Seanad Éireann díospóireacht -
Thursday, 1 Jun 1978

Vol. 89 No. 5

White Paper on National Development: Motion (Resumed).

Debate resumed on the following motion:

That Seanad Éireann takes note of the Government's White Paper on National Development, 1977-1980.

—(Senator E. Ryan.)

Mr. McCartin

Before the adjournment I had come to the point of making reference to some of the remarks made by Senator Murphy yesterday. I was making the point that I felt it regrettable that in a debate of this sort on the economy, a debate in which, whatever about the attractiveness of taking a cut at the people who have placed themselves in the vulnerable position of the Government, we have an obligation to be constructive and that in all the eloquent language in which Senator Murphy clothed his remarks I did not see the germ of a single idea which could be constructive or any solution to our problems. I thought it a pity that somebody who obviously has ability, tremendous intelligence and an intimate knowledge of our past should find it necessary to create antagonisms and divisions at a time when what we need is the maximum amount of understanding between all sections of people and between those of us who have an obligation to lead various sections of the community, political parties, and an understanding between the different sections of our society. Why anybody should seek to divide or pretend that the interests of the son who left the farm and went to work with the ESB or any of the semi-State bodies or entered the civil service are in some way opposed to those of the man who stayed at home on the land, or his sister who took up a job with the county council.

Let all of us do our best. We are not likely to see a complete solution to this problem, but there are opportunities for development in every area. I would not suggest that a tight rein should be put on the semi-State bodies, on public enterprise to develop and expand, the semi-State bodies should be given their head to follow their own schemes in the ways in which they think they can succeed. However, if that sort of opportunity is to be given to them they must have the responsibility to carry the load when the going gets tough, just as the private sector has.

I was not impressed by the catalogue of production figures by a number of semi-State bodies. I did not think that added anything to the argument. There is no point in telling me how much steel Irish Steel produced in the last 20 years when I know they had no competitors within the State and when I know Irish farmers were forced to buy from Irish Steel during my lifetime and had no opportunity to buy any place else. We had no means by which to judge whether they were producing it economically or not. Last year the farmers and industrialists of Ireland were searching the continent of Europe for supplies to replace those that traditionally came from Irish Steel, whose employees were on strike for most of the year, just when the agricultural industry and industry generally were coming out of the recession of the past four or five years.

I have no axe to grind with the ESB and I believe they should be given their head, but I do not see why if the ESB quote me £3,000 for taking a power line from a point to my premises, and if I am convinced that I can do it at £1,000, I cannot do that. I believe in giving them the opportunity providing they are able to compete. There are plenty of areas where they can compete, but what we are seeking is to take money from the private sector to give to these people for their schemes, and if they fail to compete, if they are less efficient, if they get into difficulties, then they must be propped and subsidised while the private sector can be told to close up and bail out if necessary.

I am all for giving them an even break but on the terms that I have indicated. I am not burdened by any belief that our problems can be solved solely by private enterprise. I agree with Senator Alexis FitzGerald when he said the majority of people in this House are not hung up on any ideology. I want to see eliminated any indications of increased or resumed emigration before it becomes a serious flow again. I want to see opportunities for the 20 per cent of our people who live below what we regard as the poverty line so that their position will be improved. I am not particular how that will be brought about. I do not see the public interest as being in conflict with private interests.

We have a lot of soul-searching to do about the way our civil service is run and how our public bodies generally manage their affairs. We who are responsible for the way the system is organised and run bear some share of the responsibility for some of the problems that exist. As I pointed out earlier, the good civil servant should be given more scope and more room in which to exercise his abilities. We as politicians are in some way responsible for this. It has always been a crime for a civil servant, somebody in a public position, to make a mistake, so naturally enough if he values his position and reputation or his career he must not make a mistake, but we cannot expect people to exercise initiative, to do bold things, to seize opportunities, if it is a crime for them to make a mistake. That is an area we must examine closely because we are ultimately responsible for the organising of the system.

In the area of labour relations, a small minority of us are burdened by extreme attitudes to the capitalist system, or the socialist system, or whether things should be organised by State or by private enterprise. The whole question of labour relations requires to be studied. There is blame on both sides. It is true to say that the problem started with employers who always wanted employees to bear the burden when times were difficult but were never willing to share the profits when things improved, and on the labour side we had people who wanted a guaranteed wage regardless of what the returns were, regardless of what the production was. This must be examined from both sides and there must be a serious effort by people in industry to share profits and to share information, for employers not to come crying to employees when they are in difficulty and keep the books closed when things are going well. This has certainly contributed to creating the misunderstandings and problems we have.

Basically, the average Irish young person today going out into our system to look for a job is going out fairly free from any biases or the burden of any political ideology. Those people are prepared to take their job and make it work if they can. There are a lot of them going into industry and the civil service and public companies at the moment. We have an obligation to change the system before they get tainted and spoiled by all the abuses and all the misunderstandings. As I see it, 90 per cent of the problems are generated not by the average worker who is prepared to do an honest day's work and accept a reasonable return but by people who in pursuance of their own political motives seek to use every situation to create industrial strife. There is an awful lot of that at the centre of the problem. On the other hand, I believe that people in the position of power, people who control capital, own industry and the resources of the land, have an obligation to share the profits with workers involved. If we do not take a bold step in that direction we will probably perpetuate the disorder which we have in industry and the public service at present.

I will conclude by saying to the Minister that I do not see this White Paper as containing even the beginning of a solution to the problems we have. I do not see as a solution to the problem the publication of white papers or green papers. There will not be a solution until we start to relate planning down to the very end of the production line, to the civil service, to the semi-State companies, to every place where people are working, so that they will have set out for them targets to achieve, so that they will have confidence that the purposes of a plan is to improve the situation for themselves and not to try to justify a document that was prepared in haste for the purpose of winning an election a year ago.

Mr. McDonald

I welcome the opportunity to speak on this motion. National development over the next three years is something that we all must rightly be concerned with. I would hope that every person in the State would be concerned and indeed be encouraged to contribute towards the overall development of the country which, of course, will benefit everyone living in the country. I have not read the document with a critical eye, but found it rather interesting. If I might refer to paragraph 110, I note that the White Paper purports to form the basis of the Government's submission to the Commission of the European Communities in accordance with Regulation No. 724 of 1975. On rereading the document I was a little surprised because my understanding of Regulation No. 724 was that for the purpose of the regional development fund a Government would supply not just the (a) and the (b) list of ordinary proposals that the Government must submit in order to benefit from the regional development fund but that those proposals would be enlarged upon in the overall development structure, in the overall objectives that the Government propose to pursue over the next three years.

I would have hoped that for that kind of proposal it would not be stopped at three years but that many of the projects would be carried on, especially the larger-type infrastructural projects which would be benefiting from the European Regional Development Found. I wonder would it be possible for Members of the Oireachtas to have access in the Library to the Government's A and B lists submitted in January, or indeed for any one year. This would be of interest to Members.

There are two points I am still concerned with, and I have been working closely in Europe on the regional development fund since it was funded in May 1975. I am still not satisfied that there is as far as our country is concerned a very clear concept of additionality. When the Government party were in opposition they rightly pointed this out to their predecessors in office, and even though I was then a Government Deputy I agreed with that criticism. It was acceptable and pardonable for the first year, 1975-1976, when Commissioner Thompson was anxious that the benefit of the fund would flow straight away from the date the fund was funded. The grants were paid on on-going jobs so did not have to wait for projects to be conceived and planned and drafted and put into operation, which in itself would have taken more than one year. After four years of the fund's operation, I think it is reasonable to expect that we should now see clear signs of additionality, that it should not just be parcelled in as part of the Government's capital programme. If you look at the £75 million of benefit we expect over the next three years and compare it with the total capital programme, it is quite small.

Nevertheless, it is £75 million which in itself, when matched with the matching capital, would be of tremendous benefit to many areas of the country. When we think of the development fund from a European point of view, the fund and its concept holds the most promise for this country. I would have hoped that we would have got around to the people who are benefiting to see some of the areas where the fund has actually aided development and construction. At least the fund would get due credit for that. We are moving into an election period in the next year when all parties will be endeavouring to induce public interest in direct elections to the Community. Yet we have had to date expenditure of almost £50 million from that one source. I have never seen a placard, which the regulations of the fund prescribe, indicating that portion of the RDF had been allocated in this particular area. I would hope that the Minister, Deputy O'Donoghue, would look at the small print in the regional development fund and perhaps encourage the beneficiaries from the fund here to comply with the regulations. If we get a sizeable grant, even though the fund as it is is inadequate for the huge task it is setting out to tackle, we should at least acknowledge the source from which it comes.

When we think of development we must be concerned that the Government are not utilising fully all the agencies and sources at their disposal. I am thinking of the regional development organisations which have been set up especially to spearhead development right across the country. Many of the boards of the RDOs have members on local authorities, senior technical staff and administrators alongside the technical committees which are comprised of county managers, engineers, architects and the other senior professional people attached to local authorities. It is extraordinary that in the entire concept of regional development these people have no say whatsoever. I am not suggesting that regional development organisations should have direct access to the Commission in Brussels, but at least a Government who would want to utilise and get the most from the brains and expertise of those people, who have spent a lifetime in working and developing their own administrative areas, would go to them and ask them for their order of priorities on their lists of projects that they think would benefit their own administrative areas faster or perhaps more economically.

It is a waste of the source of manpower and expertise that these people, who spend a lot of their time holding meetings, are ignored, that the only activity they have no hand, act or part in is the regional development fund. This is a shame and I hope that the Minister will think about this problem. Here are bodies specifically for regional development. Looking at the regional graphs and the organisations in the member states, on paper the Irish structure seems to be far superior to anything that there is in the Community. I have great faith in our RDOs. I have served in the midland region and I have met many of the other regional organisations and I know that there is a role for them to play. It could be of tremendous benefit to the Government if they sought the benefit of their advice and views.

Looking at the orderly development of this country, it is plain that the growth centres are not following exactly the lines envisaged in previous White Papers over the years. There are many areas one could point to where the growth has not been matched by infrastructure service. In my county we have made the mistake of providing too many local authority houses without having due regard to various facilities that ought to have been planned originally into those schemes—recreation and community facilities. We are at a stage of development in this country where we are progressing towards a shorter working year and more leisure time. We have two categories of people who will require more leisure facilities and we tend in rural Ireland to ignore this. I would hope there will be some thought brought to bear on this.

We lack a transport policy. During the winter I was on a deputation to CIE. It was not possible for them to draw up a timetable so that the bus from Kilkenny would reach Portlaoise in time to catch the Limerick train going to Dublin. To add injury to injury the official said: "We are running buses, not trains." One thing that comes out of that is that everybody wants to run his own corner and nobody seems to be interested in the public. We need coordination and harmonisation for all the services and the agencies serving the community. This is not something that one can say is the responsibility of the Government—it should have been done years ago—but we should try to make each semi-State organisation aware of the progress and the direction their neighbour or brother organisation are moving in. We need to identify clearly an order of priority in transport.

As a Member of the Oireachtas I have travelled as much as anyone in the House. From an export point of view there is a very definite need for a second pier in Rosslare. When we had this social aspect of the transport legislation with the tachograph in operation it coincided with the period when I was President of the Transport Commission and I availed of that opportunity to brief myself by travelling from this country by every possible means of transport. I took all the boats out of the country to see the kind of service provided and the kind of problems they met. It certainly puts our truck drivers at a disadvantage to have to lie up in Le Havre for a day because we only have a sailing on the St. Patrick every second day, one boat doing both journeys. This could be improved. We could have a second ferry on that route if there were facilities in Rosslare for boats to tie up overnight. One of our national priorities should be to improve facilities in Rosslare so that we can export economically.

During the Aer Lingus strike an industrialist in my own constituency who exported to the US by Aer Lingus sought permission from the Department of Tourism and Transport for a licence to have his cargoes transported by TWA. It saddened me to hear that he was told by a civil servant in the Department of Tourism and Transport, when they were arguing over the point and he was not taking lightly the refusal, that if he did not like the strike or the duration of it he could pack up and go. Senator McCartin mentioned something like that, but in the case I referred to a senior civil servant told an industrialist who was employing 35 people in my own constituency: "If you or your customers cannot wait for this strike to end, then get to hell out of here." That is not the kind of answer anyone serving this country should give to somebody who is trying to keep the work going and trying to meet his orders. If, for instance, that industrialist could send his produce by boat he would do so because it is cheaper, but he manufactures a perishable commodity and has got to meet deadlines.

We have the wrong approach and this we will have to tackle. My view is that we are in a post-industrial development era. It is sad when one reads the objections people are making to dirty industries. I do not think we can realistically expect that everybody with a nice clean industry will settle in Ireland. I am an environmentalist, but we will have to be prepared to take a mix and the public must be able to make up their minds on the pros and cons of any industry. I accept that the planning authorities throughout the country at present are very exact about the kind of environmental protection they are writing into planning permissions. They have the best scientific advice organisations can offer to them. The various concerns and manufacturers must price these into the cost of their buildings and factories. I accept they do that. But if we want to have full employment we have to take some of the risks, as every other country has done.

The amount of publicity given in the European newspapers during the Raybestos trouble was unfortunate. Even that small incident resulted in a tremendous lot of adverse publicity in European papers. That is inclined to frighten potential industries away. We must remember that only last year the United States started offering industrial incentives within that country. I was speaking to a Congressman from Mississippi and he told me that his State started an IDA-type operation on 1 January. They are offering industrialists in the rest of the United States incentives to set up industries of all kinds in that state, which he described as being undeveloped compared with the rest of the US. In addition we have got to compete with Portugal and Greece. It is reasonable to assume that they will get the same benefits we are enjoying now when in 1981 they become full members of the Community.

I should like to touch on the problem of youth employment. It is a pity that the long drawn out dispute between local authority engineers and the Government or the County Managers' Association over a pay claim obstructed the Government's environmental and youth employment policy. I was happy when the European Social Fund agreed to pay £36 per week of the wages of those young people during the duration of these youth employment projects. I hope every effort will be made to speed up these negotiations so that work on these projects will start this year.

Earlier forestry was mentioned. There is tremendous potential in this area. I welcome the fact that the European Energy Commission have allocated 80 million units of account this year to carry on experiments on additional or alternative sources of energy. A very high percentage of that is being allocated to the studies on biomass. In this regard the Midlands and the cutaway bogs should be looked at. It has been proved that this is an alternative source of energy. I hope that the National Board for Science and Technology will ensure that a considerable amount of this money and a great proportion of these experiments will be carried out in the Midlands not only on the cutaway bogs but also on the marginal high rise land and the mountains there. We have a real potential for future development.

I should now like to deal with the farm modernisation scheme. From the start this scheme has been misunderstood. I accept that Ministers for Agriculture have done their best to adopt the overall farm modernisation scheme to suit Irish conditions, but there are a number of categories in it that we should have a second look at. The scheme has been long enough in operation to have more problems ironed out. A small farmer under the minimum acreage does not get any grants under the scheme. This is a pity because there are thousands of small farmers who are full-time farmers with no sidelines or offfarm employment. It is a shame that grants for farming improvements are not allowed. This is national development. The generous grants otherwise under the scheme are good. Farmers who could be described as fairly snug benefit from these grants, whether by 30 per cent or 50 per cent, but small farmers who are struggling to keep themselves and their families sustained on a smaller acreage are cut out completely. In view of our difficulties here the Department of Agriculture should bend the scheme slightly. It would be no harm if some of our senior civil servants were seconded to some of the Italian regional departments so that they could see how some of the other administrations operate. If I require a highly confidential document I cannot get it from an Irish source because the Irish civil service, at home or abroad, keep this very high standard but I can get it in Danish. I can understand the Irish attitude in relation to national areas but I can get it from a Dane or a Netherlander. I have the difficulty then of getting it translated.

I was frustrated two years ago when I handed a document in Danish to a senior Irish civil servant and asked him if he would trade one in English for it but he would not. That is not good enough. He should not be handicapped in the European Parliament where we have not readily available to us the same facilities as our European counterparts. We are not maximising the return that it is possible to get from our membership of the European Community because there is such a lot of red tape. I do not mean that we should be dishonest and, certainly, we should not be more dishonest than anybody else. That is as far as I want to go on that matter.

I hope we can generate sufficient momentum so that the country can move and get greater national development. We have two or three years in which to get a greater momentum and a greater return because after enlargement there will certainly be more snouts in the trough.

The European Community—the nine member states—should devise something like a new Marshall Plan which would ask for not less than 2 per cent of GNP of the nine countries to be put into the four or five less developed areas. If we could sustain a European Marshall Plan with 2 per cent from each country for two or three years it could be possible to put sufficient infrastructures into the three or four poor areas, the areas that are clearly lagging as much as five or six points behind the average of the Community. This must be done. We have got to speak boldly about this. There in no point in talking about the Third World and about development all over the world in Africa or south America, if we are turning a blind eye to the problems we have in the west of Ireland. It was a mistake that the entire country was classified as underdeveloped for the purposes of the regional fund because the regions that are clearly dragging behind the east of Ireland have not advanced. The ratio between east and west or the midlands and the Dublin area that existed five or six years ago is probably even more pronounced now than it was then. The same situation is evident between the poor and the rich areas of the Community. Ireland is suffering a ratio of six to one between here and the wealthy triangle in the heart of Europe. If we repeat these things often enough they become cliches, but nevertheless, we must do something about them. I hope the Government will be bold enough now that they have a fairly comfortable majority in the House to be able to propose policies, even radical ones, that are necessary in order to ensure that this country and our people generate sufficient energy to get us moving so that we will not be smothered up in four years' time and find ourselves lagging behind Portugal, Spain and Greece.

Minister for Economic Planning and Development (Professor O'Donoghue)

Firstly, I should like to thank the Members for the many excellent contributions they made to this debate. They have been comprehensive and wide-ranging. I would love dearly to have the time to deal with all of the issues and points raised, but to do so would, I fear, take me many hours and I am conscious that there is other business which the House would wish to take. I will attempt, therefore, to be as consise as I can in my reply making the point that in doing so I am by no means unappreciative of the various contributions from Members. I console myself with the thought that I hope the House will have an opportunity of having a debate on the forthcoming Green Paper before it adjourns for the Summer Recess. We will perhaps have another occasion for covering somewhat similar ground within the near future.

I will try to organise my brief remarks around four headings. One is what I would call the background—political mainly—to the White Paper because so many speakers dwelt on that area. Secondly, I will say something briefly about what was not in the White Paper. Thirdly, I will say something about what was in the White Paper and the references to it and, finally, I will say something about the relationship between the political process and the planning process.

Quite a few speakers on the other side of the House felt obliged for some reason or another to yet again attempt to refight the election and rewrite the course of history. In particular, they seemed extraordinarily anxious to claim that things were marvellous when the new Government came into power and that had we left things alone and not done anything all would be well and there would be no need for any of the policies, which in their view are either extravagant or incorrect, that are being applied by the Government. I totally reject and refute that approach. I regret the necessity to waste time on this yet again but since it is being read into the record of the House by so many speakers on the far side and in particular since one very prominent Member on that side went so far as to imply that the opening of the White Paper almost amounted to an untruth, I feel it absolutely necessary to put the record right. I want to quote again the opening paragraph of the White Paper, the paragraph that was quoted, and which was implied as constituting an untruth.

It reads:

During the last few years, the Irish economy has tended to lose momentum. Employment has fallen substantially; living standards for many have stood still or declined; the private sector has cut back in investment; inflation rates have been higher than in any previous post-war period; wage levels have increased in a continuing spiral as workers have tried to maintain their real imcomes; and the cost of Government programmes have escalated, necessitating rising taxation and heavy overseas borrowing to finance them.

I say that everyone of those statements is true. If necessary, I will gladly debate them either inside or outside the House and will supply any evidence needed to support them. However, the implied attempt to say that they were untrue was to say that during 1977 there had been a marked improvement in the economy and that everything was now progressing for the best of all possible worlds. The line I want to take on that—men-tioned by one or two speakers on the Government side of the House—is that there had been an improvement in 1977 and it was started before the June election. Why was it starting before the June election? Because in the January budget of last year the Coalition Government, in a belated fit of wisdom, adopted the policies which Fianna Fáil had been advocating for several months prior to that. The final proof that I put forward that it was an attempt to introduce our policies belatedly and not any application of their own misguided and inept efforts of the previous few years is to be found by comparing the last known attempt at a statement of their economic policy in a famous, or should I say notorious, document called Economic and Social Developments 1976-80, published by the Coalition Government in September 1976. That was just a few short months before their last budget. What were they saying at that stage? I cannot quote it all but I will quote a few revealing sentences:

To sum up, the key features of the projection of existing trends are, continuing high inflation, mounting balance of payments deficits, drastic cuts in public expenditure, an unacceptable level of taxation, an impossible borrowing requirement and growing unemployment—in short an intolerable situation.

We entirely agreed with that. In fact, we were of the same view and about the same time, several days before the publication of that, we put forward our own economic policy. That Green Paper of the then Government purported to go on to set out an economic strategy most of which called for wage restraint in order to remain competitive. It talked vaguely about developing our natural resources and agriculture, muttered on to one or two other things about services, fisheries and so on. It contained what I can only describe as the most fraudulent set of alleged estimates of what could happen to employment over the period from 1976 to 1980 that I have ever seen. Why do I say that? I will take one example. In quoting about the miraculous change in fortunes that was going to occur, they anticipated a growth rate in GNP of 6 per cent. Let us even suppose that was so but that 6 per cent growth in the case of industry, where they were talking about a growth rate in output of 8 to 9 per cent, was to be accomplished by a rise in employment in industry of about 4.5 per cent per year, and productivity, that is output per worker in industry, was only supposed to grow by 3.5 per cent.

That statement that by some miraculous means we were going to get an extraordinarily rapid growth in industrial growth, far more rapid, mark you, than the sort of increase we are talking about, and that there was going to be an appallingly poor performance of productivity was the basis for what I can only describe as the most fraudulent attempt of an alleged improvement that would occur. If any Member of the Coalition wants to debate that inside or outside the House I am willing to oblige them because I have never seen anyone attempt to defend that appalling estimate.

The more realistic estimates that we have put forward recognise that industrial productivity was growing rapidly. The reason I say 3.4 per cent was so inadequate is that it had already been exceeding 4 per cent and any evidence that was available indicated that productivity was rising and not falling. By the time we were formulating our estimates we were allowing for the possibility of a faster growth in productivity rather than a slower one. If we are into the area of what constitutes a truth or untruth, or what constitutes a misrepresentation of the situation, I stand clearly over what we have said in the White Paper. In contrast to anything available from our predecessors, they are the ones who should be hanging their heads in shame.

The reason I quoted from that last known statement of their policy was that within a matter of days it had been disowned. That document talked about the intolerable situation and went on to say that there can be no growth in public expenditure. It stated that in some areas, if there is to be an expansion of public expenditure to meet the needs of a growing population, there would have to be restraints elsewhere and that there would be an overall restraint in the availability of resources. It stated that further growth in the real volume of current public spending was not feasible, nor would it be an appropriate economic weapon. In that statement they say that not alone can they not afford to spend more public money but it would not be appropriate. Yet, within a week of that document hitting the streets, we had the then Minister for Labour going off to meet the social partners and putting forward the first instalment of the Fianna Fáil policy. We had advocated a packet of tax cuts and of public spending, in each case amounting to £100 million or so; he was going along offering half that. He offered a more modest package of tax cuts, in the region of £50 million, and a more modest package of public spending in the order of £50 million. That was the basis of the package of public spending in the order of £50 million. That was the basis of the Coalition's budget in January of last year. It was the basis of the modest recovery which got under way from the spring of last year and the basis for the new Government when it came into office adding on and starting to implement the rest of its policy. There is no disagreement that there was indeed a recovery setting in in 1977 but quite clearly and categorically I am saying it owed absolutely nothing to the collective thoughts or the collective wisdom of the Coalition.

Mr. McDonald

I hope the Minister's policies will be as successful in Government.

Professor O'Donoghue

We will see. That is part of the record straight. I felt it necessary to digress to deal with that because of the peculiar urge on the part of some speakers on that side of the House to rewrite history.

The next point I should like to deal with is what is not in the White Paper. A number of speakers were drawing attention to areas where they felt the White Paper ought to have dealt with particular issues. I will not attempt to go through the list but I am conscious that of course one can look at it and ask why is there nothing dealing with certain matters. There were two areas of particular interest, or concern to speakers. Senator Hussey devoted her remarks to the absence of any reference to the role of women or policies towards women in our society. A number of speakers, including Senators Staunton and McDonald, drew attention to the apparent lack of reference to EEC regional policies and the way in which those policies ought to have been spelled out as applying to the regions within Ireland.

The White Paper never purported to be a comprehensive statement of policy in every area. We made that clear in one or two references. Of course, I recognise that there is scope for policy formulation in many areas, not only in the ones that I have mentioned, but in others as well. The mere fact that they are not included in this White Paper does not imply that they are of secondary importance. It simply is a recognition of the fact that if one wants to know anything one must know everything in the philosophical sense but if one is going to discuss anything one must assume a great deal. Essentially, what one has to do is select some starting point, to break in and say: "Here is where we will begin tackling the issues and as we make progress there will be many other areas of policy-making which are highly relevant and to which attention and effort will be directed." I want to assure the House that the fact that this paper is not a comprehensive statement of policy issues in every field does not imply that other topics are unimportant.

In the context of regional development Senator Staunton regretted the lack of any reference to the Western Development Board or some successors to it. He made the point that they had been exploring the possibility for a number of years of drawing together the various Departments and Government agencies which had dealings with the western counties in order to put forward some new form of institution. He wondered what had happened to the examination which the Coalition Government had initiated in that field. On the first heading, the Western Development Board, we made it quite clear from the outset that we did not regard that as a suitable solution to the question of development at regional level.

We will be coming forward with our own problems. We think it is wrong to try to put in a piecemeal institution or set of institutions for just one area. If the institutions at sub-national level are to have any coherence or any sense of adequate organisation, surely one has to determine the total set of institutions which are going to apply. We will have to determine how many regions there will be, what types of body we want for them, who is to be represented and so on.

In the actual study of sub-national levels of Government and the institutions appropriate for them, very little appears to have happened over the last four years. I can assure the House that we have revived that study and we have asked, as a matter of urgency, that the study be specifically directed to bringing forward proposals within a matter of months for the institutions that would be appropriate for regional development, that is, regions within the country itself. The reason why we did not refer to any regions within the country itself in this document, or in any documents to Brussels, quite apart from the fact that we have not had an opportunity of determining those structures was that for the purposes of EEC policies the whole of the Republic is treated as one region and it would be wrong of us to behave in a manner which implied to Brussels that we thought otherwise and that we were simply going through some sort of charade or pretence in saying that it is one single region and then saying that it is not, that there are a number of subdivisions which we regard as more appropriate. The basic argument we use in relation to Brussels is that however you draw the comparisons the Republic as a whole does have a much lower income level development than the European Community and therefore the whole region is legitimately to be classified as under-developed with respect to its larger and more affluent partners.

A number of speakers took up the question of the targets being too optimistic and questioned whether there was any prospect at all of their being achieved. Of course they are ambitious. The point we are trying to make is that the scale of the problem is so appalling that unless we can produce performance which is dramatic by comparison with the past, we are not going to overcome the difficulties. There is no point in pretending that we are going to get along with half-hearted repetitions of what we succeeded in doing in the past. The targets are ambitious. Of necessity they must be ambitious. People say that we never got 7 per cent growth in the past or that we never succeeded in achieving an increase in employment of 20,000 a year in the past and point to the evidence in history to demonstrate that because it was not done in the past it will not be done tomorrow. I want to knock that argument on the head because while indeed there is no harm done and one can benefit from studying history, the one thing it does not do is provide a guide as to how one ought to behave tomorrow in confronting new situations. After all, there were times when it would have been unreasonable to expect that the earth was round; it would have been much more sensible to assume that it was flat. Equally, it must have been very unreasonable just a few short years ago to assume that one could get a machine that would fly. I could give a list of things that were unreasonable by comparison with either historical experience or the conventional wisdom of the time.

I am not suggesting for a moment that we will succeed in attaining all of our ambitious targets. The only honest answer I can give you is that I do not know. Neither does anyone else. Anyone who alleges that he can predict the future with certainty had better be removed quickly because there are a number of grounds for being suspicious of him. What we can say is that we can look at the circumstances in which we are operating. We can look at the resources available. We can look at the possible ways in which they might be used and we can try to establish the range of probability. Senator Fitzgerald reminded us yesterday that if we were drawing analogies with military strategy, every well-dressed general would have at least three plans up his sleeve, one for the most favourable case, one for the least favourable case and one for the most probable or middle of the road case. That is what one tries to do. What we sought to do is to define the possible pace of development which can occur. We try to establish a path which is feasible. Some people will say we are erring too much on the optimistic or ambitious side. I have not seen any demonstration by anybody yet that it is not feasible or not practical. People point to the fact that changes are called for, whether in performance or in attitudes or anything else. Yes, of course this is necessary. But that does not mean that the targets cannot be achieved. There is only one ultimate way of going about this and that is to wait until afterwards and see what the numbers tells us. No one can sit around and wait for hindsight to tell one whether one is right or wrong. All investment decisions have to be taken beforehand and all that anybody can do in advance is weigh up the pros and cons, try to assign a degree of probability, a degree of risk to various outcomes and choose a preferred course of action. That is what we did. We did it clearly, unambiguously. We put it before the people in a democratic way so that they knew what they were voting for. Therefore we can only say that all subsequent discussion in that sense is irrelevant because we would be in a sense going back on the mandate we had received from the people if we did not seek to do what we said we would seek to do.

There are three main targets. I will take the most pessimistic one first, inflation. We said at the time that the target would be 7 per cent inflation in 1978 and 5 per cent in each of the two subsequent years. As of now it seems that this year's performance should come out somewhere in the region of 7 per cent. It looks as though it will be below 7 per cent for the 12 months from May last year to May this year. Yet it does seem as though prices will start to rise later in the year. We have been saying that for months now. We said it at the time of the negotiations of the National Wage Agreement. I am on public record in a number of cases as saying that if wage rates rise at, say, 8 per cent or more instead of the 5 per cent on which the projections were based, it must add something to the rate of inflation. Otherwise numbers cease to have any meaning. Equally one has to look at the influence of external factors but as of today there is no evidence that external trends will worsen the inflation rates this year. Taking the year as a whole, there have been significant improvements in import prices and even if the situation deteriorates a little in later months, overall, the performance is reasonable. We were first on record as saying that there would be some worsening in the later months of this year. What does that mean? It means that it is now highly improbable that one would go for a 5 per cent target next year. It is too soon to try to put in another firm projection although, if I had to put one in today I would say it would be more than 5 per cent. I certainly see no reason as of now for moving away from the 1980 target because that is much too far into the future. There are too many policy options open to us between now and then.

Mr. Cooney

What would the Minister reckon the rate will be at the end of this year?

Professor O'Donoghue

I said it would be about 7 per cent. There is no one in a position to give a precise forecast at this stage.

Mr. Cooney

I understand from May to May it is 7 per cent.

Professor O'Donoghue

May to May is likely to come out below 7 per cent.

Mr. Cooney

What does the Minister reckon it will be at say, next December, roughly?

Professor O'Donoghue

The only safe way to cover myself is to say somewhere between 7 and 8 per cent but there is no way, as of today, in which anyone can put their hand on their heart and say to decimal places what the number is going to be. I have to point out that anyone who reads the kind of forecasts or statements that were made will see that they were made in terms of reducing inflation to these orders of magnitude. They were always deliberately put in round numbers to avoid any impression of spurious accuracy. We could not talk in terms of moving from 5½ to 5¾, or the other way round, moving from 7 to 6½, because it is just not feasible to talk in those terms.

On the output front there is the 7 per cent growth rate. There have been a number of comments on this score in recent months. All of them came out with growth targets that are less than the 7 per cent growth target which we put forward for this year. All I can say is that nobody can tell you whether it is going to be 7 per cent or 6 per cent or 5½ per cent or indeed 7½ per cent. We are into the same business of the most likely outcome. We can agree that we are talking about growth rates of that magnitude. I do not regard it as a failure if at the end of the year we discover that the growth rate is only 6½ per cent instead of 7 per cent. The growth in output this year would have still been incredibly high in comparison with historical experience. Again, we would be talking about the trend over the year. We would be talking of figures in that region and not figures in the region of the 3 to 4 per cent that would have been more typical of the so-called good performances of the 1960s. It is more likely that the more pessimistic forecast in the 5½ per cent region and so on will be revised upwards rather than that ours will be revised down. There are many months left in the year yet. Let us wait and see.

As regards the outlook for 1979 and 1980, I see there have been one or two references by people quoting some very pessimistic estimate from EEC sources which spoke about next year's growth rate being only about 3 or 4 per cent. I have seen this but I have never seen the basis for it. I can quote unofficial estimates from other reputable international bodies such as the OECD which pencilled in figures of 6 per cent for next year. Again, it is simply an illustration that at this stage, the forecasters differ and hopefully the patient will not suffer any terminal illness as a consequence. We see no reason at this juncture for doubting that there will be growth rates of 7 per cent. When we get down to more marginal deviations from targets there will be implications for precise figures for income increases or budgetary balance and so on but it does not affect the underlying movements in the economy. As proof of that, I point out that if one takes the more pessimistic forecast available at the moment, the Central Bank one, and tries to unravel where the differences lie between their 5½ per cent and our 7 per cent one will find that in all the things that matter, for output and employment, the figures and forecasts are virtually identical. They are talking about the same sort of increases in industrial output as we are; the same sort of increase in building and construction output; the same sort of increase in agricultural output; the same sort of increase in exports. The differences arise under two headings. The most important is what they think is happening to stock changes this year as against our forecasts. That is a more technical matter and I will not detain the House in teasing out its intricacies. The main point in so far as the fundamentals are concerned about movement in the real economy is what is happening to output and so on. There is a high degree of similarity in the different approaches.

Of the remaining area, the most important in our view, is the question of employment. Here again we have the old chestnut dragged in about what was happening to the live register. Numbers counted as unemployed were to be the figures that reflected the reduction of 20,000 that we had set as our target for this year. At no stage did we ever say that the figure for the number counted as unemployed on the live register would be reduced by 20,000 this year or 25,000 next year or 30,000 the year after that. We went to great pains to avoid this sterile arithmetical argument. The reason we did so was that we had said, and we stick to the view, that the live register was not a good measure of the total number of people out of work. We have had that discussion a number of times. There is still scope for legitimate debate as to the precise numbers who are or are not out of work but most people would agree that, however one measures it, the true number unemployed is higher than the numbers counted in the live register. We said quite unambiguously that we would operate policies which were designed to result in an addition of so many thousands extra at work. Surely that is the important thing. We said that increases in the number of people at work meant a reduction in the number of people out of work. I would have thought the man in the street would not be confused if one told him there will be an increase of 20,000 in the numbers at work this year. An alternative way of saying that is that there will be a fall in the numbers out of work this year of 20,000. Because there are more people at work there are fewer people out of work. I always thought that was the simplest way to try to convey it to the non-economist, the non-statistician. I have never seen anyone come forward with a convincing reason why that exposition was wrong. When dealing with the statisticians and economists and so on then we will indeed——

Mr. Alexis FitzGerald

You sound awfully like an accused refusing to recognise the jurisdiction of the court.

Professor O'Donoghue

Certainly not. The court, if we are going to talk about it, would be the electorate. It will not be the——

Mr. Alexis FitzGerald

The live register?

An Cathaoirleach

The Minister must be allowed to continue.

Professor O'Donoghue

There was a reference earlier to women and what changes might affect them and so on. Let me give a simple reason why I would not dream of using the live register as an accurate indicator. One of the policy changes to which we are committed as a Government is to make single girls eligible for unemployment assistance this year. We do not know how many more people will be counted on the register from October onwards as a result of that policy change. The best sort of crude estimate we can produce is a figure of about 14,000 to 15,000. That means that between the end of September and week one of October, there is going to be a sudden jump of 14,000 in the numbers on the live register and if Senator FitzGerald or anyone else thinks I am going to accept that as evidence of a sudden drastic failure of our policies to put people to work then, with respect to him, he is talking through his academic or Senatorial hat.

I am sorry for having to deal with that point but it is one that has been continually used from the Opposition side of the House. They are continually trying to obscure the basic issue which is not talking academic acrobatics about how one measures particular series of numbers counted on different registers, but trying to get work for people. Before I leave the business of how to lie with statistics, since people were concerned about it, Senator Burke came into the House this morning, and proceeded to read a speech which he obviously had not written——

Mr. McDonald

That is unfair.

(Interruptions.)

Professor O'Donoghue

I am not interfering with the practices or the traditions of the House. I am making the reference to it because I want to absolve him from guilt. If I did not make the reference, I would hold him guilty for what he said. I am making the point that he read from a speech. I was going on to say that he obviously did not write it for himself. The example I want to take is that he said in justification of the Coalition's record that the increase in unemployment as a percentage has been lower in Ireland over the period 1974-1976 than in the other EEC countries. This is a fabulous example of how to manipulate statistics to present a confusing, misleading picture to the man in the street, because if one says the percentage increase in Ireland was lower than in all these other EEC countries, naturally the man in the street will assume that that means we did better. The truth in plain terms was the complete opposite because if one has a very successful economy like Germany which initially has a very low level of unemployment, 1 per cent, and during the recession from 1974 onwards the numbers out of work go up to three out of 100, two out of every 100 workers lose their jobs, as a percentage that means that unemployment in Germany has gone up from one to three, in a percentage increase of 200 per cent.

Mr. McDonald

You are now playing with figures.

Professor O'Donoghue

I am not playing with figures. I am trying to set them out as clearly as I can. Take the Irish case where one opens with a high proportion of people out of work, 6 per cent unemployed. During the recession that figure goes up to 10½ per cent which is away——

Mr. Alexis FitzGerald

That figure is got from what—the live register?

Professor O'Donoghue

I will use the worst figure then. The best estimate then of what happened to the numbers out of work is that it went up to 14 per cent which is a rise from six to eight. That means eight extra people out of every 100 are out of work. The increase from six to 14 would be a mere increase of 133 per cent so statistically one can say unemployment in Germany rose by 200 per cent and it rose by only 33 per cent in Ireland. Yet if one says how many people lost their jobs one is saying two people out of every 100 in Germany and eight people out of every 100 in Ireland, four times as bad. That is the sort of manipulation and juggling with live registers that went on with statistics in recent years. That is the reason why I was absolving Senator Burke from the guilt because I first heard that spurious argument put forward about two years ago and I would have thought the Opposition would have the decency not to try to revive it now. That is the reason why I am not spending my time talking about live registers and why I think it would be far more important for the House, if it wants to talk about these matters, to concentrate on the real issues which is what is happining to people at work or out of work.

I have said enough on the targets to indicate that as of today we recognise we are ambitious. We recognise the obstacles in the paths to their fulfilment. We see no reason for moving away from these targets in any substantial manner and I would emphasise that this is the sort of performance we require if we are going to make any worthwhile impact on our problems.

The next question I would like to comment on is whether we are placing too much emphasis on the private sector in order to achieve these results. I do not regard this as a valid argument at present. We made it clear on numerous occasions that it is not a question of having the luxury of choosing whether you will carry out a certain task by using the public sector or private enterprise to carry it out. We enjoy no such luxury. I would only wish that we did. The truth is that in Ireland we have been short of enterprise. The requirement in Ireland is to get more enterprise from every sector whether it is private or public and if we are talking about the form that it takes, even that classification is too simple. I do not know whether various forms of co-operative type arrangement should be classified as private or public in this context. I would simply make the point that what we have been seeking to do is to create the conditions in which the private sector for its part can make the maximum contribution and the public sector as directed by the Government of the day will in turn make its contribution. Inferences were put forward by some speakers that in one manner or another we were attempting to restrict or put a bridle on the performance of the public sector. This is simply not so. Immediately after our return to Government every State company or agency was invited to put forward proposals for development and for job creation whether they happened to fall within its own sphere of competence or not. Naturally we invited them to direct their attention first to their own areas of activity but if they say any opportunities, irrespective of what sector of the economy, they should put them forward.

We have also established an industrial development consortium which functions as a co-ordinating agency for State bodies and for Government agencies to come together and to work through any of these proposals. A number of proposals have been put forward and are being examined and I would hope to see them making the fullest possible contribution to our progress in the coming years.

The debate as to whether the job should be done by private or public enterprise is a sham debate because we want both sectors and we are short of enterprise. If we ever get to the happy stage where we are fully employed, where there is such a strain on our labour force and on our other resources, then we might have to chose between the one approach and the other but that day is not with us yet.

The last point I want to make before concluding is the relationship between the planning process and the political process. A number of speakers on the Opposition side of the House said that they regretted that the White Paper derived too much from our pre-election manifesto. They wished that we had attempted something different, presumably that we had been more neutral or adopted a totally fresh approach, or as one speaker put it simply, accepted the fact that that was designed to win an election and we should now write another document. I categorically reject that type of comment. I think it is to profoundly misunderstand the nature of any planning process which is to prove successful. We want to distinguish two elements in the planning process. One, the organisation of our institutional arrangements for it. Second, and more important, the nature of the policy-making and policy-analysis type of function which will go with it.

I will take the second point first because that is the one that is in contention. It would be utterly meaningless and a total waste both of politicians' time and of the taxpayers' money for the public servants involved if you were to go to the Government and say "We have no views whatsoever on any subject under the sun. Please go away and write us a nice essay on the nature of the development policy which we might or might not pursue." That would be a total Alice-in-Wonderland approach to what policy making ought to be in a democracy. It is certainly not an approach to which we prescribe. We quite clearly put forward to the people the sort of approach we wanted to adopt. Having got their support for it, of course we were going to come in and prepare White Papers and plans that were based on what we had said. So, far from deploring the fact that the White Paper owes its origins to political statements and documents, I would say that that should be the heart of any planning documents. If and when parties on that side of the House find themselves in Government, they should have policies of their own, they should have views of their own, and those policies and views should constitute the basis of their plans and their actions when they are in Government. If they are saying that they want to be so empty-headed and so devoid of any ideas of what ought to be done that they would allow an anonymous group of people to supply them with their policies, they would be writing the death warrant for democracy.

What the relationship should be then is that the Government of the day, whoever they may be, from whichever side of the House they may be drawn, should have a clear vision of their own philosophy, of their own principles. They should know what it is they want to do and why they want to do it. The task in relation to the planning process is for the civil servants and other public servants who serve the Government of the day, to carry out the relevant work, whether it is of preparation, of analysis, of teasing out the details of administrative or other arrangements that must accompany any programme of action. They should do that objectively and mutually and supply all that information and that work to the Government, so that the Government can take the decisions on the basis of the most adequate and up-to-date information at their disposal. It would be wrong for the Government ever to absolve themselves from the responsibility for deciding the course of action. That is why I say you have to distinguish between those two steps.

I am attempting, as best I can in discharge of the functions that have been assigned to me, to build up a Department of State and to build up relationships between that Department and other agencies of the State in a manner that will enable them to serve the Government of the day, whoever they may be, loyally and comprehensively. To do that you must divorce those public servants from the basic process of policy formulation and policy decision-making. If the day ever comes when there is an alternative Government in power, I hope they will find that that task has been discharged fully and satisfactorily. Meanwhile, when we are debating any planning document it is a document of the Government and not a document of independent public servants. Therefore, it is a political document. It ought to be a political document. The Government, whoever they are, ought to be willing to defend their policies in any forum. That is why I am willing to defend the policies of our Government today. I hope that on the many other occasions when the House will have the opportunity of debating our policies and actions, I will always find myself fully able to explain to the House and to justify to the House the reasons why the Government have acted in any particular manner. I should like to conclude by again thanking the House.

Mr. Cooney

Before the Minister concludes I should like to mention two points arising out of the White Paper which I do not think the Minister dealt with.

An Leas-Chathaoirleach

The Senator may ask a brief question.

Mr. Cooney

Perhaps the Minister would give us his views on the trend of public expenditure next year, which has not been touched on by the White Paper—how he sees that next year and if there will be any change in it next year in regard to specific areas. Secondly, would he comment on the worries of the Central Bank relating to possible balance of payments problems ahead?

Mr. McDonald

Will the Government be able to realise the main economic targets of reducing the unemployment figure by 20,000 this year?

Professor O'Donoghue

That is increasing the numbers at work by 20,000?

Mr. McDonald

Reducing the numbers out of work.

Professor O'Donoghue

I have already dealt with that. I have made it quite clear why I said the live register would not reflect the trend in the numbers either out of work or the numbers at work.

On the other two questions of Senator Cooney on the trend of public expenditure, while there are always changes from year to year on the amounts assigned to different areas of spending, of course there will be changes next year. I have no idea what those changes will be. It is far too soon to fix final magnitudes yet, but we have made it quite clear in this White Paper, and we will elaborate again in the forthcoming Green Paper, that our priorities are to seek to allocate expenditure in areas where it will provide the greatest return in job creation and in underpinning the faster economic growth which we need to solve our problems.

Mr. Cooney

I appreciate it is too early to indicate the orders of magnitude. Perhaps the Minister would indicate the areas in which he sees changes.

Professor O'Donoghue

By definition, if you are changing virtually every area, I am not conscious of any area where there will not be changes of some sort or other. I take the Senator's point in relation to where the biggest changes will come.

Mr. Cooney

Does the Minister have any difficulty on his views on this?

Professor O'Donoghue

As there is going to be a debate on the Green Paper within a relatively short time, perhaps we will be in a better position by then. On the second question raised in relation to fears about balance-of-payments deficits, again, in the White Paper we laid out quite clearly that we recognised that one consequence of our policies would be growing balance-of-payments deficits up to 1980 and that we were willing to accept the risks associated with those. In our view, there would be more than adequate external reserves on the one hand and inflows of private capital on the other. There are very substantial build-ups in the level of private investment and the rate at which new projects are being brought forward suggests that there will be even greater increases in overseas investment next year and in 1980. Those inflows of investment have to be accompanied by current deficits. It is the only way you can effectively transfer the capital inflow. After today I see no reason why there should be any unsustainable trend in the deficit. Again, it is early days yet. What has happened in the first four months is that the trend on our current balance of payments is more favourable than we had anticipated. If you were putting forward a revised estimate today, it would be for a lower balance of payments deficit rather than a higher one. It is too soon yet to know what is likely to happen there. I would easily envisage changes in that situation over the next couple of years.

Question put and agreed to.