Dáil Éireann debate -
Tuesday, 30 May 2000

Vol. 520 No. 1

Written Answers. - Programme for Prosperity and Fairness.

Bernard J. Durkan

Question:

164 Mr. Durkan asked the Minister for Finance if his attention has been drawn to any difficulties that might threaten the Programme for Prosperity and Fairness; if the agreement is likely to survive in view of the current trends; and if he will make a statement on the matter. [14240/00]

Minister for Finance (Mr. McCreevy)

I firmly believe that the programme will run its full course. The Programme for Prosperity and Fairness, PPF, is the fifth partnership agreement and reflects a further endorsement of the model which has served us so well since 1987.

There are concerns that higher than expected inflation will undermine the pay terms of the agreement. It should be noted that the increase in inflation in recent months has been due to a number of factors, many of which will decline in importance in the near future. The impact of the increase in tobacco prices will fall out of the index in December and the impact of the oil price increases and the fall in the value of the euro will decline over the course the year. As a result, headline inflation will be substantially lower by the end of the year.

Adherence to the terms of the PPF will ensure that the recent rise in inflation is temporary. It is the Government's view, therefore, that the pay terms of the agreement must be adhered to. These increases, when combined with further reform of income tax, will provide substantial increases in take home pay over the duration of the agreement.