Seanad Éireann díospóireacht -
Thursday, 17 Feb 2000

Vol. 162 No. 8

Programme for Prosperity and Fairness: Statements (Resumed).

Mr. Costello

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 I note that the ASTI has withdrawn from congress on the matter.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.

Mr. Cassidy

It is 5%.

Mr. Costello

Some 5%, considering the crisis.

Mr. Cassidy

Never before has there been such an increase. When the party of which the Deputy is a member was in Government the number of new houses was reduced.

Mr. Costello

Never before was there so much money and it is being spent so badly.

Mr. Cassidy

It is very hard to take this. The Senator is the most negative speaker in the House in my 18 years here.

An Leas-Chathaoirleach

Senator Cassidy will have an opportunity to contribute.

Mr. Costello

I am sure he will redress the balance when he gets started. I have to point out the lack of specifics in the document. Where there are specifics they are inadequate in terms of need. It is my job to point them out and if the Senator does not like it he will have an opportunity to say so.

How long have we been waiting for the housing forum? I have been calling for it since the Government came to office over two and a half years ago.

Mr. Cassidy

Give us the good news.

Mr. Costello

The Minister of State, Deputy Molloy, came before this House time and again when the Leader kindly arranged debates on numerous occasions and said there was no need for a housing forum, that the Minister had got it in hand. Two and a half years down the road with a major housing crisis he has agreed to set up a housing forum. Why did he not agree to set it up when it was demanded so that the matter could have been dealt with two and a half years ago? I look forward to seeing how the 20% social housing, provided for in the Bill, pans out. That is one of the most progressive measures the Minister, Deputy Dempsey, has provided but there is a danger, given the opposition from the building and construction industry, that it may be watered down considerably. We do not know yet when that will kick into operation since the Planning and Development Bill is moving slowly.

In respect of child care and family friendly policies there is a commitment to provide capital funding. That will result in an increased number of child care places. There is also a commitment to the training of child care workers and community groups, all of which are desirable but there is nothing, contrary to the promise in the Fianna Fáil manifesto, in relation to tax breaks for working couples. We know what happened to the Minister's individualisation proposals.

No national system of pre-school education is suggested, yet the new Minister for Education in the North, where there are limited resources, had no bother in achieving that as his major initiative in a two-month period in the power-sharing body which, sadly, has been suspended. Can something more specific be provided in that area? Child care was one of the areas identified by everybody as one that would be addressed in the budget but it was not, nor was it addressed in the Programme for Prosperity and Fairness, other than as an aspirational target to be dealt with over the three years. We do not know when, how or if it will be dealt with. There is absolutely no indication of specific worthwhile proposals to deal with it.

What can one say about health care? This has been a disaster area for the Government. Its handling of the health crisis has been disastrous, the same as the housing crisis. There are no specific proposals on health care improvements. One has to acknowledge that in the past two and a half years the Minister has provided a 45% increase in funding for health care but it has literally gone into a black hole. The waiting lists have grown, casualty is impossible and the level and quality of service has deteriorated. There is no proposal in the document for a change in structures. We need a system that will provide a proper health care service for all, irrespective of means. That must replace the current two-tier system where 42% of the population is covered by BUPA or VHI while the other 58% is not covered. The gap in the delivery of services to the two groups is a scandal. There is no proposal to restructure the health service with a view to proper delivery. While it is admirable that the Government should have spent 45% extra over a two year period, it is not good enough that there are no restructuring proposals on health.

The carers who met all parties yesterday are seeking a full system of non-means tested funding. Perhaps there will be some progress in that area. They are neglected in this document.

While there was a certain level of rebalancing – as it was euphemistically put by the trade union movement – in relation to matters badly addressed by the Minister for Finance in the budget and while the Minister for Social, Community and Family Affairs will have to address that area, the document is short on specifics in the key areas that provide for a caring and civilised society, health and children. Therefore, while I commend the process of social partnership I find it difficult to commend this document to the House.

Mr. Cassidy

I welcome the opportunity to contribute and to welcome the Programme for Prosperity and Fairness. In 1986 and 1987 it was not easy being a member of the Oireachtas. I recall Holy Thursday in 1987 as a member of the Midland Health Board when we had to approve cutbacks at a board meeting. That is something I hope I will never have to witness again. At 4.30 p.m. on that Holy Thursday evening, 32 people in my local hospital were given protective notice. There were over 20 cars outside my home, people waiting for me to return and tell them whether those people would keep their jobs. The then Minister for Health, Deputy O'Hanlon, had taken over from the coalition Administration. Fortunately for those people, they kept their jobs because they were working in the emergency section.

I opened my address with those remarks to put in context how programmes of social partnership – which was then known as the national understanding – have been the main plank of our achievement as a nation from 1987 to date. It has been the big success story of all political parties in Government. I want to acknowledge the intellect of the man who created it, the then Taoiseach, Charles J. Haughey. I also want to put on record the name of Michael Mullen, the leader of the trade union movement at that time. Those two men were mainly responsible for putting in place the framework for today's Celtic tiger.

At that time it was not unusual for various sectors of industry to march from Parnell Square, down O'Connell Street to the gates of Leinster House every Wednesday. I do not have to name the big national organisations involved. Thousands of people protested on the streets and hundreds of thousands of working days were lost because of strikes and uncertainty, doom and gloom, lay-offs and emigration.

Westmeath was in division one of the national hurling league in 1987. It was the only team that year to beat Galway, which won the All-Ireland. It also beat Tipperary, the cream of hurling. The following year I went to see Westmeath play Galway in the North American hurling final in the Polo Grounds in New York. No fewer that 11 members of that senior hurling team had emigrated and were working in America. That shows what can happen when there is no Programme for Prosperity and Fairness.

The employers, trade unions, farmers and everyone involved in generating employment have a master plan. This master plan is giving a 15% increase in salaries over 33 months and a widening of the tax bands to give a further 10%. As an employer is it difficult, but also heartening, that every worker will have a 25% increase in their take home pay in 33 months' time.

Mr. J. Doyle

Less the rate of inflation.

Mr. Cassidy

Everyone can plan their future with confidence. The labour exchange in Castlepollard in those days had in excess of 600 people signing on every week and seeking work. Today, thank God, about 200 people are signing on and looking for work. That is the barometer of the success that has happened.

In 1987 about a million people were working in Ireland. Today, 1.5 million people are working here. In the past two years, in excess of 45,000 people each year have returned to Ireland, bringing back their expertise and investing in the economy. In the words of the poet, "Where is the one who does not love the land where they were born?". No one emigrated from Ireland, particularly those who left to get work, without hoping in their heart they would return some day to rear their families and live the rest of their lives here. They did not have an opportunity to do so at that time or in the 1940s.

Senator Costello spoke about housing. There were never more houses built in this country than were built last year. However, the big difference is – thank God it has happened – that they are being built by the private sector. Every boy and girl is now able to afford a loan to build or buy a bungalow or semi-detached house. That is the way it has been planned.

Every Member of this House is fortunate that local authority members have placed their confidence in us and elected us to this House. I welcome the former Deputy, Colm Hilliard, who is in the Visitors Gallery. His late father was a Minister. They have given a lifetime of service, like the Leas-Chathaoirleach's family, to the people of Ireland since the foundation of the State. These people had the foresight to make us Members of this House.

We must be factual and state what we see happening in our country. We could not have imagined in our wildest dreams that the economy would be as it is today. That has happened because of the national agreement drawn up in 1987-8 by Charles Haughey and Michael Mullen.

Mr. J. Doyle

And the support of the Opposition parties.

Mr. Cassidy

And the total support of the Opposition parties. In regard to this programme, we know it will take every ounce of everyone's ability to continue the growth of our economy. However, factors outside our control – I know Senator Ross is going to speak after me – such as the price of oil, could deal an evil blow with regard to future inflation.

Having said that, the challenge facing us is no greater than the one we faced in 1987. We were told in 1986 that if that year's budget did not work there would be power sharing and that the EU Commission would do this and that. We have come a long way since then. Every young person, in particular, can feel proud of their contribution since those hard, dark days. Those of us in employment did not know whether income tax would increase to 65% or 70% in the next budget or whether bank interest rates would be 20%, 21% or 22%. In 1989, when I was employing over 100 people, I paid the bank 22% interest on money I borrowed to keep the workforce going. That was the climate then.

I remember visiting friends in Toronto for St. Patrick's Day when I was chairman of Westmeath County Council. I had gone to school with them and we hurled together for the county and Castlepollard. They had three carports in their house and a lake and beautiful surroundings. I asked them how they could afford such prosperity and they replied they were paying 6% interest while we were paying 18% and 20%. We were basically working for the banks – that was the case for every employer, farmer and self-employed person since the foundation of the State until the past two years.

This is the first time that working people, those people who are creating and providing employment, or the workers on the factory floor, have an opportunity to make money on the banks' money. This is an example of why we should be members of the European Community. Joining the single European currency has brought down interest rates so that people can invest the money in their businesses, in their homes and in improvements to their family structure in general, instead of using it to keep the big profits of the banking institutions up to the levels of previous years.

The banks are doing well now but one can borrow money at reasonable rates, 5% or 6%, and one knows that values are rising by 10%. Senator Ross, who is a financial wizard and an expert on these matters, will know that one could not make even 3.5% or 4% on the stock exchange for many years. We all, to our eternal cost, know that. However, we are fortunate to have a climate that encourages people to start up and invest in business. Up to the past three or four years, they were working day and night for the banks.

I welcome the positive aspects of this national programme. I welcome the massive investment in health in particular and pay tribute to the Minister, formerly at the Department of Health and Children, Deputy Cowen, for securing up to a 40% increase in the allocation for health services in the various budgets since the Government took office. The health services need a never-ending supply of money and I hope, in the interests of patients, nursing staff, and everyone in the health services, that the money allocated in the national plan for the coming 33 months will meet their requirements in a way that will ease the burden on them.

A debate on the problems facing the nursing industry was proposed on today's Order of Business. Young nurses are not being given the opportunity to train – they have to go to London, Edinburgh, Paris or New York. They cannot be trained in their home country, yet there is a shortage of nurses. It defies logic that 5,000 young students wished to train as nurses and only 1,100 places were available. Why can there not be 2,500 places? There should be an in-depth examination of this matter by the new Minister for Health and Children, Deputy Martin. He is a popular young man with the younger generation and they are looking to him to address this situation. He has been known in the past as a man that will act quickly and I look forward to him addressing this problem.

I welcome the allocation made over the lifetime of the programme for roads and for all the other categories included. It is welcome that there is a programme for the next 33 months and if we make as much progress in the next 33 months as we have in the past programmes, we will not be too disappointed. It was not an ideal conclusion for many of those who took part in the negotiation of the programme, but common sense has prevailed. I hope the progress made to date will continue and the country will prosper from the proposals in this programme.

Mr. Ross

I am extremely disappointed with the tenor of this debate but we ought to be grateful we are having a debate at all. There is a myth being promoted by all parties, which has just been promoted by Senator Cassidy, that our prosperity is apparently due to the fact that there have been four national pay agreements. How does he know that? He may or may not be right. It is a very simplistic explanation put about by many economists and there are many economists who would back up the comments made by Senator Cassidy However, it is mostly politicians who find these particular agreements extremely convenient as a method of buying industrial peace and buying off vested interests.

To say that our national prosperity is due to the fact that we have had a pay deal for the past few years is patent nonsense because it cannot be proved and is extremely unlikely. One of the most extraordinary things about our national prosperity is that Senator Cassidy is the only person I have heard who can explain it recently. Most people do not know why it has happened – they cannot explain it. When it is examined four or five different reasons are given. It may be convenient to say here that partnership is the reason for it and that is why this programme was produced but there are other reasons. Multinationals must have something to do with it and they do not give two hoots about this national pay deal. The EU funds would have helped as would our wonderful education system. I would have thought there are a host of reasons, but I do not know. However, to give the credit to these extraordinary deals is to whistle in the wind. It is quite possible that we would be far more prosperous had there been no national pay deals but free collective bargaining.

I oppose national pay deals, not just in specific terms, but on principle because they lock people into situations built on premises which we cannot possibly guarantee. That happened in the last one. It was negotiated on the basis of a growth rate of about 4.5%. The growth rate was running at 10%, yet the deal, to some extent, was kept on the basis that there would be 4.5% growth. The current one is negotiated on the basis that there will be a growth rate of about 6%. This is a very dangerous hostage to fortune even with 33 months to go because, and Senator Cassidy mentioned them, yesterday diabolical inflation figures were released.

It is no good dressing them up and saying that there is no need to worry, that the price of oil cannot be helped. The price of oil affects every other nation in Europe. It is not sold at a different price to that in France, Germany or anywhere else and it hits them in the same way. Why is our inflation figure now over double theirs? One cannot say it is the price of oil, if so their figures would be the same. It is not much of it at all. It has nothing to do with the difference between the two.

Mr. Cassidy

The Senator knows that cigarettes are part of it too.

Mr. Ross

The reasons are very, very different but EMU is probably the principal reason – Senator Cassidy paid great tribute to it for keeping the interest rates down, although that is debatable. One of the reasons is that we are importing so much from the United Kingdom, who did not enter EMU although we did.

We had the same consensus about European Union in this House as we have about the social partnership. Economic and monetary union has not proved of great benefit to this country and is the cause of much of the inflation. We cannot do much about it. Economic and monetary union was much like this debate – we did not have a debate on it at all. It was decided elsewhere.

My principal objection to this particular document, glossy though it may be, is that it has been negotiated by people with no democratic mandate whatsoever. It is negotiated by powerbrokers, IBEC, the trade unions, the farmers, who did not have much input, and a few others. The Oireachtas is a rubber stamp in this process. Not only are the Dáil and Seanad rubber stamps, the Cabinet is also a rubber stamp. There was very little consultation with the Cabinet on this matter. In this country, above all countries in Europe, there is a democratic deficit which is dangerous, and we accept it. We do not even vote on this question. We merely make statements on it. This is because most party politicians are frightened of standing up to interest groups and saying this agreement is a great idea even though they have not read it and do not understand it.

Mr. Cassidy

The Seanad may not vote on financial issues.

Mr. Ross

Of course we can vote on a financial motion. Senator Cassidy should not be ridiculous. He knows the Standing Orders of the House as well as I do.

Who signed this deal? It was signed by those same people. It was also signed by someone on behalf of the Government, possibly the Taoiseach. The Taoiseach, who has many conciliatory characteristics, is the man who, whenever he is asked a question on RTE, does not say he must ask the Cabinet about it, he says he must go and ask the social partners. Why should he ask them? Nobody gave them a mandate to govern Ireland. Nevertheless, this document is longer and more comprehensive than the programme for Government. Why is that?

The document deals with issues which have nothing to do with the pay agreement. They have headings such as, Commitment to the Wider World. What does this have to do with trade unions negotiating pay? The social partners are telling the Government what to do about foreign policy. John Dunne and Peter Cassells, who are the big chiefs in this matter, are telling us what our commitment to the wider world is. The document deals with our emigrants abroad. What does this have to do with farmers who will sign this agreement or with Father Seán Healy and all those other people? These are matters for Government and it is doubtful if our emigrants are even a matter for the Government.

The document goes on to deal with Ireland's relationship with our EU partners. Why on earth should the social partners tell the Cabinet what to think about our relationship with our EU partners? Our policy on the reform of the EU treaties is being dictated to us by Liberty Hall. This is an amazing document. It tells us how much overseas development aid we should pay. It tells us who is in charge, and it certainly is not Senator Cassidy or me. He and I are political eunuchs. We sit back and rubber stamp what is in this document and Senator Cassidy is happy to do that.

The sight of Senator Cassidy's party colleagues, after the budget, saying they did not like individualisation made one realise that this was their first awareness of their power. There had been no input by Government backbenchers or by any other Members of the Oireachtas in the formulation of the budget. The input had come from the trade unions and the same old friends who are governing Ireland through this document. The rebellion of the backbenchers was the first encouraging sign. They were insulted because they had not been consulted and were aware that a terrible mistake had been made.

Successive Governments have got out of touch by talking to the oligarchs who come into Government Buildings from time to time and tell the Government how to behave and how to govern the country. I have no principled objection to a pay deal but I have a principled objection to its being dictated by people outside this House. Senator Cassidy is not the only person who is guilty. Other Governments have done the same thing because this is the price they are prepared to pay for industrial peace. It is time Governments and politicians on all sides of the House stood up to the public service and told those people that they have got enough money and very good jobs.

The role of the Government in the negotiations was shameful. One would not have thought the Government was taking part in these talks at all. Day after day we saw pictures on television of people going in and out of Government Buildings and eventually, when they had agreed a deal, a Minister came in and signed it. This applies to the Taoiseach, the Tánaiste and even the Minster for Finance who went along with it.

Mr. Cassidy

The Government was fully represented at the talks.

Mr. Ross

One would not have thought so.

Mr. Cassidy

That is the fault of the media.

Mr. Ross

Let me repeat some quotes, and Senator Cassidy is welcome to interrupt.

Mr. Cassidy

May I raise a point of information?

Mr. Ross

There are no points of information in this House, Sir.

Mr. Cassidy

The Cathaoirleach knows everything.

Mr. Ross

That is right. There was a great deal of shadow boxing in making this agreement. We were told the midnight oil would be burned and it would be very difficult to reach an agreement. Brinkmanship tactics were used. We were told an agreement would be impossible and we would be forced to return to a free-for-all. It was said that one side was demanding 20% while the other was offering 10% and this was an unbridgeable gap. What everyone foresaw happened. The lads clapped hands, had a drink, split the difference to 15%, fooled the people and off they went. This had been inevitable all along. It suits the leaders of IBEC and ICTU to sell the deal to their troops, enjoy a quiet life and dictate to the Government from time to time.

This would be very well if a real agreement had been reached. The figure of 15.7% was headlined, the equivalent of 5% per annum compound interest. Of course this is not the true figure but it can be sold to trade union members as a good deal while IBEC can claim to have defeated the trade unions. The real figure is much higher. The headline figure is meaningless. The Government will give generous tax breaks which will make the 15.7% figure meaningless. Various allowances will be given, local bargaining deals will be made and the figure will rise to at least 25%.

Like every Member, I got a notice in the post the other day saying I would receive a 2% increase as well as 2% back money for last year. I was curious about this and I telephoned the official who had sent me the notice. He told me it was a productivity payment. I told him I have produced less this year than last year.

Mr. Cassidy

That is only true of Senator Ross.

Mr. Ross

That is right. I told him I had produced much less this year and asked him what I could do about it. He told me I could do nothing about it. It had been negotiated on my behalf. This is what happens in the public service. We are given money whether we like it or not because we have strong unions. I do not deserve a 2% increase.

Mr. Cassidy

Did Senator Ross send it back?

Mr. Ross

Of course I did not send it back. I am not a lunatic. It was negotiated on my behalf but it should not have been. This is what is happening in the economy. The public service is negotiating deals which are not related to performance. This has been totally fudged in the Programme for Prosperity and Fairness.

There are those who say this agreement is inflationary, but it does not appear to be so. The programme was negotiated on the basis of an inflation rate of 3% or less. The AT&GWU, for which I have a great deal of sympathy, was very quick to point out when the inflation figures were announced yesterday that a pay rise of 5% is worthless if inflation is running at 4.5%. The deal is built on the basis of an inflation rate of 2.5% or less. Trade unions will very quickly apply for an increase above the rate in the agreement. The agreement will then be in tatters.

The agreement is already in tatters because on the same day the inflation figures were produced the bus workers were looking for an increase of 20%. I would have thought their union would tell them this was an impossible demand. The 20% they are looking for does not come within the last deal or this one, but they are still looking for it and they seem to think they can get it. Why do they think they can get it? They think they can get it because the last deal was a bit of a joke. It is a guideline for some, a straitjacket for others and a blessing for the rest because it was broken by the gardaí, nurses and firemen. I am delighted they did. Everyone broke it but the pretence went on that there was a social contract which was binding on the public service. The public service just ignored it and that is what will happen with this agreement.

This programme leads to serious expectations which we cannot fulfil. It is fashionable to say that we are enjoying an unprecedented period of prosperity, which is true, but there is an irresponsibility in the Government which is dangerous. I noticed yesterday in the Dáil the Taoiseach was asked about inflation after the pay deal and he said the Minister for Finance will do what he can to combat inflation. He chose his words carefully as he always does. The question that should be asked by those who negotiated this pay deal is what can he do to combat inflation. The answer is that the Minister for Finance can do damn all to combat inflation. Why is that? The reason is simple. He has sacrificed the two weapons for combating inflation here and he is virtually powerless. This Government has given away power overseas and at home. To combat inflation the most basic, fundamental, crude weapon at our disposal is to put up interest rates. For reasons which everyone in this House supported we gave up the power to alter interest rates. Therefore, when our inflation goes up nothing can be done about it.

Our inflation rate will not be a cause of great worry to Wim Duisenberg or the President of France, Mr. Chirac, who dictate interest rates here. It will be a great worry for people in this country who have to pay more for basic commodities and there is nothing we can do about that. We have sacrificed that right. If inflation goes to 5% we will hear the same old excuses as we heard from Senator Cassidy that it is not domestically generated. He will say it is the oil price. That excuse does not hold any water whatsoever because oil prices affect our neighbours as much as us. But we will use it and say that it is part of it.

Changing the value of our currency is another weapon we could have used but we sacrificed that as well. The other weapon we could use is to negotiate a deal which is not inflationary and have a non-inflationary programme for Government. All the programme titles use jargon like Programme for Prosperity and Fairness. They sound nice but mean nothing. We could also negotiate a programme which is inflationary. We are now committed to overheating the economy internally because we have been told to do so by IBEC and ICTU but we can do nothing about inflation externally because we are powerless. That is not a great position to be in. It is a recipe for long-term folly when we are in the position where we really ought to be cautious. We have a great opportunity here for sustained gradual prosperity. We have had a huge injection in recent years and we are about to fritter it away. We are in the process of doing that because there is no caution in this document. This document promotes spending money and uncontrolled public spending while the economy is overheating.

The whole Department of Foreign Affairs is tied up reading this document for reasons I do not understand. Is there anything in this document about housing, the great symbol of inflation here?

An Leas-Chathaoirleach

The Senator's time is almost up.

Mr. Norris

The Senator can have mine.

Mr. Ross

Asset price inflation will increase by 30% every year. Housing is the real problem which affects our young people. They cannot buy houses because inflation has taken them over. I cannot find anything in the programme about it. The trade unions are bellyaching about it.

Mr. J. Doyle

Framework 3 of the document.

Mr. Ross

We are not doing anything about it. I cannot find any action on it. The trade unions complained last year about this, saying it would not be acceptable to sign another pay deal unless young people could get houses here. Young people will not get houses if this document is anything to go by. House prices will rise again this year and go further out of the reach of young people. One of the great warning signals about this is the increase in credit rates here which is now the highest in Europe. But who cares? This signal is being ignored. There will come a day when all of the wise economists and people like Senator Cassidy will come back to us and they will say with the great benefit of hindsight – which they had on the prosperity of the economy but they never saw it coming – that if we had not given so much credit at that time we would have kept our prosperity.

Mr. Cassidy

I was right in my speech.

Mr. Ross

It is easy to jog backwards. The Leader is not on his own because not one economist foresaw the Celtic tiger. They did not know it was going to happen.

Mr. Cassidy

Not true.

Mr. Ross

Neither the Leader nor anyone else can tell us why it happened.

With regard to public service pay, there is no reason why the public servants should not be paid amounts which they deserve and the Exchequer can afford. They should be properly rewarded for the work that they do. This document lacks the promise that the public service will be reformed. We needed two things, the end of leap-frogging and catch-up pay which has been the scourge of the public service for so long and performance related pay. This was promised but has not been delivered. There is no reason why performance related pay could not have been introduced in the public service. It is absurd, both in the private and public sectors, that people who sit around as pen pushers will get a 15.75% increase plus all the tax breaks while others work hard. That is one of the great curses of the public service. It also happens in the private sector but we are responsible for the public service because it is public money. That problem has not been addressed. If anyone interrupts and says there is a review body, they are correct.

Mr. Norris

There is a review on.

Mr. Ross

It is not addressing the problem. It is putting the problem off and that is one of my main criticisms of this document. The Seanad and Dáil have been completely by-passed and the power in Ireland now lies in the hands of unelected people.

An Leas-Chathaoirleach

When is it proposed to sit again?

Mr. Cassidy

Wednesday, 23 February 2000, at 2.30 p.m.

The Seanad adjourned at 2.30 p.m. until 2.30 p.m. on Wednesday, 23 February 2000.