not valid for them to say that they are not attainable. The analysis is correct. The framework built on that analysis is the logical and coherent outcome of the analysis. If the plan is implemented as charted, if the disciplines are accepted, in other words, if the Irish community by a large majority decide to accept and implement the plan then the outcome the plan outlines can and will be reached in 1987.

In bringing this plan before the country, we have provided everyone with the opportunity to take stock of our economic and financial situation — and to give his or her solution. Our economic and financial problems have been the subject of deep analysis and intense debate for the last three years. The Government took up office committed to the task of trying in the national interest to put before this House and the nation an objective and accurate assessment of our situation and its prospects.

We have discharged that task diligently and honestly. We took the best advice available and accepted that advice. This is not a political programme. It is a careful professional assessment of the extent of our problems and of the exceptional efforts it will take to improve that situation. It will require new efforts and new enterprise from us as a people. It will require firmness of resolve, unity of purpose and belief in our abilities.

The way forward is clear. The situation in which we find ourselves and the way in which our economy and our finances are moving cannot continue without dire and unacceptable consequences. Corrective action must be taken and it must start now.

This plan shows how present trends can be reversed and how we can put our economy and our finances back on a sound footing from which we can start to move forward again. The plan is sound, realistic and if it gets support right across the nation, it will work; it will succeed; its targets will be achieved.

The launching of the first Programme of Economic Expansion 24 years ago set out to convince our people that they had the strength and capacity to lift themselves out of the economic and social depression of that time. They had to be convinced — and they were — that, as Seán Lemass said, a rising tide lifted all boats. The launching of that programme marked the beginning of a new and unprecedented era of Irish economic and social development. This National Economic Plan will, I am convinced, do the same.

Success is largely an attitude of mind. When the will to succeed cannot be thwarted success comes well within reach. I ask every section of our people to give us their support in this great task which we have now undertaken. For them and for our nation the rewards which success will bring are great indeed and well worth striving for.

I move amendment No. 1 which has been circulated in the name of Deputy FitzGerald and which rejects this plan:

To add to the motion the following:—

"and rejects the conclusions reached in that document as an inadequate and ineffective response to the grave problems facing the country.

In moving the amendment I should like to point out that the Government in the plan have shown that they have neither the ability nor the intention to make up their minds on many vital issues which are crying out for decision. We have recognised that the reform of the taxation system is a matter of major importance and any document worthy of the title "National Plan" would surely have addressed itself to this subject. There is all the more reason to assume that that would have been so when a massive report had been produced at public expense, the Report of the Commission on Taxation, containing a myriad of recommendations about taxation, recommendations which would release substantial funds of savings by Irish people for investment in job creation. Yet, the Government have funked the issue and failed to make decisions on this massive report. Likewise, in this plan they have failed to make decisions in regard to industrial policy. If there were an overall criticism of the plan it would be that it is terribly weak in so far as specific measures to create employment are concerned or reform the operations of State in so far as their impact on the productive sector of the economy is concerned. Again, it is not as if they lacked information on this subject, just as they did not lack it regarding taxation in the report of the Commission on Taxation. For the last three or four months the Government have had a report in immense detail from consultants paid by the Irish taxpayer very expensively and again the Government failed abjectly to make any decision about the important issues raised in the Telesis Report as regards industrial strategy.

We all recognise that we have problems in industrial relations and if a plan were worthy of the name surely it would deal with such problems. Indeed the Fianna Fáil Government who commissioned the Report of the Commission on Taxation in the first place and now refuse to take decisions on it, knew well for a long time about the commissioning of the review of industrial policy by the National and Economic Social Council and again failed to make decisions on that. They also commissioned the Report of the Commission of Inquiry on Industrial Relations, this substantial report produced by a representative body. In this so-called national plan they have failed to make decisions about any of the issues raised in the Report of the Commission on Industrial Relations. If a plan means anything it must contain decisions. Talking about targets and what you would like to achieve if everything worked out is pure Alice-in-Wonderland talk unless you are prepared to make the necessary decisions. The Government were provided with the means for making the necessary decisions in these substantial reports and they simply funked the issue and would not make decisions. They have no right to describe their document as a national plan when it dodges so many important questions that have been posed not only to them but to the public at large at great public expense in these important reports.

These three massive reports are not the only areas where the Government have abjectly failed to make decisions. They have not made any decisions about the restructuring of CIE which has been the subject of an expensive report — which I do not have to show to the House — by McKinsey consultants, produced again at public expense. In their plan the Government "cogged" substantial portions of this report and reproduced it, from which one would say, "At least they are able to read." They are able to transcribe what the consultants say and put it into another report. Unfortunately, the Government's plan is not an examination to show that they have read all the relevant literature and that they are up to date on what everybody is saying. If a plan means anything, it means decisions and as regards making decisions on any of the matters to which I have referred or the McKinsey Report on CIE, there are no decisions in this plan.

We also have the very important issue of special pay increases and again the Government showed that they have read all the relevant literature on the subject and are quite up to date on the problems being caused by special pay increases in the public sector. If I may quote from page 19 of the plan we are told that the Exchequer pay bill in 1982 contains almost £400 million extra due to special pay increases in the previous three years alone.

Clearly that is a big problem and the Government have identified it. Indeed they have dealt with it in a very full and interesting way in this document that they call a plan. But have they made decisions about that?

I fear they have not. I should like to read the sentence in the plan dealing with special pay increases. I believe it represents a new high in gobbledegook. This is the statement by the Government on this issue:

It is intended to explore with all the interests the possibility of a Commission representative of Government, trade unions and employers to examine the entire question of special pay claims in the context of the long-term optimum development of our economy and employment.

Long-term.

They cannot make up their minds even to establish a commission. They say they will explore the possibility that they might set up a commission. That is decisive government. That is what we need. That will set the country on its feet — a Government prepared to explore the possibility of establishing a commission. Congratulations on your decisiveness on the Commission of Taxation, on the McKinsey Report, on the Commission on Industrial Relations and on special pay claims.

(Interruptions.)

I did not interrupt you, so just keep quiet and listen to me.

I apologise.

Another area where the Government show they are long on analysis but short on decision is that of capital for State companies. The Government told us that the return on money invested in State companies in the past was 4 per cent, but the Government borrowed the money at 15 per cent. That is not a a very good investment equation. I am not sure that any of the financial advisers who advise members of the Government interested in the stock market would advise them to invest in concerns which yield 4 per cent while they borrowed the money at 15 per cent. We should thank the Government for this statistic. One would have expected that they would have announced the establishment of structures which would ensure that they would get at least 20 per cent and not 4 per cent on moneys invested in State companies. What did the Government do? They threw out a number of cliches and then said they would put £350 million into State companies to get a 4 per cent return on money borrowed at 15 per cent. That shows how decisive they are in dealing with the problem that State companies are just not working out.

The Government told us that we are in for difficult times. Decisions will have to be made to cut back expenditure. They are quite vague on where these cuts will be made. They also say there is sufficient money to complete Knock Airport and run it indefinitely and continue the programme of decentralisation of Government Departments. They say there will be 4,000 fewer civil servants in 1986 than there are now. If that is so, what is the point in building a whole lot of offices for them? Surely the logic of this proposal is not great.

The Government had no difficulty in appointing three new Ministers of State today. This will cost a substantial sum of money in terms of offices and State cars. However, the party comes first and people who have been good to the Taoiseach must be rewarded.

It would be churlish of him not to give the due reward to people we are quite pleased to see elevated. The fact that the country is in some financial difficulty and could not really afford a number of additional Ministers of State to churn out letters from their offices and run the country in State cars does not matter. We must have these men appointed because they were good when they were really needed.

Undergraduate stuff.

Very cheap.

That belies in a serious way the Government's intention as far as public finances are concerned. If the country was really in trouble surely the Government would set a good example. They are talking about 4,000 fewer public servants but they have four extra Ministers of State. That is the wrong way to go about it. Surely it makes no sense to cut everywhere except in the Government.

Two. Your arithmetic is childish.

The assumptions upon which the plan are based are invalid. They have not been substantiated and I will deal with this in some detail later in my contribution. The Taoiseach challenges anyone who disagrees with these assumptions to come up with better. That is not a good answer to the fact that your own assumptions are inadequately argued. The Government are the Government. They are the people who have the ability to produce assumptions about the economy and to justify them. They have not justified the assumptions upon which this plan is based.

The Government suggest that anyone who disagrees with the optimistic assumptions produced by them is a defeatist. If the Government took the decisions which were necessary to realise the assumptions they are making about employment, exports and competitiveness over the next four years, then there would be every reason to accept them. What is wrong with the assumptions is not that they are too optimistic but that decisions are not taken in the plan to achieve them. Anyone who questions the validity of the assumptions is not questioning the need for optimism or the need to achieve what the plan sets out to do but is questioning the Government's will to achieve them on the basis of making resolute decisions. I have illustrated on many occasions that the Government dodged issues and did not take necessary decisions.

As far as public expenditure is concerned they are less than frank. They are inclined to call on the Opposition and say: "What would you do if you were in our position?" as if we should produce answers. This has become almost a reflex action on the part of some Ministers whenever they get into a corner.

It is hard to imagine a document which would be less frank than The Way Forward. We are told that low priority investments which do not yield a productive return in the public capital programme will be given less money. The Government are hoping that by using the term “social infrastructure” or “low priority investment” nobody will know what they mean. What do they mean by low priority investment? Does this mean there will be cutbacks in the hospital programme or school building? Does it mean more children will have to spend longer in prefabricated classrooms or old halls? If this is what the Government mean they should say so. They speak in gobbledegook terms about low priority being given, particularly in the early years of the plan, to investments not directly related to productive output which also increase the demand for Exchequer current resources. If this is a document of decisions, which is what a plan is, the Government should tell us honestly what these low priority investments are and should not expect anyone in this House to buy a pig in a poke. If the Government want our support for cutting back on low priority investments they should tell us what they are. They should not expect people to approve of what they are doing simply because they have said it all rather nicely and have used the words the economists have told us should be used. The Government are not like an economist producing a paper. They are the people who should make decisions and tell the people about them. As far as social infrastructure is concerned, they have not told the people what decisions they will make and until they do so they do not deserve support.

They have told us that there will be 4,000 fewer officials in the public sector by 1987. I should like to know in what Departments the officials will be sacked. Will it be in the Department of Agriculture, the Department of Lands, the Department of Finance or in the Revenue Commissioners? Will they be sacked in the planning section of the Department of Finance, which seems to be redundant now because the Taoiseach is writing the plan himself? Will they be sacked in the IDA, in the Department of Industry and Energy or in the Department of the Environment? Where will the 4,000 officials disappear from? We must know the answer to that.

I have my suspicions about what the Government will do and it is about the most irrational way to deal with the matter. If a man retires he will not be replaced. This famous natural wastage will be the way the Government will get rid of 4,000 people. Will the matter be approached in this way where, for instance, a man in the Land Commission will not be replaced when he retires but where another Department, who may have a considerable number of staff not at retiring age, are allowed to keep their full complement of people? In another Department there may be a considerable number of people coming up to retirement age and there will be huge gaps in staff there in three or four years time. This will be simply by the accident that the age structure is different in one Department from that in another. This will be an easy way out for the Government because they will not have to make any decision. They will not have to say that Department A will have more staff and Department B less staff. They can wash their hands of the matter and simply say that they have laid down the principle that vacancies will not be filled and that there is no way staff can be recruited. They can say it is not their business to say where staff should go and that it is a Department's tough luck if many of their people are at retirement age. It does not matter if grants cannot be paid and if the housing programme is ground to a halt. The Government's attitude will be that they made the decision not to fill vacancies and that is that. Is that the plan the Government will adopt? If so, they should tell us and, if it is not the case, they should say where they propose to get rid of 4,000 officials. They have no right to ask this House to accept anything on faith.

The Government have told us that they are considering the possibility of privatising school buses. I should like to know what they mean by this. Will they charge for them? Will they withdraw school buses from national schools and only provide them for children under ten years? They should tell us their proposals regarding school transport. They should not put in sentences about "considering the possibility". A plan does not consider possibilities: it makes decisions. There is no point about talking about possibilities in a plan. The Government could have put a green cover on this paper and told us that it was a discussion paper. I would accept a discussion paper that set out to consider possibilities or even to set up commissions, but a plan should make decisions. This paper does not tell us anything about the Government's decision on school transport. If they are serious about this matter they should tell us their intentions.

There is also mention of local authority rents. We are told how expensive they are and the major problem that exists with regard to financing local authority housing programmes. The statistics in the report are very interesting and I should like to compliment those who prepared them. Where I am worried is regarding the ability of the people who read the statistics to make the necessary decisions. There have not been any decisions about this matter.

The Government cannot come in here, as the Taoiseach has done eloquently and with all the solemnity he can summon on occasion, and urge the House to be responsible and make its decision on this issue when he is not telling us what is the decision with which we are being asked to agree. It does not make sense — like much of what is in the plan. It is no excuse to say it is up to the Opposition to say what they will do. If it is up to us to say what the country should do, the Government should put us in office. Fianna Fáil are in Government now and they should make the decisions. If they do not want to make decisions and if they want to produce evasive papers, they are welcome to these benches. They should not stay on the Government benches, because that is not what the country needs at the present time.

I should like to deal in depth with the most fundamental weakness in the document in so far as its economic content is concerned and the assumptions it is making about what will happen in the economy. Basically the entire burden of the report is summarised in one sentence, namely, if we can get Irish workers to cut their wages on a scale never known in the past then we will produce thousands of new jobs. In a word, that is what this plan has said about the economy. I do not deny — nobody who is responsible could deny — that wage costs represent a real problem in so far as increasing the competitiveness of our economy is concerned. They represent a problem so far as the provision of additional jobs is concerned. However, it is not true, as the plan seems to suggest, that all we need to do is simply to cut wages and thus solve the unemployment problem. The failure of the Government to make decisions on the Telesis Report is particularly important in this context. It is in making decisions on the matters raised in that report that we can do something about creating secure jobs.

Today the commentators had a rather bad day from the Taoiseach. For some reason he seemed to be angry with them, even angrier with them than he was with the Opposition. I will not comment on his obsession about commentators because I am sure they are able to look after themselves. One commentator on the paper with which the Taoiseach occasionally may find himself in agreement —The Irish Press— dealt with the Government's plan and the fact that they have pinned all their hopes so far as the creation of jobs is concerned in getting wage restraint. That commentator made the following point:

After all, if the answer to the unemployment problem lay in reducing productive workers to a state of penury, wouldn't India be the most prosperous state on earth?

That was a very good question, but it was not answered in this plan. The fact is that there is nothing in the plan to tell us how they will achieve this truly miraculous reduction in wages. According to the plan, for a period of four years workers will be asked to accept rates of increase in wages that are about half the rate of inflation. That is asking a great deal. Yet, if that does not happen, the whole plan falls flat on its face so far as employment is concerned.

Many people will be talking about the assumptions and this plan as if they were very complicated and no one could understand them. "Assumptions", "projections" and so on turn people off. If I wanted to put in plain language the case as to whether this plan and these assumptions are valid I would ask a person if he thought it realistic that workers would accept an increase in wages which is half the increase in prices they will pay not just in one year but for the next four years. If the answer is no, it must be said that the plan is not realistic. In plain language that sums up how false are the assumptions of this plan.

There is another assumption which is a little more esoteric but just as important. The plan makes the wonderful assumption that suddenly all our competitors are going to change their economic policies overnight and instead of trying to contain inflation they are going to let it rip. The plan tells us that over the four year period the rate of inflation in unit labour costs of our nearest competitors — Britain, Germany and the United States — is going to increase by 7.5 per cent. On the basis that our unit labour costs will increase by half that amount, we will have this terrific performance in our economy which the Taoiseach is so intent on telling us is optimistic and realistic.

The fact is that next year the increase in unit labour costs in the United Kingdom will not be 7½ per cent but 3 per cent, in Germany 0.5 per cent and in the United States 4 per cent. Yet, this plan blithely assumes that instead of maintaining the level they have already reached at considerable sacrifice — getting their rate of inflation and unit labour costs down to 3 per cent, 0.5 per cent and 4 per cent — everything is going to change, they will let inflation rip over the next four years and allow labour unit costs to increase by 7 per cent. If that does not happen, the plan falls flat on its face.

Does anybody seriously think that any United States administration are going to undo the work they have done in recent times to get inflation down and allow it to shoot up as the Government suggest? Will the new Christian Democrat Government in Germany be more inflationary than the previous Social Democrat Government? That assumption is clearly built into this plan and makes no sense. Is the plan telling us that Mrs. Thatcher — who according to the opinion polls seems likely to remain British Prime Minister for some time — is going to abandon her policies, give into the wets, inflate the British economy and allow prices to rip? That seems to be what the plan is telling us, because unless the United States, Germany and British economic policies are simultaneously and radically reveresed the assumptions about competitiveness in this plan, upon which are based the growth in employment and the targets, simply are not going to happen. One does not have to be an economist to see that for the Government to assume that all those things are going to change in the countries of our major competitors, the plan does not make sense. This means that the assumptions and the plan do not make sense.

It is particularly regrettable that the Government have not taken decisions on the Telesis Report and the vital issues this raised for industrial development in this country. I intend to devote much of my contribution to dealing with the issues of industrial policy that should have been tackled by the Government and to showing that the Fine Gael Party in their policy, Jobs for the Eighties, published the same day as the Telesis Report and prepared without sight of the Telesis Report, tackle many of the issues raised in that report but which are dodged by this Government. There is no point in talking about jobs unless one takes and faces the decisions raised in the Telesis Report, and the Government have dodged that issue.

What are the major conclusions reached in the Telesis Report about the Irish economy? I quote from page 25:

The stated goals for Irish industrial policy are appropriate. The industrial structure described earlier in this report does not, however, reflect the successful achievement of these goals.

There is the same problem in this plan. Its goals are laudable but the decisions do not match. The Telesis Report goes on to identify the failures of Irish industry. It says:

high-skilled, high-technology enterprises are rare; Irish indigenous exports are small and limited in geographic scope; Irish companies are not successfully providing sub-supplies to foreign-owned industry; small firms exist primarily in low-skilled non-traded businesses; little co-operation exists between primary producers and processors in raw materials-based businesses; foreign-owned industry is often unsophisticated and the evolution of existing companies shows inadequate promise for substantial improvement.

The report is quite damning so far as our industrial policy and structure are concerned. It points out that slightly less than half the jobs approved in projects during the 1972-78 period have actually been created. We are all familiar with the spectacle of Ministers arriving and announcing approval of new jobs in this, that or the other factory. Telesis now tells us that slightly less than half of all the jobs announced in that period came to fruition. They go on to say that when subsequent losses of jobs by closure or redundancy in those companies are taken into account, only 20 per cent of job approvals were actually in place at the end of the period. Those figures refer to the job record of indigenous Irish industry and clearly show a lamentable record that should have been addressed by the Government in their economic programme. Their failure to do so shows that their job targets and industrial strategy do not have the foundation they should have.

The report is equally scathing about foreign industries. We pride ourselves on the number of new electronic and electrically-related industries established here at very considerable public cost. The report points out that of the 70 multinational companies in the electrical and electronics industry here, only three have operations in Ireland which embody the key competitive elements of the companies business. The rest are currently manufacturing satellites performing partial steps in the manufacturing process. The report goes on to say that linkages in Ireland in these foreign multinational companies have been limited. It says:

If present levels of skilled development and sub-supply infrastructure are not improved, the industry's long-term future will be threatened.

What is the number of the page from which you quoted?

Page 19. Surely a Government which have a report saying such radical things about industrial development, a Government which are concerned about employment, would have done, said and decided something about recommendations of that seriousness. Yet, they have dodged the issue and completely ignored the Telesis Report and its findings in this so-called plan.

They go on to say in so far as the mechanical engineering industry is concerned that Ireland's foreign-owned mechanical engineering companies consist mainly of sub-assembly and assembly shops of the sort commonly found in newly industrialising countries. Newly industrialising countries are places such as Taiwan and Korea and apparently that is the sort of enterprise we have here. Surely if this document was serious about employment they would have addressed the issue raised by the Telesis Report in that matter. They go on to say about the foreign mechanical engineering industry in Ireland that it is hampered by a shortage of skilled workers and the absence of a skilled infrastructure of suppliers in areas such as casting, tool-making and precision plastics and machine shop subcontractors. If we were serious surely these issues would have been faced.

I believe the best response to the challenge of creating additional employment is to be found in the policy document published by Fine Gael during the past ten days. I should like to tell the House something of the measures we are proposing in that document. This is our contribution which I hope we will be able to implement in Government in the not too distant future. We identified the need to provide more funds for investment. There is no hope of getting ourselves into high value-added, highly-skilled, well-paid occupations unless we have massive investment. We know now that the source of investment overseas is drying up; the so-called pipeline which the IDA have for new products is virtually empty. If we are to get investment in our economy in the future there must be investment from Irish people prepared to put their money into productive projects which will create jobs.

The Government had an opportunity of doing something about this because in the Report of the Commission on Taxation radical proposals were made which would have increased the tax incentive for savings. There cannot be investment unless there is saving. Money must come from somewhere and if there is to be investment people must decide that they will not use money for consumption but put it aside and make it available for investment in creating wealth in the future. Our tax code at present penalises savings. A person who lodges money in a bank and receives 15 per cent interest is taxed on that 15 per cent, even if inflation is running at 15 per cent and the interest paid is simply maintaining the value of the savings. A person who spends the money instead of saving can get away with it. The commission pointed out that there is an artificial disincentive to saving. Fine Gael believe we should take decisions based on the recommendations of the Commission on Taxation so as to make it more attractive for people to save and if we provide the financial mechanism to channel those savings, not into office blocks or Government securities either at home or abroad but into new venture capital bodies that will get investment going in productive enterprise, then we can really start doing something about creating jobs. The Government should — and our Government will — take decisions to provide greater inventives to saving so that we can release funds for investment in high technology. We will ensure that these savings are channelled into the area where they are really needed.

There are two areas identified in our programme where an injection of capital is necessary. There is undoubtedly very considerable scope for small industry in Ireland, particularly in supplying components to the multinational companies which have been brought to this country at considerable public expense. Telesis points out that the Belgian electronics industry which consists mostly of multinational companies has three times more of its components supplied by small Belgian firms than are supplied from within Ireland to our electronics industry. There are immense opportunities there for new employment in small businesses providing components for the electronics and other sophisticated international industries which have been attracted here.

The big obstacle is that the small business people have not the financial resources to make the investments and defer taking any profit for themselves for long enough to get into the type of industry necessary to produce sophisticated equipment. They are so short of money that they must engage in businesses which give a quick return but which in the long run will contribute much less to the economy. We could channel institutional savings through a venture capital body and form a partnership system whereby the venture capital body might take a 49 per cent share of the business and give some management help to the small businessmen. The venture capital body, given that it had some of its own money in the firm, would be far more attentive than even the best intentioned State advisory body. This would be of great assistance to many small businesses for which Telesis says there is ample scope. We must have a system whereby equity funds can be channelled into small industries. The problem about borrowing money is that the small businessman must take all the risks. The bank does not take any risk; it just looks for its money back. We need not more loans but more equity injections into small businesses, people who will share some of the risks. That is what we are proposing.

We equally see the need to do something about the fact that our food processing industries are not being used to full capacity. This problem has been identified in a number of publications in recent days. It is not profitable for farmers to gear up their enterprise to supply all the year round and expensive food processing facilities are lying virtually empty. This has been very strongly criticised in the Telesis Report. Fine Gael believe that we must get farmers involved in some form of advance contract supply of products all the year around. It must be recognised that any such proposal involves the taking of considerable financial risks and the investment of significant financial resources by farmers. In the present financial climate farmers simply have not the courage or perhaps they are wise in not taking these measures. Again the farmer alone is asked to bear the entire risk. In order to produce milk all year around he must have much more food input than if he was only in the summer milk business and he must also have much more sophisticated buildings. The same applies to the meat industry and other industries. It is much cheaper to be engaged in seasonal production and this is the problem facing the food processing industry. There is no point in criticising the farmer. As long as he is asked to bear the entire risk of making the investments necessary it does not make sense for him, because he sees so many other farmers falling by the wayside who did all the things we are now telling farmers they should be doing in order to use their processing facilities to the full.

In our view the answer is to bring some of this saving, this institutional money, into agriculture so that institutional investment can join with food processors and farmers in financing the type of investment and underwriting the maintenance of the type of contracts which are necessary to get the level of production and the consistency of production from our land to the point where we are using our food processing facilities all the year around. That would create very substantial added value in the Irish processing industry which, in turn, would percolate into additional jobs elsewhere in the economy.

If the Government were serious about their plan, they should have taken decisions along those lines to establish venture capital bodies which would get involved in meeting the capital starvation in small businesses and in financing a level of agricultural investment which would ensure that our food processing facilities were used adequately.

In the Fine Gael policy document we have also adverted to the fact that assistance to industry is very badly organised. About five or six Ministers are responsible in one way or another for production: the Minister for Agriculture, the Minister for Forestry and Fisheries, the Minister for Industry, the Minister for Trade, Commerce and Tourism——

The Minister for Finance.

Mr. Bruton

——and the Minister for Finance. They are all pursuing their own different policies with their own different perspectives. The Minister for Trade, Commerce and Tourism may be telling somebody not to do something while the Minister for Industry is telling him to do it. There is no co-ordination of State input into the productive sector of the economy, with one body regulating it and another encouraging it.

Our policy suggests that a Cabinet rank task force of Ministers should be established to bring together all the Ministers who are involved with the productive sector of the economy to streamline and simplify the range of agencies helping or regulating the productive sector of the economy, to propose changes in any rules or regulations which necessarily hamper efficiency and modernisation in the productive sector, to co-ordinate investment by the State in productive businesses, and to map out a rational investment strategy to channel private savings into productive businesses. We believe that it is at Government level only that the mix-up, which is the productive effort of the Government, can be sorted out. That is why we suggest a Cabinet rank task force for this task.

Furthermore we suggest that there is a need for sectoral committees to be established for each industry. This is echoed in the Telesis Report where it is suggested that industry associations for each particular sector of industry should take on a much more extensive role in planning the development of their own industry and providing a more effective liaison with the Government in so far as investment planning for that industry is concerned.

We have proposed that such sectoral committees should be established and that they should be given the task of developing trading corporations which would market Irish goods abroad. The fact of the matter is that most Irish businesses are too small to make any significant penetration of foreign markets. There is a need, therefore, for these businesses to come together and form trading corporations large enough, and with a range of products sufficiently great, and with the financial strength, to become established in foreign markets.

Individual firms will not be able to do that on their own. State agencies such as Córas Tráchtála will not be able to do it either, because they are not directly involved in making the commercial decisions. We must get the existing firms which are too small to come together and co-operate, not only as a matter of goodwill but financially, and to intermesh their operations to get the type of penetration of foreign markets which is necessary. We have made suggestions in this area.

We have also suggested a new deal for the small firms so far as taxation regulations, statistical regulations and loan guarantees are concerned. This would do a great deal to promote diversity and efficiency in the Irish economy. If we are to make progress in creating secure jobs, we must give employees a direct stake in the firms in which they are employed. We have suggested that a scheme should be promoted to encourage the giving of shares to workers in the firms in which they are employed. If this is done we will get over the problem of how to get the wage restraint necessary for productive and employment growth.

If people have a share in the business and if they are to share in the rewards of the restraint they show, they will do so, but if they are told "You must restrain your income and allow profits to rise so that more jobs can be created somewhere else in the economy and you will have no share in the return from this" it will not happen. Yet that is the entire foundation for the document The Way Forward. We are suggesting a way in which it can happen, by creating a tax regime which encourages the taking of shares by workers in the firms in which they are employed. They will then be able to reap some of the rewards for their sacrifice. In our view that will be a successful approach to the problem.

We also believe there is scope for the development of State enterprise in the Irish economy. We do not believe private enterprise alone have a right to engage in productive business. State enterprise should be encouraged so long as they compete on a fair basis with private enterprise and get no concealed subsidy in the form, for instance, of free injections of capital on which they have to pay no interest to the State, and are not asked to perform duties imposed on them by the State or by politicians who say "You are a State company. You must run a bus from A to B regardless of whether it loses money."

The State should not have the right to tell any State company to do that unless the State gives them a subsidy for that purpose. Otherwise the State is not allowing them to compete in the same way as private enterprise. Private enterprise concerns are not told by the State "You must provide this or that service." They are allowed to provide whatever service they want to provide. They are allowed to compete in an open and fair way. In our view State enterprise should be put on exactly the same footing as private enterprise apart from the initial injection of capital.

We propose that to prevent the situation arising which has debilitated and demoralised State enterprise, in which they are the victims of political interference from Ministers, a national development corporation should be established which would be the holding company and which would receive each year an injection of equity from the Department of Finance for investment. They would make the decisions on whether it should go to CIE, to B & I or to Irish Shipping on strictly productive criteria. Politicians would not say "For political reasons we think this company should get more money than that company, although that company will make more money and this company will not because one is located in a marginal constituency."

As we all know, that type of thing is happening in our State enterprises. People in State enterprises know that is happening. The management know and the workers know. Clearly that is totally demoralising from the point of view of getting them to do their best work. There has to be some way of putting a distance between the politicians and commercial decisions by State enterprises. We suggest the establishment of a national development corporation which would be a holding company and which would be the informed shareholder acting on behalf of the public and would not allow the type of ministerial interference which has so demoralised and damaged the reputation of public enterprise. It is no wonder that people are suspicious of any suggestion that the State should become involved in any enterprise because they know that unless the structure is reformed it will simply mean political, not commercial, enterprise by the State. That is no good and we are proposing how it can be changed. That is why I am so critical of the proposal in this plan to inject £350 million into State companies. The Government have not shown us how they will ensure that that so-called financial restructuring of those companies will result in four years' time in their being any better off and any more efficient. They will simply pump more money into those companies without changing the structure which has made them inefficient, namely political interference in their activities. Unless you stop the political interference in State companies it is simply woeful waste to put into these companies £350 million more of State money borrowed at 15 per cent on which we will get a return of 4 per cent. It does not make sense. We have suggested a way in which we could put money into State companies but get a return from it by eliminating the political interference.

I am very disappointed at the sections in this report on forestry. The Telesis report tells us that our forestry resources are seriously under-utilised due to poor organisation, and this plan contains little or nothing to suggest how the organisation of our forestry effort is to be improved. The section on forestry in this report contrasts markedly with the statements made by the spokesman for our party on this subject, Deputy Timmins, at our recent Ard Fheis when he set out detailed proposals on forestry policy which I would commend to the Minister for Fisheries and Forestry and other people who may be interested in consulting the statements made on this matter.

As our party have suggested, we should develop our agriculture by long-term contracts with food processing enterprises with which I have dealt already, through providing mechanisms for co-operative marketing by processing companies and by the introduction of relief labour schemes to take account of the fact that, while most farmers do not need any employees most of the year, at some times of the year they need extra help. Unfortunately at the moment they cannot get that help or many of them go to the employment exchange and get people to work for them even though those people continue to sign. That should not happen but the fact that it happens, although it is against the law, shows a need and opportunity for additional employment on the land at a particular time of the year. We should organise relief labour schemes which will provide us with an opportunity of meeting that need and creating much-needed employment.

As long as we have significant numbers of people unemployed — and even this plan with its very optimistic assumption tells us that a substantial number of people will be unemployed for the next four or five years — we must find ways of putting them usefully to work. One such way is the introduction of job-sharing schemes where, for the same cost to the employer — this perhaps could be started on a pilot basis in the public sector — two young people would be employed rather than one, one of them for two days in the week and the other for three, alternating the following week, with the requirement that they engage in training for the one day in the week on which they are not working and that they would be available to take up full-time employment in the event of the full-time job becoming available in the organisation in which they are employed. That is a constructive way of ensuring that, notwithstanding the substantial unemployment that we have, there will be no young people in five or ten years' time who have had no work. We cannot afford to have people reaching 25 or 26 years of age — as may well happen even on the basis of the optimistic scenarios contained in this plan — without ever having worked. If they have not worked when they reach the age of 25 probably they will never work for the rest of their lives because they will have been so switched off the work ethic that they will be incapable of being integrated into the labour force. Job sharing, so long as it does not add costs to the economy, and we have made detailed proposals in our document in this regard, can give a means whereby many more young people who might otherwise have no experience whatsoever of work on the basis of the assumptions contained in this document and any other realistic assumptions that one might make about the economy, would be given an opportunity of working.

We must consider giving those who are unemployed an opportunity to work voluntarily. As was mentioned on television not so long ago, people in the town of Mullingar who were unemployed decided that they would clean the Royal Canal there and, I understand, had considerable difficulty with the Department of Social Welfare about being allowed to do this because they were told by that Department, who are sticklers for the law, that if they were out cleaning the canal even though they were getting no money for doing it and were still drawing unemployment benefit or unemployment assistance, they were not in the letter of the law available for work and, therefore, could not continue to draw unemployment assistance. I understand that that problem has been overcome and that the Department of Social Welfare after that initial reaction changed their minds and interpreted the law in a sensible way. In raising this issue in this way I do not intend any criticism of the Department of Social Welfare, but it indicates that a significant number of people in Mullingar wanted to do something even for no extra pay. It shows that there is a great social need in this community for something to be done to give those who are unemployed, as long as they are unemployed, the opportunity to be doing something useful. Nothing appears in this plan about this. The plan accepts, even on its own optimistic assumptions, that we will have substantial unemployment for many years to come and nothing is said in this document that is meaningful about ameliorating this problem either through job sharing or through voluntary work schemes such as I have mentioned to give people at least some opportunity to do something useful as long as unemployment continues. I am not suggesting that either job sharing or voluntary work opportunities are a substitute for work. They are not. Clearly at what the community can afford to pay in terms of unemployment benefit, it is no good for the people concerned, but these people even at the reduced levels of income they are receiving now, would prefer to be doing something rather than nothing. If we as a community are serious about helping them to achieve their personal objectives we should provide them with an opportunity, and this document does not do that. Our document does, albeit in a limited way.

The Telesis report on industrial strategy which, as I have said, is the key document in so far as the creation of employment is concerned, says that skill levels of the Irish population are inadequate. The analysis in this plan, in so far as increasing the skill and competence of the Irish workforce is concerned, is extremely weak. All they talk about is increasing the number of places in AnCO without regard to what type of places they will be providing or whether there will be jobs for them. It is simply the usual measure of spend more money, creating more places, as if that solves the problem. That has been the approach down the years. More and more money has been pumped into AnCO since they were created about ten years ago, yet we have the statement in the Telesis report that the skilled efforts of our workforce are inadequate.

Something better than that approach is necessary but it does not appear in this programme. Fine Gael, on the other hand, have made a number of concrete proposals as to what should be done to increase the skilled level of our community, and ensure that school leavers are equipped to take up industrial jobs and are more realistically trained in what industrial work involves. This is done in a number of ways — by people still at school having some actual experience of the industrial world at work, by radically improving the career guidance service by ensuring that people other than teachers are involved in it, and in so far as teachers are involved in career guidance, by ensuring that these have some industrial work experience as part of their training. There is no use in the sole input to career guidance in schools coming from people who have never worked outside the classroom. People advising school leavers on whether they are to become tool makers or fitters, farmers or accountants and who have never worked in any environment other than the classroom should not be giving this advice. I do not deny that they have a contribution to make, but they should not be the only people giving career guidance in our schools. Fine Gael have suggested an alternative whereby, through a carrer guidance team, other people apart from teachers would be involved in career guidance and would be giving more realistic support to the pupils in making the decisions necessary to ensure that the output of our education matches the jobs available in the economy.

Furthermore, we suggest that special measures are necessary to tackle unemployment, in dealing with the educational problems of those who leave school without ever getting any examination — group certificate, intermediate or leaving certificate. Twelve per cent of all our school leavers leave school without ever passing any examination. The Leas-Cheann Comhairle would be very familiar with this problem, but none of us can deny that those who leave school in modern times without having passed any examination must have a much worse chance of getting a secure job than those with even a group certificate. If we are just in our approach to solving unemployment and in not having a minority of 12 per cent who will never get work and may become the cause of crime, violence, vandalism and disturbance, we must do something special for those who have been hard done by society. We have made certain suggestions in this area, to provide them with much greater opportunity for remedial education. It is quite unjust that those who have had the opportunity of being sent to university get by far the largest injection of State funds in terms of State aid per pupil per year, whereas the least amount of State aid per pupil per year is given to the entirety of our population who go to primary schools. Those who leave school at 14 or 15 years of age without having got any examination have received least, not only in terms of educational but of financial support, from the community. It could be argued that our educational expenditure generally is a form of taking from the poor to give to the rich — the reverse of the Robin Hood principle. This will not be changed overnight but it is something which has not even been mentioned is the only way forward. I would have thought that it would have been given at least a line, but it has not been. Something must be done about this and in our policy document we have made some admittedly rather tentative proposals. Tentative as they are, they are a lot more than what appears in the only way forward.

If we are to reach the necessary level of sophistication and skill to create secure jobs for our workforce, there must be a massive increase in the output of technological colleges. The present position is that most of these colleges contain very expensive equipment provided by the Exchequer — laboratory and industrial equipment — actual machinery which would otherwise be in factories located in colleges so that students may work with them. That equipment, if the 24 hours of the day are included, lies idle for 90 per cent of the year. It is not used at night, at weekends, during the four or five months' annual holidays but only used for a relatively few hours out of the year. We are suggesting that instead of putting one stream of students through each regional technical college each year, this throughput should be doubled, using the same equipment, by changing the operation, increasing the length of the academic year and the number of teachers using the facility. If one starts earlier and ends later, extends one's term, and has less holidays, twice as many students than at present could be facilitated without any additional capital expenditure although there would have to be additional current expenditure. That, to my party, makes a lot more sense than building many new regional technological colleges at great public expense in other locations, to be under-utilised as the existing ones are. Ours is a constructive way of doing something about getting a better skilled element in our workforce.

We also intend to tackle a major constraint on industrial development which is recognised in the only way forward — that inflation is higher here than in other countries — but we have made certain specific proposals about how this may be achieved. Perhaps they are not specific enough because in anything to do with industrial relations one must be careful in showing that one will negotiate with other people and is not laying down an edict and saying "That is the way it is going to be". We have been a lot more specific on this subject than the Government have, particularly in regard to the public sector pay issue. Where they were considering setting up a commission to look into the matter, we said quite simply that there is going to be so much money available each year for public sector pay and if you want a special pay increase you must get some other workers to accept less. It is up to the people involved to make the decision within that global sum. That is meeting the issue of special pay increases head on. We did that; the Government funked it. Unless we tackle special pay increases and the whole issue of public sector pay in a realistic fashion and in the long term, keeping agreements if we make them, we will not get to the root of high inflation.

Monopoly and semi-monopoly positions in the economy which allow workers involved in those positions to get increases in wages above what their actual service to the community justifies must be broken up. One example of a semi-monopoly is the banking world, where you have a cartel working. As a result, people in bank employment have been able to get quite generous increases in pay to enable them to agree to technological advances in the banking system which are doing no more than making their jobs secure. If Irish banks do not make use of these technological advances, somebody else will provide those services. The Fine Gael Party and I believe that monopolistic positions of that type in the economy must be broken up so that nobody can get more than he or she is entitled to because of lack of competition.

A special mechanism should be established for identifying changes in the terms of trade so that if the price of what we import increases, as was the case by way of two successive oil price rises, that means no more than that the Irish community is that much poorer but it should not be used as an excuse by some workers for increases in their wages to compensate them for what has happened. If they get such compensation they are only adding to the impoverishment of the Irish community as created by increased oil prices. But what can be done is to establish a system wherein changes in terms of trade that are detrimental are not to be a basis for increases in income for any sector. In that way we will be able to absorb the increases in external prices and get on with the job of creating employment without allowing the increases to become a drag on our performance here.

Perhaps the most topical and interesting aspect of this plan in so far as the ordinary person is concerned is the question of the effect the plan will have on the 1983 budget, that is, if the Government are in office to introduce the budget. If we look carefully at the figures contained in the plan they are very revealing in so far as the question of the 1983 budget is concerned. People who are complacent at the moment about the plan may say that the Government had to produce something, that what they have produced looks all right but these people may have reason for concern later. In this context there are some figures that I should like to put before the House.

If one assumes that existing tax bands and expenditure levels are maintained and that there is a 5 per cent increase in public sector pay — that is what we are to have next year anyway — and if food subsidies increase by about 4 per cent as envisaged in the plan and if social welfare benefits increase by 8 per cent which is a little less than the rate of increase in the cost of living, we will have an opening deficit next year of £1,250 million.

Let us consider what the plan offers in terms of reducing the deficit. We are told that next year this deficit will be 5.5 per cent of GNP. That is £750 million. In other words, the Government are to decrease the deficit from £1,250 million to £750 million. That means they will have to find £500 million either by way of tax increases or by expenditure cuts.

Or a combination of both.

We are entitled to know what tax increases or what expenditure cuts the Government have in mind for bridging this gap. If the House is being asked to approve this plan, as was the Government's original intention anyway though they may have changed their feet on the matter, surely we are entitled to know what it means. It would not be reasonable if, for instance, the shareholders of a company were approached by the board of directors and asked to accept a corporate plan involving cuts of £500 million without being told where the cuts were to be made. Surely we are entitled in this instance to have more detail before being asked to approve of the Government plan. We are not asking the Taoiseach to produce his budget but he should at least indicate the areas and the type of expenditure that will be cut in each instance plus the type of tax increases he has in mind.

I should like to know also what are the Government's assumptions in relation to debt service in so far as the plan is concerned. Obviously, all the assumptions regarding the economy depend on debt service not being too large. In a recent economic study carried out by the DKM economic consultants there are alarming figures about what is to be the burden of current taxation on income tax payers and others in terms of the servicing of the existing national debt. These consultants have given a table for net interest payments abroad in the period 1982 to 1986. Some of those payments will involve private interest payments abroad but the bulk of them will be State payments. The figures are given in constant money terms. According to this report interest payments abroad in 1981 were £340 million or 3.3 per cent of GNP. The figure for 1982 is to be £540 million or 4.6 per cent of GNP. In 1983 the amount to be paid is £690 million or 5.3 per cent of GNP while for 1984 the amount predicted to be paid is £810 million or 5.4 per cent of GNP. In 1985 it will be £910 million; in 1986 it will be £990 million, a huge increase.

In other words, the level of Ireland's interest payments abroad, according to this projection, will be three times as much in 1986 as they were in 1981. Yet that enormous drag on public finances has not been dealt with at all in this document, because we are not told anywhere in the document what is the assumption about foreign interest payments out of the economy. If the Government were serious in this matter they would have told us what would be the likely total interest payments to foreign creditors during the period covered by the plan.

I promised to deal with the interesting situation put to the House by the conflicting declarations of the Taoiseach on what this debate is about. On radio on the Sunday before the famous meeting on the fifth floor where 22 members of the Parliamentary Party indicated they had less than complete confidence in Fianna Fáil's management of the country, the Taoiseach told the Irish people boldly that he would go into the Dáil with this plan and that he would ask the Dáil to approve it and to vote on it so that the Dáil could say quite clearly whether it was for or against it. That brave talk was continued until, for reasons we all regret, the Taoisaech's voting position in the House changed slightly. Then the bravery disappeared and we were told by his representative dealing with the media — I am sure the Taoiseach preferred not to talk to any of those commentators about whom he has become so scathing — that, de facto, there would not be a vote after all, that all the Taoiseach would do would be to ask the Dáil to take note of the document.

Suddenly, all the brave talking about his intention to get the House to make a decision disappeared like snow in spring and we were told that all the House would be asked to do would be to look at the document and to take note of it.

We could take note of the document without having a debate at all. I do not see the point. We all got it through the post and presumably those of us who wished to read it will do so, and there is not any need to have a debate to take note of it. A debate should be one leading to a decision. Oddly, the Government decided that the only debate they would have would be aimed at taking note of the document, and they feigned hurt when the Opposition came along and put down an amendment to oblige them, to allow the Taoiseach to do what he said he would originally, to have a vote on the issue. So we on these benches have restored the Taoiseach to his original brave intentions and we will now have an opportunity to vote on "the only way forward".

I remind Deputies that this document in its foreword claims to be "the only way forward". Therefore, any Deputy who votes for it will be agreeing that it is the only way forward. Presumably if this is the only way forward Deputies who vote "yes" will be denying their own policies. Deputies who agree that this document provides the only way forward will be throwing on to the rubbish heap their own plans for what they think should be done with the economy. If they agree with this plan which in its forword states "this is the only way forward" they will be agreeing, lock, stock and barrel, with the projections in this document, expenditure cuts, targets, and the rest of it, and they can forget about any other policy documents they might be publishing, because this "Way Forward" will become their way forward if they vote for this document.

The House will have to make up its mind. All those Deputies who are worrying about this will have to make up their minds whether to agree with the Taoiseach that this is the only way forward. If they do not agree with the Taoiseach that this is the only way forward he only way forward for them is towards the "Níl" lobby when they come to vote.

I should like to make a few observations briefly about the procedure through which we are debating this document. I am glad, a Cheann Comhairle, to make it in your presence because I know from the day you were appointed of your interest in reform of Dáil procedure. I have spoken for quite some time and I am sure that as the debate continues other Deputies will speak for as long or longer. If we wanted to have rational consideration of this document we could not have adopted a less sensible way than a succession of long speeches, the Taoiseach coming in to speak for an hour, I coming in to speak for 1½ hours, Deputy Desmond coming in to speak for an hour, Deputy Sherlock coming in to speak for an hour — long declamatory speeches. Through such a procedure this document cannot be sensibly considered.

We should have an opportunity to set up a committee of the House to go through the document paragraph by paragraph. Then, if we did not agree with, say, Paragraph 6, Deputy Leyden could say "This is what the Government meant". We could call in the excellent officials from the Department of Finance and other Departments concerned who could give their expert opinions, not political ones, on the economic targets. We could take evidence from the ICOS, a reputable body who have said the targets are a load of nonsense. Having considered all these matters we could come to an agreement, or fail to agree, on the terms of Paragraph 6. We could take the document line by line, assumption by assumption, we could discuss it through and through as we do so well in committees. In that way the Taoiseach would succeed in having the document debated.

However, the sort of dialogue that we could have in committee is not available in this debate. If I raise a question to do with some part of the document, Deputy Leyden will not be able to jump up to answer it, and I do not expect him to do it. Therefore, we are not having a dialogue, we are not really discussing the plan; I am making a speech, Deputy Desmond will make a speech, the Taoiseach has made a speech. At the beginning, we might as well have written these speeches and have them circulated with the Official Report, which is the system adopted in the US in matters of this kind. We are not going any further than that.

I know, Sir, that you will agree with me when I say that if we are to respond to the Taoiseach's invitation to consider this plan properly we must have a special committee on the economy to consider this plan line by line, take evidence from outside experts, listen to officials of the Departments and to the Government's arguments in favour of their document. Without that, these debates are just a waste of time and no matter how the vote goes at the end it will not be the result of a rational consideration of the plan or of anything I have said in the debate. I know what I have said will not have the slightest influence on what Deputy Sherlock and his colleagues will do when they vote — there are other matters they will consider. Therefore, the debate will not make the slightest difference.

Is Deputy Bruton prepared to bring a recommendation to this effect before the Committee on Procedure and Privileges. He is making a very constructive contribution——

He may have come forward with constructive proposals in this regard but we cannot consider them now.

This was discussed some time ago.

Deputy Lawlor in his discussion of this matter has been extremely constructive and I am sure we could agree on this. I am making the point publicly — which I cannot do on the Committee on Procedure and Privileges — that we are really wasting our time here. It would be a good thing if we could change the procedures so that we would not waste our time in the future. That is the point that needs to be made at this juncture.

I do not think there is any point in summing up my remarks and I shall allow Deputy Barry Desmond to get in so that he will have the papers tomorrow morning.

Just so that he will have the papers tomorrow morning.

I wish to give the following addendum——

Two amendments cannot be taken at the same time. You can discuss your amendment but you cannot move it until the end of the debate.

I am glad, a Cheann Comhairle, that the procedure has been clearly established.

I shall make one point before the closure of this opening session, that is that it was indefensible that the Dáil should have remained in recess throughout the whole summer until today in a period of national economic crisis. The unemployment data, the public expenditure data available to us throughout the summer months and the data which have become available to us at regular intervals throughout the summer on State revenue and expenditure show the appallingly serious mismanagement of the country's finances from 1977 onwards but particularly in the period 1980-81.

We had the acknowledgment of this crisis by Deputy Haughey for the very first time in January 1980. That was very welcome. What has shocked me is that from January 1980, for a period now of almost three years, a great deal of salvaging could have been done to ensure national economic recovery, but throughout 1980, 1981 and the first half of 1982 we have had a situation in which the Taoiseach refused to admit that there was the most grave and serious mismanagement of the nation's finance by successive Fianna Fáil Governments from 1977 to 1981 and right through to October 1982. At the end of all of this we get a rhetorical, statistical exercise which I have yet to find one economist of standing in the country in underwriting. Frankly I question the extent to which this document has been underwritten by the Central Bank. I do not believe it at all. I would ask the Taoiseach to produce the names of the economists in the Central Bank who have endorsed this, whether it be the Governor, the board or any other economist in the Central Bank. Neither do I believe that any senior economist in the ESRI has underwritten this document.

If he did he should stand up and say so.

Well, if Dr. Kennedy did he should be fired because it is not a document which any serious economist could stand over. It is not a serious document in terms of being capable of hanging together as an economic document. Neither do I believe that any senior economist in the Department of Finance would be prepared to underwrite this document. It is essentially a rehash within the Taoiseach's Department of the old story in the preparation of an economic plan. One gets all the data together, a great deal of which, particularly that part that one might call the means of salvation generally looks very harsh and one discards that part. One then attempts to jazz-up the first half — and this is very well written in terms of outlining the problems, if I may say so to the Department of Finance and the Department of the Taoiseach — but it carries the age old problem of the Taoiseach: He wants all of the good parts and nothing at all of the difficult parts.

Likewise with Albert.

Well, it is a part of Irish life. When I cast my mind back to the Investment Programme of 1980-81 the same thing applied. When produced it was magnificent on investment but whole sections which should have been published relating to the problem of providing Exchequer finances for investment constituting the disciplines necessary to ensure that that investment was made, all of those sections of the original draft document were discarded. It is precisely the same thing with this document. In other words it is a case of saying: give us a growth rate of 4 per cent or 5 per cent and we will work from there, not from the reality of what it might be but from what we would like it to be.

Tomorrow morning I hope to have some basic documentation from the time I was a junior Minister in the Department of Finance and to prove conclusively that Deputy Haughey was fully aware as far back as January-February 1981, had all the documentation available to him which appears now to some extent in the so-called Way Forward at the end of 1982. I hope to prove that this documentation was fully available to the Government at that time and that, of course, nothing at all was done about it because of the intention to fight a general election on phoney economic analyses despite the fact that the Government were fully appraised by the Department of Finance of the then problems. I shall leave that task until tomorrow morning.

Debate adjourned.
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