The Community, and the other international assumptions underlying the plan are, therefore, the best assumptions that can be made in this uncertain and anxious time as regards the world economy. They assume basically a slow, not spectacular, recovery in demand, a continued moderation in international inflation and stable exchange rate developments. The assumptions are neither unduly optimistic nor pessimistic. They represent responsible moderate assessments now being made by international agencies.
If international events turn out in practice to be more favourable than we are now advised, this will bring us greater economic gains sooner. If, on the other hand, the international developments deteriorate unexpectedly, we will encounter greater difficulties than the plan now envisages.
I should like to outline the essential features of the plan and the reasoning and objectives from which they derive. The plan has two main intentions — to correct fundamental weaknesses in our economic and financial structure and to initiate developmental plans in enlarging our economic capacity, improving its efficiency and output and pushing our economic potential to the highest possible level of realisation in the light of our population needs.
The Government, for their part, have accepted under the plan the heavy responsibility of bringing better balance into the public finances, perhaps at this stage the most difficult part of the whole undertaking. Governments here for ten years have managed our public finances on the basis of substantial current budget deficits financed by borrowing. Governments from all parties have adopted this course. Deficit financing is of course a standard tool of fiscal policy to counter cyclical forces in an economy. Almost without exception, every Government in the western world has resorted to deficit financing in recent years and are all now faced with the painful adjustment to the fact that it is only a temporary solution. Efforts of successive Governments in recent years to reduce and eliminate our budget deficits have been thwarted by recession. This year we have taken firm measures to control public expenditure. Had it not been for the unexpected fall off in revenue — the first such decline in recent years — the budget deficit would be substantially down on last year.
I wish here to reject categorically any suggestion that the public finances have been mismanaged this year. At the beginning of the year estimates of both receipts and expenditure were prepared in the normal way by the experts in the appropriate Departments. These estimates were accepted by this Government and the outgoing Government. As the year proceeded, considerable divergences emerged. In the earlier part of the year these divergences appeared on the expenditure side. The Government moved firmly in July to correct this discrepancy and as a result of the action taken at that time there is every likelihood that the actual outturn on the expenditure side will be fairly well on target with, or even below, the original estimates.
This represents a major achievement in financial management and in normal circumstances would have resulted in the figure projected for the current budget deficit being adhered to. However, as we moved into the latter half of the year a fairly substantial shortfall in receipts began to manifest itself. While the exact cause of this decline is not clear, my own view is that it, more than anything else, reflects the deepening of the recession and a reduction in the general level of economic activity and consumer spending.
The likely outcome, therefore, is that despite the strict curtailment of expenditure to projected levels, because of this decline in revenues we may finish the year with a budget deficit of somewhat over £900 million, a much larger deficit than budgeted for. That is a factual outline of the course the public finances have taken this year. I doubt that this factual outline will prevent that particularly hostile section of the public media from continuing to talk about "mismanagement of the finances"; but I would hope that in the more responsible section it will be acknowledged as the reality, because it is an important factor in our calculations for next year and it has an important bearing on our current discussion.
It should not, therefore, be misrepresented in the way that it has been as being the result of mismanagement rather than the actual fiscal development that it represents. If we are to have an honest debate on next year's situation, this reality must be acknowledged because of the important implications it has for next year's finances. The extent of the borrowing required to meet these yearly deficits and the burden it placed on our income have now made it urgently necessary to act firmly to reduce and eliminate the budget deficit over a reasonably short period.
There is room for disagreement about the period within which the deficit should be phased out, but the majority of responsible economic opinion favours phasing it out at least by 1986. The Labour Party opt for a longer period because of the dangers of an excessive deflationary effect from what they would regard as too rapid an elimination of the deficit. Their proposed phasing would add another £500 million to Exchequer borrowing for current purposes. Having considered everything, we still stay with 1986 as the correct objective.
The Exchequer borrowing requirement has to be reduced progressively to a level which we can fund and service within the capacity of our economic output. We prefer to do this by phasing out the current budget deficit so that we can increase our borrowing for capital purposes substantially over the period of the plan.
All parties are, therefore, agreed on the need to phase out the current budget deficit. The real differences will presumably emerge in discussing how to do it.
The plan stipulates that the deficit must be eliminated mainly by reduction in net expenditure. I am sure that there is no one in this House who will argue that further massive increases in taxation to replace borrowing are the solution. We have made clear in the plan that we intend over the period of the plan to reduce the burden of taxation as a percentage of GNP. By comparison with our wealthier Community partners that percentage is, and will still be, high and represents a heavy charge on our household budgets and the competitive side of economic output.
However, we will improve the equity and shift the burden of taxation. The PAYE sector will be asked to contribute less and within that sector we will improve the equity and progressivity of taxation. We look to capital profits and business profits, both in agriculture and outside it, to contribute substantially more. In all, we expect during the period of the plan to have reduced the PAYE contribution by about £100 million and increased the contribution from other taxation by about £400 million.
This will represent a major change particularly as regards the PAYE sector. The average PAYE employee has seen over the past ten years his real increase in income cut in half by income taxation.
The necessity to phase out the budget deficit and the increase in the Exchequer pay bill next year due to carry-over from 1982 will require some additional taxation but the main attack on the deficit will be by reducing expenditure.
An essential element of our proposals to reduce the deficit is the setting of a strict limit on the increase in the Exchequer pay bill. This limit is based on the limited capacity of the Exchequer. It will be on average 5 per cent for the years up to and including 1986 but 1983 will inevitably contain a substantial carry-over from 1982. In 1982 itself the pay bill will have actually increased by over 15 per cent, even after taking into account the Government's proposals to reduce that bill.
I would point out that at present the bill for public sector pay amounts to one half of the Exchequer expenditure, excluding debt service. It cannot continue to grow by 20 to 25 per cent as it has in recent years. The curtailment of the pay bill, inevitable in view of the limited resources of our economy, will be facilitated by the falling trend in inflation which is now at an underlying rate of less than 10 per cent. We cannot tax or borrow more to increase employment in the public service. There has been a rapid increase in the public service in recent years — an increase of some 50,000 since 1975 alone. The central civil service, the non-commercial State bodies, the Defence Forces, the Garda, the local authorities, the educational system and the health boards have all contributed to this increase. The public service in that wide sense now employs almost one-quarter of our total employment or about 260,000 persons.
We propose under the plan to effect between 1983 and 1986 a net reduction of 4,000 in that considerable body of employees paid from the Exchequer. Already in 1982 some 2,000 vacancies in the civil service have been left unfilled and there have been similar restrictions in operation in other areas. It can be argued that the reductions we propose are not large enough given the state of the public finances. We may, in fact, do better as we pursue the various further investigations we announced in the plan.
A special task force is being established to examine the administrative structures and expenditure programmes of the local authorities and the health boards who between them will spend this year nearly £2 billion in current expenditure alone. No such expert investigation has ever been carried out and we owe it to the taxpayer and the ratepayer now to see to it that every pound spent by these bodies is efficiently and justifiably spent. These bodies have expanded and developed over recent decades on an ad hoc basis and I doubt if there is a Deputy in the House who could not supply us with instances of public complaint in regard to wasteful expenditures, inefficiency and so on. I am convinced that we will find waste, overlapping and duplication and that many procedures, services, systems and processes cannot continue to be justified in our present situation.
We also propose to take a new look at procedures and working methods and practices in the civil service. The Government consider that this is the area, where essential gains in efficiency can be quickly made, that should now be scrutinised instead of the attention that had been given for so long — without much success — to far-reaching changes in the structure of the civil service.
We also propose to reduce non-pay Exchequre expenditure by some 5 per cent in volume between 1982 and 1986. This requires difficult decisions for a community accustomed for some time now to the steady expansion and improvement of public services. Current central Government expenditure as a percentage of GNP has grown from little over 20 per cent in 1960 to nearly 50 per cent in 1982. This rate of increase just cannot continue and must be reversed.
The 1983 Estimates will incorporate the reductions we propose to make in 1983 and the measures involved will be spelled out in detail to this House. We will be very glad to hear the views of Deputies on the reductions we propose for 1983 and on any alternatives that they are prepared to recommend. Since the main Opposition parties now agree with us on the progressive elimination of the budget deficit, we will be glad to have either their broad approval of the reductions we propose or the alternatives they wish to suggest. The time for avoiding these unpleasant issues has passed. Political debate on the economy has entered a new era from the date this plan was published. Parties and Deputies must now say clearly and openly what expenditures they will reduce and what expenditures they will maintain or increase. Agreement on phasing out the budget deficit makes this mandatory on all of us.
We also propose to increase existing and introduce new charges for public services for those who can and should pay for them. We have reached a new point in the development of our public services. We cannot continue to provide free to all, irrespective of income, many of the public services we have developed to date on that principle. The alternatives are to do that or to discontinue the services. This poses very difficult problems of social equity and justice. Free services, irrespective of income, are not a fundamental part of the social philosophy appropriate to our small economy. The plan states very clearly that we must now look at our main social services in the new situation where all accept that there is a new limitation on our resources. Our purpose must be to ensure that these limited resources are used with the greatest care and compassion to protect the standards of the disadvantaged sector, those on lower incomes or in need, and not dissipated to those who do not need them.
We propose, therefore, in the context of permanent economic and social planning arrangements, to review social policies and services within the parameters established by the plan. I understand that the National Economic and Social Council are anxious that such a review be made as soon as possible of our social policies and services and I assure them that this will be done.
In speaking of social welfare, I must emphasise that the plan responds expressly and directly to the growing resentment throughout the working community that our social welfare system is being defrauded by abuse and unjustified recourse to it. There can hardly be a person in the country who is not aware of these abuses, the most common of which is the unjustifiable drawing of unemployment benefit or assistance or disability benefit.
One of the most frequent abuses of the system is deliberate recourse to short-time working because under present regulations relating to benefit and tax, a person can receive more that way than if he were whole-time at work. We will be introducing legislative proposals in this session to deter that abuse.
We will also introduce other changes in the social welfare system, which are set out in the plan, to deter abuse and unjustified recourse to welfare payments.
We will also improve the administrative arrangements to ensure that the placement services of the National manpower Service are used to the fullest extent to place persons on the live register in employment or to establish that they are not interested in being employed.
One of the reasons the current budget deficit should be phased out as soon as practicable is that it enables borrowing to be devoted to its proper purpose — improving the capital stock of the economy as the basis for increased sustainable employment through greater growth, productivity and efficiency.
We propose, therefore, to expand over the period of the plan the Public Capital Programme by an annual average of 3 per cent in volume. In 1983, which is the year in which we must start to reverse the recent trends in our public finances and economy, we must regrettably envisage a fall in that programme so as to bring down the total Exchequer borrowing requirement. But, thereafter, it will increase as borrowing resources are released from current needs to meet the heavy investment requirements of an economy at our stage of development.
I have argued and acted consistently in Government in support of heavily investing in increasing productive capacity, improving infrastructural efficiency and meeting our irreducible needs for social capital. As a result, we now have one of the highest investment ratios in the western world.
The plan aims to increase further our volume of investment while restraining the share of GNP we will borrow for that programme. There are prudent limits on the extent to which we should continue to borrow, particularly when our volume of investment will be exceptionally high and any funds borrowed by the Exchequer give rise to servicing charges which must be met from the current budget. When, however, the objective of phasing out the current budget deficit is achieved, we do not exclude the possibility, if circumstances are favourable, of increasing further in the last years of the plan the share of GNP we will commit to investment through the Public Capital Programme.
We assume, however, that long before that, private investment will commence to make a greater contribution than it does now, stimulated by an economic environment of lower prices and costs, lower interest rates and growing demand at home and abroad.
The priorities in our public investment will be for productive capacity and economic infrastructure. Without these priorities, our economy will not grow in output and efficiency. We must also continue to make substantial investment in social capital because of our population growth. We cannot continue to increase social capital expenditure as a whole but we will maintain it. In housing, favourable developments under the plan, particularly in interest rates, will strengthen the contribution that the private building sector can make to housing our people.
One of the heaviest burdens on our economy in recent years has been the unprecedented high level of interest rates. This has placed heavy costs on farmers and businesses, severely impeded housing and generally adversely affected the entire economy. We cannot be entirely independent of international interest rates which have also been at exceptionally high levels. But the level of the Exchequer borrowing, as reflected in the deficits in our balance of payments, has put upward pressure on our interest rates. The strategy to reduce the Exchequer borrowing requirement and the external deficit will reinforce the downward trend now dominating our interest rates.
The Government have both encouraged and facilitated the very recent reductions in interest and mortgage rates including the further reductions of up to 2 per cent announced today in interest rates. The downward trend has also been assisted by the beneficial effect on the financial markets of the evident determination of this Government since they came into office to improve the condition of the public finances.
We propose under the plan to consider, in consultation with the Central Bank and other relevant interests, the functioning of our financial institutions. The financial sector has grown considerably in size, sophistication and complexity in the past 20 years or so. An appraisal will be timely now that we know from this plan the large expansion in output that is necessary if we are to provide for our population.
A major function of the financial market is to encourage the savings from which our investment can spring. It should be a major concern of our financial system to examine how higher levels of savings can be stimulated and subsequently channeled into priority investment which will sustain permanent growth and employment. There is a need, therefore, to review the workings of our financial markets to ensure that they are adequately organised and adapted for the purposes of a modern economy growing in accordance with clear economic and social priorities.
Our interest rates have, of course, been high partly due to the high rates of inflation we experienced at the height of the recession. International inflation is now moderating. Our import price increase is now only one-third what it was a year ago. The Government's economic and budgetary strategy has been to reinforce that trend. The mid-August consumer price index was only 2.1 per cent up for the quarter, the lowest for four years. The official forecast for the mid-November index — with all the reserve such forecasts must have — is for an increase of much the same size. Our underlying rate of inflation at present is, therefore, probably under 10 per cent as compared with an estimated 17 per cent for this year as a whole and 21 per cent last year.
This is a dramatic change which makes many developments possible which could not be contemplated when our inflation rate was twice what it is now. The downward trend in interest rates will be helped by this fall in inflation. It will lower costs throughout the economy and ease the pressure on household budgets. Above all it will enable us to accept more moderate developments in incomes than were possible when inflation was at its recessionary peak.
The trends in wages and salaries are the most important domestic determinant of prices and costs in our economy since non-agricultural wages and salaries amount to about 60 per cent of our GNP. What we pay ourselves determines, therefore, what we have to charge for the goods and services we produce. Our wages and salaries have risen annually in recent years by from 16 per cent to 20 per cent. This was related to our high rate of inflation. Our trade union leaders and their members have shown clearly their readiness to recognise the reality of our unemployment situation and of the contribution which moderate pay increases can now make to remedying it.
In our the recent negotiations with representatives of the Public Services Committee of the Irish Congress of Trade Unions, on the draft proposals for public sector pay, the same moderate responsible approach was evident. We are fortunate that we have such a trade union movement able to balance fairly the interests of their members and the interests of the community as a whole.
It is this which makes me confident that the curtailment of increases in the Exchequer pay bill until 1986 will be understood by trade unionists particularly against the background of the falling inflation during that period. The curtailment we are forced to impose will not create a fall in standards of living to the extent some commentators have suggested. There will be a very substantial carry-over from 1982 into 1983 public sector pay in a period when inflation will be running at levels about half what they were a year ago and still falling.
A central feature of our pay policy, however, is that the Exchequer pay bill provision envisaged must cover special as well as general pay increases. We question fundamentally the economic justification, in the circumstances of our economy, for many special pay increases based on relativities.
As regards pay in the private sector, this is clearly a matter for free collective bargaining between employers and employees. What we have done in the plan is to propose an average annual unit wage-cost competitive gain in our economy as the only basis on which we can hope to produce and sell enough goods and services to employ and support our growing population. This unit wage-cost competitive gain can be obtained by a combination of wage and productivity increases.
Clearly 1983 will be a transitional year because of the heavy carry-over of pay increases from 1982. But unless we begin next year to establish a pattern of unit wage-cost which gives us an average annual gain of about 4 per cent over our trading competitors our capacity to compete in markets at home and abroad will contract. I know that price is not the only determinant of success in the market place. But for the bulk of our products, we cannot get into the market unless the price is competitive.
If we can get our prices right, the measures under the plan to develop our indigenous industrial capacity in a new co-ordinated comprehensive and selective programme will bring the results we have specified. In addition, overseas manufacturing and service industry investment will increase once it is clear that our costs are gaining competitively on those other countries now seeking the same overseas investment.
There cannot be a Deputy in this House who does not concede the common sense of what this plan proposes for an economy which is so largely dependent on exports. The main domestic determinant of our costs and prices is wage-costs since wages and salaries amount to nearly two-thirds of GNP. Import prices are now rising by about 7 per cent; this reflects the falling trends in wage-costs in other countries to whom we are trying to sell. We must now moderate our income expectations to reflect our need, at a time of falling inflation, to improve our wage-cost competitiveness.
I hope that this will be one of the main messages that will come from this debate. Otherwise, many now in employment may not retain their jobs and the prospects of our being able to employ and support our population will greatly diminish. If we succeed, as I am confident we will, because of the stark truths which this plan contains, in developing moderate and competitive trends in wages and salaries, the Government will take all the action open to them under their existing powers and will examine the need for further powers to ensure that the same moderate and competitive trends apply generally. The powers in prices legislation will be central to the actions of the Government in this matter.
The present hard lesson must be learned that our economy cannot survive if we pay ourselves incomes which we can no longer afford and which the purchasers of our goods are clearly not prepared to pay us.
Growing cost competitiveness will give us the essential foundation on which to expand our output and sales of goods and products on the home and overseas markets. The rates of expansion in output and exports which we could achieve are set out in the plan. These are high rates and represent a major challenge to our enterprise and ability. They are not far above the best rates we have achieved in the past when our industrial capacity was lower and our experience and skill less. We have at present only one quarter of one per cent of world trade. The expansion forecast in our export markets during the period of the plan provides the opportunity to do better than we have in the past.
Even in the depressed export markets since 1979 and with falling cost competitiveness, our manufactured exports have grown annually by about 11 per cent in volume. We can be confident, therefore, of our ability to achieve over the period of the plan an average annual growth in our exports of 12.25 per cent, particularly with the increased output of agriculture. Already in this year of depressed demand we are likely to achieve a volume growth of about 7.5 per cent in our exports.
Also, our output calculations take into account the impact of the determined measures we will take to exploit our hitherto neglected opportunity to supply the home market. We have identified a potential annual home market of £600 million in industrial goods and components, and £250 million in building products which can be met by domestic production. In the domestic market for consumer goods we have lost heavily in our market share — an estimated £400 million in 1980 alone, the latest year for which we have such an estimate. This trend must be reversed and greater cost competitiveness will be the key to that process of reversal.
We will supplement in industrial production the growing cost competitiveness by a new radical direction and co-ordination of State aids to the expansion of our domestic industrial capacity. In future, under the overall direction of a more active industrial development policy by the Department of Industry and Energy, the State agencies concerned with industrial development will undertake in a co-ordinated way a sector by sector and company by company expansion of our industrial capacity. State aids will be combined in the case of each sector and enterprise in a co-ordinated development plan. Aid will be concentrated on enterprises which have a viable and realistic corporate development strategy.
The National Enterprise Agency will supplement the efforts of the private sector in this intensified development programme. Adequate funding will be provided to enable it to engage in all viable projects it identifies, whether alone or in partnership with private enterprise.
The work of the tripartite sectoral development committee will provide essential additional guidance on the sectors and sub-sectors of industry where growth can best be achieved.
Strict criteria of performance will apply to State aids in future. They will not be continued or renewed if the performance of the enterprise in meeting its development objectives is not satisfactory.
The co-ordination of marketing with other State aids is central to the new programme. We must now ensure that marketing at home as well as abroad is greatly improved. We know that much of the loss of the home market to imports is due to lack of adequate and persistent marketing by our own manufacturers. The sectoral development committee are completing a study of our deficiencies in marketing and preparing a programme of action which will be vigorously implemented.
In agriculture we look also for exceptional efforts in output and exports. This I am confident we can get on the basis of the new economic environment we will create through the plan for the farm industry of lower costs, a falling inflation rate and lower interest rates. High input costs, inflation and interest rates have damaged the viability of farming in recent years. We can now look forward to a period under the plan when the viability of farming can be restored.
A four-year development plan for agriculture, prepared by the Minister for Agriculture in conjunction with the main farming organisations, will be published shortly. It will provide for the practical development measures to expand output, productivity and exports in agriculture in the new favourable economic and fiscal climate created by the plan.
In this sector also State aids will be more closely related than in the past to performance. Too much of past investment in farming did not achieve the development envisaged. In future, farmers, financial institutions and Government alike must all be satisfied that aid and investment is geared to practical development objectives.
A major objective in our industrial and agricultural development under the plan will be to ensure that State investment in research, development and advisory services is having practical effect in improving our technology and productivity. We must ensure that this expenditure is deployed in a practical and effective way to provide directly to industry and agriculture the technological and innovative advice it needs.
The considerable technological and scientific skills available in our higher educational institutes must be better deployed in practical advice and assistance to the productive sectors and enterprises throughout the country. This will be part of the new co-ordinated approach to State aids to industry where gaps have grown between industrial development, marketing aids, management development and technological transformation which must now be closed in a concerted effort to bring about the rates of economic expansion our population growth requires.
The plan brings out very clearly that job losses in existing firms is one of our major economic weaknesses. These job losses are due to many causes: loss of cost-competitiveness, declining demand, bad management, poor technology, inadequate marketing. Some level of job losses is inevitable even when economic conditions are generally favourable. But we cannot afford to lose jobs if there is a viable future for the enterprise.
The efforts of the State rescue agencies are now directed to seeking to assist at an early stage firms in difficulties but which have viable prospects. Too often the State rescue agencies are called in when it is too late. We will make all the necessary resources available to these agencies to enable them assist enterprises which they are satisfied have a future. The skills and abilities of these agencies are widely appreciated. I would ask the financial institutions, who very often are aware first when a company are in difficulties, to suggest to such companies as early as possible to approach the State rescue agencies to give them an opportunity in good time to see if they can justifiably help maintain the enterprise and its employment. The financial institutions themselves should, of course, do all they can to assist such companies out of their difficulties.
Under the plan, therefore, the growing cost-competitiveness will be combined with radical sectoral development measures to achieve the output and sales objectives specified in the plan. These objectives can be achieved. If they are not, we must resign ourselves to the fact that we do not have the enterprise and capacity to employ and support our population.
The plan is honest in outlining what our requirements in employment are. There can be nobody in the country, after this plan, who is under any illusion about what a formidable challenge to us is the scale of our employment needs.
We do not conceal how great that challenge is. We admit frankly and honestly that unemployment will continue to grow into 1984 but we expect that, under the policies and measures contained in the plan, the rate of growth will be slow by comparison with recent years.
We can slow, halt and reverse that trend only by achieving the objectives set out in this plan. If we are fully successful we will succed only in 1985 in starting to reduce unemployment. If we do that, we will have by then established the conditions under which unemployment could rapidly fall as we outpace in employment the growth in our labour force.
This is not the sort of outlook any of us gladly accept. But it is the stern reality we must face based on the best technical advice available. It is clear that these projections are accepted by all commentators as accurately describing our dilemma as a people.
I would be very happy if in the course of this debate Deputies can suggest a lesser range of objectives which will enable us to provide the employment we need. That is what this debate is for. We will be very glad to hear and accept less onerous objectives if they can achieve the same results. We do not want to return to a national community debilitated by emigration. We now have the same population that we had in the 1890's. Let us clearly in this debate identify what the employment objectives must be to support that population and let us then work together in harmony and unity to achieve those objectives.
I am very heartened by the response the plan has already evoked. The support it has received from the European Commission has a special significance because of the contribution the European Community makes to our economic welfare.
We intend to enter into discussions with the Commission about the practical possibilities that exist for new efforts by the Community to assist us achieve the objectives of the plan. These objectives are already in accordance with the convergence objectives of the Treaty of Rome and, therefore, warrant new initiatives by the Commission.
Farming organisations have indicated broad support for the plan. The Confederation of Irish Industries and the Federated Union of Employers have also supported its content and its objectives while recognising the exceptional efforts it will demand.
The Irish Congress of Trade Unions, who are now considering the plan, will find in it much that reflects the views they expressed in the consultations we had with them. We have no doubt that they will note in the plan its overriding concern to create conditions in which employment can increase. This we know to be the overriding concern also of congress.
We will, now that we have published the plan, resume with the social partners the consultations we had in its preparation so that we can establish how best we can work together to achieve the objectives of the plan.
I should like to mention a criticism that has been made to the effect that we have adopted the monetarist terminology of saying there is no alternative. We do not say that. In fact the plan outlines in considerable detail what the alternative is — 300,000 unemployed by 1987, a current budget deficit in that year of £3 billion, total Exchequer borrowing of £5 billion. The plan points out what the frightening alternative is if the corrective course of action outlined in the plan is not accepted now as economic policy and followed through by determined implementation.
Another criticism is that the projected rates of growth, improvements in competitiveness and so on are not attainable. My first reply to this criticism is that the plan clearly states they are not guarantees, but it certainly claims that they are attainable. We have the best economic advice available to us to the effect that if the discipline of the plan is accepted by the whole community then the targets set out in the plan can be realised. The international framework inside which the plan is to operate is the best assessment available to us from the most reliable international economic agencies.
The plan is an integrated one. The figures and the projections dovetail into each other. No one element can be isolated as unrealistic and out of line with the general framework and strategy. It may be valid for sideline commentators to say that the targets and projections will not be attained but it is not valid for them to say that they are not attainable. The analysis is correct. The framework built on that analysis is the logical and coherent outcome of the analysis. If the plan is implemented as charted, if the disciplines are accepted, in other words, if the Irish community by a large majority decide to accept and implement the plan then the outcome the plan outlines can and will be reached in 1987.
In bringing this plan before the country, we have provided everyone with the opportunity to take stock of our economic and financial situation — and to give his or her solution. Our economic and financial problems have been the subject of deep analysis and intense debate for the last three years. The Government took up office committed to the task of trying in the national interest to put before this House and the nation an objective and accurate assessment of our situation and its prospects.
We have discharged that task diligently and honestly. We took the best advice available and accepted that advice. This is not a political programme. It is a careful professional assessment of the extent of our problems and of the exceptional efforts it will take to improve that situation. It will require new efforts and new enterprise from us as a people. It will require firmness of resolve, unity of purpose and belief in our abilities.
The way forward is clear. The situation in which we find ourselves and the way in which our economy and our finances are moving cannot continue without dire and unacceptable consequences. Corrective action must be taken and it must start now.
This plan shows how present trends can be reversed and how we can put our economy and our finances back on a sound footing from which we can start to move forward again. The plan is sound, realistic and if it gets support right across the nation, it will work; it will succeed; its targets will be achieved.
The launching of the first Programme of Economic Expansion 24 years ago set out to convince our people that they had the strength and capacity to lift themselves out of the economic and social depression of that time. They had to be convinced — and they were — that, as Seán Lemass said, a rising tide lifted all boats. The launching of that programme marked the beginning of a new and unprecedented era of Irish economic and social development. This National Economic Plan will, I am convinced, do the same.
Success is largely an attitude of mind. When the will to succeed cannot be thwarted success comes well within reach. I ask every section of our people to give us their support in this great task which we have now undertaken. For them and for our nation the rewards which success will bring are great indeed and well worth striving for.