Vol. 430 No. 5
8 Mr. Yates asked the Minister for Finance if he is in favour of establishing a new programme after the present Programme for Economic and Social Progress expires; and if he will give details of the Government's position in any such negotiations in regard to the level of wage increases and the period over which any such increases would be paid.
The Government is committed to continue the consensus-based approach to managing our economic and social affairs which has served the country so well in recent years. We will endeavour to maintain the present consensus as the most appropriate means of attaining the social, economic and fiscal objectives set out in the Programme for a Partnership Government.
Clearly, attainment of a new programme to follow the Programme for Economic and Social Progress would not be a matter for the Government alone. A renewed commitment to participation by all the social partners would also be eesential as would achievement of the necessary consensus on a wide range of policies, including pay policy, for the years ahead. I would expect that such issues will be addressed by all concerned later this year.
It goes without saying that any new programme to which the Government might subscribe would have to entail a widespread commitment to a continuation of all the measures necessary to maintain economic stability and improve job prospects including, in particular, improved international competitiveness and continued discipline in our management of our public finances to achieve the necessary reduction in the national debt-GNP ratio and conformity with the Maastricht guidelines. Continued attention to such fundamental issues will be vital if we are to secure a high level of export-led economic growth consistent with maintenance of low single figure inflation so as to create the greatest possible impact on unemployment.
In relation to the second part of the question, I am sure the Deputy will agree that it would be wholly inappropriate for me to speculate at this juncture on the pay policy which might form part of any such agreement.
I take it from what the Minister said that the Government will actively seek a renewwal of the Programme for Economic and Social Progress. Will the Minister give the timeframe for a renewed programme; will it span two years, three years or four years? Is the Minister aware that, in terms of exposed competitiveness, some people would prefer a pay deal spanning a longer period than a year to ensure competitiveness? Will the Minister ensure that public sector pay increases, which have amounted to about 8 per cent per annum in the past two years, will not be the price of such an agreement?
While it is still early days the desire of Government would be to enter into a new agreement. Deputies will recall that in negotiating the last agreement a ten year strategy was embarked on so as to work with the social partners to implement as many of the plans, proposals and policies over a longer period than the three years. Such a timescale is necessary to ensure that long term plans are workable and I hope we will continue on that basis. Pay is just part of what is involved and, naturally, it is a costly element both for the private and public sectors. In our negotiations with the Irish Congress of Trade Unions, particularly the public services committee of that group, I hope we can work out a new pay determination scheme. It is unsatisfactory that a pay increase of about 5 per cent is already built into the system for 1994. Such a system has been followed for ten to 15 years and if we were to move away from that system we would have to change the policies followed for many years. I hope that discussions in this regard will be concluded prior to discussions on the next programme.
The private sector was reluctant to take part in negotiations for the programme covering the period 1987 to 1990. At that stage the arrangement provided for a 2.5 per cent increase, non-index related. That was the kind of agreement that no Government in the western world would favour and we had to move away from that arrangement for the period 1990 to 1993. We must now negotiate a satisfactory agreement in relation to pay rates, taking into account competitiveness and inflation as well as what the public purse can afford. We are preparing submissions and data on what we believe the country can afford in the next three years.
Can the Minister confirm the rumour that the Department of Finance favours a pay freeze and that the Minister has suggested a rate of 2 per cent per annum? In relation to the non-pay aspects, will the tax element be included and what will be the relationship between the CRC and the new forum? In other words, will the non-pay elements be discussed by everybody, including political parties, or will the non-pay areas be confined to the social partners in the CRC?
Deputy Yates will know that the Department of Finance would favour no increase,
A total pay freeze?
No percentage has been considered at this stage as it is much too early to make such a decision. The Central Review Committee has worked extremely well for six years. Negotiations with the Government would be held in the context of what has been established in that six year period, with representation by farmers, employers and trade unions. In regard to consultation with the Economic and Social Forum their views in relation to the programme will be taken into account but the programme will be negotiated within the CRC.
