The Government has given the clearest indication yet that the National Development Programme will be significantly delayed.
In a document submitted for discussion with the social partners in the talks on a new national agreement, the Government says that while it is committed to delivery of all the "priority infrastructure" identified in the programme, "it is clear that this cannot be done within the budget or time-scale originally envisaged."
The National Development Programme (NDP) covers the years 2000 to 2006 and sets out the Government's plans for €52 billion in infrastructure investment in areas such as roads, public transport and industry supports. Notwithstanding massive investment under the programme - including €17 billion in 2002-2003 - major infrastructural deficits remain, the document says.
Priority will be given to tackling this deficit, it says. but "the high rate of inflation in the construction sector over the past three years and the current difficulties facing the public finances do, however, require a new approach to prioritisation and time-scales for the NDP and other infrastructure goals."
A mid-term review of the NDP, to be undertaken this year, will set priorities, and the programme comments that "investment in infrastructure will be sustained at a significant level over the lifetime of this agreement", which is planned to be three years.
Planned infrastructure provision must also be set in the context of the recently-published National Spatial Strategy, it says, and a balance must be struck between regional development goals and key infrastructural needs.
To help pay for infrastructure investment, the document say that user charges (such as road tolls) will be required, and the use of partnerships between the public and private sectors will be encouraged.
The documents put forward by the Government draw heavily on work undertaken by the National Economic and Social Council (NESC) over the past year. Representatives of the Government and all the social partners sit on the council.
In line with the NESC recommendations, a separate Government document on the overall macro-economic framework points out that, with growth slowing, the rise in public spending must also slow, after a 40 per cent rise in the last two years. It lays heavy emphasis on improving the "efficiency and effectiveness" of spending.
It commits itself to keeping taxes on work down to ensure competitiveness. "To the extent that there is any scope for personal tax reductions", it says, these will be focused on exempting those on the minimum wage from the tax net and seeking to reduce the numbers paying at the higher rate. Excise duties should "as a norm" increase in line with inflation.
The document suggest that the Government will continue to critically examine existing tax allowances with a view to broadening the tax base.
It also commits the Government, as announced on Budget day, to advance plans for a general carbon tax to reduce greenhouse gas discharges and to meet Ireland's obligations under the Kyoto Protocol, the international agreement on reducing such emissions.
On inflation - an area where new measures are likely to surface during negotiations - the document says that it will mandate the Director of Consumer Affairs "to prioritise investigations in sectors where prices do not appear justified by economic conditions".
It also promises a White Paper on regulation, which it says will be designed to create more competition in the utility sector. The Government also promises to act to boost competition across the economy, in part by drawing on studies now being completed by the Competition Authority of areas of the service sector.
Meanwhile the plan to reform the insurance market will be completed. The anti-inflation programme is expected to develop as the talks progress as it is seen as a priority by some participants.