asked the Taoiseach whether he has any plans to meet the Congress of Trade Unions to discuss pay, jobs and taxation.
4.
Ceisteanna—Questions Oral Answers - National Plan Objectives.
3.
asked the Taoiseach if, in view of the fact that the employment and budgetary targets in Building on Reality, 1985-87 have become unrealistic and unattainable, he will now withdraw the document; and if he will now state the Government's present projections for 1986 and 1987 in respect of unemployment and the current budget deficit.
5.
asked the Taoiseach if, in the light of the just published OECD Report on Innovation, the labour force and employment creation targets in Building on Reality, 1985-87 need to be revised.
6.
asked the Taoiseach if he will make a statement on the operation to date of the plan Building on Reality, 1985-87 indicating the extent to which the objectives of the plan are on target and the extent to which the conditions forecast in the plan have been met.
I will take Questions Nos. 3, 4, 5 and 6 together.
The Government have made considerable progress in achieving the objectives set out in the national plan —Building on Reality. No serious arguments have come from any quarter for economic policies different from those which underlie the plan. We are, inevitably, closer to achieving some targets than others.
Marked progress has been made in curbing the rate of inflation. Compared with a rate of over 20 per cent in 1981, inflation has been reduced to 5½ per cent. Interest rates have also come down, falling by over four percentage points since the start of the year. Mortgage rates have now fallen to 9¾ per cent per annum, the lowest level since 1977 including a fall of over 3 per cent since March last. Irish mortgage rates are now 3 per cent below those in the UK.
Substantial progress has also been made on the balance of payments front. Compared with a deficit of almost 15 per cent of national output in 1981, the deficit this year should be down to less than 4 per cent of output in line with the plan.
Employment performance has not been as strong as had been hoped for. Despite the welcome improvement in the unemployment figures for September there has been a strong upward movement in unemployment this year.
There have been a number of contributory factors to this disappointing outturn, including the higher than expected level of interest rates that prevailed earlier in the year, the slower than expected startup of the social employment scheme and the greater tendency of school leavers to register as unemployed while seeking their first jobs or before going on to further education.
With regard to the OECD innovation report to which Deputy Haughey referred in one of his questions, I should point out that the time frame of the national plan Building on Reality is 1985 to 1987 whereas the time frame of the OECD report is from 1985 to the year 2000. This obviously invalidates any comparison of projections underlying these separate documents. The Minister for Industry, Trade, Commerce and Tourism will be making a definitive statement shortly on the action to be taken arising from the OECD innovation report.
In considering what measures should be brought forward now in response to the disappointing experience with unemployment, the Government have to have regard to the position of the public finances which we inherited from our predecessors. There is no realistic or responsible alternative but to continue to work within the framework established in the plan for an improvement in the state of the public finances.
It would be grossly irresponsible for the Government to abandon the thrust of the plan's financial policies. The fiscal objectives set out in the plan were described by the EC in their Annual Economic Report 1985-1986, published recently, as the minimum amount of progress which is compatible with ensuring a halt to the situation where growing debt interest payments have pre-empted the real growth in national resources.
The Government have firmly committed themselves not to finance increased spending by any increases in the burden of taxation as a proportion of national output. This is why there is so little room for manoeuvre in relation to public service pay. Equally new measures to expand employment cannot have a significant net impact on Government expenditure.
The Government have reviewed progress on the national plan and consider it appropriate to introduce additional measures to boost employment creation and to improve the process of tax collection and enforcement with a view to bringing the employment and public finances position closer into line with the plan expectations. I will be dealing with these measures in my statement after the Order of Business.
I will be arranging to send copies of that statement this afternoon to members of the National Economic and Social Council and I will be asking them to discuss the proposals in it with me at a meeting which I have requested for Friday, 1 November.
As I indicated at meetings with representatives of the Irish Congress of Trade Unions and employer and farming organisations last July, I would intend that the meetings in NESC could be followed by meetings with the social partners separately. I am, of course, together with my colleagues in Government, prepared to meet with the Irish Congress of Trade Unions at any mutually agreed time to discuss matters of common interest to the Government and to Congress.
Neither the British Prime Minister, the Chief Constable of the RUC nor anyone else outside this jurisdiction is involved in the simple question I addressed to the Taoiseach, namely, if he has any plans to meet the Congress of Trade Unions to discuss pay, jobs and taxation. It is a very simple question, capable of a yes or no answer. May I remind the Taoiseach that the question originates from the fact that the Government stated that there would be no question of discussing anything except the public service pay freeze in their statement of 14 August? Is it the position that he is now prepared to discuss a much broader agenda, including pay, employment and taxation reform? If this is now the position, why could it not have been the position on 14 August last, thereby avoiding the unprecedented withdrawal of labour by the entire public service?
The position is as I have stated. The proposals which will be outlined in my statement this afternoon are ones I am inviting the NESC to discuss with me and with other members of the Government on 1 November. These proposals will deal with issues of employment and tax collection.
Tax collection?
With regard to public service pay, we approached the ICTU on that subject and the Public Services Committee of Congress and the Deputy is aware of that. We are willing and open to see them at any time on these subjects.
The Taoiseach insists on being devious about this matter. My question simply is whether he has plans to meet them.
I am calling Deputy Taylor next.
Where is Michael O'Kennedy?
Where is John Boland?
Order.
I wish to ask the Taoiseach——
The Fianna Fáil Leader met the ICTU and promised the National Development Corporation but now he is opposing it. He lied to the ICTU. He is playing both sides of the fence.
The Deputy is getting very worried.
(Interruptions.)
Order.
I am trying to ascertain from the Taoiseach, and I will persist in this despite anything Deputy McLoughlin may do, whether he has any plans to meet the ICTU. I am trying to find out if he is prepared to discuss with Congress this broad agenda to which I have referred. If he is prepared now to discuss it, why did he and the Minister for the Public Service in particular inflict on the country a nationwide public service strike when it could have been avoided if he had taken this action last August? It is a simple question.
The Deputy seems to forget that we approached the ICTU and proposed a meeting before that strike took place. The Congress replied to us in relation to that request——
The Government cheated them.
——and their suggestion was that the matter should be discussed at the Public Services Committee whom we were also prepared to meet. We are prepared to meet either of them at any time on the matter of pay. We are in a position to negotiate and that was made clear at the time. It was made clear at the meeting of the Public Services Committee that they were not in a position to negotiate. We are prepared to meet them as soon as they are in a position to talk to us.
With regard to other matters to which I have referred, we will be discussing taxation, pay and employment with the NESC, but without prejudice to having separate discussions with individual groups, including the trade unions should they wish to do so. With regard to employment generally, the Congress of Trade Unions had asked for a meeting on that subject in July but decided against pursuing it. We accepted their decision but we will be happy to meet them at any time to discuss that subject. I hope that answers all the Deputy's questions.
I can only take——
I wish to point out that there will be an opportunity later today to——
I had three questions down but you ruled two out of order.
Unfortunately——
I am going to pursue supplementaries on the question you permitted.
Unfortunately, that is one of the things I am paid for.
As long as you do not do things you are not paid for we will tolerate it.
You are ruling out questions——
I said I will call Deputy Taylor next.
These are my questions.
He has one too. I allowed——
In the case of Deputy Mac Giolla, because we were dealing with his question, you called him first.
I am calling Deputy Taylor.
I object to this behaviour but it is in keeping with the way you have been treating me since this Dáil reassembled. You have ruled out one of my questions which the Taoiseach was expecting and prepared to answer.
If that proves one thing——
You also resorted to advice to prevent another question being addressed to the Taoiseach and now you will not let me ask supplementaries on my question.
The fact that the Taoiseach was ready and expected to answer proves one thing conclusively——
It proves you were capricious.
Deputy Taylor.
May I ask the Taoiseach two supplementary questions? Having regard to the fact that the plan was based on certain things developing, such as the extent of world trade, average earnings per head with our main trading partners, consumer prices compared with our main trading partner countries and so on to what extent have those projections been realised and what effect will they have on the plan? Secondly, what has happened as regards the social employment scheme mentioned in the plan to achieve a participation level of 10,000 within a year? What is the progress made to date in that area?
With regard to the first question, there are a number of external factors which influence our situation. One which has evolved favourably, and somewhat more favourably than the plan targets envisaged, is the level of interest rates which have declined more rapidly than we foresaw. The volume of world trade is a little less buoyant than we projected at that time but I do not think the divergence is great. There are a number of factors involved and I do not know which ones the Deputy wishes to pursue but I have mentioned two important points. The Deputy's second question dealt with the social employment scheme. I understand that 9,000 jobs have been approved and provided for and they are being taken up as rapidly as can be arranged.
In the questions the Taoiseach took together, I had one asking about the proposed meeting with the Congress of Trade Unions and I did not get a satisfactory reply. I can only deduce from that that the Taoiseach does not know whether he is coming or going.
(Dún Laoghaire): At least the Taoiseach knows where he is going.
I also have a question down about targets in the document Building on Reality... I want to ask the Taoiseach specifically about some targets in that document. First there is the question of unemployment. The Taoiseach will recall that the document indicated that unemployment would peak at 220,000 at the end of 1984. Does he not now admit that that was totally unrealistic and that the unemployment projections are unattainable? Secondly, does he accept that the document which projected for 1986 a figure for public service pay of £2,525 million is no longer realistic or attainable? Thirdly, does he accept that we are in 1985, never mind 1986, heading for the greatest single largest budget deficit ever recorded in this country in terms of volume, size or amount and also in terms of percentage of GNP? So far as these critical areas are concerned, will he not admit that the document is totally out of line and should be withdrawn and something more realistic put in its place?
With regard to being out of line, it is not as out of line as the previous Fianna Fáil plan which had to be abandoned.
You must be joking.
Deal with the document, Building on Reality.
The Deputy does not like to be reminded of what happened to his document. I understand why because it is a sensitive issue.
If the Taoiseach were as insulting to people outside the country who insult him as he is to me here——
(Interruptions.)
It is very difficult to deal with somebody who is so extraordinarily sensitive after all these years in political life. With regard to unemployment, I made it clear in my reply that the level of unemployment is higher than projected in the plan. With regard to public service pay, the pay award agreed last year has yielded a figure which is higher than that provided in the plan and there has been some offsetting of savings against that. The Deputy's third point was——?
It was very important, dealing with the current budget deficit. I do not blame the Taoiseach for trying to forget it.
The budget deficit is a significant fraction of that which was emerging when we took office first. The Deputy will recall, and he does not like to be reminded, that at that time the budget deficit was of the order of 13½ per cent of GNP until we took action in the 1981 and 1982 budgets. In the current year the target is 7.9 per cent but it will be marginally exceeded as a result of a shortfall of revenue and some excess expenditure.
Would the Taoiseach acknowledge that, in these three critical areas, the document Building on Reality is no longer realistic? Furthermore, is he prepared to admit that in this year, 1985, he will preside over a current budget deficit which will be the largest in the history of this State, both in its amount and the percentage of GNP? Will he admit that fact?
The deficit will be about two-fifths lower than the one the Deputy left us with, which is a considerable achievement.
(Interruptions.)
Leaving aside the charges and countercharges about the success or failure of Building on Reality, may I ask the Taoiseach if new grants for housing repairs and reconstruction are being brought in to help to revive the building industry which is tottering to say the least of it? Is it possible that the Government are beginning to see the light and to realise that helping the building and construction industry is the only way to reduce our unemployment queues, reduce the deficits about which there is so much talk and give some hope to our people? There are many useful projects outstanding and we have the manpower to carry out this work. We are paying a great deal of money and getting no return for it and, in my view, this money could be invested in the building and construction industry. Is it possible that the Government are heading in that direction?
The Deputy will recall that the Fianna Fáil Government abolished these grants. I will be making a statement on this subject later this afternoon. We should move to the next question because there are priority and other questions to be dealt with.
These questions are very important and sensitive.
They are not sensitive to the Chair except in so far as they are taking too long.
(Interruptions.)
Is the Taoiseach seriously suggesting that the targets set for the percentage of GNP in relation to the current budget deficit will be met in 1986 and 1987? Is he seriously telling the House that he will take the necessary action to bridge the gap from 8 per cent to 5 per cent? Is he giving the House an assurance that that will be the percentage of GNP?
I should like to tell the Deputy that in the current year the deficit will be slightly higher than was allowed for, for the reasons that there was some shortfall of revenue——
How much?
——and, to some degree, some increase in expenditure for, among other reasons, the public service pay point which Deputy Haughey raised. Despite that the Government will continue to reduce the current budget deficit having got it down by two-fifths by comparison with what Fianna Fáil left. It will be our objective to get it down by three-fifths by the time the next election comes.
I should like to point out to the House that unless we make progress 20 lucky Members who drew questions in the ballot will have drawn non-runners.
Seeing that the Taoiseach is such a magic man on figures will he tell the House what percentage he is aiming for? Is it 8, 7, 6 or 5 per cent according to his target? That is a most important question. The Taoiseach should take his pick and give us one of the figures or does he have any target left?
The Deputy should come here on budget day.
The Deputy is aware of the targets. The Deputy is perfectly numerate and is quite capable of seeing that our targets would involve reduction to a level which is only about 40 per cent of the deficit Fianna Fáil left us with.
Seeing that the Taoiseach is not prepared to answer, and that we all know he is going to miss his targets, I should like to ask him if in the interests of reality and practicality he will give that document a decent burial? We will not quarrel where the service is held and we will all gladly attend its decent burial. The Taoiseach should not live in fantasy land any more. He either has figures or he does not.
Will the Deputy join in celebrating the fact that interest rates and inflation have fallen faster than projected or is that something he would prefer not to have said to him and not to hear?
Inflation in Europe is down to the lowest it has been in 15 years and that has had a major effect on our inflation rate and the Taoiseach knows that as well as I do.
Will the Deputy accept that on the typical mortgage the share of income absorbed by repayments on the mortgage is less than half the share of income it was when he was in office?
Waffle.
Our young people will be paying for the next 40 years for the Government's doubling of the national debt.
Mr. Cowen:
Has the Taoiseach dusted off the JCBs yet?
He does not know that when they are not working they gather dust.