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06-10-2000 Taoiseachs address at the SIPTU biennial conference


It is a pleasure to be here today at this Biennial Conference to share with you some thoughts on issues of mutual concern and importance.

Thanks to the Regional Executive Committee for the kind invitation.  

My best wishes to Jack O' Connor in his new post as Vice President of the Union and congratulations to your Regional President, Jack McGinley, who was recently awarded a Phd. That achievement represents all that is best in the trade union movement - the development of people through self-help in a framework of solidarity.

Managing Change Together

As I look around this gathering here this evening, I cannot help thinking of how much this country has changed over the past number of years. If I was to travel back in time to twelve years ago and imagine that I am addressing you, how different the themes of this Address would be!

I would be talking about a fiscal crisis, a crippling national debt, high and rising unemployment, wave upon wave of our young people leaving these shores out of economic necessity, sapped investment confidence, and a despondent national mood. Thankfully, we - Government and the social partners - turned all these tides.

I want to pay special tribute here to the visionary, enlightened and courageous role played by the trade union movement generally and to SIPTU particularly in bringing about the sea-change in the economic and social fortunes of this country. Precisely how much can be attributed to social partnership is impossible to say. What is beyond doubt, however, is:

that social partnership injected certainty and stability on a multi-annual basis into policy development and implementation;

that it moved to the centre stage the importance of structural reform, especially a pro-employment emphasis in taxation and social welfare policies;

that fairness and social inclusion were given equal emphasis to structural change and liberalisation; and

that social partnership brought about a winning formula to link fiscal, labour market and competition policy on the one hand, and incomes policy on the other.

The consequences can be judged in any number of ways and by reference to a large array of statistical measurements and policy developments. Just as impressive has been the development of a hard-headed realism that has underpinned the dramatic improvement in employment and living standards - signs that we have met the challenge of globalisation more successfully than many others.

People understand that it is impossible to pursue issues of public spending and taxation; or social policy and structural reform in isolation from each other. We know that when they are approached in an integrated way, progress on any one front serves to bring about progress on all. This coherent approach to the best interests of society underpins the Programme for Prosperity and Fairness, the National Development Plan and, especially, my Government's own Programme.

Through this approach, this State - for the first time since its foundation - can lift this economy onto a new plane of sustainable growth and this society onto a new level of social justice and fairness. They are the real challenges facing social partnership. That is what the process must be about.

That is why we must not allow ourselves to be dragged down cul-de-sacs by focussing on one aspect of development in isolation. We know only too well from history the consequences of that approach!

What we need to do instead is to re-commit ourselves to social partnership - especially in terms of its problem-solving potential. In that way, we best serve the interests of everyone - especially the low paid and those most marginalised in our society.

From the viewpoint of a trade union member, social partnership has brought the interests and priorities of people like yourselves into the heart of the decision-making process. This entailed not just income-related concerns, important as these are, but also a wide range of other objectives - in such areas as workplace conditions, employment growth and security, and quality of life issues, like housing and public transport. The contribution made by trade unions in shaping policy in these and other areas has been enormous and is particularly evident in The Programme for Prosperity and Fairness. We share a vision of an Ireland that is more than an economy, that uses its prosperity to make a good life for all our people.

Tackling Inflation and Capacity Constraints Together

An issue of particular concern at the moment to you - and to us in Government as well - is of course inflation.

Together, we must recognise that the social partnership process can be a powerful lever in compensating for the fact that we no longer have the possibility of independent exchange rate or interest rate adjustments, although it is doubtful if these would be very effective on their own. We should learn from other European countries where social partnership developed to manage full employment and, significantly, to defeat inflation.

Your concern is rightly about living standards. Through the combination of pay and tax reform, real disposable income has increased by 35 per cent on average between 1987 and last year, compared to a fall in real incomes after tax of 7 per cent in the years 1980 to 1987, despite average nominal wage increases of 21 per cent. This year, workers on average earnings will benefit from last April's tax reductions and pay increases of between 9-14 per cent - well ahead of inflation. With the start being made this year, including in the Budget, it is clear that, on average, take home pay will have increased by at least 25 per cent by the end of the PPF - more than twice the level under Partnership 2000.

We cannot do very much about the external factors which have accounted for most of this year's inflation. Around three-quarters of our imports of consumer goods come from countries outside the eurozone, which makes our economy particularly sensitive to euro value fluctuations. But there are solid reasons to expect that currency factors will contribute significantly less to price increases in the period ahead. Rising oil prices have also played a major role, but there are grounds for optimism here, too.

However, recent inflation here also reflects certain pressures within our own economy - principally on the supply side and perhaps most notably in the areas of labour and land. These capacity constraints are the product of a number of interacting factors - especially:

exceptionally high growth levels over a sustained period of years;

a population age profile which lags about 15 years behind the average EU curve; and

a continuing imperative to telescope massive infrastructural investment into a short timeframe, so as to maintain competitiveness and jobs in an increasingly globalised economic setting.

The Programme for Prosperity and Fairness was designed to meet these challenges. In it are set out a range of strategies which are targeted at overcoming capacity constraints so that our society can be moved onto a new level of competitive advantage and social fairness. And through the National Development Plan, the necessary resources - for the first time in this State's history - are being allocated to enable this country to consolidate the gains of recent years and to make a further quantum leap forward in all areas of everyday life. Equally important is that a solid foundation is being laid for easing medium- to longer-term inflationary pressures within the economy.

If we forget the lessons of the 1970s and the 1980s we will be doomed to repeat the disastrous cycle of higher prices being chased by higher wages in an inflationary spiral which leaves everyone worse off. We don't need to go down that road. We took the right road in social partnership when our sensible approach brought annual inflation down from an average of 11.7% in the 1980s to 2.8% in the 1990s.

The crucial importance of making sure that inflation does not take hold here again must be the over-riding priority for us all. If we do this, I am confident that we can ensure that the full value of the PPF can be delivered with the higher standards of living we all seek for all our people. The choices to be made in the forthcoming Budget hold particular importance. Naturally, we in Government will consider very carefully all proposals and views put forward by the social partners. We will assess them by reference to a number of criteria:

the implications for living standards - particularly for the poorer people in our society;

cost effectiveness relative to available alternatives;

the likely impact on behaviour and expectations - especially in terms of consumption;

the possible effects on inflation and competitiveness; and,

of course, the extent to which they serve to advance the ambitious economic and social aims in the PPF itself.

I want to make clear here that the Government will reflect very thoroughly on all proposals which bear on the inflation issue - whether they relate to direct taxation, indirect taxation or problems of a non-tax nature.

The only approach which can be successful is one which seeks to address the totality of the factors involved. No doubt, you here will be considering these and other issues at this Biennial Conference. You can be sure of this Government's commitment to implement the PPF in full, and to ensure that inflation does not undermine the partnership process.

The Role of the Public Service in a Changing Society

This country has overcome enormous challenges in recent years - many were of a persistent and complex nature. I am thinking in particular of rampant unemployment, mass emigration, fiscal crises, and violent conflict in Northern Ireland - to name but a few. The contribution made by public servants in overcoming these and other national priorities has been outstanding. I salute that contribution here today.

Equally, I commend the invaluable and unsung roles played by public servants each and every day in our Civil Service, in commercial semi-State companies, in our non-commercial semi-State organisations, in our Local Authorities, and in the Education and Healthcare sectors. This economy and society has been well served by the high principles which guide so much of what you do.

But just as economies and societies are subjected to ongoing change, so too are the bodies and organisations which act for, and on behalf of, the nation and community.

A major modernisation process has been under way for some years now across the public service. The aims may be summarised as;

the delivery of efficient and cost-effective service;

the improvement of the work environment in all respects; and

successful adaptation to continuing change in an increasingly competitive domestic economy and global marketplace.

The modernisation process is an expression of social partnership at local agency level. It seeks to be inclusive, rather than adversarial; strategic rather than defensive; and responsive to new challenges and new needs.

Overall, the public service has proved itself to be open to meeting the challenges of change, and innovative in responding to new needs.

We must continue to build on this promising foundation so that our education sector, our health sector, our local government system and all our State agencies continue to adapt successfully to meet the needs and expectations of society as a whole. We need to value every member of the team, encourage their development and recognise the contribution they all make to the work of our public service.

A particular challenge for Government, employers and trade unions at present is the need to cater for the emergence of a multi-racial workforce. This is bringing new complexities and sensitivities into the workplace setting, requiring the development of more sophisticated processes and responses. In that regard, I particularly welcome the recent joint document from ICTU and IBEC which seeks to bring a broader perspective to bear on this issue. In the coming years, we will need to be vigilant in ensuring that those from different cultures, who work legitimately within this State, are treated as our own emigrants would have wished for themselves when leaving for London, New York and elsewhere throughout much of the 20th century.

Before concluding, I would like to mention two important topics - public transport and housing - since they go to the heart of everyday experience, in terms of both standards of living and quality of life.

Meeting the Public Transport Need

On public transport, the Government's aim is to provide a reliable system that will assist greater mobility, relieve congestion and shift the emphasis from private car usage. Advancing that ambitious aim requires heavy investment in time, money and effort - but despite all the problems, we have made solid progress.

Under the National Development Plan, a £4.628 billion medium term investment strategy has been set out. This includes a £3.978 billion investment in the Greater Dublin Area over the period of the Plan, covering bus, rail, light rail, integration measures, traffic management and demand management. Also included is £500 million for revitalisation of the mainline railway network and £150 million for upgrading the Bus Éireann fleet. The Government has also agreed to build a metro system for Dublin on a PPP basis. This will complement the LUAS and equip Dublin for the commuter needs of this century.

Overall, the scale of investment is unprecedented and it represents a powerful statement by the Government that we are serious about developing Ireland's public transport infrastructure to the most modern standards of efficiency and coverage.

Remedying the deficiencies, however, will require reform as well as resources. The Minister for Public Enterprise has published ambitious proposals for modernisation of the institutional and regulatory system. The Public Transport Partnership Forum - on which trade union interests are represented - is now being consulted on this reform agenda. In particular, we must have a fair and efficient system to meet the legitimate interests of the public and, of course, those who work in the public transport sector.

Through the Public Transport Partnership Forum and other similar consultative structures, the voice of the trade unions and the other social partners can be heard in shaping the economic and social direction of this country. I would argue that, in itself, that constitutes a powerful reason to value the social partnership process in its totality.

Facing the Housing Challenge Together

Another example of the social partners being at the vanguard of policy development is in the area of housing. Unquestionably, it represents one of the greatest challenges facing this country in the years ahead. Achieving the necessary output will be an onerous task - especially for local authorities.

On the positive side, the housing sector has demonstrated an impressive capacity to respond to unprecedented demand, with a doubling of output since 1993. On a more cautionary note, however, because the economy has grown so rapidly, the level of demand has greatly exceeded projections and it continues to outpace supply.

Great efforts have been made to put in place the necessary supply-side measures so as to ensure that the ambitious level of 55,000 private houses per annum, identified in Bacon III, will be met. The process is under way to identify strategic development zones and establish project teams to plan and oversee progress. The major reform process set out in the Planning and Development Act will also be of considerable assistance.

I particularly welcome the recent Supreme Court finding on the constitutionality of the legislation insofar as it relates to the provision of social and affordable housing. The Government intends to proceed now with all possible speed towards implementation.

It is most important that each relevant area of the public service - at the political, official, commercial and non-commercial levels - plays its full and active role in meeting this crucial national need. I would like the approach to be characterised by a spirit of partnership. But I must make clear that if we in Government believe that further measures to increase supply are justified, we will not hesitate to act.

I want to take this opportunity to thank all of you here for the invaluable contribution which you make each and every day to making this society a better place. This country owes much to your efforts.

Thanks again for giving me this opportunity to share some thoughts with you. My Government colleagues and I look forward to working with SIPTU in the weeks and months ahead as, together, we continue to strive for a fairer and more inclusive society in Ireland.