I do not know whether or not my colleague Senator FitzGerald is with me, but I believe the atmosphere of the annual budget can be counter-productive to creative planning. That is what I mean by the process imperative. It has to be organised for, and my conclusion is that the Department of Finance is not the place for it.
The law of requisite variety states that, if any unit of an organisation is going to plan for, control and regulate the operation of some organisation, it must have sufficient variety in its make-up to deal with the complexities that are ahead of that particular organisation. It cannot be done by one person. The organisation for planning must be capable of dealing with those complexities. If it does not, planning will not work. The third imperative I am speaking about is the imperative of goal-setting. If there is any aspect of planning which has reached some acceptance, any principle of planning which has reached some acceptance, it is the process of goal-setting.
There are three levels of goal-setting researchers agree exist: the so-called normative level, the so-called strategic level and the operational level. All three must be covered in any planning process. The normative level has to do with the value system which the planners car those responsible for running a particular organisation or country have. In other words, they say: "Such and such ought to be done." They do not necessarily know how, or in what time it can be done, or if the resources are there to do it, but they have the value which says: "Such and such ought to be done." For instance, in five years' time our GNP per capita ought to be at a certain level, the output of our manufacturing industry ought to be at a certain level, the reward systems ought to be, and so on.
Given that some attempt is made to take a visionary view of things along those lines, it is possible to move to the next level which is the strategic level. This level has to do with: how can we move towards that vision we have of what ought to be done? What is on, in other words? What resources have we at our disposal? How might we deploy them across alternative routes to that desirable end position? Very often people who are good at operating at the strategic level, that is, working out these various options, generating and evaluating them, may not be the type of people capable of taking the normative view. This has to be recognised. In any Government system I would see the Cabinet coming forward with some normative views. That is what they are elected for. I would see a different layer, having a look at the strategic aspect and that is why I think it is a good thing to have a separate planning Department. People have to be fast on their toes when dealing with strategy. Clauswitz said: "In der Bewegung liegt der Sieg." ("In movement lies victory.")
The third level is the operational level and this is where each Department gets on with the action which is cleared within the time period of, say, one and a half years. The strategic time period is usually more like one and a half to five years. The normative is more like five plus. Taking the operational level, each Department get on with the job, come up with their annual targets based on the budget within the goal set in the evolution of the strategy.
Senators may feel that sounds a bit like a lecture on planning but it is an opportunity to get across at a national level that planning, in itself, is a complex process and must be handled as such, even though its various elements are simple. To the degree that these steps I have outlined are ignored, planning will fail as it has in the past.
The next question is the measures one will use to help to set goals. The measures, words and yardsticks used in themselves can be inspirational or motivational. The late Seán Lemass made GNP popular. He brought it to the point where any individual felt he knew what gross national product meant. Therefore, it was something worth working for, worth tracking. I believe another measure should be made popular and I hope the new Department might work at it.
The gross national product is made up of the sum total of all the added values produced in the country by every company, organisation, and by Government activities. I would like to see people thinking along the lines of: "What did I do this week to create a little more added value for my country?" The more of that that is created, the more successful we will be economically. If parallel with that we can discuss and resolve how that added value is to be shared out amongst the various interested parties, then we might take some of the heat out of this year-to-year fuss that goes on about wage negotiation.
If the goal of added value is used more often, and less emphasis is put on the proportions of the added value various interested parties want to optimise in their own interests, for instance profit, wages or tax, all of which together make up the added value, this is an area where somebody else could make a name for himself.
The rewards for input to any social and economic system will be looked at by the interested parties. Labour will look at it in terms of wages for work done. Capital will look at it in terms of a fair return on investment. Enterprise has to be rewarded and this depends on how much residual is left at the end of the added value. Risk, which is an essential part of enterprise, must be rewarded also. If those interested in profits, returns on investment, wages and enterprising action, do not come together and recognise that they are all in for added value, then we will continue with the type of conflict we have had over the years.
We had a number of contributions on the power required. It was suggested the Department would not have enough teeth. Power in any organisational system might be classified under the headings of structural power, sapiential power and moral power. Most of the discussion so far has been about structural power. What power will the Department of Economic Planning and Development have over resources? Can they influence income and expenditure? There is structural power in this system. Senators will recall from the debate on the Bill on science and technology that there is a science budget. The science budget, in itself, will provide teeth for this Department. Periodically the Department will have to look at expenditure across the country in this area. It has been written into legislation that this must be done. Likewise, we have the National Economic and Social Council to examine on an objective basis what is going on and, obviously, the planning system will come under that. There is an influent power available there.
The sapiential aspect of it is that the Department will be organised specially for planning. One would hope that, when we look at that Department, we will see expert planners and, as a result, we will listen to them. The moral power will be there because planning tends to be seen as good. Very few people knock planning. The most famous of the researchers who has written on this area, a man called Lindblom, talks about an alternative to planning being muddling through. Even he has regard for the planners in the more elegant sense, in that he has made a name for himself by taking them on and coming up with an alternative which he calls muddling through. God keep us from it.
The next area I should like to refer to on the structural side is the whole question of the Devlin recommendations. Obviously, this Department will affect the approach to the reorganisation of the public service, and the Tánaiste has responsibility for that area. I have written in the past that elaborate organisational development approaches to the reform of the public service may take decades. Four functional specialists on planning, organisation, personnel and finance should be appointed to every Department immediately. This can be done within a few months. It does not have to go through any of the more elaborate so-called organisational development approaches.
The notion of the Aireacht and the notion of delegation of authority and responsibility from the Minister to other officials in the Department, making up the Aireacht, can follow. In itself it is a notion which is fraught with many obstacles, the very least of them being the political obstacles. People do not like sharing power. As long as people do not like sharing power, the notion of the Aireacht will be difficult to implement. If those four functional specialists are placed in each of the Departments of Government—the planning, organisation, finance and personnel specialists— their very presence in the nest of the Minister in the Department will produce the change that we all want. I will go further and say, I would hope that a goodly percentage of those specialists, say 30 per cent at the very least, should come from outside the service, I guarantee that would produce change.
The next areas I want to explore are the international aspects. There is no doubt that planning, as an approach, has caught on in the more developed countries. Other countries have Ministers for planning. We know the more obvious ones like France — they have been at it for a long time — and we can see how the Japanese have worked operating with a Minister for planning. One area that impressed me immensely in the French scene, and it has something to do with better planning for industrial sectors, was a group set up under a Professor Tabatoni who is now a Minister of State in France to examine the strategic options available in each of the main industrial sectors.
I would hope that within this new planning Department that we will have a project of this kind and the Department, working in parallel with the IDA, the IIRS and other State agencies who are taking an interest in this, will come up with a comprehensive review of the strategic options open to any company operating in a particular industrial sector. In that way, they will help to produce a more sophisticated approach in the companies themselves.
I recall that the National Industrial Economic Council in the 1964-65 period recognised the importance of planning at company level. One of the ways they came up with to encourage that was the publication of an occasional booklet entitled "Planning your Business". That booklet was brought out to encourage Irish businessmen to plan and the carrot held out was that 50 per cent of the cost of a consulting assignment to get a planning system going in a company would be provided by the Department of Industry and Commerce. After one year of its existence, and a fair amount of promotion of that book, I checked with the Department of Industry and Commerce to see how many people had taken up this option. After one year two companies had done so. That, to me, was failure. It was failure because the planning imperatives I mentioned were not followed.
Even three or four years ago — ten years after the incident I have just related—the Irish Management Institute did research, and one of the dimensions of research they looked at was the extent to which planning was operating in various Irish companies. Again, the figures were dismal. Something less than 40 per cent of medium companies planned or attempted to plan in any organised way beyond one year. Even in the larger companies, with over 500 people employed, some 20 per cent of the directors of the boards of companies stated there was no need for them to become involved in planning in the long-term sense. I believe the steps taken by the new Government to set up a new Department for planning, as such, are giving good example to the country as a whole, and may well not only lead to better planning at Government level but also improve the approach to planning at corporate level and at the level of business. I would be willing to take bets on that.
Some points have been made about the failure of planning across the water in the planning department set up under George Browne. While recognising some of the very valuable contributions made to the notions of democracy and administration by Britain, we should not be tied to their views because they slow us down. We should look further afield. We are now part of the EEC We can look at other countries. Our Ministers interact with other Ministers outside that system, and we should look at the best, and not necessarily at one.
We all know, again referring to the Crossman diaries, why there was failure there. It was because the individual concerned lost the moral authority required. He lost the support of the Prime Minister. He did not have the complete collaboration of the Treasury Department which is required. It is essential, regardless of what personalities occupy the roles of Minister for Economic Planning and Development or Minister for Finance, as Senator Whitaker said, that the officials of the Department of Finance co-operate in this. In the same way, the financial controller of a company must co-operate with the corporate planner of a company, and that in relation to financial aspects of the planning he does his bit. It should not become a question of almost crying over the fact that a particular Department is losing portion of its original powers and some of its functions.
Senators will recall that I said one of the first steps in the goal-setting process was getting the normative aspects sorted out, that is, what ought to be done. This Department should not necessarily get licked into the economic issues alone. It should suggest scenarios which are more visionary for the country as a whole and bring them before the Cabinet. A well-known leader of this country produced various scenarios in his time among them the scenario of the comely maidens. Perhaps we should be talking now about the scenario of the well-integrated, well-edncated, skilful young people of Ireland with a lot of confidence in themselves and their skills so that they will be able to run a nation which provides full employment and has an identity which is recognised and has evolved into a culture which in itself is distinctive and recognisable from the other cultures that we have to live with in the harmony of the EEC. In other words, planning in total must take in all the dimensions, not just the economic ones alone. We know that the social aspect is covered in that as well.
The EEC are now talking about a five-year plan which involves the convergence of the economies of the constituent countries. I believe the Minister was at a meeting this week where that particular plan was discussed. He will have seen there the complexity that lies ahead in dealing with and contributing effectively to that planning process. I believe that this Government, in establishing a new Department of Economic Planning and Development, have taken a very significant step. I agree entirely with Senator Whitaker when he says that that step will have more influence on changing the workings of Government than the influence of a new set of Ministers of State. I commend this Bill wholeheartedly.