asked the Minister for Finance if his recent rejection of the EC Commission's advice to cut borrowing by 1.5 per cent of GNP in 1986 signifies a departure by the Government from the projections in the national plan, Building on Reality, 1985-1987.
Ceisteanna—Questions. Oral Answers (Resumed). - National Borrowing.
5.
I have not rejected any such advice. The Government will be giving due weight to the EC budget guideline for Ireland when they come to finalise specific borrowing targets for 1986.
Will the Minister comment on an article published in the Irish Independent on 10 December last which stated that the Minister had rejected the advice of the Commission to cut the budget deficit by 1.5 per cent in the course of his discussions with EC Ministers? That article appeared under the heading, “EC Borrowing limit is not on, says Dukes”. Will the Minister confirm or deny that the Commission sought to include 1.5 per cent in its report and he sought to exclude it?
I do not take any responsibility for articles that appear in the Irish Independent. I have the cutting before me and I suggest that the Deputy should read a little more of the article. What we agreed at the last meeting of the Council was the text of the annual report which included a number of amendments agreed by the Council.
I put it to the Minister that the national plan seeks a figure of 5 per cent by 1987 and with the present figure over 8 per cent that will mean a 3 per cent cut in the next 18 months or so. How are we to get a 3 per cent cut in 18 months? Will it not amount to a cut of 1.5 per cent approximately per annum, precisely the advice given by the EC?
The Deputy will be fully illuminated on that on 29 January.
To meet the planned target to get from 8 per cent to 5 per cent which is needed at the end of the plan will cost between £600 million and £700 million. To do that is the Minister proposing to raise taxation or cut expenditure to the tune of £700 million?
I can only repeat what I said a moment ago, the Deputy will be fully illuminated on all those points on 29 January.
That is off the rails.
Such a response from any Minister is unacceptable. Is it not clear that the targets on the borrowing and on the deficit, which we will deal with later, are not realisable and that the Government are asking the European Commission to relieve them of the targets in their document, Building on Reality, which the Commission were foolish enough to believe contained the intentions of the Government? Is it not a great blow to our credibility that we have a Minister within the year of presenting his Government's document going back on its targets?
The Deputy is making argument when he goes on like that.
My questioning cannot be that short. It is not unprecedented that any Minister should ask the Commission within 12 months to change the targets he presented?
I cannot understand why Deputy O'Kennedy is making such a meal of this, knowing as he does the procedures that go on between the Commission, member states and the Council. I should like to read for the information of the House, since apparently neither Deputies Brennan nor O'Kennedy have read it, a passage from the annual report.
I read it every night.
The Deputy should read it an odd night before he asks a question. The quotation is as follows:
These targets must be regarded as a minimum. Consequently, the authorities should in 1986 aim to make as much progress as possible in the direction of the 1987 targets. A half way step towards those targets would entail a reduction in the EBR of the order of 1.5 percentage points of GDP on the 1985 out-turn, which is an ambitious target given the sluggish revenue buoyancy. While the expected moderation of international interest rates and the dollar exchange rate will ease the debt interest burden somewhat in 1986, a significant reduction in the EBR, given tax revenue constraints, will be feasible only if there are substantial volume reductions in non-interest expenditure including... . and so on.
That is exactly what I said.
On reading this one wonders why Deputy Brennan had to table the question in the first place.
To confirm that the Minister has not any idea.
The Minister has confirmed to the House that he got the advice I said he got, that the Commission said he should stick to his plan and get it down to 5 per cent. It is in black and white that the Commission suggested that the Minister should do that.
The Deputy is rushing so fast that he has failed to realise that the passage I read out is the final version of the report adopted by the ECOFIN Council the text of which includes a number of amendments agreed by the Council.
And it is contrary to the Minister's plan. That is clear.