asked the Minister for Finance if the Government's economic strategy is now based on an acceptance of the fact that the central goals of the Government's economic plan in relation to unemployment and the current budget deficit which have been reiterated in recent budgets will not now be achieved within the lifetime of the present Dáil; and if he will make a statement on the matter.

19.

asked the Minister for Finance if the Government are reviewing their plans and strategy in relation to the unemployment crisis in view of the Government's failure to achieve their stated targets in this area in a number of Government statements and publications, including Building on Reality 1985-1987.

29.

asked the Minister for Finance if he accepts that the main targets in Building on Reality 1985-1987, will not be achieved; and if the Government have any proposals to publish any further economic plans.

35.

asked the Minister for Finance in view of the failure to achieve the main targets set out in Building on Reality 1985-1987, if the Government have any proposals to publish any further economic plans.

I propose to take Questions Nos. 13, 19, 29, and 35 together.

These questions all relate to Building on Reality, the continued relevance of the policies contained therein and the particular problems of the public finances and unemployment in that context. The general economic strategy contained in Building on Reality remains firm Government policy, but the inevitability of divergences from specific targets and projections, due to internal and external factors, must be accepted. In the case of Building on Reality, substantial progress has been made in certain respects while, in others, more remains to be done. With regard to the main macro-economic objectives, inflation now is much lower than anticipated and the balance of payments deficit as a percentage of GNP has been reduced to about half the level envisaged. The growth in output over 1985 and 1986 has been below expectations, due to the effects of adverse weather conditions on agriculture and tourism and slower growth in external markets, and private sector job creation has been slower, which has meant that unemployment will stabilise at a higher level than projected in the plan.

With regard specifically to the public finances, the central objective of the plan was to halt their deterioration and end the upward spiral of debt and taxation which had been in danger of becoming irreversible. Much progress has been made in respect of this objective. Exchequer borrowing has fallen from 15.7 per cent of GNP in 1982 to this year's likely outturn of just over 13 per cent. Although higher than envisaged in the plan, this represents an enormous improvement over what would have been the case had the Government failed to take corrective action. The Government have confirmed, in the statement of 16 October, their intention of reducing the Exchequer borrowing requirement to less than 11.8 per cent of GNP next year and of reducing the current budget deficit to not more than 7.4 per cent. As I have already mentioned in the House, such a reduction in the borrowing requirement will mean that its non-interest component will be reduced to less than one-half of 1 per cent of GNP. This in effect means that almost all our borrowing next year will go towards paying interest on past debt.

Tackling the unemployment crisis, as indicated in Building on Reality, is not a “question of establishing numerical goals” but rather of laying secure foundations for expansion of sustainable, productive activity. Although employment trends have been weaker than hoped for, the analysis in the plan and the policy approach outlined — curbing borrowing and strengthening competitiveness — remain valid. In addition to building a foundation for the future, the Government have been prepared, within the overall strategy, to act directly on employment, as evidenced by the October 1985 initiatives which are proving a tremendous success.

The Government remain convinced that the twin and inter-related problems of unemployment and excessive borrowing must be tackled together and are framing the 1987 budget in this light.

What was the unemployment figure which was targeted for in Building on Reality and what is the figure today?

The Deputy is as well able to read Building on Reality as I am and I am sure he is aware of the figure.

Does the Minister accept that the figure is now over 18 per cent?

I can give the Deputy the figure. The number of people projected to be out of work at mid-April 1987 was 210,000 or 15¼ per cent of the labour force. For 1986 on average the total projected to be out of work is 234,000 or 18 per cent of the labour force. As I indicated in an earlier reply the level of unemployment is higher than the Government had hoped would be the case.

Will the Minister tell the House what budget deficit was envisaged in Building on Reality and what it was at the end of the last financial year?

As I have already replied to that question I do not see any great need to reply to it again.

I would like an answer.

As the Deputy is well aware the position is that the budget deficit projected for 1987, in accordance with the Government's announcement in October, is 7.4 per cent. The Government had hoped in Building on Reality to achieve a current budget deficit in 1987 of 5 per cent of GNP. That will not now be achieved. This is the case for a number of reasons. The main reason is that the level of economic activity generally which generates both tax revenue and reduces the level of social welfare payments which need to be paid out has not been as high as we expected. For instance, we had been projecting a growth in world trade of 5 per cent.

You did not have the boom.

However it turned out to be only 3½ per cent. Ireland is a country which exports 60 per cent of what it produces. Therefore, when there is a deficiency in the anticipated level of growth in world trade Ireland, as an exporting nation, is disproportionately affected and that in turn affects the public finances. Last year and again this year we have had very poor weather conditions. This affected economic activity in agriculture and tourism.

Bad Government management.

And the cat got sick as well.

Does the Minister accept that having missed two central targets, unemployment and the current deficit, the plan is no longer of any use to the nation? Will he abort the plan and bring forward something more realistic?

The interests of all parties would be served by being realistic about the projections contained in the Government plan. The Government do not control the economy. They are not in a position to determine all the things that affect economic performance. The Government are just one, albeit an important one, of the factors affecting economic outcomes. What the document Building on Reality contained were projections and not promises.

You missed them all.

They were assumptions about what was likely to happen in regard to a number of variables.

You did not say that in 1982 about the budget deficit, the national debt or unemployment.

The only targets that were set as such in the plan was in regard to the current budget deficit. It comes ill from Deputy Brennan and others of his party to complain about the level of the current budget deficit.

Stick to your brief.

Every week we hear more promises of spending and higher borrowing from the Deputy's party. His party have enjoyed the facility of making contradictory statements day in and day out in the House.

Nine years in charge of the finances.

You missed every target.

On the one hand they are complaining about the level of borrowing and at the same time they are asking for more. Before the Deputy and his colleagues come into the House asking tendentious questions of this kind they should make up their minds as to where they stand as far as economic policy is concerned.

They had nine years.

Wait for it. It is only a couple of weeks away. Call an election and we will give you full freedom——

Order, please. Deputies might allow their own spokesman on finance to speak.