asked the Minister for Economic Planning and Development if the proposed pay agreement wage figures, if accepted, will require any alteration in the White Paper projections.
Ceisteanna—Questions. Oral Answers. - Economic Projections.
6.
The terms of the proposed wage agreement provide for an average increase of approximately 7 per cent in basic wage rates in 1978, whereas the White Paper projections envisaged an increase of 5 per cent in basic wage rates over the year. The wage agreement terms will obviously make more difficult the attainment of the Government's objective of achieving a reduction to 7 per cent in the rate of inflation this year and also the objectives on employment. The relative competitiveness of Irish industry which was envisaged in the White Paper targets will tend to be adversely affected, with consequent effects on exports, output and employment. In addition, the allocation of scarce Exchequer resources to direct employment-creation projects will be hampered by the need to allocate further Exchequer funds of the order of £13 million for the public service pay bill in 1978.
The terms of the proposed wage agreement represent the very maximum that can be supported if the Government's overall economic strategy is not to be thrown seriously out of line. To the extent that these terms will have an adverse effect on the White Paper projections in 1978, greater progress will have to be made in 1979 and 1980 in attaining the Government's overall strategy of reducing inflation and unemployment.