Speech at the innaugural meeting of the National Economic and Social Council
It gives me great pleasure as Taoiseach to address you here today at the first meeting of the new Council. That pleasure is increased further by the fact that this month marks the 25th Anniversary of the Council. In that time the Council has acted as a Forum for discussion of the principles relating to the efficient development of the national economy, and the achievement of social justice. It has also been the source of very valuable advice to Taoisigh down through the years, on the economic and social development of the country.
To date, the Council has published over 100 reports on a wide variety of economic and social topics. It is a tribute to the quality of these reports, that one can rarely read an economic or social review of any aspect of Irish society, without coming across a reference to a NESC report.
Since the mid-1980s, the Council has increased its profile even further by publishing a series of strategy reports, which have identified inter-related policy measures, which are essential to economic development and the broadening of social inclusion. These reports have provided a framework for the negotiation of national agreements between Governments and social partners over the past decade.
Indeed NESC has played a pivotal role in developing the whole concept of Partnership in Irish Society. The fact that from its very beginning it has been representative of the main social partners and Government, has ensured that there has been at least one forum, even at times of deep economic and social tension, where there could be an open exchange of views and ideas, on the key issues facing us.
This new Council will, I have no doubt, build on the achievements of its predecessors. It will also however be different from them in three significant ways;
Firstly, this new Council will be the first Council to be placed on a statutory basis. Granting the Council statutory recognition marks both a commitment and recognition of the major contribution the Council has made over the last 25 years to national development, and a renewed commitment to the Council's role as a source of, and an underpinning for, social partnership.
Secondly, this Council will form part of the Office for National Economic and Social Development. This Office will bring together the NESC and the NESF both of which will be housed in new offices in Frederick House. This closer grouping of the two bodies will;
improve and link the agenda-setting of both organisations;
get each body to focus on complementary aspects of the policy process (policy-making, implementation and monitoring); and
ensure that each body has access to the skills it needs.
Thirdly, this Council differs from its predecessor in that its membership has been expanded to include representatives of the community and voluntary pillar. I have no doubt that the bringing of these two important bodies together, will create important synergies, both in terms of work efficiency, and also in terms of a cross-fertilisation of ideas.
There is no doubt that the work of the NESC has been a key factor in ensuring that economic conditions are now far better than they have ever been. However, we must avoid complacency. We must avoid returning to the inward-looking policies of the 1970's, and we must continue to focus on the fact that Ireland can only prosper, if we keep the competitive edge that we have developed over the last 11 years.
We as a people can only prosper if we deepen and extend the social cohesion which already exists. In particular, the socially excluded must be brought into the economic and social mainstream.
I have no doubt that the partnership process which has underpinned our economic and social development in the last decade can continue.
But this will be possible only if the analytical work which has underpinned the Partnership process, and for which this Council must take a major part of the credit, continues also. Only policies that are based on a sound economic and social analysis can be effective.
Over the last decade the NESC strategy reports have played an invaluable role in bringing together thinking from a wide range of fields, into a coherent and easily-grasped understanding of the Irish economy and society. The development of this understanding by the members of the Council, was crucial in shaping a strategy, around which it has been possible to build a very broad social consensus, spanning all the social partners, and, indeed, practically all of the main actors in society.
I am asking the Council today to prepare a new strategy report addressing the challenges we now face. This should aim to be the basis for a new agreement between the Government and the social partners, to follow Partnership 2000. But more than that, I am asking the Council to develop a vision of Ireland leading into the new Millennium, around which the Government and the social partners can develop a new framework for the next decade, and beyond.
This Council will have a particularly challenging task in drawing up a strategy for the new Millennium. While each of the Council's previous strategy reports has been drawn up in the context of rapid economic and social change, the next report will have to address an unprecedented range of challenges at both the international and national level.
Accordingly, the new strategy must address the key questions. Namely:-
Where do we wish to see Ireland positioned as a society and an economy 10 years from now?
What underpinning is required for sustainable development?
What are the implications of these issues for development over both a 10 year and 3 year timescales?
In addressing the questions, the work of the Council will be shaped by the three major challenges facing us as a people, namely: the globalisation of the world economy, the deepening of Ireland's engagement with the process of European Integration, and the need to modernise our national systems be they social, infrastructural or administrative, to ensure sustainable growth and social inclusion.
We are probably the first Irish generation to live in a truly global economy. As the pace of globalisation increases we will need to fashion our domestic policies to ensure that we can take full advantage of the opportunities - in terms of trade and foreign direct investment - inherent in the process. Recent events in Asia, Russia and other emerging markets underline the risks, as well as the opportunities of a global economy.
At the European level too we face major challenges;
Economic and Monetary Union will mark a new stage in the development of Europe. A single currency will enable Europe to realise fully the economic potential of the single market, and place itself firmly centre stage in the global economy. Ireland, as a country which depends to a very large extent on trade, should benefit more than most.
The medium and longer term implications of EMU are likely to shape much of this Council's work. Indeed the next strategy report of the Council will, I am sure, address the policy options available to us in a single currency regime.
The outcome of the ongoing Agenda 2000 negotiations will also be very important for the Irish economy. These negotiations will be difficult and complex. We will defend Ireland's interests robustly. It would be clearly unreasonable, given our recent economic performance, to expect the same levels of EU funding as received in the last round of Structural and Cohesion funds. However, I am confident that Ireland will continue to be a significant net beneficiary from the Community Budget, and that lengthy and adequate transitional arrangements will be put in place for the phasing out of funding where necessary.
Again, this Council's work will be shaped by the new funding and policy realities, which Agenda 2000 will create.
The key focus of the Council will, of course, be on domestic policies. I am asking the Council to explore innovative solutions to tackle the problems we face, problems with which, in many cases, we have up to now been unaccustomed, such as the tightening labour market, and the opportunities created by a sharp easing of the population dependency ratio, for the next decade or so.
The reality is that, more than ever before, our economic and social future lies in our own hands. The decisions we make about investment (public and private), about how much and on what basis we pay ourselves, and the social arrangements to support inclusion, will be the crucial influences on the jobs and living standards of our people over the next decade and beyond.
For example, we must ensure an adequate physical and communications infrastructure. The likely decrease in EU assistance in this area, combined with the need for sound fiscal policies, underlines the importance of developing private public partnership in the provision of our infrastructure.
Our human resource policies, too, will require further modernisation. Already significant strides have been made in improving our educational system and, indeed, the high standard of our educational system has played no small part in our recent economic performance. We need, however, to continue to make advances in this area. In particular the promotion of life-long learning, the closer integration of the employment services with education and training activities, together with the tackling of the problems of early school-leaving and educational disadvantage, must be given the highest priority.
Our social policies too will need to be adapted to reflect the changing nature of our family, employment, and settlement patterns. The reality is that building an inclusive society, with adequate social protection and effective strategies to tackle poverty, will require the most careful reflection, and the most sustained effort in the period ahead.
Our approach to incomes will also need to be renewed. It is not just a matter of setting income levels that are in line with productivity and competitiveness, crucial though that is. We must also strengthen pay and reward systems which encourage innovation, flexibility and lifelong learning. This will mean strengthening the arrangements for partnership at the enterprise level, which have been emerging in recent years.
Particular challenges arise in the public service. The arrangements agreed in the PCW have been applied. We have to move away from the old ways of destabilising rounds of 'special' increases designed to maintain traditional relativities.
When I spoke at the Plenary meeting with the Social Partners at the end of July last, I stated my belief that we now need to take a fundamental look at how pay bargaining and pay management are approached in the public service, beyond Partnership 2000. I set down by belief in the need for restructuring and the importance of performance management. I set down my belief in the need to consider how public pay policy can, by more closely relating pay to performance, meet the aspirations of public servants, while maintaining the unavoidable limits on public spending.
I believe events since the summer have made that task more urgent. We need to work on how to bridge the gap between aspirations and limited public spending, and do so in a way which delivers top class responses to the customers and clients of our various public services. That work must focus on performance, on the factors necessary to deliver top class performance, and it will have to recognise the need for - and develop the specifics of - the changes, necessary to achieve a closer relationship between pay and performance.
The changes involved, if they are to be effective, will have to tackle difficult issues. They will not be agreed overnight. This reinforces the need to commence the work involved at an early date. I see two parts to that work. I believe NESC has an important contribution to make in drawing out the lessons of relevant experience in Ireland and abroad. I believe we must also commence discussions with ICTU and its Public Services Committee on how to move forward on an agreed constructive basis. The two parts can usefully inform each other. I believe the outcome we must arrive at is one that recognises and values all that is good about our public service, but in parallel, recognises the need for, and benefits to the achieved from, the pursuit of top class performance.
In developing a vision for Ireland in your next strategy report, you will not be engaged in an academic exercise. You will be bringing to bear the cumulative experience and insights of the various interests around the table.
The great strength of the NESC is that the process of preparing the reports, by the involvements of the social partners, is in itself a key factor in securing their validity and their prospects for implementation.
The potential of the NESC to provide a basis to secure continued growth in the period ahead is unrivalled. I have no doubt that you will apply yourselves to it with enthusiasm. I can assure you of the Government's commitment to the work of the Council, and support for its unique role in the development of partnership.
ENDS