Seanad Éireann debate -
Wednesday, 23 Nov 1977

Vol. 87 No. 5

Ministers and Secretaries (Amendment) Bill, 1977: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for the Public Service (Mr. Colley)

The purpose of the Bill is to give effect to the Taoiseach's statement in Dáil Éireann on 5th July last that a new Department of Economic Planning and Development would be established.

Before I go on to deal with the circumstances leading to the proposed establishment of the new Department, I think it might be helpful if I dealt briefly with the technicalities of what is being done in order to avoid possible confusion in the debate. Quite simply, the Bill will amend the Ministers and Secretaries Acts, 1924 to 1973, to provide for the establishment of a new Department of State which will be in charge of a member of the Government known as the Minister for Economic Planning and Development. The Ministers and Secretaries Act, 1924, was described in its long title as an Act for constituting and defining the Ministers and Departments of State. It established 11 Departments of State, administered by Ministers, amongst which the administration and business of the public service were distributed. The powers, duties and functions of each Department were set out in general but comprehensive terms. The reallocation of functions and the creation of new Departments to meet changing needs since 1924 have been effected by amendments to the 1924 Act. The Ministers and Secretaries Acts now provide the statutory basis for the Departments of State and define the distribution of the public business between these Departments. The descriptions of the functions of Departments are necessarily set out in rather general terms, leaving scope for development to meet changing circumstances. No effort is made in the Acts to provide for the detailed operations or the processes to be employed by the Departments.

In the circumstances of 1924, the concept of the role of the Government in the management of the national economy was, to say the least, undeveloped. Over the intervening years, however, a series of developments have revolutionised the position. The tentative first steps towards State involvement in the economic process through the creation of State-sponsored bodies accelerated through the thirties and the post-war years. The growing importance of Government action in the management of the economy was finally recognised institutionally with the publication of the first programme for economic development in 1958 and the subsequent establishment of the Economic Development Branch and later the Development Division of the Department of Finance. Looking back, it is now clear that the institutional developments from 1958 onwards brought about a radically new approach to the development of economic planning by Government; it has, however, become increasingly clear in recent years that the time has come for another fundamental institutional development.

The Report of the Public Services Organisation Review Group in 1969 stressed the need for the strengthening of the planning function throughout the public service. The Public Service Advisory Council, in their last report, urged that urgent attention be given to the provision of appropriate planing institutions in the public service and that the plans of individual Departments should not only be consistent with, but form an integral part of, a national plan. Above all, however, it was the absence in recent years of any overall national economic plan or programme that indicated that it was time to take stock once again and ask if the existing institutions for planning are equal to the needs of the economy.

The Government have been convinced for some time that the first essential reform is to provide separate institutions for planning not only within Departments but by assigning central responsibility for planning within the Government to a Minister in charge of a separate Department. Looking at the response to the difficulties which faced this country over the past four years, it became evident that the Government need an institutional capacity to co-ordinate their approach to economic and social development. Because of the importance which the Government attach to this major institutional reform, the Taoiseach announced, in his first statement on his appointment, that legislation would be introduced to establish a new Department of Economic Planning and Development to be headed by a separate Minister.

We are fully aware of the difficulties which will face this Department. Planning is an activity which is difficult and which often receives little recognition for its achievements. If, and when, all the targets of a plan are achieved, the planner can expect little thanks. When we achieve our aims we are already looking forward to other objectives. On the other hand, the few failures of the planner will attract more attention than all his successes. It it no wonder, then, that both people and institutions often prefer to devote themselves to other tasks and to neglect this difficult and unrewarding activity. However, unless we are to place our trust in luck alone, the success of our endeavours depends on the competence and diligence with which our plans are laid and pursued. For this reason, it is now a common practice in large institutions to assign to a specialised part of the organisation the responsibility for developing and tracking the implementation of plans for the future. In establishing the new Department we will, we are convinced, therefore, be bringing the organisation of government into line with the best modern practice.

The general responsibility of the new Department will be to promote and co-ordinate economic and social planning for the development of the economy both generally and as respects different sectors thereof and as respects different regions of the country.

These functions have in the past been discharged by the Department of Finance, not under specific statutory authority but as complementary to their responsibility for the business generally of the public finance. In this Bill it is necessary, in constituting and defining the Minister for Economic Planning and his Department, to set out his functions, which is done in Section 2 (2). The functions as set out in the subsection contain a wide definition of the area of responsibility of the new Department but they do not and should not lay down the details of the processes and operations of the new Department. Because they are both concerned with the central co-ordination of Government business, the Ministers for Finance and Economic Planning and Development, and their Departments, will necessarily have a very close working relationship. Although the functions of economic and social planning and of budgetary and financial control will in future be organisationally separate, they will both form part of the central co-ordinating systems of Government with the main areas of contact in the preparation of the budget and the development of national plans.

Although the finer details of the planning process will be worked out and developed when the Department become fully operative, the general design is now complete. The new Department will be required to promote and co-ordinate economic and social planning. The Department will, therefore, be the centre of the planning system for the whole public service and for developing the overall view of the economy and reconciling sectoral and regional plans with national goals and criteria. Other Departments will have particular sectoral responsibilities in such areas as industry, agriculture, health and social welfare. As part of the development of the planning system the planning capacities of the responsible Departments will also be strengthened to form part of a total public service planning function and to provide a support service to the management of these Departments.

Apart from their remit to promote and co-ordinate economic and social planning and development, the Department of Economic Planning and Development will be assigned certain more specific functions to enable them to act in the appropriate areas of Government. In accordance with what I have said about the definition of functions rather than processes for the new Department, it is important to ensure that this definition of functions is wide enough to allow the Department the freedom to develop the method and techniques of planning without being tied in advance into a set of processes which may prove unsuited to the needs of a developing economy. The more detailed functions set out in section 2 (2) have been drafted with great care and after much consideration, to achieve these ends.

After the general mandate set out at (a) of subsection (2), the first more particular function of the Department, as set out at (b) of the subsection, is designed to make the Department the central source of advice to the Government on economic and social policies. The Department will be required to report to the Government on the policies they consider necessary for economic and social development. To do this, they must have the capability to ascertain and analyse the evolving state of the economy. They must be in a position to identify the possibilities, offered by availing of external and internal opportunities and by policy changes, to operate at maximum capacity. The output of the analytical process will be a report to the Government by the Minister for Economic Planning and Development on the desirable direction of Government policy towards economic and social development. I would stress, however, that the final decision will be for the Government who may, as they see fit, publish draft plans as discussion and consultation documents.

The translation of policy into plans and activities is a critical stage in the planning process and (c) of subsection (2) assigns to the new Department the function of consulting with Departments on their plans to give effect to Government policies for economic and social development and of reviewing and appraising these plans. The end product of such consultation is set out at (d) of the subsection — to make proposals to the Government for the co-ordination of these plans and activities and for their integration with national economic and social plans.

In this process, two things are not rigidly laid down. First, it is the intention of the Government that there will be consultation with the main interest groups in the economy on the preparation of economic and social plans. Employer and employee representatives, industrial and agricultural groups and other important representative bodies will be consulted but it would not be wise to specify once and for all in legislation who exactly are the groups to be consulted. Groupings will change in the future as they have in the past; bodies will coalesce and disintegrate and the Minister for Economic Planning and Development will have to take account of such developments in deciding on the bodies with whom he will consult from time to time. Secondly, no attempt is made to lay down the time perspective for national plans nor to specify the frequency at which plans will be prepared. Planning is concerned with an uncertain future and it is essential that the Department should be left with the flexibility to structure their plans to the changing needs of the times.

In this connection, I might also mention that the need to consult the Oireachtas on national plans is fully appreciated by the Government. I can assure the House that there will be an opportunity for debate on such plans; I am convinced, however, that to require the presentation of plans at regular intervals would be counterproductive; it is preferable to have the production of plans geared to the requirements of economic and social conditions than to have the production of plans made a mechanical exercise to be completed at set intervals.

Finally, the functions laid down for the Department require them to review the implementation of national economic and social plans and to report thereon to the Government. The greatest danger facing a planning system is that, with the devotion of a major effort to the preparation of plans, those concerned may believe that the job of planning has been done. However, to will a desired outcome is not to ensure its achievement. Progress with the implementation of plans must be kept under review; where targets are not being achieved, the reason must be ascertained and corrective action must be taken or targets must be revised. It is only by such an iterative process that the plan can be maintained as a continuing overall guide to development.

Given the functions of the Minister and his Department, the details of the planning process will, as I have said, be developed as the Department put the new planning system into operation. The task will require certain structural arrangements. I have pointed out that the planning capacities of the main economic and social Departments will need to be strengthened to form part of the total public service planning function and that the Department themselves must have an economic and social analytical capacity equal to their task. Outside the Department proper there are other institutions concerned generally with the planning process for which the Department will assume general responsibility. The first of these is the National Economic and Social Council whose main task laid down in their constitution and terms of reference is:

to provide a forum for discussion of the principles relating to the efficient development of the national economy and the achievement of social justice, and to advise the Government through the Minister for Finance on their application.

The NESC, who are not a statutory body, will in future relate to the Minister for Economic Planning and Development whose Department will deal with their finances and other relevant matters. The new Department will also deal with the Economic and Social Research Institute whose finances are at present largely provided by means of a grant-in-aid from the Vote for the Office of the Minister for Finance. Under legislation at present under consideration, the Minister for Economic Planning and Development will also have responsibility for the new National Board for Science and Technology.

The new Department will have responsibility for the promotion and co-ordination of economic and social planning as respects different regions of the country. While the reconciliation of the regional and sectoral elements of the planning matrix will require development, the immediate structural effect will be the transfer of responsibility for the county development teams and the special regional development fund to the new Department.

Finally on the institutional arrangements, I might say a few words on the informational and statistical bases of the Department of Economic Planning and Devolpment. Much of the statistical material on which the Department will depend is already produced by such institutions as the Central Statistics Office and the Department of Finance. In other areas and, particularly in the area of social statistics, there are gaps not only in the statistical material available but, more importantly, in the development of meaningful indicators. The improvement of the statistical base for economic and social planning will be a task for the new Department in consultation and co-operation with the Central Statistics Office and the various Departments concerned.

I have dealt with the purpose of this Bill and with the functions and broad structural arrangements for the new Department of Economic Planning and Development. Recognising the deficiencies which have existed in the function of planning, we are, in this Bill, proposing the institutonal means for strengthening this function to meet the increased demands imposed by the acceptance by the State, in this country as in all western democracies, of a central role in economic and social development. The perfection of systems and the introduction of the necessary skills and techniques will require hard work and effort but, in the final analysis, it is a technical problem capable of a technical solution. No matter how well the new Department work, and, indeed, the better they work, the wider will be the range of alternative courses of action for final choice and implementation. The National Economic and Social Council have come to the central issue in Report No. 32 dealing with the question of choice between different policies in the light of the conflicting views of different interest groups. I quote:

However in the last resort such differences may be resolved, or the action that is appropriate to the circumstances taken despite them, only by a political process or procedure. This is a responsibility which in a democracy must properly be borne by the Government alone.

This Government are firmly committed to making the necessary choices and implementing the consequential policies and programmes. This Bill provides for the necessary framework for planning and I confidently recommend it to the House. The consequent responsibility for the development of the economy will, in the final analysis, rest with the Government, but I can give a firm assurace that, before making final choices, the Government will engage in the maximum possible consultation with all the relevant interests in the State and will afford the opportunity to have national economic and social plans fully debated in the Oireachtas.

Mr. Alexis FitzGerald

I welcome the Bill as an opportunity to express my views on the idea of planning our economy and to make some observations on the scene as I see it. I am afraid I detect some euphoric sense that the creation of the Department, or the presentation of a plan, is in some way the inauguration of an age of plenty. If, in fact, the planning is successful and the Department and the Minister achieve the very best they can, their best success will be to bring home to the people who operate the political processes, cited by the Minister in the document of the National Economic and Social Council, the fact of scarcity which will endure for this economy as it continues for all the economies of the world however rich they may become. That fact, from time to time, may tend to get obscured in the operation of these political processes and concealed from the people that, if they are adopting a particular set of policies, they are foregoing the cost of these policies, they are foregoing the alternative policies which could have been purchased if the costs of the policies chosen had not to be borne. The fact of scarcity will not disappear with the establishment of the Department, however well timed, however well manned. The fact of scarcity will not disappear with a plan however well chosen or pursued.

On the matter of structure I have little enough to say because I feel that I can give essentially only a sort of a nominal assent to the value of the arguments offered by various people. It seems to be a judgment worth expressing on whether this should be located, as so many people think it should have been, in the Department of the Taoiseach, whose office would enable him to bring its support to the support of the plan within the Government who must decide upon it, or whether it should be located in the Department of Industry and Commerce as, in Irish circumstances, some have suggested might be right, as that Department have the largely freely-operating Industrial Development Authority designed to promote the growth of exports which must lead to the growth in manufacturing without which the necessary growth cannot be achieved, or whether it should be located in the Department of Finance where the skills, such as they are, must exist to achieve the controls on public expenditure without which any plan will fail, or whether there should be a new Department. I cannot make a judgment of great value on that question to this assembly. It seems that you have to be a Minister, or an ex-Minister, or a public servant of considerable experience or to have been—in the way I have never been — on the inside of the decision-making processes of the Government.

We have, at any rate, the decision of this Government. It seems to me that, as the Department is separated from the Department of Finance, which will remain the body which will control public expenditure, as the Minister indicated in his speech, success or failure will depend finally on the degree of collaboration and co-operation between these two Departments. One cost of the decision to have a new Department is that 10 per cent roughly of the lifetime of the Government is gone by without the process of planning having started. Practically five months have gone and that is roughly 10 per cent of the average lifetime of an Irish Government. If the Department of Finance had been chosen at the start, we could have spent that 10 per cent elaborating on the plan which we might now have.

Mr. Colley

The Senator is overlooking the fact that we published it before the election.

Mr. Alexis FitzGerald

Perhaps the Minister will allow me to carry on in my own lumbering way. One of the tasks the Department will have to discharge clearly will be the business of explaining to the community the implications of scarce resources. The desirability of planning is now generally accepted. It was not always so. I remember when there was a debate, not so very long ago, when there was an argument — it seemed to me of a most vague and theoretical nature— about the difference between programming and planning. The programmes have now come to be described as plans. I remember, not so long ago, when planning was a socialist policy, recommended by socialists, and feared by the promotors of private industry, feared by entrepreneurs.

I made a quick check the other day and I noticed that in 1974 the entire conference of Irish industry took place without one of the speakers referring at any stage to planning. Planning first came to loom in, or zoom in, or whatever the word is, on the managerial side towards the end of 1975. We have now something which, if I understand it correctly, will tend to lead to a collaboration of clauses. Historically, such has happened from time to time. Let us hope one of the desirable consequences of the existence of a plan, about which hopefully a consensus will be obtained, will be this very collaboration, collaboration not merely between classes but also between sectors. In part the Minister's role, or the planner's role, would be to teach the farmers the need for manufacturing success for the future of their families, to teach the identity of interests between the two sectors, to bring them together and reconcile them and make them realise that they have a common problem whose common solution will benefit both.

The bringing together of agriculture and industry should lead to a realisation of linkages which may not be observable by industrialists without the aid of farmers, and likewise on the farming side. Properly presented and properly shaped, while the problems will not disappear because of a plan, they should come into better focus. The inter-relations which a plan will expose could lead to investment, to the realisation of potentials not previously realised, just as on the discovery that one company is making a great profit out of a particular enterprise, its group may be discerned as presenting opportunities for others.

One of the objectives of this Department should be the stimulation in other Departments of policy units. This has been said in the other House and is a most desirable objective and a justification of the whole planning exercise if that stimulation takes place. With that stimulation, we will begin to face into one of the first hurdles which any real planner will have to overcome. That has been referred to in another debate, the reform of bureaucracy. It is necessary to say this because, with all its merits and its merits are frequently referred to and I do not have to repeat them and sometimes because of politics with lip service only, bureaucracy is now a political factor. Many civil servants have many votes and they may not like the necessary adjustments involved in the reform of bureaucracy.

It also is a very important factor in the formulation and the maintenance of any incomes policy. It is a very important factor in determining the level of Government expenditure. Therefore, it is a very important factor in determining the level of taxation whether in this year or in succeeding years, and through taxation tending to affect our competitiveness, our unit wage costs, the availability of stimuli for the innovator, the degree of release that can be provided, anything that can make bureaucracy more confident in itself and in the usefulness of the work it is doing, more efficient as a work force, better value for the money it costs. The more good planning achieves this, the more and the greater the contribution to growth and to the improvement of the economy.

I grew to the age of reason when, through a whole series of factors, level of education, excessive strength of Treasury control, deep dissention in the community, the Official Secrets Act operation, insufficient number of voluntary bodies, inadequate understanding by the academic institutions of the operations of the economy, insufficient commitment by experts to their society, the delusion, for delusion it was, was rampant that the civil service knew best. In some cases they knew most, because they knew some of the factors alone which enabled a final decision to be made, but they did not necessarily know, or make a proper judgment about, all sorts of other factors other people knew, or which are now known at any rate.

A little reminder of what I am speaking of, something perhaps nobody in the House will remember, is that it was part of the law of this land right up into the fifties, that you could not fish from a boat longer than a particular size. Through a policy of protecting the inshore fishermen, we rejected all the developments of modern technology, resisted advice which came into that Department from outside, because I presented it not knowing a damn thing about it but representing somebody else, and we were left behind in the race for the development of our fisheries. This is one single example.

I believe the Industrial Development Authority, or shall we put it this way, the idea of its establishment, was not enthusiastically received by the Department of Industry and Commerce. Now, and this is one good thing about that development of the sectoral interest, there is a great deal more enlightenment about public matters through the development of the representation of these sectional interests, and this enlightenment is of value to the Government and capable of making the Government self-improving, capable of making the bureaucracy self-improving.

I was interested in the Minister's reference to one of his own Departments. He has so many different descriptions that if I do not use the most honourable of them all of the time it is just because I am focusing on another. I refer to the Department of Finance. There is a feeling, and I throw it out for enlightenment as much as anything else, that there is a danger, which I gather from the Minister's statement over the years has got less, of the Department of Finance duplicating the work of other Departments. In planning our economy — the beginning of the planning is in the public sectors — the beginning of the useful work is to be done where it can be most directly done.

It is obvious to me that the Department of Finance must be as flintlike as ever the Treasury was on the matter of approving new services because, if you allot £1,000 in the first year, God only knows what it will become in year ten and, if you look back on the original estimates of the costs of free health, for example, and find out what in then current terms these services came to cost, you realise the importance of a tremendous check on the constitution of new services.

Another function of a successfully operating Department of Finance would seem to be reviewing old services, particularly very old services, as you would a list of old debtors. Those of ten years and upward would get a more anxious consideration than those of five months and upwards, to see if they are longer justified in the new circumstances which exist and how much can be saved for better purposes by their elimination. These two functions seem to be all important for the Department of Finance to perform.

I do not know what difficulties there are, but subject to that, I should like to see—and I should like to be told the difficulties — as much as possible the resources allocated to particular Departments left to the Ministers of these Departments to allocate themselves within services, each of which has been approved by the Department of Finance and if you were dealing with one Department as I might do on a particular occasion, you would not have to feel you would have to go on to Finance yet again. Once it was within an overall provision you dealt with the people who really knew about it, who really knew the difference between two aeroplanes, for example, being the experts in that matter, and you did not have to await a decision, provided the overall allocation was under the final checking process.

In the matter of planning I do not notice anywhere — I may have missed it — reference to the importance of the actual texture of taxation, the fiscal system itself. I would be prepared to bore the House at another time with an exposition of the mutually contradictory operations of various tax reliefs contained in the fiscal system, one encouraging the attainment of one target, and the other discouraging the attainment of the same target, or one encouraging one kind of activity, and the other discouraging the very same activity or, perhaps, not so positively doing that necessarily, but where neither quite reconciles with the other.

I would have thought that if the planner is going to be successful he will have to be aware that expenditure decisions on the one hand and taxation decisions on the other, will have their effect not merely on this year's budget — and I presume this is a movement away from Gladstonian budgeting — but on the attainment of targets through a period of years and will have long term consequnces. There are a variety of tax features in our codes which have had long term consequences, some of them good and some of them bad, but most of them unintended; certainly a lot of them were unintended and it is the unintended consequences of changes of expenditure and changes in taxation that seem to me to provide the planner with his greatest problem.

Target setting or forecasting seems to me to be a reasonably easy kind of technical process. Making judgments about the effects of changes over time — I do not know how any machine does that thing — involves all sorts of judgments and inter-relations that are not merely macroeconomic but inter-relations between human beings who are themselves changing under the change in the economy.

I have some sympathy with the critics in the other House who were disappointed that the word "social" was not somewhere in the Minister's title but I shall not waste the time of this House on what we are not going to get even if we were gifted with the gift of Demosthenes at this stage. But there are many references to social policy in the Bill. I think up until very shortly, it was my view with regard to this that I am against the sort of diluted Rousseau-ism which has been operative in our social policy, shall we say in a phrase which I never normally use but is useful for this purpose, "pursued by successive Governments". I do not believe in the equality of the horse that is last in the Grand National and the horse that wins the Derby. I do not believe that a policy designed to pretend that they are equal is good, particularly if it is costly and particularly if it wounds the animal that might have won the Derby and can no longer run in it, through his brightness of intellect having being held back to keep in tune with the chap that could have run faster than him. I would like to suggest that the social policy of the planner ought to be directed towards the business of eliminating poverty, concentrating on the matter of the people in real need, and less concerned with removing inequality, particularly the removal of the inequality that reduces the ability to create wealth with the social dimension.

I would like to think that the planner who is to have this overall view of our economic and social scene bore more compassionately in his mind than I see signs of in any public document, the social cost of inflation; those whose monetary savings are eroded who have no hidden treasures by which they can be supplemented, the handicapped, whether by youth because of widowhood or orphanage, or the aged, those who are out of participation in the inflationary stakes through retirement. A quick example of the sort of thing I have in mind: there is a limitation — I think it is 5 per cent—on the extent to which a private patient scheme can proof itself against inflation. In the kind of depression, this very curious crisis that we have lived through, which I think uniquely combined the business slump with the price inflation, what happened to the pensioners? I know that many of them, remembering happier days, are in very poor conditions and live on incomes very much below the average industrial earnings, having spent their lives working as hard as any of those who receive these average earnings, and live lives of quiet desperation behind lace curtains. I think society is very foolish in ignoring the effects of inflation in many of these cases. Subversion can be bred in curious crannies; alienation can be found arising from different sources. The annual budget is, I suppose, a kind of a plan, is it?

Mr. Colley

Short term.

Mr. Alexis FitzGerald

Short term and varying according to the Government in question. I would like to know more precisely than I have understood — no doubt I have been precisely told — what is going to happen now. I am all for flexibility but not so much flexibility that we have nothing positive and solid. Are we going to be given a four-year plan with a rollover and when? Is it going to roll over into the next Government? Can we be told now or, if not, when, what the objectives are? Above all, what policies will be used to achieve these objectives and how are they to be costed? I think that the Government will be doing itself and the nation a disservice if it does not accept the responsibility of budgeting firmly for a term of years which should at least be four. If it does not state the assumptions it is making and accept the obligations of adjusting the plan, these assumptions are incorrect.

I believe the Government have an opportunity of recognising that there is potential here for a consensus. There will always remain sufficient for the parties in this country to disagree about for it to be unnecessary for them to disagree about a matter so vital as this. If democracies are going to survive they must be capable of producing the goods. If their political processes have to be adjusted to that, the political parties operating them are those to make the adjustment. If cynicism which is corrosive of democracy is to be overcome, it can only be overcome by an honest statement of the truth by everybody involved in political life.

The invisible hand that Adam Smith talked about a couple of centuries ago has visibly disappeared, or at least is not visibly operative in this economy at the moment. I should have thought it an important State purpose, an important planning purpose to demonstrate to the people the connection between progress and employment. I think all dishonesty should be dropped about this. In so far as it is remuneration on capital it should be seen to be such; in so far as it is another word for some other class or some other category of person to get a higher income there should be a policy about that. I, personally, do not hesitate to express my conviction that whether or not the economy or the policy is ripe for it now there will not be success here until there really is participation. I do not mean participation in management which seems to me rather a nonsense — people have to make decisions; people have to govern; people have to exercise discipline — but participation in the fruits of reward. There is an obvious time lag between the generation of profit and the creation of additional employment but if private gain is accepted by the Government as the engine of growth its social dimension must be exposed. The linkages between all the different components operative in the economy must be demonstrated.

I would like to refer, if I may, to this matter of scarcity again and make one general point about it: it is always relative to expectations. These expectations are sometimes greedy and sectional and to the extent that the economy here has grown, taking a secular view of the matter, not a few years but a 25- or 30-year period, the economic circumstances and conditions of the vast majority of people in this country have been totally transformed. People are infinitely better off in the generality than they were. That has had a spoiling effect, just as new money always has a spoiling effect on people. We have a kind of a plutocracy concerned with sectional interest and without social commitment and, as this plutocracy gets better off and as economic growth increases, that will get worse, unless corrected by some means of moral education through political parties, education by example as well as by precept and other forms of education. These resources which are scarce will be in even greater demand.

The social pattern changes with growth. It has a dialectical element, but these expectations that are demanding are rarely as demanding, once you get to a certain stage of development, as the expectations of the good, the philanthropic, those whose hearts are moved by feelings for others, once they have got to the point of actually noticing the existence of the others they become clamped to the desirability of satisfying these needs which they have just observed. The satisfaction of these expectations will be a very great task, one I would have thought beyond the power of the planner and finally one which can be solved only through community leadership.

I am not, to use the phrase, "a Brits out" man but in this matter of attitude to our situation I am a "Brits out" man. I am a "Brits out" man on attitudes of people engaged in business and in agriculture. I am a "Brits out" man in the matter of Governmental machinery. I am a "Brits out" man, above all, in the matter of leadership. This country has, relatively speaking, wonderful opportunities presented to it — the new markets of the Community, 260 million, the new quality of our industry, our mineral discoveries and the potentially greater discoveries in that field, our new forestry and above all the demographic pattern of our work force. If only our people can be got to understand that they are damaging their own interest, their children's, their grandchildren's interest, their neighbours' and their neighbours' children's interest by looking for more than can be given to them, if they can only be made to grasp that this is not hypocritical—talk that is absolutely true— and if they are encouraged to be as innovative and as risk-taking at home as they have been abroad and if all the institutions of Government are as good as they ought to be, then I would have the greatest confidence in the future of this country. I am not at all too sure how long a life I give this new Department because I think it turns on many matters. I hope, at any rate, that the life of the Minister who will head it will not be, as someone said recently, of "the lives of all political animals", "nasty, brutish and short".

Professor Hillery

I congratulate the Tánaiste on his appointment and wish him well in his important work in the years ahead. I welcome him on this, his first occasion to visit the new Seanad, and by coincidence, this is the first time that I have spoken here.

I welcome this Bill setting up the new Department of Economic Planning and Development. The functions of the new Department as envisaged in the Bill will ensure that its work will not be concerned with abstractions and generalisations but will be linked specifically with the development of the economy and with hard reality. The functions of the new Department which are clearly set out in the Bill underline the important and demanding work with which the new Minister is charged. I would like to refer briefly to these functions and to comment on them. Section 2 (2) (a) refers to the promotion and co-ordination of economic and social planning. In practice, these plans will relate to such concrete matters as energy and agribusiness. Furthermore, the reference to planning and development of regions of the country in this subsection is both welcome and appropriate and underlines the importance of the grass roots. While the word "social", as has already been pointed out, is not mentioned in the actual title of the Department, it is specifically mentioned in this subsection and in three further subsections. In any event, in economic analysis and policy formulation the word "development" includes social as well as economic elements. Therefore, it is clearly intended that the new Department will be concerned with the social as well as the economic aspects of planning and development for the economy.

Section 2 (2) (b) indicates that the Department will be concerned with identifying the policies they consider necessary for general economic and social development and will report thereon to the Government. The Minister referred to the new Department as providing central advice to the Government on economic and social policies. Policies, of course, and policy-making are the very heartland of Government activity. It is the deliberate intention as I understand it, that this new Department will have limited executive functions that they will be removed from most of the day-to-day pressures associated with other Departments of State and therefore the Minister will have the time and the opportunity and the necessary objectivity and detachment to identify policy options and to place these options before the Government for decision. The overriding objective, of course, in pursuing these policies will at all times be the achievement of the development of the economy as a whole.

Some years ago the Department of Finance was the only Government Department engaged in the identification of policy options and in the placing of these options before the Government for decision. Indeed, I suggest if previous efforts at economic planning were less than fully successful it may have been because the Department of Finance was unable fully to impose the discipline of their planning on other Government Departments. The creation of the proposed new Department creates a framework in which such an occurrence can be prevented.

This new Department will have a central staff function. One hears much about the pre-eminence of the Department of Finance. It should be remembered, however, that the role of the Department of Finance has undergone very significant changes over the years, not least through the establishment of the Department of the Public Service in 1973, which had the effect of hiving off a large section of the functions of the Department of Finance. The establishment of this new Department will give further impetus to the changing role of the Department of Finance and indeed will change the structure of Government itself.

Section 2 (2) (c) envisages that the new Department will review and appraise the plans and activities of individual Departments of State. The new Department, therefore, will play, as I see it, a lead role in going to other Departments to review and appraise the plans already set at individual Department level. In so doing, the new Department will be following through, at programme level, the progress of departmental plans. With regard to subsection 2 (2) (d), the key word here I think is "integration". Having reviewed and appraised the plans of individual Departments and their part in implementing already agreed Government policy, it will be the task of the new Department to ensure that individual departmental plans form an integrated whole, again with the overriding objective of meeting national economic and social plans.

Finally, Section 2 (2) (e) as specified in the Bill completes the planning process or cycle with the new Department reviewing the implementation of the national economic and social plans already approved by the Government in Cabinet. The new Minister will report on progress thereon to the Government.

The functions of the new Department as outlined in the Bill follow a very logical sequence indeed. From this brief review of the functions of the Bill it is quite clear to me at any rate that the new Department will possess solid, tangible functions in the areas of economic planning and development. The success of the new Department, like any Government Department, depends rather heavily on the co-operation and support the new Minister will receive from his Cabinet colleagues and, in particular, from the Taoiseach. There is every reason to believe that such co-operation and support will be readily forthcoming.

I would like to return to the question of the relationship between the Department of Finance and the proposed Department of Economic Planning and Development. The establishment of any new Department of State, but in particular one which will be concerned with planning, naturally raises the question of the relationship of the new Department with the Department of Finance. One of the primary functions of the Department of Finance, as already indicated by a previous speaker, is the budget. The budget is a first step in the planning process and consequently the new Department will of necessity be involved in a constant dialogue in a two-way process of communication with the Department of Finance. With due modesty I share the belief that economic planning and finance can be separated successfully. I consider the establishment of the new separate Department timely and appropriate to Irish circumstances.

As already indicated, the new Department will have a central function, having full departmental status at Cabinet level. The Department of Finance, while obviously an important Department of State, produces its annual budget only after several months of preparation following consultation and discussion among all Ministers in the Cabinet. When the Minister for Finance presents his budget in January next he will have functional responsibility for it, but the budget will be the product of a Government decision and not solely a decision of the Minister for Finance. In common with all major decisions made by the Government, the budget will be the product of Government decision-making at Cabinet level with the Cabinet acting as a team. I do not share the view, therefore, that the Minister for Economic Planning and Development will suffer from a lack of power because of lack of control over finance. Such a claim would exaggerate the present role of the Department of Finance and would ignore the present decision-making processes of Government. Moreover, since the new Department will be responsible for policy as well as planning, its role will be one of collaboration with the Department of Finance functioning in a new environment, and will not be in conflict with it.

Mrs. Robinson

The Labour Party are committed to the necessity for economic and social planning and, therefore, would be prepared to welcome any measure which would improve the Government's performance in the area of economic and social planning. We would be prepared to welcome any effort by the Government to co-ordinate and streamline their plans and to inject more social and economic planning into coping with the very serious problems which face the country. I tried by reading carefully through the debate on this measure in the ether House, to get a more definite sense of what the Government thinking behind it is. As was pointed out, this was not a proposal which was contained expressly in the Fianna Fáil election manifesto. There may be some truth in the observation that the Department is being created to fit the man rather than to fit a very explicit outline of the Government's approach. I do not want, in any way, to denigrate the approach unfairly. I would like to be clear on what precisely is meant. The new Minister himself gave useful insights into what is intended to form at least part of the role of the new Department in his contribution to the debate in the other House on 19th October. I quote from column 824 of the Official Report of that day:

I think the reason why this new Department should have very limited executive responsibilities is to avoid the danger of it being sucked into day-to-day executive matters which would ultimately impair its ability to carry out the more detached, longer-run assessment which is necessary under modern conditions.

The Minister then went on to say that he was not going to elaborate on that point because it had not really been raised in the debate so far. I would be grateful if the Minister for the Public Service replying would elaborate on that aspect of the functions of the Department.

I can see a problem for any democratic Government in trying to plan for the longer term and in so doing to avoid the pressures to provide short-term but not necessarily wise solutions to particularly acute problems. We have a massive unemployment problem and, in particular, we have the acute social problem of providing a sufficient number of jobs for younger people whilst also ensuring job opportunities for the less young, job opportunities for women coming back into the work force and the adequate training for these jobs. The problems and the short-term pressures are there. I would welcome more specific elaboration of how the new Department, in an effective sense, could provide that degree of detachment which would allow them to influence Government planning. The Department could indeed become a very high-powered think-tank, but surely the structure of creating a whole Department under a Minister who is one of the 15 Ministers in the Cabinet is much too elaborate a structure just to formalise the think-tank approach? Clearly much more than that must be intended. I have referred to the first insight that the new Minister, Deputy O'Donoghue, gave during the debate. The second one, further down in the same column, was where he said:

... it is the intention of the Government and the Minister for the Public Service to ensure that all Government Departments have an adequate planning capability, an adequate capacity for policy analysis and so forth, so that they can work in harmony with this new central Department of Economic Planning and Development.

Again, I would welcome further elaboration by the Minister for the Public Service because there the new Minister appears to be conceding that it is the Minister for the Public Service who will have a major role to play in building up the adequate planning capabilities in the various Departments. I would like to know what the precise relationship will be between the Tánaiste, as Minister for the Public Service, and the new Minister.

I listened to Senator Hillery give his assessment of the functions of the new Department, examining them as set out under section 2 (2) of the Bill. He made a very constructive contribution in trying to assess how this would work out. Nevertheless it is all still very hazy and it is difficult to see how this can be an effective method or technique for ensuring that the Government do address themselves to the necessity for serious economic and social planning. I would contrast the approach to the very specific planning proposal of the Labour Party: the proposal for the establishment of a national development corporation and the accompanying planning to harness the resources of the State to provide for the economic and social needs and welfare of people. That is specific. It is something that can be comprehended. What I find very difficult about the wording of the various paragraphs of subsection (2) is that the words mean almost anything or nothing. Section 2 (2) (a) reads:

to promote and co-ordinate economic and social planning for the development of the economy both generally and as it affects different sectors thereof and different regions of the country.

It could be said that the National Economic and Social Council are doing that at the moment or that they could be briefed to do it. Paragraph (b) states:

to identify the policies it considers necessary for general economic and social development and report thereon to the Government.

Again, it is a think-tank approach. What significance will be placed on it? What power does the new Minister have to ensure that priority will be given to these reports? What power do his officials have to ensure that they will stand up to the conflicting priorities in the Department of Finance or the Department of Agriculture with regard to the needs of those particular Departments? It is difficult to see how the new Minister can deliver results on the general planning function which he has been given in this bill, namely:

(c) to identify in consultation with Departments of State and to review and appraise the plans and activities of such Departments giving effect to the policies for general economic and social development adopted by the Government.

That seems to be the type of function which the central policy review staff has which was first established by the conservative Government. That type of review body is a possible instrument to advise the executive arm of the Government. When the new Minister emphasised that the Department would not have executive functions, a fact which he welcomed, I wonder whether he realised that the fact that it would not have executive functions means that it may inevitably fall into the mould of a think-tank which will put forward proposals of a co-ordinating nature but will have no actual power of an executive nature and no power to implement the particular plans.

It is very regrettable that the Minister has been given the narrow title of Minister for Economic Planning and Development, and that the Department have been called in the Bill the Department of Economic Planning and Development. The Department should be set up to be a Department of economic and social planning and development. The emphasis must, from the beginning—both in the title of the Minister and in the Bill establishing it—emphasise the importance of social planning. Otherwise, the approach would appear to concede that one can somehow plan in economic terms and then afterwards start thinking about social considerations. I admit that in the text of the Bill there is emphasis on the need to promote and co-ordinate both economic and social planning. This should be reflected in the title both of the new Minister and of the new Department. Otherwise, it may tend to get downgraded in the approach of the Department and it may tend to get neglected.

Last week I participated in a seminar organised by the Council for the Status of Women and the title of the seminar I was speaking at was called "Economic and Social Planning— Where Do Women Fit In?". Indeed, the new Minister also spoke at that meeting. Far too little attention has been paid to the economic and social consequences of the achievement of equality and the need to plan for full participation by women as citizens and in the workforce of the State. There is a tendency still to regard certain issues and topics as somehow falling within an artificial concept of "women's issues". The necessity to integrate women fully into the life of the nation is a very important part of economic and social planning, and must form a very significant part of the Government's approach. It must even take priority in certain areas, because of the need for training and re-training women in order to redress the present intolerable imbalance in the contribution which women workers make in the life of the nation; the fact that they are cluttered at the bottom of the scale, either in secretarial jobs or unskilled jobs, in many cases beyond the reach of equality legislation providing for equal pay for equal or like work, because their work is not comparable with their male counterparts. They are in "women only" jobs, as they are called.

Therefore, apart from the magnitude of the unemployment problem, there is also the need in Ireland to restructure our society totally, and to think much more radically than we have done about making a reality of equal participation by women. This does not mean to encourage a few or substantially more women to participate in employment in precisely the way that the male work force has participated in jobs. What is needed is a much more radical evaluation of work itself and of the human contributions, of the time involved and of the other aspects of the human dimension. In other words, we need to understand the degree of social planning involved, and this we have not seen as yet in the approach to these problems especially at Government level.

The responsibility resting on the new Minister and the expectations which the creation of this Department have raised risk being disappointed. The Minister may be at risk, in some sense, of becoming a whipping-boy if there is not a greater sense of the practical implementation of a broad-based social and economic plan. Of this there seems to be very little evidence in the contributions on the Government side. Some of the initial euphoria seems to have passed and the problems are still there.

I do not want to under-estimate or to play down the seriousness of the problems, or to suggest that they can be coped with in a simplistic or easy manner. The type of planning that we will require in this country if we are to have place for our young people, and opportunity for them to participate in jobs, is going to be very tough indeed. For that reason I would particularly welcome some elaboration of the notion that you can have a Department of State sufficiently detached from the executive day to day implementation or short term implementation, or even perhaps detached from pressure group activity, which will have sufficient strength and courage to put forward very tough decisions about planning. the creation of jobs, who will have jobs and possibly about job sharing and the way in which we must use the resources of the State. For example, a Department who are prepared to assume this responsibility might have some very tough proposals to put to the Department of Agriculture. How would these be received by the Department, and how is the implementation going to work if the priorities are different between this particular planning Department and the executive Departments which are going to implement in the the various areas?

I share the view—which must have been basic to this legislation for the creation of the new Department—that there is a need for a new dimension of economic and social planning in this country because we can no longer solve our major problem as we have solved it down the years—not solved it but eased the strain of it—through the terrible blight of emigration. We have always had unacceptably high unemployment. During the forties and fifties and even during the comparative boom of the sixties, we allowed emigration to resolve it m some measure. That particular alternative is not there, certainly to anything like the significant degree that it was before, though I am sorry to see that there is once again a rise in the emigration figures, particularly of young people going to the Continent of Europe, to Holland and to Germany, looking for work.

We have to face these problems in the knowledge that our population is increasing dramatically each year, and that this increased population is going to come on the labour market each year, successively aggravating the problem unless we have managed to cope in a much more radical way. Plans on paper are not going to be sufficient. What will be required will be the approach which the Labour Party had put forward. It will require the establishment of a national development corporation or an equivalent type of body which can actually create and provide the jobs on the scale that is going to be needed, and can use the resources of the State to do this. The setting up of a sophisticated think-tank or long term planning department will not really face the other Departments with the necessity to take the concrete steps which will be required. I am still at a loss to see how this new Department will really face the Government with its responsibilities and will create the type of enforcement mechanisms needed. It will streamline a certain part of planning, and I accept that is important, but I do not think it will realise the expectations that have been created and the rather optimistic assessments by the Government supporters of its potential.

Dr. Whitaker

The purpose of this Bill is to change the structure of Government. It will change it in a way which is of course more significant than the appointment of new Ministers of State, necessary and urgent as that reform undoubtedly is.

In the Dáil on the Second Reading the Minister for Economic Planning and Development expressed disappointment at the extent of the consideration which had been given in the Dáil to the Bill "as a measure, to change, by the introduction of a new Department, the structure of Government as we know it". I am quoting him. I would like to address my remarks to the principle of the Bill, that is, I would like to offer some comments on whether the introduction of this new Department is a good change in the structure of Government, whether it will contribute to the smooth and efficient discharge of Government functions in relation to economic planning and development or whether there was perhaps a better way which has been set aside without sufficient consideration.

I hope to discuss this question entirely without reference to personalities. I will be making, perhaps, an unpopular argument, namely that the Department of Finance should have been confirmed and strengthened in its planning responsibilities. I want to make it clear that nothing I say implies any view as to the relative status or competence of the Ministers concerned. They are obviously both persons who would strengthen any Cabinet and I have the greatest respect for their qualities.

The function for which the most appropriate Government agency is being considered is that of economic planning in a broad sense. So the first question is what is a plan and the second is, what part does Government play in bringing it about. As I conceive it, a plan is a coherent and comprehensive set of policies for economic and social development over a period of four or five years ahead. The plan must be consistent with the availability of resources and its various parts must be well integrated. Since, in my view, a plan is the supreme policy document of the Government, it should be settled early in the life of a Government. Several projections should be made of economic prospects based on different but not implausible assumptions. These projections, the assumptions underlying them, and the conditions for realising them, should be published and used as a basis for consultation with the major economic and social interests.

I was glad to hear the Minister say tonight that that sort of consultation is intended. This would mean that, in advance of the final settlement of a plan and its presentation to the Dáil, objectives of social and economic policy would be considered under the compulsion of necessary choice between alternatives. I agree with Senator FitzGerald that, since scarcity still obtains, this choice between alternatives is imperative. Not only should the objectives be considered against that imperative, but also with an understanding of the conditions to be observed in order to achieve the chosen objectives. The hope would be that aspirations could thus be brought more into line with the total availability of resources, that conflicts about priorities would be at least lessened, if not resolved, and that at the end of the consultative process a definite plan, which was both realistic and had a wide measure of public support, could be adopted. Otherwise a plan might merely express wishful thinking and irreconcilable desires and the lack of consensus would in any event tear it apart.

Since a plan may have to be modified because of new developments which falsify the original assumptions, or because of failure to realise certain basic conditions of success, a process of review and adjustment is obviously essential. It is my argument that the annual budget is the appropriate occasion for that review and adjustment. This would make its own contribution to the more mature working of democracy by placing the budget in its proper perspective—bringing the shorter term into convergence with the longer term—and so divesting the budget in part at least, of its traditional Santa Claus connotation. It would also ensure regular accountability of the Planning Minister to the Dáil, a point on which concern was expressed by Members of that House.

The preliminaries of a plan, to my mind, are no less important that the end results aimed at. I see great merit in involving the various social and economic interests in considering development potentialities, the conditions on which they can be realised, and the uses to which the gains made should be put. This method of educating and persuading the various interests towards an understanding of the trade-offs involved—the trade-off, for example, as between higher incomes and higher employment—of persuading them towards some form of consensus about policies would, I believe, make Government easier and better directed and do something to rescue democracy from disorder and the economy from the rather grim prospect of permanent heavy unemployment.

What I am saying is that politics may be the art of the possible, but we should always try hard to extend the range of the possible, that is, the area of consensus for action, so that the democratic system will not degenerate into intolerable ineffectiveness.

It will be clear from what I have just said that I see a significant difference between a plan and a pre-election manifesto. I consider it is the degree to which the plan's objectives are achieved, subject, of course, to any unavoidable or desirable modifications, which should be the foremost measure of the success or failure of the Government's economic and social policies.

If this is what a plan should be, how it should be produced and adjusted and how it can make a contribution to the better working of the democratic system, I come to the second question I asked a while ago, namely, what part does Government play in making a plan effective? Discussion of this question should help to decide which is the most appropriate agency of Government for that purpose. There are limitations to Government action in the economic and social fields. Indeed, it could be said that Governments tend at times to assume management responsibilities beyond their capacity. I should like, however, to focus on the positive side. So far as Governments can influence the achievement of social and economic objectives they do so mainly through their fiscal prerogative, that is, the right—indeed, I would think it a duty—to settle the scale, purposes and method of financing public expenditure; "method of financing" covers the question of how much by taxation and how much by borrowing.

There are, of course, other policies through which a Government can try to influence the course of the economy, monetary policy and incomes policy in particular. As we all know, these are not so readily available. They may be of limited or doubtful efficacy in particular circumstances. The scope for monetary policy in an open economy with free outward and largely free inward movement of funds is restricted, though not insignificant. The development of incomes in a way helpful to competitiveness and progress is, as we all know, of great importance but, unfortunately, not as easily influenced by Government action as are expenditure, taxation or borrowing.

The point I want to make, however, is that the execution of all these policies has rested, and even after this Bill has been enacted will continue to rest, with the Department of Finance. The Department of Finance are quite competent to draft a plan and conduct the necessary consultations. They could do the whole preparatory job as the Government's central agency; they could do the co-ordinating at Government level, and, as I have just said, they will always have the vitally important executive role. One could see it in this way, that the Minister for Finance will be the performer on the field of play while the Minister for Economic Planning and Development gives advice and encouragement from the sidelines and tries to keep play within the "development" rules.

As I know from my Central Bank experience, there can be a wide gulf, perhaps a wall of silence would describe it better, between advice and action. The influence that may be exercised through advice and persuasion is a second-best, I believe, to the power of the purse. The role of an adviser or co-ordinator who has no direct power, no money allocating function, is not an enviable one. The Minister for Economic Planning and Development was careful to spare the new National Science and Technology Board this particular frustration; yet, surprisingly, he accepts it for himself.

This is the basic weakness of the proposed separation of functions, a weakness that could have been avoided had the Department of Finance been confirmed in their development responsibilities and had that Department's conscience, as it were, been made more sensitive to this overriding obligation by having it clearly assigned to them.

To my regret, this has not been done. The Department of Finance, through this lowering of its sights, this lessening of its responsibilites, is being allowed, perhaps, to slip back into that negative, restrictive role, that preoccupation with candle-ends to the possible neglect of long-term national development needs, for which its critics have always loved to pillory it. They equate it, as I heard Senator Keating do, with the old-time Treasury in order the better to set it up as an Aunt Sally. For someone who, over a long period of years, has tried to bring the exercise of the traditional functions of the Department of Finance—and they are important functions—of critical analysis and control of expenditure and equitable levying of taxation into line with the even more important macro-economic planning functions, this new move is rather disheartening, the more so, as I still vividly recall the enthusiasm and dynamism released in my Finance colleagues of 20 years ago when we turned our minds away from purely critical preoccupations towards a constructive study of national development possibilities.

In the Dáil, the Minister for the Public Service saw "the establishment of this new Department as part of the evolutionary process first begun when the Economic Development Branch was established within the Department of Finance". I am bound to say that I had a different vision of the evolutionary process. I saw it as leading naturally to a Department of Finance and Economic Development in which the day-to-day controlling functions and the annual budgetary process would be set in the framework of a longer term development plan prepared and administered by the Department. One of the principal lessons of French economic planning is that the success of a plan largely depends upon the participants believing it to be their own plan. I fear, therefore, that evolution has taken or been given a wrong turn; that it has, as it were, branched off from the homo sapiens route. The development consciousness of Finance is being diminished but its powers are not being transferred.

We have, it is true, been assured that there will be close contact, consultation, exchange of information, goodwill and co-operation between the Ministers involved and, of course, it has been pointed out that there must be Cabinet discussion and resolution of major issues. As I see it, the situation is such as to engender doubts and render these assurances necessary. I have no difficulty in believing that there will be the utmost co-operation and good working relations between the two Ministers immediately involved and that they will overcome the risks to which the new structures expose them. But structures should not depend for their viability on the qualities of particular holders of ministerial office. The new system will require more co-ordination both between Departments and at Government level. Of its nature it opens the door to friction. The new Department will be another cog in the administrative machine. I state that as a fact and not with any pejorative implication. I raise the question whether the arrangement could be expected to work well if, say, a Coalition were in power and the Minister for Finance were drawn from one Party and the Minister for Economic Planning and Development from the other. Indeed, what might happen if there were a personality clash between Ministers of the same Party in power?

The Tánaiste has referred to the heavy strain already imposed on the Minister for Finance who is also Minister for the Public Service. I appreciate this. But could not one have tried to ease that strain in other ways, for example, by using the proposed Ministers of State to assist the Minister for Finance, on the one hand, with the function of controlling public expenditure and raising money and, on the other, with his public service functions, leaving the Minister himself more time for the all-important development responsibility?

I would concede that, for one reason or another, the Department of Finance has in recent years tended to let slip its planning function. I think, however, that the Tánaiste was less than fair to himself and his predecessors when he said in the Dáil that no Minister for Finance had ever effectively exercised it. Disenchantment with the more detailed kind of planning had become pretty general in Western Europe even before the destructive impact of the oil crisis. Then the difficulties of the time were given as a reason for not attempting to take a longer view and the Minister for Finance largely concentrated on short-term problems and devoted much of his time and energy to tax legislation rather than development planning. The growing unruliness of our society —the evident lack of solidarity, of a sense of community inter-dependence —were also inhibiting factors. As I have already explained, I entertain, optimistically maybe, the hope that these difficulties might at least be somewhat eased by the educative and persuasive process of consultation that should precede the final settlement of a plan.

I do not believe that experience, here or elsewhere, establishes the need for a drastic change in planning responsibilities. The Department of Finance is competent, and the Minister for Finance is well placed within Government, to discharge these responsibilities. Confirming that they rest with the Minister for Finance, and equipping that Minister with the aid and resources to discharge them, would, I submit, be preferable from the point of view of logic, order, unity and strength to the creation of a new Ministry.

I realise I shall probably not make any converts to this view and I hope that what I have said will not be taken amiss. I feel it my duty to speak here according to my judgment and experience. While I do regard the new structure as a second best, I certainly do not wish it to fail. I am sure that the Ministers concerned and the civil service will do their best to make it work. In the interests of national progress I hope the new Ministry will successfully overcome the disabilities and strains to which I have been referring and that time will disprove my misgivings.

Mr. Markey

This is the Second Bill we have had before us today which for me indicates a certain rush about drafting the legislation and the motivation behind the legislation and a certain lack of conviction in the arguments being put forward by the Government as to both the reasons for the legislation and the chances of success at the end of the road of our passing both Bills.

This Bill sets up the Department of Economic Planning and Development and it also outlines the functions which will be appropriate to that Department. The setting up of this Department invites the question, first of all, as to whether a separate Ministry is needed at all for the task. One could be, perhaps, a little bit mischievous and be a little bit political if one were to start speculating on the compromises which no doubt had to ensue as a result of negotiations between the new Minister and the Department of Finance when it came to the drafting of this legislation, and also as regards the seeds of friction which even at this early stage can be seen to exist between the Departments as regards the successful implementation of such a Department.

One wonders whether the Department of Finance could not carry out this function which is being entrusted to a new Department and a new Minister. It is no harm to go back to the history of previous plans. The first plan, which was from 1959 to 1963, worked to an extent. The second economic plan, of 1964 to 1970, collapsed somewhat half-way through its duration and the third plan, which was projected to commence and run for a period of four or five years from 1971, never really got off the ground and disappeared at a very early stage. If the Department of Economic Planning and Development had existed for the duration of those three plans would their efforts, have been any more successful than was the case? The first economic plan worked to an extent but it has always to be remembered that it was starting off from a very low basis indeed as regards social and economic improvement in this country; that it should succeed to an extent was beyond doubt from the outset. But the experience of the second and third plans was that they came up against the inter-play of forces, both within our society and from outside our society, which affect any democratic state and a free economy such as ours. Therefore, I wonder whether the Department of Finance could not be depended upon to do as good a job as they did in the first economic plan, bearing in mind that no matter who devises a plan and tries to pursue its implementation we will always have to run the risks of the pressures within and without our society.

The functions outlined in this legislation foresee that the procedures for compilation of a plan will have to be simple but yet concise. I wonder if enough thought has been given to the possibility of the bottlenecks which will no doubt arise in this compilation of plans. Will this extra Department create an extra layer of bureaucracy in the drafting of the plan? Will the existence of another Department in our overall executive structure delay Government action in the end? Whether Departments will co-ordinate and co-operate with the new Department is something which remains to be seen, but one is inclined to doubt whether these other Departments are geared structurally and even psychologically to co-operate with a new Department which, when all is said and done, will be there merely in an advisory and a persuasive capacity rather than in a really executive capacity.

The purse in the final resort is all-powerful and I have no doubt that if a plan for the future economy of our country were to emanate from a Department which held the purse strings it would be all the more accepted by the other Departments. It would be wrong of me not to wish the new Minister every success in the task he has ahead of him, but he has been less than fairly treated in receiving what I would regard as inadequate powers to carry out his ministerial functions in this most important task. I wish the new Department the best of luck in their task but I must admit that if politics is an ephemeral business, while I do not extend that to the new Minister, I hope he will be with us for a very long time. I cannot hold out much hope that this Department will be with us for a long time because I am afraid they will fall between pressures of lack of co-operation from other Departments and the over-riding consideration that they have no teeth and no effective powers in which to ensure that the policies and the plans which they adumbrate can be carried out.

Mr. Mulcahy

I wish to contribute under a number of headings and what I have prepared beforehand has been influenced obviously by what Senator Whitaker has said and therefore in speaking to the points which I had prepared before I would like to advert to the line he took. I see Senator Whitaker as being influenced by the economic imperatives in following a particular policy line and in developing his views. I, on the other hand, would be inclined to follow what I would call the planning imperatives and my proposition is that to the extent that planning has failed in the latter years it has failed because the planning imperatives were not recognised and were not followed.

At the risk of losing my logic in an analogy I see that the Department of Finance and the Department of Economic Planning and Development are somewhat analogous to the financial comptroller in a large corporation on the one hand and the corporate planner on the other. The large corporations over the years found that the narrow approach to planning taken by people who are trained mostly in the field of finance or accounting was not sufficient and a new function emerged because there was a need and that is the function of corporate planning. If one asks in what way is the corporate planner of a company short on power and therefore not able to come forward with plans that are acceptable, have teeth, make an impact, have a chance of being implemented and so on, the reason is that usually he has the chief executive on his side. In this case over and above the collective operational stance that a Government take and responsibilities that they have, I would see that the Taoiseach would have that type of influence, and in fact some of it we can see is working in practice.

One of the main planning imperatives is that planning is a process. It is not so much that you are going to come up with a five-year plan that is bound up in a yellow, green, red or any other colour document which might be filed away ultimately in the Minister's safe and perhaps never implemented. It means that you instiute a process of planning which is much richer than just a process of consultation. It is a process of real involvement in the evolution of options and in the evolution of ideas that will tend to optimise existing resources and maybe find ways of getting new ones. There is a danger with placing planning in a financial function, whether it is a macro-financial function in the sense of macro-economics or micro in the sense of accounting. Those people who know about lack of resources can very often inhibit the very development of the ideas that should evolve in a planning process. So far from taking the view that planning can come only from that financially oriented area I would take the opposite view and say that it must come from another area. In saying that I am influenced for instance by what President Eisenhower is stated to have said, that "plans never work but planning is everything".

Planning for me comes from a study of a number of works in this area and has three levels. It has the normative level, the strategic and the operational levels. I will translate that.

An Cathaoirleach

May I interrupt? Would the Senator please move the adjournment, because the Chair wishes to call on the Chairman of the Committee of Selection to give his report?

Debate adjourned.