asked the Minister for Economic Planning and Development if the projection for the end-of-year inflation rate has been revised; and if so, the new projection.
Ceisteanna—Questions. Oral Answers. - Inflation Rate.
Since the publication of the White Paper "Programme for National Development 1978-1981" in January, both external and domestic developments have made the attainment of the target of an annualised rate of inflation of 5 per cent by the last quarter more difficult. However, given the appropriate response from all sections of the community to our present difficulties, it is still possible to achieve an annualised 6 per cent rate for the last three months of 1979.
Does the Minister accept that the whole purpose of Government policy in this area should be to achieve an appropriate response and then the results will look after themselves? What does he propose to do to achieve that response?
The Government have been taking a number of actions designed to bring about that appropriate response. We spent several months negotiating a complex set of proposals which took the form of a proposed national understanding. Unhappily they were rejected by the trade union movement. In the wake of that rejection, as the Deputy knows, the Government have now put forward an interim pay guideline designed to provide an increase to meet any change in the cost of living to protect living standards in the next six months. It is hoped that that breathing space or pause would enable trade unions, employers and the Government to come together to achieve some appropriate understanding as a response to our present economic difficulties.
Will the Minister tell us how the 6 per cent has been estimated?
It is an annualised rate throughout the quarter. In other words, it assumes an increase of 1½ per cent for the mid-August mid-November period, and that multiplied by four gives the 6 per cent.
Will the Minister not accept that is a totally unacceptable way——
I am answering the question that was asked of me by Deputy Horgan.
Is it not absolutely bogus, a completely false picture, if a hefty price rise is deliberately delayed until the middle of August, as has repeatedly happened?
I would be quite happy to discuss annual rates of inflation and to answer questions on that topic if they are asked. If questions are asked regarding a quarterly figure I will answer those also.
Question No. 26.
With the indulgence of the Chair, since the Deputy was permitted to get his remarks on the record I should like to be given the opportunity of replying. I do not accept that it is bogus to use quarterly figures as indicators of trends. On the contrary, it can be very important to use interim figures whether they are monthly or quarterly so that we can know as quickly as possible the direction in which we are moving. I would hate to think that we would condemn ourselves to inappropriate and unnecessarily high projections of price and, consequently, wage increases just because people were using historical information that was out of date. In other words, it is possible to have very high price rises in the early months of the year and then have much lower price rises in the later months. Surely, it is important to know that the trend is down.
Would the Minister agree that a quarterly figure can be quite misleading?
If taken out of context, as has been done by Deputies on the other side of the House for their own purposes.
How can the Minister say that? The Government waited until 17 May to increase the price of petrol and the figure were released on 15 May. What use would that quarter be?
The remaining questions will appear on tomorrow's Order Paper.