Wednesday, 16 October 1991
Dáil Éireann Debate
11. Proinsias De Rossa asked the Taoiseach if, in regard to the interview he gave on RTE radio on 22 September 1991, he will clarify his comments that the Government could not afford the next phase of the pay increases provided for under the Programme for Economic and Social Progress; if he has formerly notified the trade unions of this position; and if he will make a statement on the matter.
12. Mr. Spring asked the Taoiseach if he will make a statement regarding his recent meeting with the social partners concerning a review of the Programme for Economic and Social Progress; if he will outline the extent and nature of any agreements reached at that meeting, and the process that will ensure as a result of the meeting; and if he will make a statement on the matter.
On 18 July 1991, accompanied by the Ministers for Finance, Industry and Commerce, Agriculture and Food, Labour and Social Welfare, I met the Central Review Committee under the Programme for Economic and Social Progress to review the progress of the programme and to review generally the economic and social background to it.
On 31 July 1991, the Minister for Agriculture and Food and myself met representatives of the farming organisations which are party to the programme to discuss developments in regard to agriculture and food particularly the EC Commission proposals on CAP reform and difficulties in the beef market.
On 8 October 1991, accompanied by the Ministers for Industry and Commerce, Agriculture and Food, Labour and Social Welfare, I met the Central Review Committee to discuss the general economic and fiscal situation. Because of commitments in Germany, the Minister for Finance was unable to attend. Copies of the joint statements which issued after the meetings have been placed in the Oireachtas Library.
All the parties to the programme have agreed that the current serious economic and financial difficulties can best be tackled through co-operative action. In the light of the prospective outlook for next year, they have agreed that there would be a series of bilateral discussions at officials' level between the Government and the social partners. These discussions which commenced this morning will examine in more detail the outlook for 1992 and the possibility of measures in the areas of taxation, employment, the stimulation of growth, etc., that might  be taken, with the co-operation of all parties, to ensure that there was no deterioration in the public finances while protecting the basic objectives of the programme to maintain the competitive and growing economy established since 1987 after years of stagnation and falling employment.
In relation to the CAP reform proposals and the negotiations on CAP related GATT proposals, meetings, as agreed at the meeting on 31 July, have been held by the Government with the farming organisations at technical levels and there was a further meeting between the Minister for Agriculture and Food and the presidents of the organisations this morning to discuss all the matters at issue.
It is not proposed to establish a separate forum on jobs on the lines envisaged by Deputy Bruton. The Task force on Employment, established last June, under the Central Review Committee of the Programme for Economic and Social Progress, have met on 13 occasions and have submitted four reports to Government.
The first report of the task force identified an estimated £1 billion of products and components which could be made in Ireland to meet the needs and specifications of multinational companies in Ireland. This area for action is being pursued by two working groups of the task force.
The second report of the task force recommended to the Government the provision of additional places in public and third level institutions and an extension of the HE grant scheme to private institutions subject to appropriate designation of the institutions and certification of courses.
The third report of the task force proposed the initiation of a new job training scheme which would comprise combined training and work experience for up to 3,000 participants initially. Employers would contribute £30 per participant per week towards a training allowance. The balance of the allowance would be met by FÁS from the Vote of the Department of Labour and compensatory savings  would be achieved in the Vote of the Department of Social Welfare when participants come off the live register.
The fourth report of the task force recommends a revision in the exemption limits for the imposition of stamp duty on new houses on the basis that this measure would provide an incentive to increased activity and employment in the construction and building materials industries.
All the reports of the task force will be considered by the Government in the context of commitments under the programme and the public finances. The publication of the reports of the task force is a matter for the Central Review Committee.
The Taoiseach: The position is that the programme outlined in the Programme for Economic and Social Progress for 1992 in regard to commitments of various kinds was based on the economy achieving a growth rate of 3 per cent in 1992. As I explained earlier, the growth rate we had hoped for in 1991 will not be achieved and the growth rate that we expect for 1992 is not likely to be achieved. On that basis it will not be possible for us to meet all the commitments in the Programme for Economic and Social Progress.
Mr. J. Bruton: Does that mean that the budget is being prepared on the basis that the Government have already decided they will not honour all the commitments in the Programme for Economic and Social Progress?
The Taoiseach: No, the budget as such is not yet in course of preparation. What is happening at present — as the Deputy knows, this is what normally takes place at this time of the year — is that we are engaged in the examination of the  Estimates of expenditure. I might mention that next year it is our intention to ensure that these Estimates can be examined in detail by the House, commencing with the budget right through to the summer recess. That is the element of the budget which is now in course of preparation.
With regard to all the different aspects of the Programme for Economic and Social Progress, what is happening is that we are meeting with the social partners — at present these discussions are at official level — to outline fully the difficulties the Government will encounter in 1992 in regard to the commitments in the programme and to seek the contribution of all the social partners in resolving these difficulties.
Mr. Spring: In relation to the Programme for Economic and Social Progress and its terms, given that the Taoiseach has stated in recent days that he and his Government are, to use his words, facing an appalling economic crisis, that the growth rates, which I would say were ill-advisedly forecast last January, are not being realised, that the targets are not being achieved and the obvious consequent difficulties this will have for the Government, may I ask the Taoiseach if there is a fixed time limit on when the Government have to reach a new agreement with the social partners in he context of preparing next year's budget?
Mr. Spring: May I ask the Taoiseach if he and his Government are looking for a renegotiation of the terms of the Programme for Economic and Social Progress with the social partners or if they are prepared to go into 1992 honouring the outstanding arrangements in the Programme for Economic and Social Progress?
The Taoiseach: I have already explained that it is clear to us, and I think to everybody else, that the economic conditions which will prevail in 1992 will not permit us to fulfil our commitments in the Programme for Economic and Social Progress to the full. We are now engaged in this process of discussion with the social partners to foresee how between us, the Government and all social partners, we can deal with this difficult situation. As I have said again and again, we will not be calling on any one sector to bear the brunt of the difficulties but we will expect all the social partners in some way to contribute to the solution of the difficulties.
Proinsias De Rossa: In relation to Questions Nos. 8 to 11, inclusive, may I ask the Taoiseach if the task force subgroups are expected to report soon, specifically the one in relation to import substitution or the provision of components to many of the multinationals who are at present importing their needs? May I ask him if there are any other job creation plans, as distinct from providing places at university and training places at FÁS, emanating from the task force in relation to job creation in the context of the actual provision of jobs which will provide a week's wages for those employed other than the import substitution proposal which we dealt with in this House before? When I asked this question previously in June the Taoiseach was not able to give a precise idea as to how many jobs would be created by attempting to provide this £1 billion import substitution. Does he have any idea now as to the number of jobs which will be provided through this process?
In regard to one of my other questions which deals with the pay element of the Programme for Economic and Social Progress, on a previous occasion the Taoiseach indicated that he was conscious of the low paid workers in the public service and the public sector generally and said he did not need to be reminded by me of the fact that there were thousands of these people. Does he intend, as might be implied from what he  is saying, to ensure at the very least that these low paid workers will get the increases they were promised under the Programme for Economic and Social Progress and which have been deferred a number of times?
The Taoiseach: One of the major additional undertakings we are engaged in with the social partners is the development of the area based response which has the specific aim of providing jobs in these hard hit black spot areas. I do not know when the two working groups on the components aspect will be in a position to report but they know the Government are anxious to get the results of their deliberations as soon as possible.
With regard to the Programme for Economic and Social Progress. I cannot say at this stage what is likely to emerge on any front, including pay, but I wish to indicate to the House that we are asking all the social partners to make a contribution to the solution of the difficulties. As I mentioned, we are also considering formulating a scheme whereby employers will take on additional employees directly. That is the response to the Deputy's question on whether we have any measures directed towards the specific creation of immediate employment. It is something we are turning our minds to.
Mr. Shatter: In the context of the discussions which are now taking place at official level, may I ask the Taoiseach if  it is intended, before any adjustments are made to the Programme for Economic and Social Progress, to bring any changes in the programme before this House for consideration before the Government commit themselves to a revised programme? May I also ask him in that context if he would accept that it was a mistake not to first allow this House to consider what was proposed in the Programme for Economic and Social Progress before the Government agreed to it with the social partners?
Mr. Barry: Does the Taoiseach appreciate the uncertainty he is creating in the business community by his constant references both in this House today and on radio programmes to all sectors being asked to contribute towards a solution and that many people who are considering investment interpret this as meaning changes in the corporate tax structure which will, of course, mean postponement of investment? Does he also appreciate that canvassing for new business by the IDA has come to a virtual standstill because of the use of this phrase by him? He has a responsibility, which I hope he recognises, to resolve this matter as quickly as possible in the interests of job creation.
The Taoiseach: I am glad the Deputy raised this point because it gives me the opportunity to say that nothing of that kind is contemplated. This Government are committed to the regime of taxation  for manufacturing industry and that will be adhered to.
The Taoiseach: It did not strike me that anything of that kind was contemplated. When I say that all sectors will have to contribute I am thinking in terms of the private sector in the jobs area in particular.
Mr. J. Bruton: Can the Taoiseach explain why he is opposed to the concept of an all-party forum on jobs in view of the seriousness of the problem and the fact that the Irish Congress of Trade Unions are supportive of such a forum and would, along with other social partners, co-operate fully with it?
The Taoiseach: I do not see that they could do anything of any great value that some other organisation are not doing at present. With regard to participation by Opposition parties, surely, this House is the place where they can put forward any proposals they wish. This debate gives Deputies an opportunity to put forward any proposals for consideration and there are many other ways in which Opposition parties can submit any sort of proposals they wish. We have, as I say, a number of organisations and agencies already involved in the whole question of job  creation. Without being dismissive about it, I do not really see what particular role a forum could play in an area which is of such a technical nature as job creation.
An Ceann Comhairle: There are a large number of questions tabled to the Taoiseach today. I am anxious, with your co-operation, to dispose of as many as possible. I want to bring these questions to finality. Deputy Garland is offering. I will call Deputy Spring and finally Deputy De Rossa.
Mr. Garland: I am most disappointed with the Taoiseach's response to Deputy Bruton's Question No. 4 on the national jobs forum. Would the Taoiseach not agree that the social partners basically comprise people who are in receipt of income whether as employees or employers and that the interests of over 250,000 unemployed people are inadequately represented in the social partners? Would he agree to reconsider his answer to this question?
The Taoiseach: I take the Deputy's point about the need to hear views from the people who are unemployed but I believe we have adequate access to their views. First of all, I do not think the Deputy would deny that the trade unions represent the unemployed as well as the employed.
The Taoiseach: That is news to me if that is not so. To a major extent, the unemployed are all members of trade unions. Also we in the Government have quite a number of ways in which we have access to the views of the unemployed, and I think, in particular, we will get a valuable and useful response from our area-based employment pilot scheme.
Mr. Spring: Very briefly, I would also like to ask the Taoiseach if I understood  his initial reply correctly? He said that the task force which was formed in June or July have met on 13 occasions and they have four reports.
Mr. Spring: May I ask the Taoiseach if he would consider ensuring that those reports are made available to Deputies and that a debate can take place in this House? Given the serious level of unemployment, whatever contribution we have to make could be made in a far more constructive manner if we had the information available to us and if we could make an input in this House on this very important topic.
Proinsias De Rossa: The Taoiseach, in his reply, in regard to Programme for Economic and Social Progress indicated that all sectors would have to make a contribution to the resolution of the Government's financial problems and I think we would all support that. Nevertheless, he went on to say in response to a supplementary question that the tax regime in regard to manufacturing industry would remain untouched. May I ask him in what way will the rest of the community — other than the PAYE taxpayers and the unemployed who are all the time asked to make a contribution — the other sectors, be asked to make their contribution to rectifying the finances of the State? In particular, I would ask him to address the question of a report in the papers which indicates that only 5,000 of the self-employed have declared income in excess of £20,000 to £25,000 per year, which seems an extraordinarily low number of people in that category. Does he intend to address the tax system so that there is a fair return from all sectors?
The Taoiseach: A fair return from all sectors is a total priority of this Government and I think we have given evidence of our desire to achieve that. We have,  over the last three or four years, initiated enormous improvements in that regard. I think there is still room for further improvement. As part of our preparations for the 1992 budget and in other regards we will certainly see what further steps we can take to maximise the return of revenue from all sectors of the community and particularly from those who, on the surface, would not appear to be contributing enough. With regard to what way other sectors could contribute I have already mentioned that we would expect a contribution from the private sector employers on the side of employment. There is no doubt that the two programmes have created conditions for development and expansion in the private sector. Regrettably, so far that development and expansion in the private sector has not given us anything like the expected return in jobs. That is one area we will be specifically exploring with private sector employers as to how in the reasonably good economic climate which the programme has created they can provide more jobs.
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