The Minister for Finance Mr Charlie McCreevy TD announced today that the Government at a meeting earlier this week approved the policy priorities and general financial framework for the National Development Plan 2000 - 2006.

Consultation on Plan

Government approval of the policy priorities and general financial framework of the Plan follows intensive bilateral contact between the Minister and his Department with his Government colleagues at political and official levels. There has also been major consultation at political and official level with the Social Partners and Regional Interests.

The Government decision provides a comprehensive framework for the drafting of the Plan. Work on drafting the text of the Plan has commenced and the Government will consider the full text of the Plan again in September with a view to finalisation of the text by the end of that month. This will allow the Plan to be submitted to the European Commission by the deadline of end October.

Priorities and Financial Framework

In approving the policy priorities and general financial framework the Government decided that the National Development Plan 2000 - 2006 would be based on the assessment of the development needs of the country and would put in place the investment programmes required to meet these needs. The plan will therefore tackle national and regional priorities through a major multi-annual investment programme.

Unlike its two predecessors, the new Plan will not be primarily designed to draw down EU Structural and Cohesion Funds. The contribution of these Funds at some £3 billion over the next period will still be a valuable, but relatively small part of the financing of the investment needs of the country.

Whilst the precise level of investment involved over the 7 years of the Plan will be finalised by the Government in the context of their approval of the text of the Plan in September, the Government agreed at their meeting yesterday that the overall investment would be of the order of £38 billion at 1999 prices. In terms of annual average provision for the period this represents an increase of 25% over 1999 levels.

The total level of investment envisaged in the infrastructure and productive sector areas is well in excess of the proposals made by the ESRI in their report on National Investment Priorities for the period 2000-2006. The total investment proposed is also significantly in excess of the two recommendations in the Consultancy Studies commissioned on behalf of the two new regions.

The Minister stated that it is proposed that the Plan will be implemented through five Operational Programmes, three National and two Regional, which will focus on the key policy priorities of the Plan. These Operational Programmes are:

- Two Regional Operational Programmes

The Minister indicated that particular emphasis will be placed on infrastructural and other investment to achieve a better regional balance in economic growth and to help relieve the problems of urban congestion.

Budgetary Framework

The Minister stated that while substantial resources will be made available to meet the Plan objectives, the Plan will be implemented in a manner consistent with the maintenance of long-run budgetary sustainability - including the achievement of budget surpluses while economic growth remains strong - and with the ongoing level of demand in the economy. The overall budgetary framework for the Plan must also accomodate steps to address the major long-term costs associated with the progressive ageing of the population.