I welcome the Minister of State to the House. My remarks on the Programme for Prosperity and Fairness have not, to date, been very complimentary and I do not intend to vary too far from that vein of thought. I received a copy of the programme by post today, weeks after the deal was done. Members of the Oppo sition are as irrelevant as ever; they are not deemed part of the social partnership. I note the Taoiseach's complimentary remarks in the final paragraph of the foreword to the programme which reads:
I would like to take this opportunity to thank all the many people who took part in the negotiations and who worked so hard to bring about this wide-ranging and very ambitious agreement. We in Government look forward to working closely with the social partners in making it a reality.
Those not consulted were also Members of the Oireachtas. I would like to see that changed so that all social partners and representations from the Opposition would be included in this document. We should ensure we have a wide-ranging debate in advance of future documents being signed.
The debate last night, like many recently, gave me no great sense of belief that this will be a successful agreement. I note that the ASTI has withdrawn from congress on the matter. A meeting of all teachers unions, held last weekend, condemned the agreement and a large number of grassroot members were very unsupportive of it.
I noticed during our debate on overseas development aid last night that this programme gave no succour to anybody. While we are maintaining funding and increasing the amount contributed, the percentage increase is not being made pro rata. This is a great shame. We are no closer to reaching the figure of 0.7%, decreed by the United Nations as the appropriate amount of GNP which each member country should spend on overseas development aid than we were when the previous Government left office. That amount was increased four-fold between 1992 and 1997 while it has been increased by only one third in the three years since the current Government took office. A disparity exists in this area.
While I commend the process of partnership as the ideal way forward and would like to see it extended to include those currently omitted, I have many problems with the content of the agreement. It is quite lengthy in its documentation and words but is more modest in what it achieves. The proposed 15% wage increase is very modest in the context of the current inflation rate. I gave warning in December about the inflation rate when the Minister proudly predicted in his statement about his prudent fiscal rectitude and the inflation rate increasing by 1.6%. The preliminary figure for 1999 was set at 3.9% and today it is 4%. That is a 350% increase on what it was six months ago. The increase has quite clearly been dramatic in the latter half of this year. Many commentators have said it is not good enough. The Government say this is due to unusual factors such as the increase in the price of cigarettes, oil and petrol. The price of oil and petrol in Ireland is nothing like that in the United Kingdom where it is far more expensive. Anyone living around the Border who travels from North ern Ireland to the South to purchase petrol and diesel will know this.
I often wonder why tobacco, a dangerous drug, is part of the consumer price index in the context of the basket of goods which make up our inflation rate. The increase in the price of cigarettes was marginal and could not have resulted in fuelling inflation. Much relates to how money is spent. The budget is skewed in favour of the well off and luxury consumer goods are paid for with a currency that is strong against our punt.
I am primarily concerned with the main thrust of the document. While the wage increases are modest, the aspirations are very strong. I am concerned that, as SIPTU stated yesterday, the programme will have to be reviewed if inflation does not taper off. There is little margin for progress with an inflation rate of 4% and a 5% wage increase. A great deal of this document was compiled on the basis that the Minister for Finance stated there would be a 1.6% increase in inflation over 1999 and that this would hold good for the coming year. An inflation rate three times that mentioned is not very good for those who bought into this deal. I am concerned, given its policies, that the Government is in danger of allowing the economy to overheat and endangering the whole programme of social partnership.
I said I was worried about the aspirational nature of the agreement and the number of things which are not specific. As in the case of ODA, instead of specifying targets and amounts, it seeks an increase in the substantial gains that have already taken place. There have been no substantial gains in recent years.
There are some specifics in the area of housing but they are inadequate. According to the programme more money is to be spent on social housing. We note that 22,000 houses will be built by local authorities over a four year period. That is in the region of 5,500 per annum, only 700 more than is currently being provided. That does not meet the need. While the need is escalating all we have is a modulated increase from the Government.