Address at the Plenary Meeting with the Social Partners

I am delighted to be here today with you, together with my colleagues, the Tanaiste, and the Minister for Finance, at this, the first Plenary meeting under the new Agreement Sustaining Progress.

At the outset, I would like to record my appreciation to you, the social partners, for the continuing and challenging role, which you are playing in the development of our economy and of our society.

Addressing future challenges together

I believe that if we have learned anything in the past fifteen years, it is the lesson that shared understanding of the issues which affect us all and following a pragmatic, problem-solving approach have paid dividends for this small country. The decision to initiate social partnership and its supporting process of engagement has had profound effects on the economic and social destiny of this country.

Sharing the Benefits

I do not need to remind this audience of the dramatic benefits of this approach over the past decade, in terms of jobs and income levels, in particular.

Clearly, progress over the past couple of years has been slower. But let us be clear: the Irish economy has performed - and is performing - extraordinarily well by comparison with our European and international partners.

Delivering our commitments under Sustaining Progress

In opening the talks on a successor agreement to the Programme for Prosperity and Fairness at Dublin Castle last October, I emphasised that economic conditions were tighter than they had been at any point in the previous five years and that this would have an inevitable impact on the public finances. I stressed that realism should guide us all and that, to secure an agreed outcome, expectations must adjust to current economic realities.

The challenging international environment

The Sustaining Progress negotiations were conducted against the backdrop of the NESC analysis, which showed that a number of inherent vulnerabilities in the Irish economy - over which we have no control - were likely to impact on our economic performance over the period immediately ahead.

That has come to pass, through the difficult international environment and the strengthening of the euro, in particular.

The NESC argued that if this challenging period were managed through sensible policies, the economy would resume a relatively strong growth path when the external environment improved. That is also the essential message of the ESRIs Medium Term Review, published today.

Whatever about the finer points of the divergence last year between GDP and GNP, growth has dropped significantly, but will be well ahead of the eurozone average this year.

The performance and outlook in many of the worlds leading economies do not provide hope for a speedy international recovery. We in Ireland, therefore, need to be diligent on the competitiveness front, especially given the highly open nature of our economy in terms of both investment and trade. We also need to be particularly adaptable to change in the workplace, in both the public and private sectors.

We share an acute awareness of significant high-profile closures in recent weeks, which, together with other job losses, underscore the importance of striking the right balance in managing our way through the present challenges. We all want to maintain our relatively strong employment performance: unemployment is still low - at 4.4% for the first quarter of 2003, compared to a eurozone average of 8.8% for the same period. But that gives absolutely no room for complacency.

Competitiveness

On the economy, competitiveness was identified as a key issue in Sustaining Progress. Failure to restore competitiveness will have stark consequences back to the vicious circle of high unemployment, high emigration, high inflation and low national self-esteem.

This is in large part a matter of tackling costs in the Irish economy. Competitiveness is the key to preventing job losses. We have to get inflation down to the eurozone average of around 2%. This is a challenge for all of us. Now, the downward trend in inflation in recent months is encouraging and very welcome. Annual inflation fell to 3.5% in June, the fourth month in a row that a fall has been registered. However, it is essential that further progress is made. There is a pressing need in particular to address the domestic causes of inflation.

Sustaining Progress

Social partnership is not just about wages and costs. It also provides a framework for consistent policies to underpin competitiveness and our productive capacity, while progressing our social agenda for a more inclusive society. This requires that we remain a high value-added economy, embracing continuous change. Educational attainments at all levels, and for all sectors of the community, and especially education participation at third level, remain vitally important objectives for Government.

We remain committed to developing our infrastructure, so that Ireland becomes an attractive place in which to live and work and also continues to attract foreign direct investment. We are committed to making strong progress in developing the road and rail infrastructure needed. Critically, we are also committed to developing a proper communications infrastructure, incorporating internal broadband availability and promoting a competitive environment.

Fastracking delivery

The expeditious delivery of these national infrastructure priorities is critical to ensure Irelands competitiveness into the future. The Minister for the Environment, Heritage and Local Government has this week outlined his objectives to the Government for the development of a consent process in respect of strategic national infrastructure.

These objectives are that the country has a planning process for strategic national infrastructure

The Minister will review the existing legislation in this context and announce his proposals in the Autumn following consultation with the Government. We will be working hard to ensure that the new legislation is delivered quickly.

Commitment to affordable housing

An agreement to engage together in a new, dynamic and highly focused way on a range of special initiatives, which have a high priority in terms of social inclusion and quality of life, is hugely significant.

If we can bring our combined efforts to bear on the special initiatives, as we have done in other areas in the past, we can make significant and tangible progress, in improving the quality of peoples lives.

Together we are going to solve, once and for all, the problem of affordable housing. I have already said quite openly and frankly that it is time that development enriched the many and not the few. I also want to again place on record my personal commitment and enthusiastic support for developing the affordable housing initiative. As you know, the Government has been actively looking at all aspects of this issue and at all available options to make land available for housing.

I have asked the Oireachtas Party Committee to look, as a matter of urgency at the cost of building land and to assess the possibility of placing a cap on the value of development land. In doing so the Committee has been asked to consider the constitutional and practical issues involved.

Government has shown its firm resolve in this regard by agreeing to the immediate release of lands currently owned by the Office of Public Works at Jamestown Road and Infirmary Road to Dublin City Council. In addition, we have agreed a proposal for the release of lands at Magee Barracks, Kildare and Gormanston, Co. Meath, totalling 309 acres, for inclusion in the initiative.

We have also agreed in principle that further State lands should be released for the initiative and in this context specific proposals will be submitted to Government for consideration by end September 2003 at the latest.

These actions demonstrate clearly to any doubters that Government is deadly serious when it says that it is going to solve, once and for all, the problem of affordable housing.

I would also like to stress that in developing this particular aspect of the Housing Initiative, we will ensure that undue social segregation is avoided. It is the clear intention that the initiative will not detract from the funding available for existing social and affordable housing programmes, or affect in any way the momentum of delivery of these programmes. Capital spending on the provision of affordable housing, and other social housing programmes will amount to over €1.7 billion in 2003.

Quality Public Services

In the current economic climate, the payment of the Benchmarking awards poses a challenge for the credibility of partnership. The level of public expenditure - and public service employment - has grown by an unprecedented amount in recent years. There is also a strong and widely held perception that this increased expenditure has not been translated into sufficient improvements in the quality and level of services. This must be a cause for concern for all stakeholders in Irish society, but especially for those who are committed, as I am, to the public service tradition and ethos.

While the Government is committed to further public investment over time and as resources allow, the reality is that the answer does not just lie in increased expenditure. Progress also depends on increased productivity in the public service. This requires changes in how services are delivered and how public service organisations are structured. Partnership must demonstrate its ability to enable and embrace this modernisation and change - both nationally and at the level of the individual organisation and workplace.

Mechanisms have been established to verify that these conditions are met. This places an onus on public service managers, employees and unions to deliver real productivity and service improvements on behalf of the taxpayer. The public service needs to take the opportunity to demonstrate that it has understood the need for change and is capable of delivering.

On the day that is in it, it is appropriate that I refer to the commercial semi-State sector. The Government are committed to active engagement with the social partners on the future of the State companies on the basis of our commitment to their role in providing services of world-class quality at a competitive price to the consumer, with a viable long-term future for individual companies based on appropriate forms of ownership for their particular needs.

I see no need for confrontation on this issue if we can engage in real dialogue about the needs of customers and the legitimate expectations of taxpayers. I very much regret that action today will damage the financial health of critically important State companies when I have signalled very clearly the Governments policy in this area, which is to build on the existing agreement about the need for change and to seek to agree a partnership approach to realising the changes that are required. Industrial action and the threat of conflict are signs of weakness not strength, from that perspective. I hope that we will not see any repeat of todays regrettable action.

Building a fair and inclusive society

I have mentioned how important I feel social partnership is to our continued development and growth as a country. I would like to particularly welcome the new members of the Community and Voluntary Pillar who are attending their first plenary meeting today. The expansion of this Pillar reflects our wish to increase the involvement of this vibrant sector in dealing with problems, in particular unemployment, poverty and social exclusion. It is also a realisation that the widening of participation would help us to better manage these problems.

In Sustaining Progress we reiterate that the core objective is to build a fair and inclusive society and to ensure that people have the resources and opportunities to live life with dignity and have access to the quality public services that underpin life chances and experiences. The framework for addressing these issues is extensive and we all agree that at this point the main challenge is implementation. Overall, we want to ensure that we have the proper legislation, policies, programmes and institutional arrangements in place to achieve our core objective. It is my view that in many cases the challenge is not simply about more resources, but better use of existing ones so that we can achieve the outcomes that we want.

We have already made significant advances in implementing core objectives:

· the Health Service Reform Programme has been published;

We are facing a changed economic situation and this will make budgetary decisions even more difficult than usual. Nonetheless I want to assure you that targeting resources at those most in need is, and will continue to be, our priority.

Partnership at local level

The application of the partnership model at local level is a core principle of the ongoing programme of local government renewal. New Structures - namely local authority Strategic Policy Committees and County/City Development Boards - have been established in each county and city. On the SPCs, councillors and sectoral interests, including the social partners, sit side by side to develop and oversee the implementation of local authority policies. I know that the Minister for the Environment, Heritage and Local Government is currently finalising a review of the SPCs which was been carried out in full consultation with all the interests. The objective of the Review is to ensure that the SPCs deliver on their mandate. In addition, Eamon Ó Cuiv TD, Minister for Community, Rural and Gaeltacht Affairs, is coordinating a review of local development structures, so that the lessons of recent years are fully applied in policy and practice.

Partnership at Workplace level

Earlier this week, I launched a consultation paper on the workplace of the future, in preparation for the establishment, next October, of a Forum on this key issue. The role of the Forum, which it is envisaged will report by October, 2004, will be to foster in-depth discussion on how workplaces can best respond to competitive pressures, improve the delivery of services and respond to the changing needs of employees. The consultation paper, which is available on the NCPP's website, sets out the overall context for this important debate and provides a framework for responses and submissions. I would like to take the opportunity to call again upon all workplace stakeholders to seize this opportunity and to engage in shaping the workplace of the future.

Conclusion

Government and the Social Partners together must remain focused on the long term and on the big picture. We have a consistent policy framework and every component part necessary for long term and sustainable progress. The question I have posed on previous occasions but worth repeating today is whether we have the will to pull together to realise our potential? It is only by working together that we will all ultimately benefit. The successful conclusion and ratification of Sustaining Progress has provided part of the answer to my question. However, the full answer rests in our ability to work together to achieve its implementation in a very challenging environment.

These are the goals that we have set for ourselves as Government and Social Partners. Now, together let us drive forward to achieve them.

ENDS