asked the Minister for Finance if the trend of rising consumer prices which give an August to August figure of 8.2 per cent, will be likely to lead to double digit inflation in 1979.
2.
Ceisteanna—Questions. Oral Answers. - Inflation Level.
1.
asked the Minister for Finance if estimates of the effect of the latest round of price increases on the cost of living approved by the Minister for Industry, Commerce and Energy have been made; and if he appreciates that the effect of such increases contributes to an upward move in our level of inflation.
I propose, with the permission of the Ceann Comhairle, to take Questions 1 and 2 together. The price increases referred to by the Deputy in Question No. 2 were recommended by the National Prices Commission and then accepted by the Minister for Industry, Commerce and Energy. The July report of the commission, a copy of which is in the Library, estimates that these increases, if approved, would add 0.7 per cent to the increase in the consumer price index. I should point out that several of the increases recommended by the commission had already been implemented before the consumer price index for mid-August was taken.
I do not accept the implication in the Deputy's questions that there is an upward move in the level of inflation which will lead to double digit inflation in 1979. The Government's policy as indicated in the White Paper, "National Development 1977-1980," and repeated in the Green Paper, "Development for Full Employment", has been to achieve a substantial reduction in the rate of inflation in the period from 1977 to 1980. This will continue to be the Government's objective.
Would the Minister accept that the likelihood now is that the November to November figure, the last figure to be available before Christmas indicating the price movement over the past year, would indicate a figure in excess of 9 per cent, not very short of the double digit inflation predicted for next year? Would the Minister agree that the likelihood is that recent price increases will push the consumer price index over 9 per cent for the November period?
No. On the contrary, I believe that the indications are that the mid-November figure will show a drop in the year on year rate of increase as compared with mid-August.
Can the Minister give an assurance that the November 1978 to November 1979 figure will not be a double digit figure for inflation?
I have indicated the objectives of the Government and it seems to me that the likelihood that there will be a drop in the trend when the next figures come out is a hopeful sign as regards next year.
Would the Minister accept that in the figure for November we must take into account the consequential effect of such recent increases as those in respect of beer, turf briquettes and sugar? Would he agree that the lagged effect of these price increases must surely be a figure of approximately 9 per cent for the November figure? Leaving that aside, if Government intentions in relation to phasing out food subsidies or raising indirect taxation on other items are carried through is it not obvious that we would have an inflation rate after the budget next year of more than 10 per cent or leading towards that?
This is a matter for argument. The question has already been answered.
Surely it is not an argument when it is laid down in several study papers of the Government that it is their intention—they have described it as an option—to phase out food subsidies.
The Deputy will have opportunities to argue about this other than during this Question Time.
Would the Minister be as confident in saying, in consideration of this prospective Government action, that we will not have double digit inflation, or at least inflation in excess of 10 per cent, during the coming year?
The likely trend in the immediate future is for a downward trend rather than an upward one, contrary to what the Deputy has stated.
I should like to know if the Minister, in his forecast of the mid-November figure, took into account the fact that the August and September reports of the National Prices Commission have not yet been published. Did the Minister take into account in his forecast of the mid-November figure any increases which might be contained in those reports and of which the House is not aware of?
The indications to which I have referred take account of all known expected increases.
I should like to ask the Minister if, in view of the possible confusion in the public mind and in view of the fact that there is not a great deal for the layman in the figues he quoted in his reply, the Government would consider the publication of price increases, something which was discontinued by them, in the form they were published?
As the Deputy is aware, the question of publication of price increases and reports from the National Prices Commission is not a function of mine.
Is the Minister saying that there will not be any increase in the price index for November?
He is saying that it is going to fall.
Is the Minister saying that it will remain stationary or will fall?
I thought what I had said was explicit and quite clear. I do not understand how the Deputy can put that question.
It does not suit him. He wants the cost of living up.
I want the truth.