If economic growth is to be maintained at high levels, according to the Taoiseach, Mr Ahern, projects envisaged in the six-year, £41 billion National Development Plan will have to be implemented on time. That will mean lucrative contracts for foreign companies and possible trouble with Irish businesses and trade unions.
As chairman of the Cabinet committee on infrastructure, Mr Ahern is fast-tracking key infrastructural proposals, particularly core national road routes and investment in public transport. The State is entering uncharted territory and the old ways are no longer valid. Jobs will go to tender on an EU basis. It will be a shock to the cosy relationships of the past. The Taoiseach anticipates trouble: "I want people to understand what is going to happen. Within two years an awful lot of the EU contracts in this area are going to go to outside companies. The people here do not have the capacity to take them on. We are determined to get on with this and the huge contracts are going to go abroad. "That has not happened here before. It is going to be big stuff, big money. And, of course, they [foreign companies] are going to bring in a lot of their own workers, too.
"I don't want to be accused later of not saying this, but outside contractors will have to be brought in. We are going outside the existing road structures. The new road to Cork will be built in one block, with one planning hearing and one contract . . . "That kind of project requires an enormous amount of money. And to do it by 2006, it will have to go to EU tender. The best of luck to Irish consortiums. I think they should be looking for arrangements with European companies because a substantial amount of this work will go abroad."
Thinking big and thinking long-term was at the core of the Taoiseach's message. Fianna Fail might be on the rack at the moment because of allegations involving political donations and local authority bribery in Dublin, but Mr Ahern was not going to be deflected from planning for the future. Not only would the Fianna Fail/PD Government complete its full term in office, the Taoiseach had in mind a second term in government when plans now being laid would come to fruition. Growth and development were centre stage. During the next decade, Mr Ahern said, the population of the State would increase to five million and we would have to gear up to having a far bigger population. The Government was putting the building blocks in place, but the developments would not be completed this side of a general election. That was not what it was about. It was about planning for the future in a structured way.
Warming to his theme, the Taoiseach listed the achievements. An extra 100,000 jobs had been created last year alone. There had been an increase in disposable income. And while some problems on the supply side emerged, people had a certainty of work that had never been there before. Ireland was now the second most open economy in the world, after Singapore. We captured 23 per cent of all US greenfield investment into the EU. We were the biggest software exporter in the world. And our fundamentals were right.
But what if the US digital economy hit the wall?
We had to continue to develop indigenous industry, Mr Ahern replied, and expand our markets into Asia and Latin America. But that was already happening. And he pointed to Baltimore and to a range of other high-tech Irish companies as examples of the new economy. Of course there were dangers involved in being too exposed to the US economy, but we should look at what we had already achieved and spread ourselves further into world markets. If we kept doing the right things through social partnership, there was no reason why we should hit boom-and-bust politics. If we managed ourselves properly we could keep our high growth rates, our high employment rates and put more money into research and development.
Was the Government's expansionary fiscal policy not misjudged at a time when inflation had hit a 10-year high of 4.6 per cent? Exceptional factors, such as increases in oil and tobacco prices, were to blame for the jump in inflation, he said.
But he had to be careful to avoid an inflationary spiral. Adherence to the pay terms of the Programme for Prosperity and Fairness (PPF) was the most effective way of countering inflation. A series of medium-term measures were also being undertaken and these involved the liberalisation and deregulation of many market sectors in order to generate competition and reduce consumer prices. There was, he said, every reason to expect that inflation would moderate later this year and would average out at about 3 per cent during the lifetime of the PPF.
But wouldn't the effects of deregulation feed through very slowly? And what about cutting VAT rates, as suggested by the ICTU?
The Taoiseach remarked that five years ago people did not believe the Government would deregulate commercial State companies. But extraordinary progress had been made through stakeholding. "I think liberalisation and deregulation, within the context of social partnership - which is very important because that is how we are going to achieve these things rather than by adversarial rows and disputes . . . if we take account of the benefits to workers and sustainable jobs, then I think we can really make this economy attractive."
As for VAT rates, he would be "slow to take action" because it was a catch-all area. Our VAT rates were high by European standards and they could be looked at when planning for the next budget, depending on inflation levels. But it would not be his number one issue.
Society was changing. And if we invested £40 billion over the next six years it would have a radical impact on the lives of everyone in this country. There would be an enormous improvement in roads and public transport, in housing, education and training services, in childcare and health places. It would give more balanced regional development and some £15 billion alone would be devoted to promote social inclusion and affordable housing.
But what about the ESRI suggestion that economic growth should be moderated in order to reduce demand for foreign labour, to minimise infrastructural bottlenecks and to retain a higher quality of life ?
Mr Ahern understood what the ESRI was saying. He didn't favour growth for growth's sake. But there were 700,000 more people working in the economy today than 10 years ago and he wanted that growth to continue. It looked as if growth rates would come back to 5-6 per cent and that would be extremely good because we were on a higher base now. But we still had 1.25 million young people in education in this country and an enormous number would be looking for jobs in the next 10 years.
Half a million houses would be required over the next decade. An increase in the housing supply was essential if prices were to moderate. But that was being done and no housing schemes were now being held up in Dublin because of a lack of water or sewerage services.
"Long-term unemployment is now down to 2 per cent. As we go on, growth of 5 per cent would be grand and would ensure that all our people would get work. But I don't believe we should operate on the basis that we should lock our doors."
WAS he concerned about the influx of refugees and the opposition to reception centres by some local communities? Would the Government insist on the dispersal of asylum-seekers?
"We have to do it. And, as I say, I have led by example. The three biggest reception centres are in my own constituency of Dublin Central and we have got agreement from the people for that . . . This is a sensitive issue that attracts a wide range of opinions . . . the Government may have been slow in getting off the ground in taking action but it now had plans to build 4,000 units and to provide other accommodation . . . "There are those who would shut the door to non-Irish people and I totally reject that view. Equally, I reject a totally open-door policy . . . Government policy aims to put in place procedures that are efficient and fair and honour our obligations under international law and the UN Convention on Human Rights . . . There are no easy options, no short-term solutions. And fair arrangements bring with them tough decisions . . . The Government, regardless of criticism, will stand by those policies . . .
"On the same week that there were arguments going on in other parts of the country about reception centres, I got acceptance for three new centres in my own constituency in the inner city. We went to public meetings, we talked to the people . . . Unfortunately, nobody from the media turned up to record these successful advances. It isn't a question of reception centres in rich or poor areas. It is a question of manageable numbers . . . "I'm not saying it can be done without criticism. I have taken a lot of criticism in this area. But I think I understand it better than most because we have had the highest number of refugees in my constituency since 1994. We have been dealing with it for six years, but it has only become a political issue in the last year."
What about allegations of corruption involving elected representatives?
He had made it very clear that members of Fianna Fail would be held accountable to the highest standards and that position was fully outlined in the code of standards adopted at the ardfheis. Procedures for the investigation of allegations against any member had been agreed, involving sanctions up to and including expulsion. "If members are found to be in breach of the code, they will have to suffer the consequences."
His relationship with the Tanaiste, Ms Harney, had been strained in the past because he had not kept her fully informed on controversial issues. How was it now?
"I think the working relationship I have with Mary Harney is excellent and has been throughout the three years we have spent in government. On one or two occasions we had differences, but the issues were dealt with and I think we understand each other's positions. We have been extraordinarily supportive of each other and helpful to each other. She is a person I enjoy working with and I have the highest respect for her and I admire her and her huge dedication."
The Taoiseach didn't anticipate an early election. He didn't see any reason, other than a shock factor, why there should be an election before 2002. He wasn't disappointed that the PDs intended to campaign as an independent party. It was a party decision taken to maximise its vote.
As for entering a coalition with Sinn Fein after the election, the Taoiseach was cautiously dismissive. "Time will tell in all these factors, but quite frankly, I do not regard it as a realistic prospect. It certainly is not a realistic prospect from our point of view, whatever Sinn Fein says, until the matters surrounding their association with the IRA are fully and satisfactorily cleared."
As he prepared for today's bilateral meetings on Northern Ireland, Mr Ahern was at pains to emphasise the good working relationship that existed between the two governments in the review process. "If it was left to the governments we would have agreed a range of options long ago. But we need to get the support of all the other parties. We had a lot of foot-dragging in the past but I think the parties are now working hard to resolve their differences. We still haven't got a breakthrough. But I think I can say they all want to see the institutions up and running. And I think they realise there is big support for that on the ground . . ." The Taoiseach would not accept his Government had misjudged the willingness of the IRA to decommission before the Executive was formed last November.
"What officials might not have fully appreciated, which I think is a different thing, is the difficulty of this issue being resolved within the paramilitaries because of the idea of surrender . . . We didn't fully appreciate that for them to move from where they were to where we are and to where we want to look into the future, that is enormously difficult. And we also, maybe, made the judgment that everybody was at the same level of development, that everybody was political and everybody was moving on a political front, and of course that is not the case . . .
" I have a good relationship with and an enormous amount of respect for David Trimble . . . I equally see Gerry Adams and Martin McGuinness as doing their best in trying to move their community into a new Ireland where people will work in peace and harmony with cross-party support . . .
"We should not forget what we have achieved. Before the Good Friday agreement, these people would not sit in the same room together. Now there is almost daily dialogue between the UUP and Sinn Fein and, on the ground, even the DUP co-operates . . . There have been huge reforms in human and civil rights issues and the Patten report is out there. We should look at how much has been achieved and acknowledge the difficult steps ahead. I am confident we can do it," the Taoiseach said.