asked the Minister for Finance the current Government estimate for inflation in 1980.
Ceisteanna—Questions. Oral Answers. - Inflation Estimate.
16.
The latest published figure for consumer prices is that for mid-February last. This showed a rise of 3.8 per cent over mid-November 1979. The increase in the quarter to mid-May is likely to be higher than this because the mid-May figure will reflect the increases in indirect taxation required to pay for the substantial income tax concessions and social welfare benefits which the budget contained. It is not possible at this stage to predict accurately how inflation will go for the remainder of the year because of uncertainty about factors such as the course of oil and other commodity prices and the trend of incomes.
Apparently the only thing the Minister is certain about is his own uncertainty. Would it be reasonable to expect that inflation this year will exceed 20 per cent?
The Opposition would reasonably want to give that impression. I think their reasonable expectation will not be realised.
(Cavan-Monaghan): That is the Taoiseach's estimate.
If the Deputy is suggesting that economic projections at this stage should be a matter of determined certainty, he had better take note that he is running against the expert advice of OECD, EEC and other informed analyses. If the Deputy has some information available to him which means that we should be isolated from all of these trends I should be glad if he would make it available to us.
(Interruptions.)
The Minister has thought for some considerable time that we should be isolated. It is reasonable in all the circumstances, that have been brought about mainly by the policies of this Government, to expect that inflation will exceed 20 per cent in the current year.
The Deputy asked that question. The Deputy should not answer the question.
The Irish people know better than the OECD the worth of the £ in their pockets.
The Minister said that it is impossible at this stage to predict the outcome for the current year. How was it possible for the Government in 1979 to predict 5 per cent end-of-year inflation for that year?
Circumstances at the beginning of 1979 were very different from the circumstances now.
(Interruptions.)
There are some realities from which Deputies in this House who want to ask questions can isolate themselves. Even the published EEC Commission data in relation to the inflation trends in each country of the EEC have all been revised within a month of publication. Are Deputies suggesting seriously that somehow these are ignoring the realities or that we should ignore the realities in this country? If so they are living in another world.
Does the Minister mean that the circumstances at the beginning of 1979 were more certain for that year than they are now for 1980? If that is so, does it mean that his projection for 1980 is going to be worse than the realities proved in 1979 when inflation turned out to be nearly 20 per cent over the projection of 5 per cent end-of-year inflation by that Government? There was a performance that must have ignored all records.
(Interruptions.)
Order, please.
If I may be allowed to answer the question, undoubtedly the circumstances as they existed at the beginning of 1979 when both projections were made were very different from the circumstances that existed at the beginning of 1980, even if the Deputy is not aware of it.
Not really.
Did I hear the Deputy say "not really"? The oil price increases had not started——
They were well known for the previous three months.
The level of increase in oil prices during the 1979 period was of the order of 80 per cent. If the Deputy suggests that that did not have a significant impact——
That was known three months before the budget of 1979 but they pretended that it was not going to happen.
Arising out of the Minister's several replies, will he outline to the House in the briefest form possible in what way this economy is more open now than it was in May 1977?
Perhaps only in that the level of our exporting is much more significant than it was in May 1977 and for that reason the level of our trade has grown considerably over what it was at that time. For that reason obviously it is effective to that extent more than it would have been then. I am glad to tell the Deputy and the House that we are riding the problems very much more successfully than we did before 1977.
If the Minister is so intent and secure in his opinion that we are riding these problems, could he tell us how well they are being ridden? Could he give some degree of evidence in order to back up the assertions he has made?
The pattern is placing us very much at the centre rather than at the bottom or top, as the case might be depending upon which tables we are talking about, of the inflation pattern as well as the employment pattern where previously in that period we were always at the bottom of the wrong table and at the top of the wrong one as well.
The housewife in the supermarket knows where we are with the price of things. She is not interested in statistics.
(Interruptions.)
Order, please.
Arising out of the Minister's reply indicating where we are located in these tables, would he indicate now to the House and to all the commentators who were listening to his words what the anticipated rate of inflation is likely to be for the next year?
That question has been answered.
It has not been answered.
(Interruptions.)
Order, please.
How many percentage points which the Minister's Department have calculated in the inflation for the current year can be attributed directly to the budget?
Less than 4 per cent —of the order of 3.8 per cent. You also have to take into account the increase in purchasing power made available through the income tax allowance and the social welfare benefits.
It is a three card trick.
Question No. 17 is for written reply and Questions Nos. 18 and 19 are postponed.