National Economic and Social Plan: Motion.

I move:

That Dáil Éireann approves the policies set out in the National Economic and Social Plan—Building on Reality.

The Government's plan Building on Reality 1985-87 is a statement of the Government's general policies for the next three years. In preparing the plan the Government have drawn on advice from many expert sources, and in particular from the National Planning Board, who published their report Proposals for a Plan 1984-87 last April. The social partners and various interest groups have offered views and policy proposals on many areas and these have been carefully considered by the Government.

In making the choices, many of them difficult, the options were limited. It has not been possible to walk away from economic realities and serious budgetary problems or pretend to a belief in instant solutions. Bogus remedies have been avoided.

The challenge facing the nation is immense. In some ways, it is greater than when the first economic programme Economic Development was published in the late fifties. At that time, while there was a crisis of national self-confidence after a period of comparative economic stagnation and large-scale emigration, the external environment was favourable and the world was experiencing a long period of economic growth. In recent times, conditions have been entirely different. The Irish people chose by referendum in 1972 to participate fully in the international trading economy. Full membership of EEC has brought disciplines and costs, as well as benefits. Ireland has become a more open trading economy, more fully exposed to external economic events, at a time when the world economy has been severely disrupted by two major recessions. Our population has been rising, and emigration is low by comparison with the pattern of the fifties. The structure of employment has changed and social, health and educational services have been greatly improved and extended.

Unemployment, with the human misery it entails for so many people, has re-emerged as the major problem. The recession has meant that job opportunities have been diminishing at a time when young people were entering the labour force at the fastest rate in Europe. Public expenditure and taxation have been rising sharply while at the same time demands were being strongly made for both lower taxation and more public expenditure which could only be sustained by more and more borrowing.

On taking office, therefore, the Government were faced with critical policy choices and apparently conflicting priorities arising both from the impact of the recession and from the way the economy had been managed in previous years.

The Government faced that challenge with a range of short-term corrective measures, including difficult decisions in the 1983 and 1984 budgets. The aim was to create the conditions for economic recovery, to minimise any adverse effects on employment and growth, and to preserve the essential fabric of our public services in health, social welfare, education and other areas. Now, Building on Reality contains a set of decisions and priorities for the effective continuation of the Government's work in the medium term.

Last year about this time, I opened a debate in this House on the economic situation on behalf of the Government. In doing so, I referred to the twin dimensions of the task facing the Government; first to the dimension of control which was and is necessary if we are to continue to exercise discretion and choice at national level in the management of the economy and to sustain the social progress already achieved, and secondly to the major need for a creative dimension in national policy if we are to obtain the sustainable and worthwhile jobs that are required by our people in the years ahead. These themes are now just as relevant to the presentation of the national plan Building on Reality which embodies the overall strategy of the Government, both in terms of general policy directions and specific decisions for the next three years.

The phased correction and careful planning of the public finances are still of vital importance. There are and will continue to be major constraints and limitations on policy and on the choices that can be made; these arise from the effects of recession, from the burden of accumulated debt both domestic and foreign, and from the necessity to halt the growth of the overall level of taxation. At different times, in the course of the past 22 months the Government have been criticised for being over-concerned with "bookkeeping", with "balancing the books", with being obsessed with numerical financial targets rather than the real problems of our people in their daily lives. The facts have never sustained this line of argument. On the other hand, the Government have been criticised for not taking more severe action on the public expenditure side. Very often the people or interest groups making this criticism have done so on a general basis, without being specific on where and how public expenditure is to be cut or if they are specific, the direction favoured for cuts often has been, at least by implication, those services in the areas of welfare, health and other areas so vital to the poor and disadvantaged in society. In addition, calls for "reflation", from some quarters at any rate, have been accompanied by clear signals favouring major and indiscriminate restrictions in the social services. The Government reject this approach.

In the plan, the Government have laid out a set of general proposals for the public finances that are consistent with the economic and social policies chosen. The earlier aim of phasing out the current budget deficit by 1987 was always to be seen in the context of taking due regard of prevailing economic conditions, and in particular to the importance of achieving economic growth and dealing with unemployment. The broad overall budgetary targets were met in 1983; we expect the 1984 target to be achieved also. Circumstances clearly dictate that the phasing out of the current budget deficit by 1987 is neither possible nor desirable in terms of public expenditure cuts or increased taxation. It would be immensely deflationary.

Following consideration of the report of the National Planning Board, and in view of the current state of the economy and the trend of interest rates, the Government aim at a position whereby in 1987, there will be:

—a reduction or at least a stabilisation of Exchequer foreign debt and foreign debt servicing, both as a proportion of GNP;

—a halt to the growth of the overall National Debt/GNP ratio;

—a reduction of the balance of payments deficit to a manageable three per cent of GNP;

—a reduction of the Exchequer borrowing requirement to less than 10 per cent of GNP, a level last attained in 1977;

—a reduction of the total public sector borrowing requirement from 17 per cent to just over 11 per cent of GNP;

—a reduction of the current budget deficit to five per cent of GNP.

These objectives are related to the specific assumptions listed in the plan, to the other targets chosen, and to the successful implementation of the policy choices made.

These aims show clearly that the Government are not obsessed with a set of financial targets at the expense of the unemployed, the weak or the poor. They mark a significant step forward in the essential task of correcting the nation's finances and represent a realistic framework within which policies for growth and employment must be developed.

The overall financial situation rules out apparently "easy" solutions by indiscriminate additions to public expenditure involving borrowing in excess of the limits specified. This is so when we examine the facts of the situation. For instance, the National Planning Board report pointed out that in the EEC the average net borrowing of general government for 1975-83 was 4.4 per cent of GDP whereas in Ireland it was 12 per cent of GDP, or almost three times the EEC average. Debt service now accounts for some one-third of total tax revenue and foreign interest payments from the Exchequer are some £700 million in 1984. In 1985-87 much foreign debt will have to be refinanced and additional new loans raised.

Nor is there any answer in increased taxation. The Government have decided that the overall level of taxation cannot be allowed to rise further. There is considerable scope, however, for both changes in the tax system and for new taxes considered necessary in the pursuit of equity, and the plan states several decisions in this area.

The broadening of the tax base and the reduction in the need for social welfare payments through increased employment will aid the process of financial adjustment. While the Government foresee a steadily expanding economy for the next three years, this alone cannot ensure adequate correction in the national finances.

Therefore, in formulating the plan the Government have examined carefully all the major areas of public expenditure both current and capital with a view to achieving economies that are the least damaging socially or have the minimum adverse effect on employment, and devised new measures, for example, in relation to roads and the construction industry that will have a positive effect on employment.

In fact, the plan along with the statement of the Government's industrial policy which preceded it and other Government decision in the course of last year contain a wide number of new and creative measures aimed at employment creation. For their successful implementation, widespread support in the community at large is required, as well as active and continuing consultation with the social partners and a firm will and commitment on the part of the Government.

I want now to refer to the key role of the public sector in ensuring the success of the plan's overall objectives. First, this Government is not anti-public sector, ideologically or otherwise. Secondly, however, the public sector cannot be immune from keen public scrutiny and concern at its performance, both in the Dáil and the Oireachtas Committees and throughout the community. Thirdly, this Government are committed to ensuring greater efficiency in the public sector generally and at establishing monitoring and control procedures that are effective. Fourthly, a substantial proportion of the adjustment called for in the plan falls on the public sector.

I now wish to refer to the semi-State bodies that deal in goods and services in the commercial sector of the economy. Many of these enterprises have experienced serious difficulties in recent years, partly arising as in the rest of the economy from the effects of recession and adverse cost movements. However, in different enterprises other factors have compounded the situation; for example, confusion about objectives and about the commercial, social or strategic roles of various organisations, deficiencies in planning, project design and execution, the expectation by boards, management and employees that Government would in the end support clearly non-commercial operations and honour debts, and a lack of flexibility in adapting to market situations. In the Government's view, commercial public enterprise has a key role to play in the future; this means addressing the weaknesses that have arisen and laying major emphasis on developing modern industry, on commercial viability and on the earning of adequate profits. As stated in the plan, capital investment must be more carefully directed with returns clearly sufficient to justify the allocation of resources to new projects.

Legislation to establish the National Development Corporation is being prepared. The corporation is a primary instrument in translating the Government's philosophy and approach to direct State involvement in industry into practice. The NDC will have a wide ranging mandate in industrial development. For example, it will have key functions in the development of structurally strong Irish firms, in initiating itself new commercial job creating projects and in stimulating projects involving productive employment in the existing public sector, and in acting as a State investment company in existing or new private sector enterprises, or in joint ventures with the private or co-operative sectors, particularly in the advanced technology area. The corporation will become involved in natural-resources based industry; in stimulating the development of food processing, in forest products and in high technology projects. The NDC will deal only with commercial operations and will strengthen indigenous industry and enterprise. The Government will be ready to make funds available to the NDC for commercial projects as and when needed.

It is clear that more enterprise and innovation is required if we are to get the sustainable jobs that are needed. The plan provides a framework aimed at creating favourable conditions for investment and growth and should assist the private, co-operative and the commercial public sector to create more productive jobs in the years ahead. The corporation will need time to develop its expertise to get suitable projects together, but I have no doubt that it can be made to work, and that it can re-introduce the ability to take risks to the commercial public sector bringing a new dynamism to the task of job creation.

I believe that the potential of the commercial public sector, with jobs that will last and stand the test of the market place, can and must be built in the years ahead.

I would like now to refer to the many thousands involved in health, education, local authorities, the Garda and Army, those working in Government Departments, and in public administration generally. Most of these workers provide services that are absolutely essential for the community at large, and they do so with dedication and integrity. They work in areas where market forces, either from the nature of the activities involved or by deliberate choice, do not operate. This does not render their work any less valuable or important — in fact any honest evaluation would suggest that in many cases the contribution to society made by the public service far exceeds that of many types of activity in the market sector of the economy.

However, the structures of the public service have changed little over the years, and now, at a time of scarce resources nationally, it is necessary for efficiency to be improved, for new and better standards of management and accountability to be developed, and for the effectiveness of public expenditure to be more thoroughly analysed. In the plan it is stated that a White Paper is near completion on the management and operation of the public service. It is clear that a more efficient and effective public service requires the co-ordination of policies on manpower, personnel management, organisation and pay. It is in this context that over the period of the plan, a reduction in public service employment is projected to occur; redeployment, retraining, the search for better ways of delivering services to the public and better methods of determining priorities are all factors to be considered carefully.

Pay accounts for the largest share of voted current spending and achievement of the Government's public expenditure targets requires the growth in the public service pay bill, especially in 1985, to be severely restricted. However, the setting of an overall cash allocation for public service pay provides the opportunity for consideration of the appropriate pay structures within the framework of the allocation. It must, indeed, be recognised that public service employees have, in the past been willing to show moderation, most notably in 1982 when the then Government unilaterally amended the public service pay agreement and in a responsible attitude to pay claims in 1984. Given the share of resources pre-empted by debt service, in the plan the Government have sought to achieve an appropriate balance between the need to allocate resources to employment, to essential transfers in the social services, and to public services pay and pensions.

The issue of employment is the central concern of the plan. Since 1980 there has been a decline in the numbers at work of some 40,000. We are now at a turning point, and prospects for increased employment are far better. Inflation has fallen substantially from over 20 per cent in 1982 to about 8 per cent, manufacturing output and exports, particularly in the new industrial sector, are experiencing rapid growth, and the balance of payments has improved significantly.

In all sectors of the economy, there is need for greater initiative, innovation and managerial effectiveness. Competitiveness is vital to the success of the plan, but this concept must be applied far beyond comparisons of movements in money wage rates. While in the short term, with a given technology, movements in money wage rates greater than those of our competitors will tend to reduce investment and increase unemployment, critical additional factors at the level of the enterprise include efficiency in production, adequate quality control, marketing skills, good customer service and a capacity for research and development in new products or methods of production. In both the public and private sectors, there is need for adequate and mutually understood structures for communication and consultation between management and employees.

In the modern enterprise, survival is often dependent on a willingness to develop a commitment to flexibility and change whether in methods of production, work practices or product innovation. The main responsibility in this respect lies with management; its quality and capacity for leadership are critical. In this context also, the plan recognises the importance of good industrial relations between management and employees, refers to discussions on industrial relations reform currently in progress, and notes that the aim is to achieve shortly the maximum possible degree of consensus. The Government intend to introduce new company legislation to deal with malpractices in the management and direction of companies and to act by legislation on the Fourth EEC Directive on Company Law.

Over the period of the plan, world trade and Ireland's export markets are expected to grow by about 4 per cent per annum, and a continuing strong export performance is of great importance to the success of the plan. Therefore, as part of the new industrial policy, State assistance will be directed away from fixed asset investment and towards support for export marketing and the acquisition of technology from abroad. The international environment for manufacturing industry will be highly competitive and technological change is likely to be rapid. Projects will need to be evaluated in the light of their contribution to value added in the economy as a whole — this provides a basis for increased employment through better linkages with sub-supply industries.

The Government's aim is to ensure that the environment created by tax and incentive policies is conducive to employment creation in the private sector, and as I have already said is committed to a programme of action, through the National Development Corporation and other State companies, whereby the public sector can contribute effectively to employment growth in the years ahead. In summary, manufacturing industry is expected to contribute some 13,000 net additional jobs in the period 1984-1987 and private services, where employment has held up well even during the recession, a further 22,000 without including employment in the new schemes started this year and planned for the future.

In the building and construction sector, output has fallen sharply in recent years after a major and somewhat artificial boom in the late seventies. When the Government took office this sector had become over dependent on public spending, and the inherited financial constraint meant that public sector investment could not be undertaken at a level that would offset the substantial fall that occurred in private investment. For the future, substantial increases are planned in road construction and in educational building; the maintenance of the £1,000 grant and £3,000 mortgage subsidy represent important incentives to private housing. New measures relating to local authority housing including a non-repayable grant of £5,000 for a local authority tenant or tenant purchaser buying a private house and giving up a local authority dwelling is an important innovation. In summary, employment in the building and construction sector after a number of years of decline should at least stabilise over the period of the plan.

Agriculture is still of major importance in the Irish economy in terms of output, trade and employment. Stability in the national economic environment, and a reduction in inflation and interest rates are of major significance for future development. Continuing changes in the common agricultural policy make clear the necessity for greater efficiency and competitiveness across the range of farm enterprises. Farming has now become a business, requiring maximum attention to efficient production at farm level, needing adequate training and expertise, and a close co-ordination between the producer and the processor to satisfy the needs in the market place of increasingly sophisticated consumers. While direct employment in farming must be expected to decline, the further development of the food industry, which requires careful planning at farm level, is a major priority for the Government. Controversies about the amounts contributed by farmers in taxation, which I will deal with later, are not to be confused with the vital national need for an efficient, productive agricultural sector.

New measures aimed at the developing of our tourist industry have been outlined in the plan. The Government attach major importance to the development of industries based on natural resources such as forestry and fishing. Work is proceeding on completing reviews and studies in these areas that will provide a firm basis for future development.

A range of supplementary measures to aid employment creation have been devised or are already in operation. The enterprise allowance scheme introduced this year is proving a significant success in providing opportunities for unemployed people to start their own enterprises. The Youth Employment Agency is involved in co-ordinating the vastly expanded training and employment schemes for young people under the age of 25. The employment incentive scheme has recently been revised and improved.

However, the plight of the long-term unemployed whose numbers have grown substantially, calls for additional direct Government action of a special nature. In the plan, the Government specifically reject the false view, held by some sections of society that unemployment is in some sense the "fault" of the individual involved. In fact the great majority of the unemployed are without work through no fault of their own, and are genuinely seeking a job. The Government have announced a significant initiative in the plan — a social employment scheme — directed to offer an element of opportunity and hope to significant numbers of long-term unemployed people, and in addition decided to introduce a special scheme entitled "The Alternance Scheme" offering a combination of appropriate formal training with an element of on-the-job placement in a public or private sector firm or organisation. My colleague, the Minister for Labour, will deal with the details announced in the plan during the course of this debate.

The measures in the plan and other decisions by the Government in the last two years are aimed at halting and eventually reversing the upward trend of unemployment. Already, this year, the rate of growth of unemployment has slowed significantly. The first task is to get overall employment rising again, and the Government are confident that this will be achieved. Experience in other countries of the European Community, whether they are ruled by governments of the right, left, or centre show us that there are no easy remedies, no painless solutions to the unemployment crisis. The Government are determined to avoid bogus optimism; rather the policies in the plan are based on realism and offer a measure of hope that as a society we can gradually, but decisively, again increase the number of our people at work and begin to grapple with the problems of economic and social organisation of the last decade and a half of the century.

The energy sector is important to future economic development. In the plan, the general thrust of Government policy is presented; the need for secure supplies of energy and to implement where possible a market-related pricing policy, to lessen our dependence on imported oil and to encourage the exploration of additional domestic supplies of oil, gas and coal. The distribution of natural gas to towns and cities will be pursued where this is economically justifiable. However, the cost of infrastructure must be recovered and an adequate price paid to Bord Gáis related to the true value of the gas as measured by its opportunity cost. During the period of the plan, the ESB will be completing their programme at Moneypoint. Following consideration of the report of the committee established to review ESB prices, further measures aimed at improving costs and efficiency in the electricity industry will be adopted. I want to direct my main remarks today on energy, however, to issues relating to exploration for oil and gas.

The House is no doubt aware that at various times during the last year or so, and again in the past couple of weeks, there has been much speculation, as reflected particularly in share trading, on whether or not Ireland is about to become an oil province. I would like to say that this type of speculation with the associated euphoric build-up of wild hopes is of no assistance to the national exploration programme. Of its nature, exploration is a long-term job and rewards come only after a long period of high risk investment in exploration, appraisal and development of successful discoveries.

In the long term, it is inevitable that the type of speculation to which I refer will have harmful effects and could be damaging to our efforts to encourage the major oil companies to explore offshore Ireland. Many of the speculators who gamble in oil shares have no long term interest or involvement in the development of offshore exploration.

At the present moment, three offshore wells are being drilled in the Celtic Sea. This is a real and physical manifestation of the Government's ongoing policy, as outlined in the national plan, of seeking a thorough and expenditious programme of exploration of the Irish offshore. It was in pursuance of this policy and in response to the increased oil industry interest in the Celtic Sea generated by the discovery there in 1983, that I launched our third offshore licensing round in February of this year. I remain optimistic about the success of this round and hope that through the round we will achieve the success we have been looking for since the first well was spudded in 1970.

During my tenure as Minister for Energy, every effort will be made to ensure that hydrocarbons discovered will be developed if this can be done. As far as the 1983 discovery is concerned, delineation work is proceeding. In the meantime, exploration work is also going on this year and will continue next year under existing work programmes. The more exploration drilling that takes place, the greater the chances are of identifying the presence of commercial reserves.

If oil revenues are secured in the future, they must be used in such a way that, added to our other resources, they will enable us to achieve a real and lasting economic independence. The Government intend to proceed on that basis.

The Government must, therefore, look ahead, not in terms of any one use of oil resources, but to all possible uses, which could provide the best overall return in terms of economic activity, employment, revenue and securing our national energy requirements.

Our primary consideration in formulating policies will be the national interest. It is vital that the benefits from oil should continue, even when the oil itself has stopped flowing. The House can be assured, therefore, that as Minister for Energy, I intend to apply all the effort and resources necessary to ensure that the oil exploration effort is pushed ahead as vigorously as possible.

The plan recognises that society needs a unified and integrated economic and social policy and that economic growth can be self-defeating if its effects are to maintain and re-enforce injustice. Poverty and inequality are still widespread in Ireland, and even in times of severe financial constraint, social progress is essential. In the plan the background facts common to the formulation of both economic and social policy are stated; the high proportion of our total population in the dependent age groups, our high rate of population increase and our extremely high level of unemployment. Although there is need for selectivity in the use of scarce resources, social policy is not about social expenditure only. The Government are vitally concerned with the wider question of social justice, of appropriate legal provisions and with actions aimed at tackling the structural and other causes of poverty in society.

The plan states some general principles underlying the Government's approach. While there will continue to be access for all, irrespective of income, to certain specified services it is recognised that Government assistance, in the social area, where possible and justifiable, should become more specific and more carefully aimed and delivered to the poor and underprivileged instead of using generalised measures. There must be greater efficiency and cost effectiveness in the administration of the social services, and it is important that all involved — the recipients of the services, those in the public service administering them, and the taxpayers who finance the services — should be prepared to accept changes over the years. Needs and priorities change over time and this may require the modification or phasing out of established services and structures to provide a more efficient system in the future. Nevertheless, any necessary restriction of allocations in areas of main social spending Departments and any decisions on increased charges have been chosen with care, so as to minimise hardship and protect the basic fabric of the system built up over the years.

I do not intend in this presentation to the Dáil to elaborate in detail the Government decisions in the social policy area. Rather I will refer briefly to some of the main areas and decisions taken

—in social welfare, the Government have committed themselves to keeping long term payments at least in line with inflation and short term unemployment and disability payments in line with take home pay.

—a new child benefit scheme will be introduced to unify in a single payment support towards the cost of rearing children. This will integrate the present child support schemes and will be treated as assessable income for tax purposes. In this way the effective benefit of the scheme will be tailored to take account of income levels and family circumstances, so that resources can be more efficiently directed to those in need.

—further reductions in food subsidies will be deferred until the introduction of the child benefit scheme to ease the impact on low income families of increased costs of basic foodstuffs.

—provision has been made for the establishment of a permanent combat poverty organisation to develop community action against poverty.

—in education, primary education will be a priority for expenditure, including special funding for disadvantaged areas. The major thrust of policy at second level will be in the area of curriculum reform, and at third level real resources will be increased by 1987 and the maintenance elements of grants and income limits for eligibility increased. Full time courses for young people involving basic educational training will be developed with the aid of ESF funding.

—three new Bills in relation to the care and protection of children will be presented.

—the development of health policy will be based more and more towards a preventive approach and on the provision of community care. There will be no charges for public ward treatment.

—provision for development aid will be increased by 47 per cent from £34 million to £50 million by 1987 and the share of GNP devoted to this purpose will be raised by 0.015 per cent per annum. This is not as rapid an advance as we would have wished but represents a substantial commitment for the years ahead.

In the plan, the Government have given a clear commitment to policy measures aimed at halting the escalation of the tax burden. Taxation as a proportion of GNP has more than doubled since 1960, and since 1979 the increase has been from just 27 per cent to over 36 per cent of GNP. The overall level of taxation will not be increased; while some individual taxes may have to be increased and new taxes introduced, changes will be counterbalanced by tax reductions. In personal taxation, the Government will adjust tax bands and allowances each year so that the overall income tax burden will not increase.

It is not possible at present to undertake the restructuring of the tax system as recommended by the Commission on Taxation. However, it is accepted that the tax base should be extended and this will be a priority over the period of the plan. There will be selective amendments to VAT rates, but the Government have concluded that a uniform VAT rate is not a feasible option at this time. Any adverse effect of VAT changes on the lower income groups will be taken fully into account by public expenditure and taxation policy generally.

In view of the Government, the yield from capital taxation should be increased in the interests of equity and visible redistribution of wealth in society. The base for capital taxation has been narrowed unacceptably in recent years. Progress, however, has been made in redressing the balance, the residential property tax has been enacted and while the yields have been disappointing so far, increased revenue should arise as the tax becomes a fully established part of the system. The Finance Act of 1984 instituted substantial changes in the taxation of gifts and inheritances, and capital transfers are now taxed comprehensively on a lifetime accession basis. The yield from this revised tax should grow appreciably over time. The Government introduced a significant number of new measures over the last two years aimed at countering tax evasion. These measures are now beginning to show their effect and will be pursued with vigour. It is of critical importance that the collection system is as efficient as possible to ensure that liabilities for all taxes, including capital taxes, are fully discharged.

It is necessary for the Government to devise new measures to substitute for the PLV system and to ensure that the farming community pay their fair contribution. Accordingly, a new farm tax, based on adjusted acreage will apply from 1986. It will be levied and collected by the local authorities, and full time farmers with holdings below 80 adjusted acres will be exempted from income tax from 1986-87. The new arrangements will be devised to increase the yield from farmer taxation in 1986 to about twice the level produced by the present system. This objective of increasing the yield is an absolutely critical factor and the legislation will be designed to ensure that the administration and collection of the tax will be fully effective. The implementation of the farm tax system will be accompanied by appropriate measures to ensure the effective collection of health charges, the youth employment levy and the special income levy, until it is phased out.

There is a widespread demand for a reduction in the level of taxation. However, without unacceptable reductions in public expenditure, much of which is related to services expected and availed of by the public in their daily lives, the furthest the Government can go at present is to prevent the overall level of taxation rising further. Within that framework, the taxation base can be and is being widened and the Government are fully committed to the pursuit of equity.

As I said at the beginning, the Government drew on advice from expert sources in the preparation of the plan, both from within the public service and from the National Planning Board, and the views of the social partners were fully considered. In the final analysis, however, the Government are accountable for the decisions taken and the policy thrust of the plan. However, other experts and interest groups will have different and varying views on the best evolution of policy. While a common basis of analysis may be agreed, trade union, industrial, employer and farm organisations, for example, can be expected to advocate different choices in many areas, both on the broad thrust of policy and on the details of individual decisions. The Government, in seeking the maximum consensus for the implementation of what is a national plan, are conscious of the need for appropriate consultation in the implementation of chosen policies.

In the reconstituted National Economic and Social Council, the representatives of the main economic and social interests will have an effective influence on the development of economic and social policy, and this forum will provide an opportunity for regular consultation with Ministers on economic and social policy. However, direct bilateral contact and meetings between representative interest groups and the Government and individual Ministers will continue to be necessary and appropriate from time to time to discuss policy measures.

The plan contains projected expenditures up to 1987 by ministerial groups. Expenditure on the supply services is projected to increase by £940 million in 1987 over the 1984 budget provision, but this is estimated to reduce this main portion of public expenditure by 2¼ per cent of GNP, that is, from 35 per cent to 32¾ per cent by 1987. I have already referred to the measures decided in relation to public service and parliamentary pay. In addition, wasteful and unproductive expenditures are to be eliminated and a number of other policy decisions have been taken with the objective of reducing current public expenditure as a proportion of GNP.

Allocations for the major headings of the Public Capital Programme are also presented in the plan. The structure of the Public Capital Programme will change significantly over the three years with the phasing down and completion of the ESB investment in additional generating capacity by 1987 and the finalising of an intensive stage of telecommunications investment. Adequate resources will be made available for investment in industry, and as I have already said, the roads programme will be greatly expanded with a planned increase of £53 million or 52 per cent in annual spending within three years. Overall, the Exchequer borrowing requirement for capital purposes will be reduced by less than one percentage point of GNP by 1987.

It should be noted that special circumstances will apply in 1985, with a substantial increase in debt servicing payments. In that year, the Government intend that both the current budget deficit and the Exchequer borrowing requirement are kept broadly to their 1984 proportions of GNP.

I wish now to make some concluding points. Each of the parties in this two-party Government had a major input into the formulation of the plan. What has emerged is a set of decisions and a charting of the course of policy over a three year period — a national plan which the Government are presenting to the Dáil and the people. In the light of commitments entered into in the Programme for Government and the inescapable facts of the economic and social situation facing the country, the plan represents a realistic course for the three year period ahead.

The Fine Gael and Labour Parties have different traditions and political philosophies. Both are independent political parties. This has always been the case in the past and will continue to be the case in the future. Individual party policies for the development of Irish society do and will diverge. Arrangements for participating in Government have been made in the interests of the people as a whole and for stated objectives. What has occurred in the preparation of the plan, and has been happening in Government is that enough common ground has been found and sufficient shared values exist in relation to practical short term political choices to offer a realistic set of proposals for the lifetime of this Dáil. Members of the Government will be participating in this debate over the next few days and elaborating on the plan's proposals. I do not wish to prejudge the contributions to be made by the Opposition parties and Deputies generally. Indeed, I expect that many important points relevant to the implementation of the plan will emerge.

I commend to the House the motion "That Dáil Éireann approves the policies set out in the National Economic and Social Plan Building on Reality.

There is, by now, widespread acceptance of the fact that the document Building on Reality published by the Government last week is basically a political document, born out of a political need and designed to secure a political objective. It is not a plan or a programme for economic development. It is nothing more than a political formula to pull this Coalition Government through a serious internal crisis and to provide it with a facade of temporary unity.

This is a serious indictment of this Government and the integrity of its members. It raises in a fundamental way a doubt about their fitness to govern and to remain in office. It is a heartless breach of faith with the people. At a time when there is mass unemployment and rising emigration, when there is real hardship and deprivation on a wide scale, when excessive taxation is crushing the very life out of business and industry and depressing living standards, when the very fabric of our society is under strain in many areas, this Government of the day turn away from these harsh and pressing realities concerned only with securing their own survival, and put forward this shallow cosmetic document, this series of patent compromises.

The launching of this document saw a new and unhealthy development emerge in Irish political life. Many people, both inside and outside the political arena watched with dismay the shameless propaganda exercise undertaken by the Government and the national handlers as they went about selling this document, trying to put it across as something which it clearly was not.

The whole exercise amounted to a national scandal, a massive attempt at public deception. Political salesmanship was engaged in to a cynical extent, that even for this Government was unprecedented. There was an all-out attempt to swamp the entire media, line up every possible favourable comment, crowd out every channel so that it had all the appearances and trappings of the launch of a new brand of soap powder. If even one-tenth of the effort that was put into selling this inadequate document had been put into its preparation, we might, in this debate, have something worthwhile to debate instead of this pathetic non-event.

Any economic plan has to be based on assumptions and projections. Even in totally planned economies, plans often go drastically wrong and targets remain unfulfilled. In a mixed economy a plan will necessarily be greatly influenced by the unpredictable operation of the market. In a mixed economy like ours an economic plan should outline specific policies with attainable targets. It should project what can be achieved given the right circumstances and the right decisions. One of the advantages of such a plan would be that it would outline the goals, set out the guidelines and the parameters within which all must operate. If the plan is right, it will inspire all sections to strive to achieve the targets set out. Our basic criticism of this present plan is that it sets out to achieve nothing. There is nothing to inspire confidence or special effort. No worthwhile prospects are held up before our people which could motivate them or persuade them to accept the discipline imposed. All it can offer is a continuation of the dismal, depressing, present.

A number of very dubious assumptions are used as a basis for these proposals. The first of these assumptions, of course, concerns US interest rates. It was ironic, but in a way typical of the sort of situation into which this Government constantly blunder, that the day after this document appeared there was a prediction by a former member of the US Federal Reserve Board that, "We are more likely to see interest rates rise rather than fall over the next few months". A number of similar comments have emanated from authoritative sources in the United States. We are already painfully aware of the costly mistake made by the Minister for Finance in his foreign borrowing operations in 1983. His mistaken policy has added millions to our foreign debt and to our interest bill. His track record is pretty poor and the unrealistic assumptions he makes about US interest rates do little to inspire any confidence in this document now before us.

There is also an extraordinary contradiction between this document and the White Paper on industrial policy published a short time ago by the Government. The White Paper states on its very first page that the labour force is growing by about 17,000 a year. The assumption in these proposals, however, published less than three months later, stipulates a growth in the labour force of only 15,000 a year. This is a considerable discrepancy in such a key area and no explanation of any kind is given for this change in assumptions. It may well be that the difference arises from the fact that the Government are now relying on increased emigration to effect this significant change. If that is so we should be told. If the figure for growth in the labour force used in both the industrial White Paper and The Way Forward is still valid, then unemployment with even the Government's projections will be 216,000 in April 1987, which represents a rise of 7,000 on the figures for April 1984.

Another doubtful area is the projection for public service pay. I am well aware of the difficulties a Government encounter in this area in attempting to project any realistic figure even for one year ahead. To make the sort of favourable and optimistic assumption that is included in the proposals in respect of one of the key factors of the whole structure seriously damages the credibility of the entire exercise.

This "plan" as every economist knows is based on doubtful assumptions and suspicious figures. The unemployment figures, the labour force figures, the unrealistic cash limits for Government Departments and local authorities, the forecasts for public service pay, all contribute to make the whole exercise a very unreliable operation. As one economist has said privately, "The plan contains the most fraudulent set of figures since Al Capone's tax return".

For two years now this Government have kept on telling us that they were devoting all their energies to putting the public finances right. They have not done so. The foreign debt is now two and a half times what it was three years ago. This document stipulates that the current budget deficit will remain at its present level of about 7½ per cent of GNP not merely this year but next year as well. On the revised GNP figures published earlier this year the current budget deficit in 1981 was 7.7 per cent of GNP. Next year in 1985 on the basis of the decisions in the Government's document the current budget deficit will be — believe it or not — 7.7 per cent of GNP. That is how much progress has been made with the policy of fiscal rectitude.

Two years ago in his 1982 Ard-Fheis speech the present Taoiseach promised that overspending would be eliminated over a four-year period. "Only the fixing of, and firm adherence to, such a target will maintain our credibility in the eyes of those from whom we have borrowed so many millions", he said. Last Sunday on radio, the Taoiseach was asked about this. His reply was to the effect that, "It seemed like a good idea at the time. All the sacrifices made, all the hardship suffered, all the trauma and disruption of services of the last two years, it now seems, were in aid of nothing more than something that seemed to the Taoiseach like a good idea at the time.

Can the man be serious? Can I ask the Taoiseach, in view of that idiotic statement and all his other abandoned commitments, if there is any good reason in the future for anyone in this country to take seriously a single thing he says?

This document finally explodes the myth of Fine Gael as a party with a caring social philosophy and one committed to social justice. The Government's proposals for the next three years will seriously increase the hardship and the deprivation at present being inflicted on the poorer, weaker and underprivileged sections of our community. Let there be no attempt to hide that grim reality. This document offers the more vulnerable sections nothing but cutbacks in every area that matters to them and that affects their welfare.

Already this heartless Government have taken much away from those whose need is greatest with their inadequate social welfare provisions, tax on clothing and reduction in food subsidies. Whatever about several of them, all Government Ministers cannot be unaware of or oblivious to the combined effects of these measures in terms of real, actual hardship.

They know that there is no compensation for the families of social welfare recipients or, indeed for the vast majority of working families for the reduction in the food subsidies. Can Deputy Desmond, Deputy Leader of the Labour Party and Minister for Health and Social Welfare, as he sets about the progressive dismantling of significant portions of our health and social welfare systems not remember saying here in March 1979:

The evidence, which is available to the Government, is overwhelming. The disadvantaged groups — those in poorer employment, those on lower incomes, those with large families and the elderly living alone, spend a greater proportion of total food expenditure on bread, butter and milk than do the rich.

For a very large number of people the distressing fact is that these proposals contain no commitment anywhere to maintain the real value of social welfare payments. This is despite the quite specific recommendation of the National Planning Board that long-term social welfare benefits, including unemployment assistance, should be indexed against the CPI. It is of deep significance that this Government have not accepted that recommendation. So much for the rhetoric, the protestations, the nauseating clap-trap about commitment to a just society.

Indeed, the social welfare provisions for the next few years, which with the exception of 1987 are only very marginally above the expected rate of inflation, will be quite insufficient to keep up the real value of benefits, especially given the introduction of a temporary new scheme applying to limited categories such as the family income supplement. This is because of the rise in the number of beneficiaries, estimated at 8 per cent between 1981 and 1986. Indeed, the social welfare beneficiary can expect real cutbacks in both the level and range of benefits. Paragraph 5.16 of this document spells this out. I quote:

It is important that everyone in the community — whether those in the public sector administering the social services, or the recipients of the services, or all taxpayers financing the services should be prepared to accept changes over the years. The needs of the country have changed greatly in the last decade so that the range of social services and the way in which they are provided must also change. We must all be prepared to accept a reduction in, and even abandonment of, established services and structures which are no longer appropriate to current needs or requirements, so as to enable an efficient

note the word

and streamlined system to provide economically for the needs of the future.

The chilling message could not be clearer.

Lest there be any doubt about it the Tánaiste, in what can only be described as a rather lack-lustre speech in introducing the motion stated it again. The Tánaiste said:

The plan states some general principles underlying the Government's approach. While there will continue to be access for all irrespective of income to certain specified services it is recognised that Government assistance, in the social area, where possible and justifiable, should become more specific and more carefully aimed and delivered to the poor and underprivileged instead of using generalised measures. There must be greater efficiency and cost effectiveness in the administration of social services, and it is important that all involved — the recipients of the services

the same clap-trap again

those in the public service administering them, and the taxpayers who finance the services — should be prepared to accept changes over the years.

If, by any chance, a member of the British House of Commons had drifted in here and listened to the Tánaiste I do not think it would have required any great stretch of the imagination on his or her part when the Tánaiste reached that section about the social welfare services to think that he, or she, was listening to a British Tory Minister rather than a Labour Tánaiste.

The Irish people have been suffocated over the past three years by the self-righteous rhetoric of the Taoiseach about the just society and concern for the poor and the underprivileged. He now proposes to tax child benefits and short-term welfare benefits as a practical demonstration of that concern.

The family income supplement was paraded for three years as further evidence of the Fine Gael Party's social conscience. It was announced in the 1983 Budget but not introduced. It was announced again in 1984, but deferred to the end of this year. Now we learn it is going to be in operation for only 16 months before being abolished.

As Deputy Barry Desmond, Labour Minister for Health, prepares to axe 3,000 jobs in the health services and dangerously reduce services and the number of hospital beds, I draw to his attention what he said only two years ago in the debate on The Way Forward. He said then:

I want to advance a philosophy which is totally different... the policy objective of our party is a further proportionate actual increase of public expenditure which is necessary to remove the many inequalities in the present system. If we are to have the best standards of health care available in all parts of the country to all those who need those services, if we are to have a greater emphasis on, for example, preventative medicine, which we should have, if we are to have a greater emphasis on community health programmes, which we should have... then there is only one way we can do it, namely, devote a greater proportion of GDP to public expenditure.

If we examine the provisions for Health, can see that over the next three years there will be a cut of about 5 per cent in real terms on the current side, and a larger cut on the capital side. Inevitably, these cuts in the public health services will hit the poorer and less well-off sections especially the old whose very lives often depend on a reasonable level of medical care. I believe that it is inevitable that people will die as a result of these savage cutbacks in our health services. I genuinely cannot understand this Minister for Health and his present stance. It is not just that he is accepting cutbacks in essential services; he is going about implementing them with a ferocity and enthusiasm that would make a right-wing Tory monetarist Minister appear caring by comparison.

Another indicator of the Government's attitude to the less well-off is contained in the sections on local authority housing. All work on repairs and maintenance is to be stopped. Local authority rents are to be raised "progressively" in line with the costs of local authority housing. This is apart altogether from increased local charges. Since many of these charges are flat-rate, they are bound to have the severest impact on those who can least afford to pay them. It is apparent that the poor are being hit from every angle, increased taxes, lower benefits, higher rents, maintenance costs, higher charges, food subsidies abolished, hospital cutbacks and so on.

I shall now deal with the taxation section of the document. The only thing that is clear from the chapter on taxation is that there will be no reduction in the burden of taxation and no significant tax reform before 1987. The question to be examined therefore is whether there will be a further increase in the burden of taxation. The only firm commitment the Government have made is to adjust tax bands and allowances each year so that the overall income tax burden on taxpayers will not increase. That falls considerably short of a specific commitment to indexation for all taxpayers. Moreover, other taxation proposals envisage an increased yield in real terms from capital taxes, a land tax, as well as tax on child benefits and short-term social welfare benefits and new local authority charges. The Government's taxation promises have proved to be worthless so far and the public should not pay the slightest attention to the promise that taxation will be kept to its present level of 36½ per cent of GNP, especially as GNP for any given year is not determined finally till long after the event. There is also of course a sleight of hand involved, to the extent that taxes raised locally, such as the land tax or local charges, will not figure in Exchequer receipts, so that when the Taoiseach is talking of keeping taxation at its present level, he is of course ignoring an unknown number of local taxes yet to be introduced.

The Fine Gael Party have executed extraordinary U-turns on taxation policy. Three years ago the present Taoiseach specifically and personally promised the housewives of Ireland a tax refund of £9.60 every week to be delivered to them personally in their homes. At the same time he promised to reduce the standard rate to 25 per cent. These promises were flagrantly dishonoured. The Taoiseach at one time was all for a system of tax credits also. He has now discovered that they were not such a good idea after all. Fine Gael do not keep their promises about tax.

Two years ago the main thrust of Deputy Bruton's attack on The Way Forward was that it contained no decisions on the report of the Commission on Taxation. Now the position is that the basic ideas in the two reports of the commission on direct and indirect taxation have been peremptorily dismissed not only by the Minister for Finance but by the Government as a whole.

The most heralded taxation measure in this document was the introduction of a land tax on farmers. It is important that what exactly is proposed and its effects should be clearly understood by the general taxpaying public. First of all, it is certain that the new system, when implemented in 1986, will make no contribution of any significance to alleviating the burden of the PAYE sector. Secondly, there will be no change in the situation of the larger farmer. The removal of income tax from all farmers with under 80 adjusted acres will mean that from 1986 on there will be fewer farmers in the income tax net than at any time in the last five years.

The Dáil and the public are entitled to know if the claim by Professor Walsh that less tax will be paid overall by farmers stands up. This statement must be urgently investigated and the results disclosed to us all. While the land tax system may have merits for some categories of farmer, it will not be seen as fair, in the way that a system based on income is perceived to be. There will be anomalies and injustices. Farmers should realise that the new system, once established, leaves them open to arbitrary increases in taxation, unrelated to income, which is not possible in an income based system.

While I am on the subject of farming, I should point out that this document has no proposals for the development of our natural resources, such as agriculture, fisheries and forestry — key economic areas. There is no real concept of how they might contribute to national development. The next three years will see a further substantial decline in investment in agriculture. In 1983 Fianna Fáil proposed to invest £137 million in agricultural development. In 1987 the present Government propose to invest £73 million.

Taking into account the decline of money values over the period, it means that State investment in agriculture over the period of this Government has been cut by three-fifths. The Fianna Fáil Four Year Plan for Agriculture has been dropped; the farm modernisation scheme has been scrapped; the Land Commission is to be abolished. A totally negative attitude is predominant. It would seem that agriculture is now regarded as incapable of making any worthwhile contribution to national economic objectives and that the Government have written it off. This is economic madness.

The latest appalling muddle which has arisen over the figures on milk output makes one wonder if this Government can get anything right. It is just one more incident in a series of errors of judgment, miscalculations and plain simple mistakes which began with the famous discovery of the "Black hole" in the balance of payments statistics at the beginning of the year and has continued since. The passages on fisheries and forestry are even more perfunctory than those on agriculture and merely state that some committee or other body is looking into them further.

One of the most cynical aspects of this whole exercise by the Government and their handlers is the inclusion of the word "reality" in the title of this document. One harsh reality of Irish life today is that there are over 211,000 people unemployed. What has the plan to offer these thousands of men and women of whom over 66,000 are young people under the age of 25?

Does the document recognise the reality that the dreaded spectre of the emigration ship has returned to Irish life? Have the authors of these proposals read a series of articles published recently in The Irish Press by that paper's London correspondent who suggests that some 70 young Irish boys and girls arrived in London every day over the summer months and that this would indicate that there are now over 6,000 young Irish people on the streets of London? Is there any realism in this document in so far as the parents who sacrificed so much to educate these young boys and girls are concerned?

Another harsh reality of life in Ireland today is the crushing burden of personal taxation both direct and indirect. Are the authors of these proposals aware of the reality of the economic and social consequences of this high level of taxation and the acute anxiety and distress it causes to thousands and thousands of families who are now at their wits' end to know how they are to pay their food bills, mortgages and countless other outgoings, impositions and charges?

Is there any reality in their plan to eliminate the current budget deficit, to reduce foreign borrowing? Are there any realistic plans to develop our natural resources, agriculture, forestry, fisheries? The great gap in the Government's proposals for the next three years is in regard to employment or, as we now must unfortunately think in terms of, unemployment.

The crucial aspect of economic and social life in Ireland today is the frightening level of unemployment. We now have permanent, mass unemployment with all that means in human terms, the loss of dignity and self-respect, hardship, degradation, the disruption of family life. To me, it is hardly credible that the authors of these proposals and the members of the Government are oblivious to the deep-seated evil that unemployment represents. We can only assume that they have turned their faces away from its awfulness and placed their economic theories and their belief in fiscal rectitude ahead of and above everything else. They cannot, apparently, see that, if mass unemployment is allowed to continue indefinitely, then nothing else will matter and everything will go down in a whirlpool of social disorder that spreads wider every day.

I want to pose this question again and again. Can we be satisfied with a society of which mass unemployment is a permanent feature? Can we regard ourselves as doing our duty to the Irish people and organising their affairs satisfactorily when more than 200,000 people are permanently barred from the normal economic process; prevented from playing any part in it; left standing idle and deprived of all these things which their efforts could and should provide for them and their families?

At the last election the Labour Party told the electorate: "Labour does not accept the prospect of continuing mass unemployment". If they did not accept it then, do they now? If they do not accept it now, then they cannot accept this "plan", because mass unemployment for the next three years is an integral part of this document.

We in Fianna Fáil do not underestimate the magnitude of the task of tackling unemployment. There is an enormous amount of ground to be made up. The haemorrhage of recent closures and redundancies has been unceasing and the damage caused has been deep and wide.

The first essential step must be a complete turnaround in thinking and policy. A constant and sustained attack on the levels of unemployment must be placed as the central objective of Government economic policy. This must be the first priority. If it is, then all other aspects of policy can be accommodated to this central objective. To turn monetarist fiscal targets into policy objectives has been shown over the last two bitter years to be self-defeating. The current budget deficit has not been reduced, foreign and domestic indebtedness rose by a greater amount in 1983 than ever before. Taxation is at its highest level ever. Monetarist policies which progressively depress the economy make the achievement of even their own limited and barren objectives increasingly impossible.

It is all too clear from this document that these mistaken policies of the last two years will be persisted in for the next three. The bookkeeping ethos still prevails. There is no room for increased public or private investment in these proposals. On the contrary, the public capital programme will be continuously scaled down so that, as Table 7.2 on Page 145 clearly shows, by 1987 it will be half the real level proposed by us in the 1983 public capital programme, published in November 1982 and a further 20 per cent below its present real level.

That is the fundamental difference between The Way Forward and Building on Reality— the approach to investment and employment. This present document pays lip service to the importance of unemployment, but it is not, in fact, concerned with investment and job creation. The Way Forward set about providing for economic development while correcting the nations's finances. It proposed a rational and balanced approach, the right mix of corrective and developmental action.

Our approach was to make room for capital investment as the key to job creation. In this present document Table 1.2 on page 26 is a damning indictment of a callous administration which coldly contemplates an actual increase in the present level of unemployment as the outcome of its so-called three year plan.

In order to identify our own objectives and make our plans to reach these objectives, we must look carefully and in detail into what exactly is happening on the employment scene, not just here at home but in the world around us. Unemployment throughout the developed world is at an unprecedented level with almost 33 million people unemployed in the OECD area as a whole.

The picture, however, is not a uniform one and there are considerable differences between the different regions even within the developed world. The broad picture is that America and Japan, while still suffering from rates of unemployment which would have been regarded as unacceptable in previous decades, are now showing some improvement while the overall situation in Europe continues to worsen — a reflection on the democratic leaders of the European Community.

Just as there are regional differences in the employment situation, there are even more pronounced differences in all the regions between the different sectors of the economy and a definite and significant shift in employment between the sectors can be clearly discerned. We must study these in depth and see what lessons we can learn and what guidelines they can provide for us in our own situation. While there is a wide variety of local and regional differences, the general trend throughout the Western developed world is reasonably clear in broad outline. There is an overall need throughout the whole developed world for sustained economic growth, financed by investment. New jobs in massive numbers are required, both to provide for the overall increase in the labour force and to provide jobs for those leaving agriculture and those who are being displaced from their employment because of the decline in traditional manufacturing or "smokestack industries".

On the other side, job opportunities are arising in the fast growing high-technology sectors of manufacturing industry and in a very rapidly expanding services sector. The changeover in job opportunities from traditional manufacturing industry to the services sector has been dramatic over recent decades. In the OECD area, as a whole 60 per cent of persons employed now work in service activities, while in North America the proportion is 69 per cent. Industry, as a whole, now accounts for only 32 per cent of employment.

I find this overall trend in the developed world very encouraging and I see it offering us a clear path of opportunity along which we can travel. The two areas where growth is evident and where the job opportunities exist, that is, high-technology, scientifically-based industry and services industries are ones which we in Ireland are particularly well placed and equipped to exploit.

As I have often pointed out in the past, we have an educated, well-trained, flexible, young population. We have a higher proportion of our population in third-level education than in many larger and more industrialised countries. Most of the expansion in the third-level sector of our education has been technologically and scientifically oriented. We do not have the millstone of a vast workforce locked into old declining industries. Our population is young and small enough to enable the entire workforce to be fully and remuneratively absorbed into the new expanding areas. Mass unemployment is not natural nor need we accept it as the norm. It is simply that new forms of activity are taking shape and we must become part of them.

In my view, the future is on our side. World trends are in our favour. But we must move quickly. We must identify the opportunities and plan the lines along which we intend to develop; the sectors we intend to get into; the training and educational programmes we need; the categories of trained personnel we need. There is no shortage of expert advice and recommendations. What is needed, however, is a Government who understand the opportunities, who understand the changing environment and who are prepared to move comprehensively in response to these changes.

This document and these proposals give no indication whatever of any thinking along these lines by this Government or any realisation that they are aware of what is happening in the world around us and what we should be doing to lever ourselves into the forefront of the nations that are adapting successfully in this rapidly changing world.

This document and these proposals must be condemned because their entire emphasis is wrong. They offer no prospects of development, of investment or of an expansion in employment. They propose further depression, more closures, more unemployment, more hardship.

Since the document has been published, the Taoiseach has spoken on a number of occasions about these proposals offering stability. Of course they offer stability, they plan for stability, but it is not the kind of stability that this country needs. The Taoiseach offers us the stability of depression. His proposals will ensure that we will have stable but appallingly high rates of unemployment, that we will have stable but an appallingly high rate of personal taxation. We do not need that kind of stability. What we need is progress, expansion, development and, above all, investment. Investment today means jobs tomorrow. While the proposals include a small amount of capital investment in one sector, investment which indeed we have constantly advocated for the last two years, this is not, in fact, additional investment. It is merely a switch within an overall limit which in real terms will decline during the period of these proposals.

I imagine a great many people must have gasped at the sheer audacity of the Taoiseach when they heard him in his Ard Fheis speech last Saturday actually say that "this Government will dust off the JCBs left idle by the recession that began in 1980 under Fianna Fáil". I think that one will go into the Guinness Book of Records.

It is in the record of the unemployment statistics already.

The recession in the building industry did not begin in 1980 under Fianna Fáil. The downward decline started in the second half of 1981 under this Coalition Government and this Taoiseach and every building worker knows it.

A Deputy

That is for sure.

The construction industry has been savagely hit by the actions of the Government. In every year between 1977 and 1982 there was a real increase in public capital expenditure affecting the building industry. In 1983 public capital spending on building construction under the Coalition fell by 15½ per cent and it fell by another 6½ per cent in 1984. As a result there has been a fall in output of the building industry of at least 14 per cent over the last two years. Employment in the building industry fell by 8,000 in 1983 and will further decline in 1984. Figures recently published by the Central Statistics Office show that employment in the building industry is 65 per cent of what it was in 1979. Housing output will fall back to around 25,000 this year, for the first time since 1976-77.

It is clear from the public capital programme provisions in this document that expenditure will be reduced by another 20 per cent between now and 1987 and that the building and construction industry can only look forward to a very bleak future. The much publicised expenditure on roads is, of course, welcome and, in fact, we have been pressing for it for more than two years, but it is minimal and will be more than counteracted by reductions elsewhere.

Employment in building and construction is projected in the document to be maintained at its present level over the next three years, even though real public expenditure is declining. The Tánaiste has just referred to that. They hope only to retain employment at its present depressed level for the next three years, even though real public expenditure is declining. If real public expenditure on building and construction is declining the only way employment can be maintained, even at its present depressed level, is by investment in the building industry by the private sector. But no attempt is made in the document to show how the private sector activity can be revived, when all the present evidence points in the opposite direction. This document inexplicably ignores the central importance of the construction industry and its enormous potential for employment and for generating economic development generally.

I cannot understand how at this stage, with the present condition of the economy, some real positive, concrete effort was not made to get the building and construction industry going again.

This Taoiseach and this Government have made a farce of the legitimate practice of party election platforms and policy undertakings. In a comparatively short period of years, they have succeeded in building a massive pyramid of broken promises and dishonoured political commitments and undertakings.

I could, if I so wished, devote this entire speech to a catalogue of such broken promises. It would not be very productive. I shall, however, confine myself to giving one specific example which is very relevant to this debate and which is a kind of a prototype of all the others. Nearly two years ago, Fine Gael and Labour came together on the basis of a joint programme for Government. One of the first sentences in that programme reads:

The dual task of halting and reversing the growth of unemployment, while phasing out the current Budget Deficit holds a greater challenge than any Irish Government has faced domestically since the earlier years of this State. Fine Gael and Labour Parties recognise and are prepared to face up to this twin challenge.

The document presented to us now two years later does not even attempt to offer any prospect of reversing the growth in unemployment. As I have pointed out on many occasions, at the end of the three-year period of this plan, unemployment will be higher than it is now. Neither does the plan purport to phase out the current budget deficit by 1987. Therefore, two of the most important central promises in the Programme for Government have been totally discarded so far as the plan we are discussing is concerned.

The document is an acknowledgement of failure, there is no attempt to offer a solution to the two main problems confronting the Irish people today; mass unemployment and a crushing level of taxation. Between now and 1987, even if everything predicted in the proposals works out, unemployment will be actually higher than today and the levels of taxation will not be reduced. What sort of a plan is this? Even if it meets its own targets it will still leave all our problems unsolved and leave the economic situation as bad as if not worse than it is today. It is a classic example of the futility of running faster in order merely to remain in the same place.

The Irish Congress of Trade Unions have recently published their framework for a national plan. I should like to endorse fully the objective outlined in the opening paragraph of that document and I quote:

The first priority for the Trade Union Movement is the creation and maintenance of jobs for all able and willing to work. The major issue facing Irish society over the next decade is the need for a rapid development of the economy so as to create the tens of thousands of jobs required for young people coming on to the labour market, to provide work for the unemployed, as well as to ensure the resources for essential social services.

That is the right approach. We in Fianna Fáil are in broad agreement with the thinking of Congress in regard to a national plan and I should very much welcome an opportunity to discuss with the Executive Committee of the Irish Congress of Trade Unions their proposals for such a national plan. I believe that the present economic situation is so desperate that, whatever about traditional protocol, every possible effort must be made by those who have a sane view on unemployment to combine their efforts.

The tragedy for the young people of Ireland today is that this Coalition Government and the economic and financial establishment have completely embraced monetarist philosophy. Instead of planning for expansion and development and employment, all their thinking is concentrated on a rigid inflexible monetarist approach to the national economy whatever the cost in human terms.

To the Taoiseach and the Government I would say in producing this totally inadequate and entirely inappropriate document, you have done a great disservice to our country. You have placed your own survival as parties in Government before the national interest. Your policies are in shambles, you are confused about your objectives, you are incapable of clear-cut and decisive action in any area. The whole country knows that effectively your race is run. You know it yourselves. Why do you prolong the agony? Why do you not now recognise the inevitable and call it a day?

The Deputy had two chances. We have only had one.

Your last one.

It is difficult to follow such an eloquent speech. While listening to Deputy Haughey I could not refrain from casting my mind back to a senior trade union official in both the Irish Shoe and Leather Workers' Union and the ITGWU and to that time when the Labour Party as well as the ICTU and their affiliates were campaigning vigorously against our joining the EEC. It is difficult not to say, "we told you so" because much of the unemployment referred to by Deputy Haughey has been caused by our membership of the Community. The wise men such as the Austrians and Norwegians stayed out of the EEC and it is clear now that in international terms those two countries are among those with the lowest levels of unemployment in Europe.

As a backbencher I welcome the opportunity of contributing to this debate. I shall concentrate on areas that are relevant to me as a trade unionist and also on those items in the plan that would have an effect on my constituents.

The plan contains many items on which clarification is needed. It is appropriate that we have this debate so that Ministers are given the opportunity of explaining the small print of the document. In addition, the debate gives to backbenchers an opportunity of putting their point of view.

It appears to me that the plan may either stand or fall on the whole question of the public service. This would cause me concern because when one hears people, particularly employers' representatives, refer to the public sector, they seem to create the impression that all public servants are highly paid. That is not the case at all. There are 25,000 public service employees in the union I represent, that is, the Irish Transport Union. Many of these workers such as those in local authorities or in the craft sections are taking home between £80 and £90 per week. Therefore, there is no justification for anyone trying to create the impression that everybody employed in the public service is well off.

I suggest to the Government that if the plan is to be based largely on the control of public spending and on developments that would take place on the wage front in that sector, it could prove very dangerous. The next round for public service and many other agreements will be due to start early in 1985 but the vast majority of workers in the public service have not received any pay increase under this round. The unions will still be talking about the current wage round but we will be involved in the next round. If that kind of development takes place there could be chaos in the public service in relation to pay and conditions of employment. If this plan is to succeed, the time is right to invite the Employer-Labour Conference to deal with this important subject. It will have to be tackled in a reasonable and organised way in order to avoid total chaos in the public sector.

I am sure many of the unions in the public service would be very pleased if we had a national agreement or a national understanding. Many of my colleagues who spoke against other national wage agreements would be happy to have such a document in force. Unfortunately in the way national agreements developed from 1969 the public service tended to be guaranteed the increases contained in such agreements while industrial workers and those in the services sector tended to fall behind. The position has now reversed and generally industrial workers and those in the commercial sector have got increases in line with what was contained in national agreements, also taking into account individual agreements. It would be dangerous to allow the situation to drift to a point where there might be a confrontation between the Government and the public sector.

I ask the Minister to convey my opinion to the Government, namely, that there should be a national forum to deal with the situation. In my opinion the only effective instrument is the Employer-Labour Conference. The arbitrator has been appointed to deal with pay and conditions of employment in the public sector. If an award is made by the arbitrator it will be an award made by one man dealing with public sector pay and it is my understanding it will have to come before the Dáil for a decision. I should much prefer to have agreement within the Employer-Labour Conference, which is representative of Government, of the ICTU and employer organisations. An agreement made at that level would have a much better chance of succeeding.

The plan contains quite a lot of Labour Party policy but naturally it excludes many points that are Labour Party policy. However, it is not possible to have 100 per cent of what one wants in any plan. Deputy Haughey referred at length to the PAYE sector and I agree with him to the extent that this is an important part of the plan. The Labour Party have not achieved everything they would like with regard to the PAYE sector and general taxation but the prospect of index linking for the PAYE sector is a step in the right direction and on that basis I welcome it. However, it does not go far enough and much work remains to be done.

At the 1983 Fine Gael Ard-Fheis the Minister for the Public Service announced he was setting up a number of committees or groups to examine in global terms the operation of the Revenue Commissioners but I do not know what happened to that suggestion. Have those groups examined the entire operation of the Revenue Commissioners and the question of tax collection? Have they reported back to the Minister and, if so, perhaps he would let us know what has happened in that regard.

The Labour Party, through their leader, stated quite clearly that in respect of farmer taxation the farmers were not paying their fair share. Even the farmers themselves will admit that privately although I would not expect the leadership of the farming organisations to admit it. There are very poor farmers, much poorer than industrial workers in many sectors but I am sure the farming community will accept that the removal of the PLV system, with all its problems and inequities, had to be replaced by some other method. It has had a detrimental effect on many local authorities and many of them have found themselves with substantial deficits because of the High Court decision to eliminate the PLV system. If we are going to have local authorities, local democracy and local services, all the people, including the farming community, must make a contribution.

The proposals contained in the national plan may not satisfy people in the urban areas. They constitute the vast majority of the PAYE sector and they have to make the largest contribution to the Exchequer. Quite a large percentage of the money they contribute goes to farmers by way of subsidies. We cannot have it both ways. We do not want to create a rural-urban division that will have farmers against industrial workers. Many farmers have sons and daughters employed in industry and these young people could tell their parents about their problems when they have to pay 40 per cent of their gross pay in PAYE and PRSI contributions. I do not think the farming community is under any illusions about that matter.

I want to refer particularly to problems encountered in Border areas. I am the only Labour Party Deputy representing the whole of the Border area and am very conscious of the problem encountered there, as are my colleagues in the other parties. We have spoken with one voice on this subject.

We welcome the decision contained in the national plan to reduce VAT on spirits. However, the brewing industry is most important to Border areas and I would strongly recommend to the Minister that he engage in the same exercise with regard to beer. People will continue to go across the Border in large numbers because of the continuing price differential in relation to beer.

If the Deputy will put down an amendment in that respect we will support it.

I might consider that suggestion. We could not be in disagreement about this because we have spoken with one voice in this respect.

I had been hoping that there would have been some recognition given in the national plan to the fact that both the retail and wholesale electrical goods business in the whole of the Border area has been severely affected. Probably it represents the worst affected industry in relation to trading in Border areas.

Down as far as Dublin too.

There were questions earlier in relation to natural gas. I would strongly urge the Minister for Energy to proceed with the extension of the pipeline to the Border as a matter of urgency. If that is not done then industry and services in Border areas will suffer more, will be rendered less competitive than they are at present and there will not be a just and equal distribution of the jobs becoming available. If such pipeline is not extended to the Border it will mean that at some future date — whether that be five or ten years hence — its extension will cost perhaps five or ten times as much as of now. Additionally I might point out that the EC gave a clear commitment to substantially subsidise the laying of that natural gas pipeline to the Border. At most I can calculate its extension cost to be 50 per cent of its commercial cost. That EC money may not be available in five years' time. Therefore I advocate strongly that that proposed pipeline be proceeded with as a matter of urgency.

During Question Time there was reference to a company called Premier Periclase Limited, an important industry in my constituency, a company that would use more natural gas than would be used in the whole of Dublin city. That may seem incredible but nonetheless it is factual. How can one justify supplying natural gas to Dublin city while one company in my constituency could use as much as the whole of that city? Yet reasons are being advanced for not extending that pipeline to the Border.

I welcome a number of most important developments outlined in the national plan. When I first became a member of this House I stessed that for me one of the most important national goals was the introduction of a national pay-related pension scheme. I pointed out that most of the poverty obtaining in our society was that encountered by old age pensioners, men and women, widows, orphans, that they represented the most impoverished section of our society. The introduction of such a pay-related pension scheme would eliminate poverty from that sector, allowing people who have worked a lifetime in industry or the services to enjoy a decent retirement pension and the remaining years of their lives without having to go, cap in hand, to community welfare officers, or some of them even having to beg in order to eke out an existence. If this national plan were to achieve nothing else, and were I never to be re-elected to this House, I would feel that my time spent here had been put to some good. I implore the Minister to introduce that national pension scheme without further ado. In the course of my membership of this House I can remember five different Ministers who talked about white, green, black and every other type of coloured paper but we still have no national pay-related pension scheme.

In regard to housing I welcome the introduction of the £5,000 subsidy to local authority tenants wishing to buy alternative housing. In effect that subsidy will amount to £9,000 to those people who wish to return their houses to local authorities, and build or buy a new or secondhand alternative house. This innovation will entail the handing back of much needed housing to local authorities for re-letting to people on their housing lists while at the same time boosting a much depressed building industry.

I welcome also the intended provision of £420 million for roads. I know Deputy Wilson would agree with me that the roads in the north east region generally could well do with the expenditure of that total sum but we must not be greedy; we get our fair share. If the roads in Counties Louth, Cavan and Monaghan are improved then this will have proved to be a worthwhile development. In this respect I assume that all of the relevant civil engineering contracts will be dealt with through the various local authorities, that there will be a definite commitment and provision at county engineering, county managerial and at town clerk level that will ensure that Irish materials will be used in the implementation of such contracts. The proposition of the £420 million that would be spent on piping, cement, blocks, bricks and other products on the building of bridges and roads would give our economy a much-needed boost, and also the building and civil engineering trades, but that goal can be achieved with that stipulation about the usage of Irish materials only. When contractors tender for local authority contracts, if they do not make provision for the usage of Irish materials then the lowest tender should not be accepted. That directive should be given either verbally or in writing to all local authorities, and I say that as a member of two local authorities.

I welcome also the suggestion contained in the plan that social welfare benefits be increased in line with inflation, a very positive statement. I hope those benefits will be maintained in line with inflationary trends obtaining. I shall be watching those developments very carefully because that is the section of our community which will have to take the brunt of any further increases in the cost of living. They are the people who will encounter the greatest problems.

The support of the fishing and forestry industries is to be welcomed also. I have been maintaining for many years now that there has been no national policy in relation to fishing or forestry. The fishermen in my constituency must work a seven-day week, utilising boats they have had to mortgage to the hilt. Sometimes they do not see their families from one week or month to another. They are working far away from their homes endeavouring to earn a miserable living in what has become a depleted fishing industry. Positive support is needed through the introduction of a proper national fishing policy. There must be proper financial support and proper harbours and boats must be provided.

It is incredible that with a natural resource such as forestry we should be talking about unemployment. We are felling the trees in the Border areas and sending them to Northern Ireland, the UK or Sweden. Our furniture manufacturers have to import timber from these countries, simply because we have not got the necessary facilities. It is a crazy situation which would not happen in any other country.

I am disappointed that there is no provision in the plan to assist further the textile, clothing, footwear and food processing industries, our main native industries which are so important to us. It appears that those people within the Department of Industry who have the responsibility for dealing with these industries are not actively seeking in the EEC the types of supports and controls needed to safeguard remaining employment in these areas. I was in Brussels last week at a meeting concerned with one of these sectors and I am quite convinced that the EEC have written them off because national Government and civil servants representing them are not putting the case for proper protection against indiscriminate imports of cheap footwear, clothing and textile products into Ireland.

It has been suggested that there is nothing we can do to help industry, that industry must help itself. There are many things that can be done. We have the highest energy costs in Europe. It is absolutely scandalous in a small country like ours, where we have the raw materials such as water and peat which could be used in generating stations, that our energy costs are so high.

That is only for the last few years.

It has been like that for quite a long time. It was the position before I came into the Dáil and I do not know what Government were in power before that. They were changing so quickly that I forget.

The year is given in Ciaran Kennedy's study. Perhaps it is since Deputy Mac Giolla left the ESB.

I congratulate my colleague, the Minister for Labour, on introducing the enterprise allowance scheme. This has been one of the most successful schemes for young people. In my own town and throughout my constituency many useful job creation efforts have resulted. I was directly involved in quite a number of them and I know that young enterpreneurs are anxious to create employment for themselves because they accept that the multinationals will no longer employ them. We should give further encouragement and assistance to these young people.

Unemployment is obviously the most important problem facing us, whether we are members of the Labour Party, The Workers' Party or Fine Gael. Instead of having a go at each other and constantly bitching we should be putting our heads together and putting forward ideas rather than scoring points. There are Dáil committees examining such things as public expenditure, State and semi-State bodies, marital breakdown and so on. It might be a lot better if we had a couple of committees finding out the causes of unemployment and bringing in experts to talk about dealing with the problem. That might be a much more valuable exercise and a better way to spend taxpayers' money.

It is amazing that the two speakers so far on the Government side have been Deputy Spring of the Labour Party and then the rebel backbencher, Deputy Michael Bell, in support of this so-called plan.

I was not speaking for the Government. I was speaking for myself.

Deputy Bell was the speaker on the Government side of the House. It is amazing that they can both find something to cheer about in this plan. Deputy Bell says they cannot expect to get 100 per cent of what they are looking for. I wonder if he can show me where they got even 1 per cent. He finished by saying that the most important problem facing the country is unemployment. I would be very pleased if he could show me what they are doing in the plan about this problem. The Government have deliberately and cynically walked away from the enormous job crisis and have refused, presumably for political reasons, to confront the vested interests of farmers, private sector employers and the owners of capital. Instead they have put the burden of solving the crisis on the back of the PAYE workers, the unemployed, young people looking for jobs, people on social welfare benefits and, of course, on the constantly maligned public sector employees. These are the people who are to solve the economic crisis.

Now that the dust has settled somewhat following the high priority given by the media to this so-called plan, we can look at it calmly and coldly and see how the figures in it have been managed, in somewhat the same way as was tried by Fianna Fáil in The Way Forward a few years ago. It will be seen that the Government are attempting to mislead the public. By the end of the plan 50,000 more people will be unemployed than when this Government took office in 1982. There will be a significant fall in the living standards of the majority. There will be no measure of tax reform. The tax burden on PAYE workers will be increased. There will be a reduction in essential services and we are promised increased charges for local authority services in 1985 and 1986. Labour Party members should note that this plan involves substantial re-negotiation of the Programme for Government agreed in December 1982 and a reneging on commitments on jobs, taxation reform and the protection of those dependent on social services. It is clear that the new right has won.

Before dealing in detail with the question of jobs and taxation, I wish to comment on the type of plan this is. It is important to stress that it is not a national plan. It simply sets out a list of objectives without stating how they are to be attained. It does not constitute a plan; rather it is a statement of projections and aspirations. If the Government were genuinely seeking a national consensus there would have been discussions and consultations with the Irish Congress of Trade Unions and others on the formulations of the proposals and provisions would have been made for reviewing them on an annual basis. Targets would have been agreed for output, investment and employment in industry, agriculture and the services sector. This is what a plan is all about. The plan also fails to tackle the problem which is at the heart of Irish economic planning, namely that the targets should be implemented by individual enterprises. It should have provided that State grants and other incentives and services would be given to an enterprise only if it formulated with the agreement of the trade unions an integrated plan for development over the following four or five years of that enterprise. The grants and incentives would be helping the plan which was formulated and agreed between the trade unions and that enterprise. That would be seen as a plan which was being adhered to and annually reviewed.

The Taoiseach told the Fine Gael Ard-Fheis last Saturday that this Government were wiping the dust off the JCBs left idle by Fianna Fáil. In fact, what he should have told the delegates was that the Government were wiping the dust off The Way Forward and attempting to build on reality with the same faulty material as the original party of reality led by Deputy Haughey. Both The Way Forward and Building on Reality are prescriptions for the same old medicine that has failed to cure the sick patient of Irish capitalism in the past. Both documents represent Thatcherism, not so much with the human face as with an Irish complexion.

Building on Reality was welcomed by the bosses' organisations—the FUE, CII, and CIF; in the Irish Farm Centre there was a loud sigh of relief at the pathetic nod in the direction of a land tax; and the ICMSA had the honesty not to pretend to be too upset about a plan which was giving the farmers more than it was taking from them.

Who has the Leader of the Labour Party, Deputy Spring, in mind when he warns bravely that no interest group will stand in the way of this plan? It is the same old tune we have heard down the years from both Fine Gael and Fianna Fáil Governments under the Cosgraves, de Valera, Lemass, Lynch, Haughey and now FitzGerald, the same cry, labour must wait, workers must tighten their belts; we must have a wage freeze; living standards must be lowered; the survival of the fittest; look after your own; the law of the market must have its way, whether under Fianna Fáil or Fine Gael, with a bit of Labour. Whoever is in power the message is the same and it is being parroted now by tame socialists on the backbenches and the token socialists in the Cabinet.

We are told that this plan would have been worse if it were not for the input of Labour. The Minister for Labour, Deputy Quinn, who is never slow to blow his own trumpet, tells us that Labour won the debate. We remember the slogan "Vote Labour, a voice that will be heard" in November 1982. That voice is not much heard now and the lengthening dole queues and the intimidated public sector workers in November 1984 will cynically listen to the voice that can be heard from Labour.

The Workers' Party put Fianna Fáil out of office in November 1982 because their plan, The Way Forward simply showed the way forward for a particular class. It was a class based document just as this Building on Reality is a class based document but the working class will have to pay for it. They are the people who are being hammered and they are the people who will stagnate. That was seen in 1982 when the plug was pulled on the Fianna Fáil Government by Joe Sherlock, Paddy Gallagher and Proinsias De Rossa. Paddy Gallagher and Joe Sherlock are not here today but The Workers' Party are. We are the only alternative to both the conservative parties and the only real opposition to their bi-partisan approach to the economy.

I wonder will any of the Labour Deputies do the honourable thing in this debate? Has any of them the guts to stand up and be counted on the side of the class he claims to represent? Will they allow themselves to be led like sheep to support the document which is little more than a bosses' charter and makes a mockery of the most basic principles of socialist planning?

When the ICTU published their framework for a national plan —Confronting the Jobs Crisis— it was abused by the Federated Union of Employers for challenging the assumption that it was the job of Government to make things cushy for the bosses so that they could give out the jobs as they pleased. The FUE did not produce any plan, they did not have to because this is their plan. This is the reality as seen through the eyes of the employers, the builders, the ranchers, the stockbrokers, the merchant princes and the industrialists. This so-called plan is a blueprint for generating profit rather than jobs, for accumulating rather than producing wealth and certainly it is not for distributing wealth.

This document builds on reality as perceived from the FUE headquarters in Baggot Street, CII's Confederation House in Kildare Street, CIF's Federation House on Canal Road, the Farm Centre on the Naas Road, or the Irish Management Institute's headquarters in Sandyford. This document is not built on reality as experienced by the unemployed, the elderly, the poor, the sick, workers on low wages or families whose living standards are dropping every day because of increased prices, reduced services and so on. When this document talks about a pay freeze in the public sector, it ignores the reality of the thousands of workers in county councils and health boards who take home less than £100 a per week. Would the Government's economic advisers like to live on less than £100 per week? They should try it, even for a couple of weeks.

This document, which is prepared to throw money at budding entrepreneurs and penny-halfpenny capitalists begrudges those who teach the young and nurse the sick a living wage and proposes to cut their living standards further. This document is built on a view of reality that puts more value on a night club proprietor than a night ward sister.

One of the fundamental flaws in this package of aspirations is the assumption that if capitalism and capitalists flourish that we will all benefit; the State's job is not to interfere with but to encourage and pamper the private sector at every hands' turn. This document is all about creating the right economic environment and letting the free play of market forces deliver the goods. This approach has been rejected by the trade union movement. The Workers' Party reject this approach and the philosophy behind it.

Now we come to the basis of the plan itself. Probably the most outrageous and misleading part of this plan relates to the attempt to show that 45,000 to 50,000 jobs will be created over the next three years. Even on the most optimistic of the assumptions contained in this plan, when one reads it one realises that no more than 30,000 jobs will be created and this would result in 230,000 people being unemployed in April 1987. Even if we accept the Government's own figures of 40,000 to 50,000 jobs, there will still be 210,000 unemployed in April 1987, more than there were in April 1984. More importantly, there will have been an extra 40,000 people unemployed since this Government took office. Fine Gael and Labour should remember that in December 1982 170,000 people were unemployed and the Programme for Government specifically said that this unemployment trend would be halted and reversed. The figures given in the so-called plan are faulty and it appears that false figures were deliberately produced.

Deputy Haughey has already referred to the labour force figure. In the document it says the labour force will grow by 15,000 a year for three years, but they give no basis for that figure. The White Paper on Industrial Policy gave a figure for the labour force of 17,000 per year increase. The NESC and ESRI gave a figure of 20,000 per year increase in the labour force. Suddenly, at the stroke of a pen, between 2,000 and 5,000 people have disappeared in the Government's plan. Where did they get the figure of 15,000 per year increase in the labour force?

In their figures for emigration the Government plan says that 21,000 people will emigrate over the next three years. I do not know where they got these figures because other projections are that 39,000 people will emigrate. Current projections are that 13,000 people are emigrating annually at present — 39,000 people could emigrate over a period of three years without any increase in emigration. However, the Government say that 21,000 people will emigrate over three years. Possibly, as a result of their juggling of the figures, they had to come up with the figure of 21,000, but it is blatantly wrong.

The plan says that 13,000 jobs will be created in the manufacturing industry over a period of three years. They do not say where these figures come from or where these jobs will be. The White Paper on Industrial Policy gave a figure of 9,000 jobs over three years while the IDA who are on the ground, on the job, every day of the week in regard to manufacturing industry, give a figure of a maximum of 1,000 manufacturing jobs in industry per year. That would mean a total of 3,000 jobs over three years, and yet the Government produced a figure of 13,000. Where did they get the extra 10,000 as compared with the IDA figure? Where did they get the extra 4,000 as compared to the figures in the White Paper on Industrial Policy? Both of these figures were worked out in detail but the plan does not state how this can be done. Would the Taoiseach or his sidekick say where they will create 13,000 jobs in the manufacturing industry? These are the kind of answers which Deputies want.

I do not regard "sidekick" as parliamentary language.

It is better than many other descriptions in the House.

Would the Taoiseach or the appropriate Minister give us details of where the 13,000 jobs in the manufacturing industry will come from? In the services sector they gave a figure of 30,000 jobs over three years, but again there is no indication of where these jobs will be. Perhaps some member of the Government will tell us where these jobs will be. They are probably going on an assumption of jobs in services over previous years. If that is the case, they must realise that many jobs in the private sector services were in banking and insurance. They must know that that has stopped and that there will be no increase in jobs in banking and insurance because of the great technological changes which have taken place. Where will the jobs be? Even the architects of this pie in the sky plan must know that the era of jobs in banking and insurance is gone.

Perhaps they are pointing to US experience in the number of jobs and services as a result of increased jobs in the manufacturing industry. However, in the US the fastest growth is in the area of health — nurses, nurses' aides — teachers and certain other professional workers. In this country there is a Government embargo on employment in these areas. Under the plan 5,000 jobs will be lost here in the public sector, 3,000 jobs in the health area alone. Where are the 30,000 jobs in the service area coming from? There is no indication in the plan and it appears to be a figure pulled out of a hat. Perhaps the Taoiseach, this honest man of integrity, with the unflawed pedigree, would tell us how he arrived at these figures.

There is also manipulation of figures in the areas of special employment and training schemes. These areas will not provide even one sustainable job, yet in the plan the Government reduce the unemployment figures by the amount of places provided in training, work experience and part-time jobs. This is not the hallmark of honesty and integrity. The Minister for Labour will offer 11,000 half jobs for two-and-a-half days per week on relief schemes. To compensate for that he reduces the number of unemployed by 11,000. He will also offer 2,500 places in training and work experience. However, none of these constitutes any kind of job, part-time or otherwise; yet, as a result, he also reduces unemployment figures by a further 3,000. This is manipulation of figures, because these are not jobs. They do not even pretend to be jobs — training and work experience are not jobs and yet they are used to reduce unemployment figures by a further 3,000.

Between all these new schemes and schemes already existing for young people over £144 million will be spent and not one permanent sustainable job will be created. The enterprise allowance scheme caters at present for 3,000 people but they are falling like ninepins. Many enterprises set up are collapsing at a very rapid rate but the plan says that there will be 14,000 people self-employed under the enterprise allowance scheme in three years. Where did they get this figure? How did they propose to do it? Again, it is simply producing a figure out of a hat.

The plan rejects the whole Telesis strategy and places total reliance on the private sector, although this is the sector which has caused the problems. This sector has created unemployment; it has not developed or invested in its own industry. It is totally inefficient and yet it is being relied on to get us out of the difficulties it created.

There are no measures to develop large Irish firms into high productivity exporting firms. There is no role for public enterprise in the high growth areas of manufacturing industry and in natural resources based industry.

The National Development Corporation has been abandoned. The Labour Party made much of this corporation and it was announced with a flourish a few months back. At that time it was said that under the agreement the Government were to have made available capital of £200 million and also borrowing powers for a further £500 million. It was established but has now been abandoned because no money had been provided for it under this three-year plan — not alone the £200 million but, apparently, none at all. The National Development Federation has a staff of between 16 and 20, which gives an indication of how the Government see its role, compared with an IDA staff of 700.

The Government plan produces very minimal figures with regard to employment. Unemployment will not be reduced at all even if these figures are achieved and there is no basis for these figures. We would like some information here on how these figures were arrived at and where these jobs are going to arise. The area in which jobs can be created has not been dealt with at all by the plan. It is, in fact, not a plan. The obvious areas of food processing, for instance, have not been dealt with. Take the meat trade which is a simple example. There is no plan to deal with the crisis which has existed there for a number of years. People know how this can be dealt with but no Government have been prepared to tackle it. Last year 200,000 live cattle were exported by a tiny number of cattle men who are very powerful — the Purcells on the Fianna Fáil side and the Larry Goodmans on the Fine Gael side, who deal in millions of pounds. If these live cattle were not exported but were killed here and developed as consumer cuts, thousands of new jobs could be created. In the existing dead meat area, if 50 per cent of the meat which goes to the meat factories were exported in consumer cuts and cooked meats, that alone would create 4,000 new jobs. In that one small area of the food processing industry, not going into the vegetable, cereal or any other food processing area, 6,000 or 8,000 jobs could be created. The plan does not consider in any way areas where our natural resources could be used to develop jobs, such as in food processing.

The fisheries and forestry area, which has had a fair bit of attention lately, is dealt with in about five or six lines which indicate that some small change will be made in the tender system. This has been pressed for for a long time and I have been advocating it in the House for a couple of years. The whole area of forestry marketing development and the need to take that out of the hands of the civil servants in order to create jobs has not been tackled. The Government have no plan nor any new ideas for developing forestry or fisheries.

This is a sector which is now in public ownership and the Deputy wants to take it out of public ownership. Surely it would be more to the point to retain it in public ownership.

The Deputy is missing the point. I want to retain these in public ownership.

The Deputy has demolished his own point. He sat on his own landmine.

Order, please.

I have spoken on that matter here. I am afraid the Deputy is not aware of the facts. I made it quite clear on a couple of occasions in the House that I do not agree with commercial public enterprises being in the hands of civil servants. If the forestry area were put in the hands of a State company on the lines of Bord na Móna——

Are they not civil servants under a different name?

——that would show what can be done with commercial development when taken out of the hands of civil servants who are totally defending and maintaining a system of contract tendering which is exactly the same as it was in 1921 or 1922 when it started. These people do not know what is in the forests. They have no idea of commercial development. Unless they change, there will be no commercial development and expansion in the forestry area. It is deteriorating at the moment because of this Government's embargo. They are cutting back on forestry workers in the field, while their administration is perhaps as large as or larger than it was before. That shows the need to tackle that area which has not been tackled at all by this Government or this plan.

Does the Deputy understand it now?

I understand it very well. This is the kind of logic one would get in Bucharest.

I am afraid the Deputy is missing the whole point.

He does not want to get it.

Deputy Mac Giolla is advocating a commercial change for the worst if he moves from civil servants to a semi-State body.

Structure, Deputy.

If Mr. Lemass had not understood that many years back and some of the original members of Cumann na nGaedheal as well in the early years of this State, we would not have some of these tremendous public enterprises which we have at present, like——

Like CIE or NET?

——the Sugar Company or Bord na Móna. CIE are always used as a stick to beat the whole public sector. That company was cobbled together back in the thirties when private enterprise totally collapsed and there was no transport system. They were founded as a public service and are not at all to be compared with commercial enterprises which have been so highly successful in the public sector. The same could be done in the forestry area.

Our party published a plan for jobs in 1982 called Into Crisis, for recovery and employment and leading on to full employment. The plan recognises that the land of Ireland is the country's greatest natural resource. Unfortunately, the Irish farmers have failed to realise anything like its full potential. Past policies aimed at increasing production have been almost total failures for one reason or another. After ten years in the EEC, the output per acre on Irish farms is the lowest in the Community, apart from Greece which is the newest member. Dutch and Danish farmers produce 3½ to 4 times as much as ours and British farmers twice as much as ours.

Not as edible.

Farming and processing of agricultural produce account for up to 35 per cent of the total workforce. With agricultural products accounting for almost half of the total exports, this has a tremendous impact on our balance of payments, particularly when one considers that the import content of agricultural exports is low. The aim of our plan is to increase agricultural output by an annual average of 5 per cent. Past performances in certain years and studies and reports show clearly that such a target output rate of increase is more than possible. For this plan to succeed radically different policies would have to be implemented.

The Government plan does not look at all at the need for changes in agriculture—in methods, management and so forth. There are three major factors involved which need to be looked at—land, capital and management. The policy of past Governments has been to give aids, grants and subsidies to farmers which are not linked to output in any way or to results, and through the EEC to give maximum price increases, again without regard to results.

Over £400 million is given annually by the State in grants and subsidies and millions more by way of price increases. £1 in every £3 of these price increases is paid for direct by Irish consumers. Since entering the EEC, despite the huge financial input into agriculture, the output record of farmers has been appalling. During this whole decade when prices were never higher and incentives were plentiful, Irish farmers have thrown away an opportunity. The Government have thrown away an opportunity by not guiding and leading Irish farmers into increased output and a greater variety of production instead of concentrating on dairying and meat.

That is not true of small farmers.

Irish workers have had to stomach this. The potential of the land has not been used as Irish workers continued to pay for this costly exercise both through their taxes and higher food prices. The farmers' "fair share" contribution to taxation continued to be almost nothing. Despite the millions invested, the level of net agricultural output has shown virtually no increase since 1975. Yet Government policy continues without much change. This plan continues precisely the same system as before: in other words to increase the incentives, grants, headage payments, and so on, to farmers and reduce the tax take from them. These policies have not worked in the past and will not work in the future except for a small minority of progressive farmers. You will always find those who will develop their farms, but there is a clear need for a radically new approach to the exploitation of agriculture, this great natural resource.

With regard to industrial employment we should proceed immediately with the recommendations in the Telesis report. This plan rejects the Telesis report. I am not maintaining that it is a socialist industrial plan or anything like that, but it points to the need for a strong State intervention approach to industrial development. This approach was also endorsed by the recent ERSI report Employment and Unemployment in Ireland. We must develop industries based on natural resources such as food processing, forestry, fishing, and so on. As pointed out earlier, the key problem in these sectors is the haphazard nature of production and supply of raw materials. These must be got under immediate control to guarantee a national development of these sectors.

Another key area in industrial development which has not been dealt with by this plan is the development of new advanced technology industries. On the basis of their analysis of the electronics industry in the Republic, Telesis concluded in their comprehensive report on the Irish economy:

It is an overstatement to say that Ireland is in the electronics industry to any significant extent despite the presence of so many facilities in the country.

None of the companies has a stand alone operation in Ireland. Only three have operations which embody the key competitive elements of the companies' business. All the others perform only some partial steps in the manufacturing process. Most of the operations perform only assembly, test, packaging and simple machining or coating functions.

The electronics industry is a highly skilled industry worldwide, but Ireland's electronics industry does not reflect this. engineering functions performed in Ireland are mostly limited to product adaptation and marginal process improvements. Ireland is being used as a site for assembly and simple fabrication. In consumer electronics and electrical components the majority of firms are involved in low labour cost assembly operations. The integrated circuit industry consists of a number of different types of operators who represent some of the most skilled and least skilled operations in industry. With only one exception the operations in existence in Ireland are only packaging and testing which are the least skilled.

Although the Irish electronics industry is growing rapidly and the companies are highly profitable, it is not providing the mechanisms for Ireland to move towards higher value added businesses. The present low levels of integration into skills development and sub-supply infrastructure threaten the long term survival of the existing electronics industry. These problems must be resolved in order to develop world leading companies in key sections of this sector. Electronic industries are experiencing rapid growth worldwide. Over the next decade the market for electronics in Europe will more than double. Less than half of 1 per cent of that market for Irish products would be worth over one billion dollars annually.

This is an area of development which any economic plan should deal with in great detail. This plan talks about 30,000 jobs in the services sector without giving any idea where they are to come from. A progressive micro-electronics industry is a pre-requisite for an expanded modern and efficient services sector which must become an important part of our export industry. In this plan the Government have given no indication that they have a plan for jobs and for industry. They leave it to the market forces to do what they will. In the electronics industry they are doing the minimum. There are low skilled jobs for our people but we are not getting into the high skilled, high wage area for which we have the potential and the ability. One or two firms are doing this in a small way and they have shown tremendous potential.

Massive unemployment is not inevitable and is not caused by forces outside our control. The main cause of it is ourselves. Some people are pessimistic about the future but I think we should be very optimistic. Full employment is possible. We should fight the mentality which suggests that full employment is not possible and that in the future we must change our ideas about work and start to talk about leisure and training people for leisure rather than for work. There is no basis for that. To suggest that the new technology will cause unemployment, or that it is the cause of unemployment, is a fallacy. If that were true Japan, the highest electronic area in the world, would have the highest unemployment.

How much public ownership is there in Japan?

The Deputy should listen to the points I am making. We will go on to public ownership in another area and how much private ownership we have got here of any high technology industry which has any intention of developing in the way I mentioned. They are simply assembly areas for electronic industries in other countries. We are the assembly and packaging area for them.

How long would CIE survive in Japan? How long would they continue to pay a subvention to CIE?

Does the Deputy think we should not be in the electronics industry and that we should forget about it?

Before I call on Deputy Mac Giolla to move the adjournment might I suggest to him that he move his amendment?

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"deplores the failure of the Government's National Economic Plan to provide a strategy for reducing the overall level of unemployment; condemns the continued refusal of the Government to establish tax equity, and particularly its failure to ensure an adequate return from the business, farming and self employed sectors; expresses serious concern at the additional cutbacks proposed in the public service; regrets the failure of the Government to take into account the principles expressed in the recently published Irish Congress of Trade Unions document, Confronting the Jobs Crisis; and believes that the plan is basically a restatement of unsuccessful social and economic policies pursued by previous Governments".

Debate adjourned.
The Dáil adjourned at 7 p.m. until 10.30 a.m. on Thursday, 11 October 1984.