The report outlines the council's vision for the development of Irish society over the coming decade, together with a comprehensive and imaginative strategy to achieve a wide range of objectives. Given the wide-ranging consultations and discussions which were taken into account in its preparations, the report can be said to reflect the aspirations of all sectors of society while addressing the challenges faced by Ireland in the new global economy. The recommendations will be carefully considered by the Government in the context of budgetary preparations, discussions on a successor agreement to Partnership 2000 and as an input to other important policy decisions in the years ahead.

The report begins by identifying what the council sees as the foundations of a successful society. These are a dynamic economy, a participatory society, a commitment to social justice and inclusion, development that is socially and environmentally sustainable and which responds to the need to maintain international competitiveness, which is seen as a prerequisite for continuing economic and social success. In summary, the overview supports a renewal of social partnership, but with a new combination of competitive pay increases, further tax reductions and an increase in emphasis on performance related pay applied in the public and private sectors. These issues are under ongoing consideration by the Government.

Given the comprehensive and wide-ranging nature of the report it may be helpful if I mention the key elements of the NESC strategy. These include improving living standards, including wages, consistent with protecting economic success to date, further progress towards an inclusive society and economic and social development that is self-sustaining, a recommendation that the budget should be kept in substantial overall surplus with economic growth remaining strong, the real increase in current expenditure being kept at a minimum in line with the real increase in GNP and a greater priority to be given to public infrastructural investment. I will refer separately to each of these main areas.

With regard to macroeconomic policy, the council believes that while growth remains strong, policy should aim to maintain substantial overall budget surpluses at close to present levels. This would avoid further overheating the economy while providing funds for investment, leaving fiscal policy with room for manoeuvre and repaying some of the debts incurred in the past when the economy was weak. To achieve this the council states that the real increase in current expenditure should not exceed the growth in real GNP, while tax reforms should continue to play an important role in increasing employment and promoting social cohesion. The council also favours the move towards the pre-funding of our future pension liabilities.

Given the close association between public service pay and public expenditure, the council believes that reform of the current system of public pay determination is an important priority. The council's view of the conduct of future fiscal policy is generally in line with Government policy. In the review of An Action Programme for the Millennium the Government states its intention to continue to observe the 4 per cent ceiling for annual increases in net current expenditure, maintain healthy budget surpluses and reduce general Government debt to under 40 per cent of GDP by the end of 2002.

The council supports further reductions in income tax and attaches a high priority to increases in personal allowances. It favours increases in the standard rate of personal allowances, which, as the House is aware, are due to be converted to tax credits. An increase in the personal allowances/tax credits raises the threshold at which people enter the tax system. This is seen as the most effective way of helping the low paid while at the same time providing tax reductions of equal amounts to most taxpayers in a straightforward way. The council also attaches significant priority to an increase in the income level at which people become liable for the higher rate. While we welcome the NESC recommendations in this area, Senators will appreciate it is not possible to comment on specific recommendations in advance of the budget. However, the NESC recommendations on income tax are consistent with the Government's Action Programme for the Millennium, which advocates a balanced strategy of moving more of the lower paid out of the tax net altogether.

Public service pay constitutes a very significant percentage of overall public expenditure. In this context, NESC has highlighted the importance of reforming the current public service pay determination system, particularly given the close association between public service pay and public expenditure and the link between pay and public service reform generally, which is a major issue. It has also highlighted the need for a greater relationship between pay and performance and it has mentioned the possibility of greater decentralisation of pay management to Government Departments and agencies. We welcome these conclusions, which are very much in line with the views previously expressed on this subject by the Minister for Finance and myself.

Developments under the PCW, and more recently, clearly demonstrate that a new approach to determining public service pay must be developed for the future. We cannot continue with the system of the fixed analogues and rigid internal relativities that has bedevilled us in the past. Private sector pay systems have become far more flexible and responsive to performance at enterprise level. Similarly, we need a new approach to public service pay which incorporates greater sectoral flexibility to deal with the operational requirements of each sector and which supports the modernisation of the public service so that we continue to deliver good services efficiently to the public. It must, of course, meet the reasonable aspirations of public servants but must also be consistent with an appropriate evolution in public expenditure.

As the House is probably aware, Government representatives and the Public Services Committee of ICTU have already had some discussions on how a new pay determination system might be introduced and the principles that might underlie such a system. It is essential that the preliminary work which has already been done in these discussions is built upon in the discussions which are now getting under way on a possible successor to Partnership 2000.

The NESC report has set the scene for a new partnership agreement to succeed Partnership 2000. Senators will be aware that the Irish Congress of Trade Unions recently voted by an overwhelming majority to enter talks on a new national partnership agreement. The talks have now commenced and the Government, for its part, is determined to do everything in its power to ensure that a new agreement is put in place as quickly as possible. While it is true a number of factors have given rise to our recent economic success it would not have been possible without the social partnership. A new agreement will be vital if the benefits of our recent economic success are to be maintained in the medium to long term. The benefits are there for all to see.

Growth in the economy has been at unprecedented levels of almost 8 per cent per annum in the period 1993 to 1999 - almost the envy of the world at this stage. Moderation in labour costs development has helped to maintain rapid growth in employment which has spurred a major decline in unemployment. Moderation in pay has been accompanied by low inflation and targeted tax reductions. Look at what this has meant in terms of take-home pay. In the pre-partnership period of seven years prior to 1987 manufacturing earnings increased by 101 per cent in nominal terms but real take-home pay decreased by more than 7 per cent because of the impact of inflation and tax. Since partnership began, in the twelve years to 1999 manufacturing earnings increased by 59 per cent in nominal terms while real take-home pay increased by more than 35 per cent - a staggering increase. The growth in real incomes has been particularly high over the period of Partnership 2000 - 15 per cent compared with about 5 per cent during each of the first three partnership periods of the PNR, the PESP and the PCW.

Employment in Ireland has grown by about 4.5 per cent in recent years. The unemployment rate has continued to decline and now stands at 5.2 per cent - down from a peak of almost 16 per cent in 1993 - a staggering decrease. We now have net immigration. It is not so long ago that thousands of our young people had to emigrate to find work. Our unemployment rate is now considerably lower than the EU average, reversing the historical trend. This could not have been achieved without our national partnership programmes.

Employment creation is the most effective weapon against poverty. Our success in that area during the recent years of partnership has transformed the poverty position. A new partnership agreement will ensure continued progress in reducing poverty in our society in line with the aspirations of NESC for a more inclusive society.

On a broader note, the council recommends development of a strategic framework to promote lifelong learning. It also recommends the development of family-friendly working policies, including child care, parental leave and other family leave arrangements. In relation to lifelong learning, apart from early childhood education on which proposals are currently being developed, action is being taken by the Department of Education and Science at all levels and further measures are proposed in the upcoming national development plan. On child care, the council supports continued capital allowances for expenditure on workplace-based child care facilities but also argues for measures to aid existing independent registered facilities to meet the requirements of the 1996 Child Care Regulations. The council also favours a rationalisation of responsibility for child care policy, planning and implementation at Government level.

On the demand side, the council favours an increase in child benefit as part of the policy response to demand side difficulties. The inclusion of child benefit as taxable income would yield resources that could be used to raise its overall value. This would be particularly advantageous to lower income groups.

The council welcomes the introduction of parental leave but is concerned that because it is unpaid it will remain an option only to those on higher incomes. It suggests that further analysis is required to investigate ways to make the take-up of parental leave more equitable. The Government will be giving careful consideration to all these suggestions. A high priority is attached to child care. Issues in this area are currently under consideration by a Cabinet sub-committee.

Child benefit payments have traditionally provided income support to families while avoiding downsides from an employment incentive perspective. More recently, it has been suggested that this could help resolve difficulties in the child care area. NESC acknowledges considerable complexities and difficulties in attempting to produce a coherent and equitable strategy which will reconcile the key objectives involved. The Government will seek to address the various elements concerned in future budgetary decisions. The council proposes that a new benchmark for the income adequacy of social welfare payments be established through the social partnership process. It proposes that a mechanism be agreed to index levels of payment to improvements in the general standard of living. It proposes a targeted special investment approach to poverty relief and social inclusion in targeted areas of severe disadvantage. This is a complex issue. The council acknowledges there are substantial implications for expenditure and taxation in the proposed indexation of social welfare payments. The options for benchmarking and indexation require to be assessed in the context of overall fiscal strategy. These and related questions are being considered in the general context of budgetary preparations and of the upcoming partnership discussions. The NESC recommendations will provide very useful input to policy consideration in these fora.

I will turn to the NESC discussion and recommendations in relation to the labour market and employment generally. The report includes recommendations to the effect that (i) there should be active consultation and co-operation with the social partners in the devising of the employment action plan; (ii) the question of whether existing active labour market policies contribute as effectively as possible to social inclusion should be examined to ensure the development of the most appropriate measures to achieve the successful transition of the long-term unemployed to the labour market; (iii) greater attention should be paid to the long-term unemployed acquiring core skills such as literacy and numeracy to increase their employment potential; (iv) the community employment programmes should be continuously evaluated to ensure that they meet the needs of the unemployed as well as communities. The report indicates that industrial policy must adapt to the environment of a tighter labour market by shifting State support from capacity expansion in firms to increasing firms' capability in, for example, marketing and management and creating a better regional spread of industry. It also recommends that focus be placed on increasing high value functions in industry such as R&D capability and that the level of regulation on industry should be reduced where it is not in line with the economy's current needs. The Government would support all the above recommendations.

To sum up, the NESC strategy provides a valuable shared vision and context for discussions on a successor social partnership agreement to Partnership 2000. The strategy's significance lies in the fact that it outlines a vision for the development of Irish society over the coming decade which reflects the aspirations of all sectors of society while addressing the challenges faced by Ireland in the new global world economy. I recommend the report to Senators.

Mr. O'Dowd: I welcome the Minister of State to the House for this important debate. It is important and timely to have such a discussion. This is an excellent report which summarises the collective wisdom of many people who are well placed at senior level in our Administration, including public and private enterprise, trades unions and the farming community. There is a lot of food for thought in this report. My party leader, John Bruton, and I see this report as a vision for our country for the new millennium. We must get to the core of the issue and create an environment to which we can all aspire and reach. We should eradicate and change anything in society which militates against aspiration.

The report reflects that the growth in employment and investment in Ireland since 1994 have been phenomenal. The statistics indicate that 15 per cent of the workforce were unemployed in 1994. This has decreased to below 6 per cent in 1999. This was unheard of in the past and has happened so quickly that people are still trying to adjust to that massive change. Another important statistic is that in 1994 the standard of living of the average Irish person was 80 per cent of the European average; this has now increased to 93 per cent. Things are now good for many people. Many changes have taken place and there has been great progress in that period. However, we must address the management of that change and how we share out the benefits in the community. This must not be done by way of a wish list of collective improvements, be it road, rail or whatever; we must improve the quality of life for ordinary people. It is important for people to reach a level of achievement which will fulfil their abilities and desires.

The plan refers to education. An aspiration with which I agree is that every child should leave primary school literate and numerate. This is a very fine vision which we have had for many years. Unfortunately, it has not been achieved because we have not invested properly in primary education. In terms of literacy and numeracy, many more remedial teachers are needed in schools. Specialist back-up from people such as educational psychologists is also needed. If a student of normal intelligence has a serious reading problem, he or she is referred to as remedial, which means their problem can be remediated and their situation improved. However, if the difficulties in the home or in their environment are such that they are thinking in school about the serious economic deprivation in the home or other social problems, they will not benefit.

The State must invest in support services for teachers at the cutting edge of education. More resources must be invested during the years of compulsory education which is now up to 16 years of age. I am not saying that less money should be spent on higher education, just that more money should be spent on first and second level. One of the problems facing young people who have difficulty reading and writing and who come from disadvantaged communities or backgrounds is that the environment in which they grow up is not supportive enough. Nowadays we refer to nuclear families. An increasing number of children are growing up in single parent families. We now have smaller families but greater problems. It is exceedingly difficult for most single parents, particularly mothers, who do tremendous work in trying to support their families. These people are not getting enough support.

Something which is missing in larger urban housing estates is recreational facilities for young people. Young people aged 12, 13 or younger are out on the streets at night and getting into trouble. Other Senators spoke about the problem of under age drinking, anti-social behaviour, drugs and so on. Legislators and Government need to make a determined effort to insist on proper recreational facilities in larger urban housing estates. If recreational facilities are not provided for 200 or 300 houses, children will get into trouble on the corner and experiment with drink and drugs. There must be a pragmatic programme to provide these communities with the wherewithal to develop properly. There is a serious lack in thinking in this area. While the increasing concern about crime and drugs must be fought by the Department of Justice, Equality and Law Reform, it must also be fought by supporting the local community, building up structures which do not inherently exist and helping leaders from that community to get young people involved in recreation.

The report refers to a fairer and inclusive society. It addresses the issue of taxation and comments on it in detail. I support the views expressed. One of the reasons the new partnership will be so important is that it will bring together the collective wisdom of workers, employers and Government to come up with a fair and equitable system. PAYE workers believe that they have been the poor relation in the past and have paid every penny of tax - they had no choice in the matter - while others, whether in high business or high politics, have been part of the golden circle of the nod, the wink and the brown envelope. It is time everyone paid their fair share of tax, whether in politics or business. It saddens me when I read what is happening in the tribunals. Tax evasion in particular must be tackled as the report suggests. This must be tackled in the next budget.

When speaking about education, I would like to draw the Minister of State's attention to a programme in a working class area in the town of Drogheda. This is a homework and breakfast club where parents, quite often single parents, are employed to provide meals for the students in the school. These students can have a breakfast, lunch and evening meal. People from other schools come to that area and help students with their homework. There is now a fantastic sense of community in an area which was a barren desert in terms of strategies to improve and support this community and its leaders and to give status to single parents who are stigmatised by society in many ways. This experimental support structure in Drogheda allows for up to 300 meals to be provided to these people. The mothers involved are in gainful employment on the FÁS scheme. The young people benefit greatly in terms of nutrition, friendship, meeting with people and education through the supportive homework club. Other schools and people are getting involved and playing their part.

The child care debate has been the subject of much comment by Fine Gael and Government parties. I will not comment on it today but it is an important issue which has come a long way in a relatively short time. Let us look at our vision for the future and what faces young people, for example, an 18 year old in his first job who has formed a relationship and wants to start a family with his partner. In the past 30 to 40 years every person could own a house if they had an income because 2.5 times their income and once that of their partner was sufficient to buy them a decent house anywhere, be it a local authority house or one in the private sector. That day is gone and the Government has presided over that situation. Despite the Bacon report, owning their own home is becoming a remote possibility for ordinary people and that is disgraceful and unacceptable.

We must have more useful and efficient strategies for dealing with the issue. The Planning and Development Bill going through the Seanad attempts to address some of those issues, but it does not go far enough. We also have new regulations in terms of housing densities whose implementation I oppose outside cities and major urban centres. The houses being built at the lower end of the private sector do not match what is being built by local authorities. Building more poorly designed houses and flats in increasingly smaller spaces is a recipe for slums. I hate to think, as we approach the next century, that some of the housing being built will be more akin to what was available in the late 18th and19th centuries than what is needed for the 21st century.

I feel strongly about this. I accept that in a city environment and the traditional business area of a community, the town centre, there can and should be higher densities. However, outside those areas we should aim for traditional levels of density. I accept we must have smaller houses because families are smaller. However, we must be careful that the environment supports the people living in those houses. Children will be brought up in these places and more children will be brought up in smaller areas. That will be a nightmare. That opinion may not find favour with many people but I believe it is important.

If one lives in a local authority house and has been a tenant there for up to ten years without buying it, one will never be able to buy it under the housing purchase system. A tenant cannot buy the house which was built for them for £30,000 to £50,000 because of the way the market is changing. The house is now out of their reach. Not only will they not be able to purchase the house but the rent will increase each year. People are caught in a bind. They may live in a local authority house they want to buy but they cannot. I urge the Minister for the Environment and Local Government to change his tenant purchase scheme and allow thousands of families to fulfil their wish to own the house in which they may have lived for ten to 15 years.

Transport is a key issue which has been well addressed and is well signalled in the Government's plan. However, Fine Gael wants it dealt with in a different way. We want development moved out of cities into the towns and regions. There is no point having longer queues in Dublin, Cork and Limerick. We want the towns and regions to be developed and to have growth centres. We have identified certain ones and there are others we would also like to have considered. We must shift the emphasis away from people living in cities in overcrowded conditions, increasingly expensive homes and a reducing quality of life. People should be encouraged to move to the regions away from cities. It would be cheaper for them to buy houses there. The Government must exercise positive discrimination in favour of these areas and against cities. That must be the way forward.

We measure the quality of our society by the quality of health care we offer our citizens. It is unacceptable that we have such long waiting lists that people can wait for one or two years to undergo a badly needed major operation. That is shameful and disgraceful. The report addresses the health issue but the Government must show itself to be serious about the matter. Fine Gael proposes that each major acute hospital should have a new type of consultant who would be highly paid but who would not do private work. They would work on public patients to reduce waiting lists and they would have as dignified a career in the public sector as they would in the private. That is an important change which must come about.

Do we have a two tier health service? Probably we do. If two people are waiting for a bypass operation, the man with a medical card who is not in the VHI will have his operation when it is seen he absolutely needs it. The person in the VHI will receive it as soon as possible. There is a difference and people are suffering. Private health care is important but those who cannot buy an operation must wait until they are in extremis. People awaiting cardiac operations in national hospitals must stay in local acute hospitals, otherwise they will be taken off the national cardiac waiting list. This is a disgrace. I know of one case where a man was in a hospital for over three months and could not be discharged because he would not have his bypass operation later. That is disgraceful.

The other shame is that of young children requiring speech therapy. A young child of schoolgoing age with a speech disability cannot attend school because he or she cannot speak. Such children may be normal in every way but they must wait a minimum of a year in the Drogheda community care area of the North Western Health Board before they can see a speech therapist. This means young people with this problem are not attending school because they cannot speak and communicate. The chronic shortage of speech therapists is a shameful and serious problem which must be addressed. Another issue is orthodontics.

The most important people in our community in many ways are our senior citizens. They receive a very bad deal from hospitals. There is pressure when they enter hospital to discharge them as soon as possible and send them home. However, there is a crisis in the home help area and there is no one to care for them at home. Many senior citizens believe they are being treated disgracefully by the system. A great deal more attention should be paid to their needs. We need to pay home helps a great deal more money to work with them in their homes. That is the only way it can be done. Who would do it for £2.50 or £3 an hour, which is the pay a home help receives at present?

Mr. Finneran: I welcome the Minister of State to the House. I am pleased to have the opportunity to speak on the NESC report. The report is a timely and practical one which clearly outlines the situation which has obtained over the past five years and also provides an overview of what should happen in the coming five years.

Some of the best brains in the country were involved in the compilation of this report, people who are at the cutting edge of the constituents which make up Irish society. The report, which was carried out under the chairmanship of Mr. Paddy Teahon of the Department of the Taoiseach, involved a number of Secretaries General from other Government Departments together with representatives of the business and employers' organisations, the Irish Congress of Trade Unions, the agriculture and farming organisations and community and voluntary organisations, including the Irish National Organisation for the Unemployed. Those involved in the compilation of the report represent a broad spectrum of the groups at the coalface of Irish society. This report is worthy of intensive debate in this House.

About ten years ago, in the late 1980s, the country was on the verge of bankruptcy. It was suggested that people in the International Monetary Fund were ready to involve themselves in Ireland's financial affairs. One would have to be impressed by the fall-out from decisions taken in the late 1980s when one considers what has happened in the past five years. The positive results of those decisions come under a number of headings.

Significant changes have been achieved in the state of the public finances, the growth in employment and reduction in unemployment and the easing of the tax burden. An additional 335,000 people were employed between 1994 and 1999, a very significant increase in the numbers in the labour market. We are the envy of Europe in that regard. Unemployment figures have decreased drastically in the same five year period. In 1993, we had a 16 per cent unemployment rate but that figure has now decreased to just over 5 per cent. The claim can be made that we no longer have an unemployment problem in this country because a certain level of unemployment must always be carried. One of the most welcome developments in the five year period 1994-9 is a reduction in the level of long-term unemployment which has fallen from 9 per cent in 1994 to 3 per cent today.

It is estimated that a single manufacturing worker's wage packet has increased by 18 per cent since 1994 in real terms. Prior to 1994, increases were made but wage levels decreased in actual terms. It is what people have in their pockets at the end of the day that counts. It is estimated that the income of a married couple with two children has increased by 19.5 per cent after tax and inflation. Our position vis à vis Europe has also improved dramatically. In 1994, the standard of living of the average Irish citizen stood at 80 per cent of the EU average but five years on it has reached 93 per cent. All of the above changes represent very significant developments in the Irish economy and have resulted partly from good husbandry and housekeeping practices in the late 1980s. However, the real change has come about as a result of social partnership. I have attended meetings in Europe in recent years where I have been asked how I would explain our success. I have always answered that social partnership is the most significant component, followed by investment in education. Those two factors have played a real part in this country's development.

This report is something of a blueprint for the national development plan in so far as it outlines where we should be going. I have no doubt the Government has taken on board many of the report's recommendations. The report is very strong in the areas of decentralisation, road and rail infrastructure, housing and planning. We must ensure that regional development becomes a reality in this country, not a mere aspiration to which we pay lip service. We must produce and implement definite proposals in this regard. The recent Government decision to divide the country into Objective One areas and Objective One areas in transition was a step forward in this regard because it identified for the first time that certain parts of the country were lagging behind. We now have a genuine opportunity to create equal wealth and opportunities throughout the country and we should not lose that.

The over-concentration of economic activity and Government Departments in our major cities, particularly in Dublin, is detrimental. Dublin is bursting at the seams while other fine locations throughout the country are crying out for development. I hope the national development plan will include proposals to carry out development on a regional basis. The development of our road and rail services is vitally important. We cannot have a situation where dual carriageways extend only 15 or 20 miles outside Dublin and we expect the rest of the country to develop on old national primary and secondary routes. That has been the case to date. Today when you travel 15 or 20 miles from Dublin in many directions you would think you could turn back the clock by many years. That is inappropriate. Citizens from the midland, west and Border regions have the same entitlements. As I said, I hope the national development plan ensures that the national roads network is expanded to the west coast, the south coast and the north-west coast.

With regard to the development of rail services, in the last plan and in the last agreement we had with Europe all European money was to finish east of the Shannon. Did anyone ever hear such a nonsensical point of view? How could anyone think we could develop Ireland yet stop the development of a railway line half way through this country? What did they intend to do with the rest of the country west of the Shannon? I am glad this plan was turned on its head. Railway lines into the west are now included in our development plans. I want to see this project accelerated. Adequate money must be provided in the national development plan to develop these railway lines so that they stretch through the midlands as far as the west coast, to the south and the north-west.

We have not had true decentralisation in the truest sense but a relocation of a small percentage of Departments or offices to some towns. Real decentralisation would mean taking a Department or a large portion of it and relocating it, in a true sense of administration, in a town in the midlands, the west, the south, etc. By doing that we would unload the burden that is being placed on services in Dublin while revitalising rural towns. We would allow Dublin to breathe again and give its citizens some space. They could get to work on time and reduce their ten hour day to an eight hour one. Now they spend an hour in their cars getting to work and do the same on their way home in the evening, even though they only have to travel a few miles. That is the reality of working in Dublin today. This was borne out by a recent statement made by a trade unionist. He said that the people of Dublin now have a longer working week than they had 20 years ago. Therefore, a definite decentralisation policy is needed.

I am pleased with recent statements made by the Minister of State at the Department of Finance, Deputy Cullen, and the Government that they have adopted this policy. Both parties in Government made a formal statement to that effect. I want to see this policy implemented during the next five years. In the past it was only an aspiration. If there is a tentative approach to decentralisation it will not be worth the effort. We should have real decentralisation. We should clearly identify county towns and areas that can and will support a Department or a major portion of one in the regions that I have already mentioned.

I am glad agriculture was mentioned in this report but I am not happy with the level of attention paid to it. Agriculture is our main industry and a major export industry. It also has a knock-on effect on almost every aspect of life in Ireland. We need it to keep family farms and rural communities alive. In order to do that we must ensure that the Government, the Department of Agriculture, Food and Rural Development and the European Union continue to support the principle of the family farm in Ireland. It is necessary for national Government to identify that in order for the agricultural sector to survive and to maintain the current number of people, we must have off-farm employment. That is becoming more apparent to me every year. In future we will have fewer farms where an entire family is totally dependent on agriculture. Either the husband or his wife will need an off-farm income and in some cases both will need one. Off-farm employment would support the agricultural community.

For too long we have looked for markets for farm produce outside Europe. We should concentrate on European markets, particularly under the World Trade Agreements. Recently I examined the beef and cattle trade. In the 1980s and early 1990s we were told we needed middle-Eastern and third country outlets to maintain our level of activity. Whilst those outlets are welcome and we still pursue them, there has been a vast opportunity under our nose that has only been tapped into during recent years. I refer to the sale of young cattle of the right quality into Europe, inside the Single Market. This market has transformed the mindset of many farmers because they now must have quality stock if they want to supply cattle to it. Other stock was suitable for some of the third country markets but unacceptable inside the Single Market. We should concentrate more on all the other areas of agricultural produce inside the Single Market. We should also have a special agency that will identify products and relay that information to the farming community.

There seems to be a threat that we could face a shortage of electricity in the national grid. This matter should be addressed in the national plan. The development of indigenous resources in the west should be examined again. Thousands of acres of peat bog have lain idle in the west for many years. There may also be gas finds off the west coast. The establishment of a power station in the west using gas and peat should be considered. There would be employment opportunities in such a development.

Housing is a major problem. The greatest challenge facing local authorities is that we have so many young couples who cannot afford to buy their own house. I have made a suggestion at local authority level which I will repeat. Many years ago, when a similar crisis hit Ireland, the Government of the day introduced the Small Dwellings Act whereby local authorities provided loans for people to build their own houses. Unfortunately, that is not possible today but we should provide serviced sites, particularly in a rural context. The provision of serviced sites to young couples on a means test basis is one way to identify with that section of the population which is not in a position to buy on the open market but which should not necessarily be on the local authority list. That group is getting larger and it is a matter which I would like dealt with.

I welcome the report, many aspects of which could be debated for hours. Health, support for the elderly and disabled, education and, indeed, tax evasion are mentioned in the report as is pay related performance and so on. By and large, I welcome the NESC report and commend it to the House.

Mr. Quinn: May I share my time with Senator Henry?

Acting Chairman (Mr. R. Kiely): Is that agreed? Agreed.

Mr. Quinn: I welcome the opportunity to debate the NESC report, Opportunities, Challenges and Capacities for Choice. As Senator Finneran said, the best brains in the country worked on this report and it is certainly well worth reading unless it becomes a wish list. I fear such a report would become a wish list of all those brains because everybody's wish is included in it. The Minister, Deputy Cullen, spoke about the key elements and about improved living standards, progress towards an inclusive society and an increase in public expenditure in line with an increase in GNP, which is exactly the type of thing on a wish list. To a certain extent, I would criticise it further in that the report states that greater priority needs to be given to the issues affecting people's well being. This is the danger; it is wishful thinking.

I would like to talk instead about the challenges facing us. Let me describe to the Minister something which influenced me greatly in 1991. I attended a lunch in Dublin of Canadians visiting Dublin with the former Prime Minister Brian Mulroney. I had just come back from Argentina. As we sat around the table and talked about Argentina and Canada, somebody said to me that if one had emigrated from Ireland at the creation of the State in 1922 and had a choice of whether to go to Canada or Argentina, both countries were almost identical in terms of national productivity, capacity, population size and opportunities. In 1991, 70 years later, Argentina had become a Third World nation - fortunately, that has since changed and it got things right - while Brian Mulroney was in Europe to attend a G7 meeting. These were two countries which had equal opportunities in 1921 but one had succeeded while the other had failed. The only people to blame were the people in that country who elected governments which ran the country in a particular way. I looked at Ireland and said we have nobody to blame if, 70 years after the founding of the nation, we are not succeeding.

Senator Finneran talked about the changes which have occurred in recent years. I would love to take credit that it occurred since 1991 when I decided to run for the Seanad but I do not believe I would be given that credit. We have to grasp the opportunities and avoid the pitfalls. I welcome reports, such as the NESC report, but fear that when one puts so many people together we end up with that wish list.

I would prefer to concentrate on some of the longer-term implications. If we are to succeed in the future, we will have to make sure investors come here. Investors, whether ourselves, Europeans or people from outside Europe, should decide it is a country in which they want to invest. We must, therefore, get the infrastructure right - and that infrastructure is water, roads and electricity. We touch on that infrastructure to see how well we are succeeding.

I would like to sound a note of caution regarding something of which hear too little these days. Not so long ago I used to argue that being pessimistic all the time inhibited our economic recovery but now I find myself almost in the opposite corner and counselling against the type of confidence which would perhaps be better described as "cockiness" - almost a belief that nothing can go wrong. I am old enough to remember the economic mistakes we, as a nation, made in the 1960s. When I talked about Argentina, I saw that we made those mistakes and paid dearly for them and it took us nearly a generation to make up lost ground.

We were also confident in the early 1960s. I remember that time very well and the economy was expanding. We had just begun to attract the multinationals. We were profiting from the new free trade agreement with Britain. Emigration had almost disappeated and, indeed, it was reversed as Irish people came back from England and further afield for the first time to take advantage of the all the opportunities opening up in Ireland in the 1960s. Inflation, as a problem, had not been heard of - it did not exist. Unemployment, about which we talked earlier, was a mere 50,000 or so or probably even lower than that in reality. Conditions were as promising and people were as confident as they are now yet, despite all we had going for us, we blew it. Make no mistake about it, we were the ones who blew it.

People who have set out to rewrite history do so in a way which suits them and often trace the cause of inflation back to the oil shocks of 1973 and what happened after that. The truth is that we had well and truly cooked our goose a long time before those oil shocks. We started the 1960s in fine form but by the end of that decade we were well and truly in trouble and the cause of that trouble was entirely home grown As I said, we were the ones who blew in the 1960s. We blew it by trying to take more out of the economy than we put in. We created our own home grown inflationary spiral by a series of competitive wage rounds in which one public sector group chased another. It was almost like a cat trying to catch its tail and the private sector was sucked into this. When people saw those in the public sector doing so well, they wanted more as well. While this sorry dance led to more public debt and higher taxes in the public sector, it led to businesses closing and to thousands of jobs being lost in the private sector.

It was a classic economic tragedy - exactly what we saw happen in other places. I am not saying the 1960s economic situation is being rerun now but my point is that we were on the top of the wave before and we blew it by our own efforts. Let none of us think we, or the economy, are invisible - I heard that recently. It is very tempting to draw comparisons with what we did wrong in the 1960s.

Once again this monster of spending on public pay is threatening to devour us. I am concerned about public pay. Not only is the growth in public sector pay unsustainable, it is spilling over into the private sector and is made worse by the emerging skills shortage to which Senator Finneran referred. We are in danger of coming up against an economic brick wall - a place where one could go out of business by pricing oneself out of the market. If we topple over the brink into uncompetitiveness we not only kill off existing jobs and businesses, but we also put off new investors from coming here. However, those new investors need not necessarily come from outside the country.

I am frightened by how narrow the difference can be between getting it right and getting it wrong. There is only a whisker between doom and boom, as anyone who saw what happened in the 1960s will remember. That danger does not seem to be appreciated by those who are either too young to remember or too blind to see the realities of history.

About five or six years ago, before things had taken off here, I sat around a table in America with a number of Americans. I mentioned this before in the House because it impacted so much on me. One of the Americans introduced me as someone from Ireland and said it was a smashing place to go on holidays and to play golf and go fishing. I felt very proud but then one of the other Americans said not to open a business in Ireland. I asked him why. I could not believe what he was saying. He told me he was on the boards of a number of companies and after opening a business here once he would not allow any of those companies to open here again. He said we were unwilling to accept that risks in business mean sometimes businesses fail and that we made it difficult for people to close a business even to regenerate another business. On that basis he discouraged the companies of which he was a board member from opening businesses in Ireland. I hope we are past that, but it is a reminder of how difficult and dangerous we can be with problems of our own making if we are not careful.