(Limerick East): It is a coincidence that we were talking about the economic plan last week, the Finance Bill today and now we are back to the same theme again. There are hardly variations on the theme at this stage. It is difficult to think of anything new to say when one has been over the ground so often.
First we should state the principle which underlines this initiative by Deputy John Bruton and the Fine Gael Party in advocating an economic accord for 1990 and then seeking to legislate in the areas of that accord which would require changes in the law. We are of the view that there are certain fundamental flaws in our economy which prevent economic development and growth. An gad a bhí níos gaire don scórnach was the burden of the national debt. We realised after our period in Government that to establish the kind of consensus not only in this House but among the key players in the economy whom the Government describe as the social partners and also to get a consensus among the electorate at large we required a bi-partisan approach.
We do not believe that the Government could have proceeded with such a series of expenditure cutbacks to bring us in sight of stabilising the GNP-debt ratio without that consensus in this House. That consensus went out to the wider community and the supporters of the parties who were in general agreement here found that they did not line up with individual pressure groups who were trying to put the Government's policy off the rails. We have had a number of examples of this over the past two or three years. There is certainly still a problem with the national debt since it is growing all the time, but as a percentage of GNP it has been substantially reduced. Consequently the crisis element has disappeared and the debt remains the problem which continues to exist. That was a success in terms of people agreeing that there were general principles on which they could work together, even though they were divided about other matters in this House.
We have sought to extend that thinking to other areas of the economy. We tried it in the reform of taxation. I argued on the last Finance Bill and the one before that reform of personal taxation was absolutely vital, but I also said quite openly that it would be very difficult to reform personal taxation. Clearly the resources necessary to establish very low rates of income tax are not there and will not be there for some time. What is involved in the reform of taxation is a reallocation of resources and in any such reallocation, with a different spread of the burden of taxation, there will be winners and losers. The experience in other countries was that if the reform of taxation was approached incrementally it did not work because the winners identified their winnings much later than the losers identified their losses. Frequently many people paying income tax won a little bit. They gained in a small way and did not become over-excited about it, but those who lost a particular tax avoidance scheme or taxation perk they had enjoyed felt the pain rather dramatically. They organised themselves very quickly into effective lobby groups and stopped the Government who tried to move incrementally on the reform of taxation. I and my party are of the view that if we are to reform taxation we should do it by presenting a package which would clearly identify the losers and the winners and we would try to establish a consensus in this House in judging the most effective personal income tax system to encourage growth and development. We put this forward as a proposal and the Government have decided not to go along that road.
The Government could share some of the views we have on economic development. No matter what countries we compare ourselves with, it is quite clear that the Irish economy has performed very inadequately in this and the last generation. In terms of a league table of developed economies we have slipped back. Our rates of growth have only been about half that of the average for the EC over the past generation. Why is that so? Why can we not perform as the Danes, the Dutch, the Belgians and the Germans perform? Why should we always be the sick man of Europe? Is it some fault in ourselves or some fault in the way we arrange matters? Clearly it is a fault in the way we arrange matters.
Various people have analysed the difficulties in the Irish economy. The best analysis in recent times is in chapter 1 of the National Development Plan. It is an economic and social analysis which effectively lists the problems in trying to make this economy grow. It does so very well. It may be moving from a wrong motivation. Somebody may have decided that the way to get the maximum Structural Funds from Europe was to present the blackest picture possible and to point out in great detail the inadequacies of the Irish economy so that if the case was made as black as possible we would attract the maximum amount of Structural Funds. Whether or not that was the motivation, we still have in chapter 1 of the plan a serious analysis of the problems of the economy and the factors which are preventing growth, both at the macro-economic and sectoral levels. That should be taken very seriously. The plan does not subsequently move to eliminate those weaknesses. It sets out a series of infrastructural projects, all of which are worthy in themselves, but the sum of all of them does not constitute a plan.
What we and Deputy John Bruton had in mind was a very simple idea. If we could identify and agree that there are certain structural and sectoral weaknesses in the economy there would not be that much difference on either side of the House. An analysis such as we have in chapter 1 of the national plan would point out those weaknesses quite clearly. We might be able to pick out a number of them as priorities and seek to get a lasting agreement, regardless of which party were in Government, so that there would be continuity of policy. We would also seek a wider consensus among the trade union movement, employers' organisations and the farming groups so that certain key principles and strategies would remain the same and there would be a continuing policy into the nineties towards removing those factors which inhibit growth in our economy.
I should like to quote two examples. The first is the whole problem of being on the periphery of Europe. We are the ultimate peripheral country out in the Atlantic. With the Channel tunnel now being constructed we will shortly be the only island on the western approaches to Europe. The plan says that because of our peripheral location transport costs for Irish exporters to Europe are between 9 and 10 per cent of export sales values, approximately twice those incurred by Community countries trading with one another on the European mainland. This cost penalty applies to the great bulk of Ireland's international trade, exports, imports, materials and capital goods. I do not think there is a Deputy in this House or a citizen in this country who, if he understood the economic arguments, would disagree with that. The fact that we are on the edge of Europe and have to transport our goods to the marketplace is a serious problem which is preventing this economy from growing. The home market is only 3.5 million people, and it is self evident that we cannot organise enough economic activity internally to gainfully employ all our citizens. We have to export to live; it is only as a trading nation that we can survive. It is clear what the problems of transport are. We are suggesting that we should agree a programme and stick to it, right across the floor of this House.
The list of infrastructural projects, particularly the 1,500 or 1,600 miles of national primary routes which are going to attract the resources of the Structural Funds, are all desirable objectives. Of course we need main roads running to the ports and improvements in our main roads structure. We need more than that because there are other cost factors. We also need an immediate movement to reduce the cost of excise on articulated vehicles because that is one of the major impositions which makes transport here so expensive. Second, we should reduce excise on auto diesel. I know that there are not vast sums of money lying around in the Government coffers to make dramatic reductions in the price of petrol simply by removing excise duties. That would be unrealistic; but we can move selectively beginning with auto diesel, so that some of the disadvantages which are suffered by Irish exporters are reduced simply by reducing the cost of transport.
We must also look at how we arrange transport to the continent of Europe. There is a very strong case to be made for having a central location somewhere in the hinterland of the channel ports on which Irish truckers can converge and avail of a whole range of activities which are organised so that the various economies of scale which would result from such an enterprise could accrue to the benefit of the Irish State. If we cannot take our goods to the marketplace and sell them as competitively as those who produce them at the centre of the marketplace, we have a problem. That aspect of economic development alone is something that should be addressed.
We have sought the consensus necessary to do things like that. Simply building the roads in Ireland, improving them and putting in dual carriageways, running a motorway from Belfast through Dublin to Rosslare, will help; but it will not solve the problem. We are at risk now from competition from abroad, particularly from the United Kingdom. Carriers with lorries travelling from Europe down the motorways of the UK, coming to the ports of England, coming into Ireland and linking up with a further good network of roads will be in a position to wipe out many of the people here who trade on the home market. Competition works in both directions. If our network of roads becomes very effective for distributing foreign goods around the country and we leave our truckers and our exporters with all the disadvantages of the high cost of fuel and the high cost of excise duties on articulated trucks, not only will we not achieve the desired objective of exporting more to the UK and mainland Europe but we will find that the home market is taken from under our feet as well.
I am not talking about small sums of money. It costs 40 per cent more now to shift a metric tonne here than it does in the UK and that kind of competitive disadvantage can only result in UK traders taking a larger slice of our market if we improve our roads.
