asked the Taoiseach whether he is aware of the RTE "Today Tonight" programme, screened on Thursday 18 October 1984; and if he will make a statement on the revelations which that programme contained regarding serious inaccuracies in statistics relating to manufacturing output and export growth and which were highlighted in a report written for the Central Bank by his economic adviser.
Ceisteanna—Questions. Oral Answers. - “Today Tonight” Programme.
1.
The issues discussed in the RTE "Today Tonight" programme on Thursday last were fully known to the Government at the time of the publication, last May, of revisions to the balance of payments and national accounts statistics.
This is obvious since I dealt with these issues in my contribution to the debate in this House on the revisions on 31 May last.
There is, therefore, no question of any changes in official policy or any further revision of official statistics arising from the points made last Thursday.
Would the Taoiseach advert to the crucial aspect of this matter, that is, that the same person who prepared the paper for the Central Bank, Dr. Honohan, in which he outlined the doubt that arises about many of these statistics, particularly in the export area, was also the principle author of the document, Building on Reality? Is it not extremely serious that in preparing one document, not only did he not advert to the contents of the other but did not mention the doubts that existed about the validity of the figures in the second document?
The Deputy will be aware that there are no principle authors of national plans. They emerge by a rather more complex process. The point the Deputy seems to miss is that when Dr. Honohan wrote the article he was then in the employment of the Central Bank. That was in February last and he was seeking from outside the system to identify problems in respect of the national accounts and industrial statistics which subsequently were identified and dealt with in the revision published in May last. It happens that he was first on the mark as it were, even from outside and without the benefit of inside knowledge, in identifying these problems. While he did not have the benefit of precise knowledge of how CSO figures are prepared, he also quantified, as it turned out in retrospect, almost precisely the scale of the revision of the figures required. All that was dealt with in the House in May last and I am grateful to Deputy Haughey for drawing the attention of the House to the fact that my economic adviser had the skill and prescience to identify this problem at a time when others had not done so. The implied compliment is one I receive gratefully on his behalf but other than that I am not clear as to what point the Deputy is trying to make.
The Taoiseach's capacity for bluff is becoming increasingly enormous. On the question of the economists and the authorship of the plan my information, which has been confirmed in a number of directions, is that Dr. Honohan was the principle author of that plan. In that connection would the Taoiseach not regard it as significant that the six or seven economists who have left the Department of Finance in the past 12 months have been at pains to point out that they had nothing to do with the preparation of the plan?
That is just tittle-tattle.
The Taoiseach will realise that papers prepared for the Central Bank are confidential and not meant to see the light of day but fortunately for us in this case the document did come to light. Apart from Dr. Honohan having knowledge in one capacity and expressing serious doubts about the validity of certain figures, he repeated those figures in the second document as if they were totally reliable.
Has the Deputy a question?
Is the Taoiseach not aware that the ICTU, who are a very responsible body, have dismissed the document as shabby, dishonest, politically contrived and unacceptable?
I cannot allow the Deputy to make a speech.
I am putting these questions to the Taoiseach since he has spoken at some length on the matter. Is he aware also that a member of the Planning Board, Mr. Jim O'Leary, has given further impetus to Dr. Honohan's Central Bank interpretation of the figures as distinct from the interpretation he gave as economic adviser to the Taoiseach? Mr. O'Leary said that recorded growth in exports and imports——
This would be more appropriate in a speech.
——and in industrial production are to a significant extent illusory and that instead of export led growth we may have export led fantasy. Having regard to all this evidence, would the Taoiseach agree that the document, Building on Reality, is in fact building on fantasy?
It is a fraud.
I am grateful to the Deputy for giving me the opportunity to deal with these points. The figures used in the national plan in respect of balance of payments and so on are, of course, the revised figures which were published in May following a revision by the CSO to deal with the very issues raised so presciently by Dr. Honohan from his position outside the system in February last. Every revision made was taken into account so far as the figures in the plan were concerned. The Deputy is well aware of that and should not attempt to suggest otherwise. He refers, too, to the six economists leaving the Department of Finance. The Deputy made the flagrantly unjust, absurd and cheap allegation that six economists had left the Department because they were in some way dissatisfied with the manner in which the plan was being produced. A journalist approached the six economists to discover whether there was any truth in the allegation but each of them pointed out that they had not been involved in the preparation of the plan.
Would the Taoiseach return to the point?
The point is the point raised by the Deputy and I am answering it because he has attempted to give a false impression in this matter and he does not like the fact that that impression was corrected by a journalist asking the economists concerned about their leaving the Department. Deputy Haughey is not happy that his attempt to give a false impression in the case has been exposed.
Why not confess now? The whole thing is a fraud.
I note the comments of the ICTU and of other interested groups. These comments will be given appropriate consideration in due course but as I made clear at the outset the plan is a national plan, endorsed by the Dáil. It will be carried through by the Government. We will not be put off course by pressure from any source though we recognise and respect the right of the ICTU to make their comments.
I will allow a final supplementary from Deputy Haughey.
I hope that you are not attempting to rush away from this very important matter.
That remark is unworthy of the Deputy. It contains an implication which he should withdraw.
We are dealing here with a matter of fundamental importance, with a document prepared and put forward by the Government, purporting to be a reliable document.
I will allow the Deputy a question.
Evidence is increasing daily as to the fraudulent nature of the statistics given in the document.
Has the Deputy a question?
I wish to make it clear that I am asking the question because the document is a fraud and I am endeavouring to have the Taoiseach admit that.
The Deputy is addressing the Chair as if he were addressing a public meeting.
The Chair has often addressed a public meeting himself and, I might add, with considerable effect.
Would the Taoiseach not advert to the fact that since the document was published an increasing number of persons, experts of one kind or another inside and outside the public service, have thrown serious doubt on the validity of the statistics, projections and assumptions in the document? Would he not also advert to the fact that one of the principal authors of the document was aware of certain dubious elements in the statistics in his capacity as an official of the Central Bank, and that nowhere in the document published — this is what I fault him primarily for — did he infer that there might be some doubt about the statistics and the figures he was using even though he himself had prepared a very careful paper illustrating clearly where the doubt lay? That is what the Taoiseach has to answer. After all, it is the same man who prepared both documents and yet in the second document he makes no reference whatever to the doubts which he clearly expresses in the first document.
The Deputy is very complimentary to Dr. Honohan in suggesting that he prepared the national plan. He was one of a number of people who worked on it and the Deputy is over-kind to him in this respect. He did a lot of very useful work on it but the Deputy should not overstate the position in that respect.
Mack the Knife.
I have nearly given up trying to get anything through to Deputy Haughey. The paper in the Central Bank was prepared and dated last February. Following that, a revision occurred of the relevant statistics which validated the order of magnitude of the revision indicated by Dr. Honohan. I think Dr. Honohan mentioned a figure in the order of 5 per cent——
It was 20 per cent.
——in regard to the GNP and the revision effected was in the order of 4 per cent. The same applies to the industrial figure so what he had suggested turned out to be correct. The figures in the national plan are revised figures — revised after a full examination of all the material available by the CSO, discussed and debated in this House on 31 May very fully and which stand as the most accurate available data upon which to base plans in this country, just as plans in all countries are based on the available national accounts and balance of payments.
The Deputy's further supplementary gives me an opportunity to reply to a point I missed earlier. He referred to Mr. O'Leary as a member of the board — he is not a member of the planning board, he is an economist working for them. He indicated in that programme that he was concerned about the existence of high profits based on transfer pricing. The Government were fully aware when the industrial policy document was produced that the transfer pricing mechanism can affect the question of how much of the value added in certain industries is retained in this country. If the Deputy carefully reads industrial policy, he will find that the wording there in respect of using value added retained in Ireland as a criterion of successive policy was consciously based on the analysis referred to by the Deputy in regard to Mr. O'Leary and Dr. Honohan. I am more than happy to be able to clarify that point as well for the Deputy. If the Chair permits——
I will not permit anything.
Deputy Haughey rose.
The Deputy is trespassing.
One final question.
That will lead to another one.
I just want to mention that when I refer to Mr. O'Leary I am talking about a paper he delivered in Kenmare. I want to quote from that paper——
You cannot quote at Question Time.
He gave his view that systematic distortions in official data make the framing of sound economic policy a more than unusually difficult exercise.
The Deputy is quoting.
That is what a member of the secretariat of the planning board says about the Taoiseach, the plan and the whole fraudulent exercise.
It is cosmetic fraud.