I thank Senators for their warm welcome to the House. I have enjoyed the incisive comments made about the national development plan. Notwithstanding a very obvious western bias, I will try to bring some balance to the debate, although the points that have been made are both valuable and correct. As I said at the outset, the national development plan will be of great significance in shaping Ireland, particularly in the early part of the next millennium. Therefore, it is important that we seize opportunities to have these important debates in the run up to the publication of the plan in the near future.
I support the motion before the House and I am happy to have this opportunity to speak about the National Development Plan, 2000-2006. I am also happy to hear the views of Senators as the process of developing the plan comes to a conclusion. The draft final plan will be submitted to Government in the next few weeks for approval of content, submission to the European Commission and publication. The plan will reflect the consensus view of what the country's economic and social priorities ought to be for the first seven years of the new millennium and the appropriate development policies and public investment proposals to address those development needs.
A comprehensive consultation process has been undertaken by the Government in drawing up the plan. In a process which began in February 1998, written submissions and views on the plan have been requested and received from regional interests, the social partners, sectoral interests, public bodies and Government Departments. Other valuable inputs include the Economic and Social Research Institute's report on the ex-ante evaluation of investment priorities for the period 2000-2006, commissioned by the Department of Finance and the two regional strategy reports for the two new regions – the Border, midland and western region and the southern and eastern region – which were commissioned by the existing regional authorities at the request of the Minister for Finance, in light of the Government's decision to regionalise the country. A submission on the plan was also received from the Western Development Commission.
Meetings to discuss the submissions received and the views of the various interests on the plan, have been held at official and ministerial level during the course of drafting the plan. A seminar on the plan to which all interested parties and bodies were invited was also held in May this year. At the beginning of this month, meetings chaired by the Taoiseach were held with the four social partner pillars to discuss the proposed draft content of the plan, reflecting the Government's determination that it should, as far as possible, take account of the key players in Ireland's social partnership process. The Government is especially anxious to ensure that the plan forms the emerging consensus on the way forward in relation to economic and social policy.
A meeting to discuss the draft content of the plan was also held with representatives of the Irish assembly of regional authorities and a meeting with the new regional assemblies is also planned for later this week. A separate but key further element of the consultation process has been the series of informal meetings held at official level involving all the Departments and the European Commission. In addition to the extensive consultation with regional and social partners, political debate on the plan at national level has also been facilitated. A valuable opportunity in this regard occurred when the Minister for Finance accepted an invitation to address the Joint Oireachtas Committee on Finance and the Public Service on the plan on 1 June last. The Minister noted in particular the views of Deputies and Senators on the committee concerning the priorities and scope of the plan, especially that the plan should be broad in scope, address the country's economic and social infrastructural needs, be a "people plan" and a plan for employment.
The background against which the plan is being prepared is one of remarkable economic success – a fact that has been widely noted in this debate. The economy has grown in real terms by an average of 8.5 per cent per annum between 1994 and 1998. This rate of economic growth has easily been the most dramatic in the EU as a whole. A very substantial increase in the numbers in employment has occurred. As a result, Ireland's unemployment rate has fallen dramatically from 15 per cent in 1993 to 5.8 per cent in early 1999, and is now significantly below the EU average. These unprecedented levels of economic and employment growth have been delivered in a stable non-inflationary environment. That stability is a crucial ingredient in our success. In tandem with this economic performance, the public finances have also been transformed. The budget has been in surplus for the last two years and that performance will be repeated again this year. In the last several years, the national debt has been nearly halved as a proportion of GDP.
One of the consequences of such economic success is that Ireland's case for substantial EU assistance is very much reduced compared to what it was in the past. For example, in terms of GDP per capita– the key indicator – it is estimated that by the end of 1999, Ireland will be over 105 per cent of the EU average, by comparison with the Objective One qualifying criteria of 75 per cent per capita. Nevertheless, the outcome of the Berlin summit, in terms of Ireland's share of Structural and Cohesion Funds in the next round, was more than satisfactory. Ireland's share, including headage payments to farmers, is £3.4 billion. More essentially, however, the Government obtained Objective One status for half the counties in the country and the best possible transition arrangements for the rest of the country. This commendable outcome also highlights the new reality where Ireland must increasingly look to its own resources for the extensive investment in infrastructure and human resources that the country still needs.
As EU assistance declines over the next seven years, the burden of funding the next plan will fall to a much greater extent on the Exchequer. Due to the prudent and sound economic management of recent years we are in a very good position to meet this challenge. We must continue with these sound policies. Therefore, the plan will be implemented in a manner consistent with the maintenance of long-term budgetary sustainability, including the achievement of budget surpluses while economic growth remains strong, and with the ongoing level of demand in the economy. The overall budgetary framework for the plan must also accommodate steps to address the major long-term costs associated with the progressive aging of the population.
The Government approved last July the policy priorities and general financial framework for the national development plan. In approving the policy priorities and general financial framework, the Government accepted the prevailing view that the national development plan would be based on the assessment of the development needs of the country and would put in place the investment programmes required to meet those needs. The plan will, therefore, tackle national and regional priorities through a major multi-annual investment programme. The following key objectives will underpin the strategy for the plan: achieving maximum sustainable national economic growth, balanced regional development and the promotion of social inclusion.
While the final decision on the overall financial parameters for the plan will be a matter for Government in the next few weeks, the plan will involve substantial public investment over the period 2000-6 of an order in excess, on a comparable basis, of that proposed in the ESRI and two regional authority studies. Taking on board the concerns of the ESRI evaluation and the consensus on this issue, it is likely to be broader in scope than recent national development plans have been traditionally and to include investment in social infrastructure such as housing and health capital. The sectoral investments in the plan will be broken down by region in line with the designation of Ireland into two regions, the southern and eastern region and the Border, midlands and west region, for Structural Fund purposes.
The plan will be implemented through six operational programmes, three inter-regional and two regional programmes which will focus on the key policy priorities of the plan. The operational programmes are the three inter-regional programmes of economic and social infrastructure, employment and human resources development, the productive sector, a multi-sectoral operational programme for each of the regions, the Border, midlands and western region and the southern and eastern region and a separate operational programme for the PEACE programme which operates in the Border counties and Northern Ireland. This will include cross-Border economic and social co-operation measures. This deals with the point raised by Senator Finneran and others.
Much progress has been made in developing our physical infrastructure under the current plan. Nonetheless, it is clear that the recent rate of economic growth is placing enormous pressure on our infrastructure, particularly in Dublin and other urban centres. This can be seen most starkly in the areas of transport and environmental infrastructure, such as public water supply/treatment and waste management facilities, to support industry and services and in social infrastructure, such as affordable housing. As well as relieving congestion in Dublin and the larger urban centres, the provision of good quality infrastructure in the Border, midlands and western region will also have to be a priority for the plan. Targeted investment in energy and communications, particularly in less developed and more remote regions, will also be necessary to promote balanced regional development. Substantial investment in economic and social infrastructure will have to be a priority if the economy is to achieve its full potential over the medium term and if we are to secure development which is sustainable.
The investment in human resources in training and education in the current plan has paid major dividends in terms of the ability of the labour force to avail of the employment opportunities generated. Reductions in total unemployment and in long-term unemployment have been significant in recent years. Notwithstanding the advances made, the next plan must also have a strong focus on the continuing development of our human resources with a stronger focus on the long-term unemployed and the socially excluded. In the context of a tightening labour market, the plan will also address emerging skills shortages.
Key elements of the employment and human resources strategy will be lifelong learning measures in education and training and measures designed to facilitate access to the labour market for women, people with disabilities and disadvantaged groups. The plan will also include a number of measures to counter social exclusion at national and regional levels. Opening up education, training and employment opportunities to all sectors of society is the best way to counter poverty and social exclusion. It is recognised, however, that this is not sufficient to alleviate urban and rural poverty blackspots and the plan will, therefore, contain targeted interventions to deal with these specific problems.
In the context of the improved economic climate the private sector will be expected to contribute more to the productive sector's development needs. Public investment in the productive sector in the plan will, therefore, be more targeted with greater emphasis on assistance for foreign direct investment and indigenous industry on promoting balanced regional development and enhancing competitiveness. The single biggest investment in this area is likely to be in research and technological development and innovation. There will also be substantial investment targeted at SMES. There will continue to be investment within the sector on promoting agricultural development in areas such as the control of farm pollution, young entrants to farming, animal welfare and hygiene, etc., and in sectors which have the potential to make a significant contribution to balance regional development and rural development such as fisheries, forestry and tourism.
The private sector will have an important contribution to make, especially in the areas of the productive sector and infrastructural investment. Public private partnerships – PPPs – will be an especially important element in the next plan in addressing infrastructural investment needs generally. In looking at the scope for PPP projects, the key considerations will be value for money for the Exchequer over the lifetime of the projects and an assessment of how the PPP process can deliver infrastructure projects in a comparatively quick and cost effective way.
The commitment to more balanced regional development is a fundamental objective of the plan and I welcome Senators' comments in that regard. As a former Senator and as a Deputy, I fully agree with that approach. Regional concentration in the plan is of the utmost importance. The achievement of balanced regional development will be pursued in the plan through specific regional expenditure allocations in the inter-regional and regional operational programmes and the integrated and targeted application of sectoral policies, making use in particular of the discretion to vary State aid rates in favour of lagging behind regions under State aids which regionalisation permits. This approach must, however, also recognise that there will be high quality large employment enterprises which will always wish to locate in, or close to, the major urban centres. It will be vitally important that Ireland continues to attract such enterprises, not least for the spin-off opportunities that they present to home grown businesses. It is envisaged that the plan will also address the need for the development of a separate spatial development strategy to set a long-term national framework for greater co-ordination in relation to physical and economic planning.
The plan will contain for the first time two specific regional operational programmes which will be managed by the newly established regional assemblies. The assemblies will provide the secretariat and will chair the monitoring committees for these programmes and will carry out managing functions currently exercised exclusively by Departments. The regional OPs will in structure, content and the proportion of resources to be allocated reflect substantially the views put forward in the Fitzpatrick regional strategy reports. There will be measures under the sub-programmes of regional infrastructure, social inclusion and productive investment to complement the investment in the inter-regional programmes.
I believe the plan will play a vital role in the ongoing development and transformation of our society over the next seven years. I am glad to be present for the debate and I am pleased to endorse the motion before the House.