I am honoured to have been invited to address you this morning. We meet at a time of considerable challenge to all that we have achieved together in the social partnership process over the past fifteen years.
While the Irish economy is doing a lot better than most of our partners, the fact is that our achievements are vulnerable. We are a highly globalised economy. That means there is much in our economic performance which is heavily influenced by decisions made elsewhere. It also means that we have to be very clear about what we do in those areas which are within our control. Above all, we have to be clear about the facts of our situation.
One of those facts is the continuing importance of the trade union movement. Some rather misguided voices have expressed doubts about the relevance of trade unions in modern Ireland. They say that only 40% of workers are members. They say that trade unions are not active in key sectors of the modern economy. They say that union views should not be taken too seriously by policy makers.
Well I have news for those people. They are doing a grave disservice to the more than three-quarters of a million men and women on this island who are members of unions, up by 10% since 1998. The same commentators might like to ask the people of, say, France, whether trade unions are a significant force when only 10% of the workforce are unionised.
The fact is that trade unions are a vital part of Irish life. They have contributed significantly, both in representing and vindicating the rights of their members, and also in helping to shape our strong performance and rapid development. The instrument through which we have worked together is social partnership. Through it, we have helped to ensure that the policies of Government and the behaviour of the social partners are consistent with each other and, together, create the right environment to secure jobs and living standards.
That is why it was so important, at this challenging time, that we secured the agreement of the social partners to the terms of Sustaining Progress. In it, we agreed to work together to create a climate of stability in a very uncertain world. We agreed realistic pay terms. We recognised the importance of responsible economic and fiscal policies, in line with the NESC analysis. We recognised the importance of deepening our competitiveness while continuing to progress towards a more just and inclusive society. We agreed to work together to tackle a number of key issues which impact greatly on the quality of life of our people. And we agreed to improve the framework of employment protection in this country, while retaining the essential flexibility required by ongoing change, managed creatively in all our interests.
I want to confirm here this morning that this Government, which had the negotiation of a new Agreement as a critical part of its Programme, is totally committed to the partnership way of doing business. We are committed to delivering on our obligations. We ask only that all of our partners, including Congress, deliver on theirs.
Commitment to affordable housing
Housing has dominated public discourse since the middle of the last decade. Our growing economy has attracted returning emigrants and new immigrants alike to join with huge numbers of young workers who all want to be housed. Historically low interest rates has made borrowing cheaper than ever for those who can afford to borrow - and many can. These circumstances have led to dramatically increased prices for houses.
From the beginning the Government recognised the crucial economic and social importance of this issue. We made it a priority to do the one thing that is most important when there is a shortage. That is to increase supply. The output of housing in Ireland has increased hugely and is now at 57,000 per year. The eighth successive year of record output.
The Government also recognised that a stable rental market one that treated tenants fairly - is a vital part of any housing market. We determined to reform landlord tenant law to ensure that tenants have security of tenure and that they have available to them a one-stop-shop to settle disputes.
And, so on housing a lot has been done. But clearly more remains to be done. The aspiration to owning a home is dear to every Irish family. It is also an aspiration that is proving impossible to realise for some. You in the trade union movement have made the case very forcibly that low paid workers cannot get onto the property ladder. The case you make, makes sense and forms an important part of 'Sustaining Progress'.
Today, I want to make it clear that Government shares your resolve to build more affordable housing. Social solidarity demands that our economic development enriches the many and not just the few.
I had asked the Oireachtas All-Party Committee on the Constitution, 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.
Today, I am particularly delighted to be able to confirm that Government has agreed to the immediate release of lands currently owned by the Office of Public Works at Jamestown Road and Infirmary Road to Dublin City Council - or an associated project development entity - in order to deliver affordable housing units. In addition, Government has agreed a proposal for the release of lands at Magee Barracks, Kildare and Gormanston, Co. Meath (totalling 309 acres) for inclusion in this initiative. The necessary planning work will commence immediately.
Further State lands will be released for the initiative. Specific proposals will be submitted to Government for consideration by end September 2003.
So, on housing, Sustaining Progress is delivering as it was promised that it would deliver. These decisions demonstrate to any doubters that Government is serious about delivering on what it said it would. In partnership we are together solving the problem of affordable housing.
In developing the Housing Initiative, we will not allow social segregation. Neither will the initiative detract from the funding available for existing social and affordable housing programmes. Capital spending for affordable housing, and other social housing programmes will amount to over €1.7 billion in 2003.
We have delivered record housing output. We will deliver on affordable housing also.
Employment Protection - progress
We are also delivering on our commitments in Sustaining Progress to extend and safeguard the rights of employees in the workplace. Since the ratification of the Agreement, progress to date in these areas includes:
- the passing of the Redundancy Payments Bill by the Oireachtas in May;
- new Regulations giving effect to the mandatory provisions of the consolidated Transfer of Undertakings Directive were signed into law with effect from 11 April;
- the Protection of Employees (Fixed-Term Work) Bill has also passed all stages in the Dáil and Seanad. We have taken on board Congress concerns about it;
- The Maternity Protection (Amendment) Bill has completed its Second Stage in the Seanad on 28 May.
The Government has also approved the drafting of legislation to amend the Employment Equality Act, 1998 and the Equal Status Act, 2000, to give effect, in an integrated manner, to the three EU Equality Directives. The legislation will be published later this year with the intention that the Directives be implemented at the earliest possible date.
A critical issue for Congress in the negotiations was improving your capacity to represent workers who sought union membership but where employers would not negotiate. I am pleased to say that the Industrial Relations (Amendment) Bill, 2003, has been approved by Government and published. It will enhance the dispute resolution procedures on the lines agreed in the negotiations.
At the same time, the Labour Relations Commission are revising the existing Code of Practice on Voluntary Dispute Resolution and developing a Code of Practice on Victimisation. The LRC has also been requested to develop a Code of Practice on Access to Part-Time Work. To facilitate this and other work, both the LRC and the Labour Court have been allocated additional resources by the Government since the ratification of Sustaining Progress.
Legislation is also being prepared in the area of workers pensions. The Social Welfare (Miscellaneous Provisions) Act, 2003, contains an amendment ensuring that the Pensions Board is in a position to respond to the funding challenges currently facing defined benefit pension schemes.
Finally, on 24 June, the Government signed an order to increase the level of the minimum wage from €6.35 to €7.00 with effect from 1 February, 2004. This decision, in line with the recommendations of both the Irish Congress of Trade Unions and IBEC, will increase the pay of those currently on the minimum wage and benefit young and part-time workers in particular.
On workers' rights and the role of trade unions, the Government is delivering.
Public Services & Benchmarking
We have also delivered on our commitments to employees in the public service.
The payment of the Benchmarking awards - as provided for in Sustaining Progress - poses a significant challenge for the credibility of partnership. The National Economic and Social Council has stated that in a difficult public finance situation, such a large step-adjustment in public pay warrants a step-increase in flexibility and self-adjustment towards new systems of continuous improvement. The payment of the final 75% of Benchmarking is conditional on real and verifiable outputs in relation to modernisation and flexibility. Sustaining Progress is clear that payment is dependent on:
· implementation of the modernisation agenda set out in Sustaining Progress,
In the private sector, companies which do not react appropriately to change, quickly enough, perish in the cut and thrust of the competitive business world. Because public service providers are normally monopolies, they do not face the same stark realities. Accordingly, there is an extra responsibility on the public service to provide the excellent services which an increasingly discerning public rightly demand and expect.
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, including the trade union movement. The quality of public services, as well as the effectiveness of our public institutions, is a key benchmark of our national competitiveness.
While the Government is committed to further 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 sector. This requires changes in how services are delivered and who delivers them. It requires changes in how public service organisations are structured.
We all find that change done to us can be threatening; but that change made by us can be exhilarating. The opportunity to be involved in making change in the public sector arises through genuine participation in partnership by both workers and management. I see partnership at the level of individual public sector organisations as the engine to deliver the change that the public demands. Partnership must demonstrate its ability to enable and embrace modernisation and change - both nationally and at the level of the individual organisation and workplace.
At a time of private sector job losses and scarce public resources, the public service needs to take the opportunity to demonstrate that it has understood the need for change. It needs to deliver.
Living Standards
This Government has delivered for ordinary workers right across the economy.
Over the last six years the Government has taken a range of measures to boost the living standards of people on modest incomes.
We brought in the national minimum wage. We brought in record increases in the level of child benefit. We brought in tax credits to make the system fairer and more transparent. And we brought in substantial increases in the value of those credits in order to ensure that tax relief went to those who needed it most.
This is a record of reform of which this Government can be proud. And it is a record of reform of which this country can be proud. International studies show that Ireland now leads the way when it comes to helping ordinary working people and their families.
The OECD recently examined the burden of direct taxation on industrial workers with families right across the developed world. They looked at income tax and social security contributions, net of child benefit, as a percentage of the income of a person on average industrial earnings in a one-earner family with two children.
What they found was that the burden of direct taxation was lowest in Ireland of all the countries they looked at. Not only that, but the tax burden on the industrial worker in Ireland was actually negative. In other words, the person in Ireland actually gets more in cash benefits from the State than he or she pays in income tax and social security contributions to the State.
That is a remarkable achievement when you consider where this country has come from. It shows the enormous social progress that we have made in a relatively short space of time. And it shows what can be achieved by a reforming government working with the social partners to make this country a better place for all our people.
Our tax reforms have helped to promote social inclusion. Six years ago the rate of unemployment in Ireland stood at 10.4%. Today it is just half that. Six years ago the number of people trapped in the misery of long-term unemployment was 90,000. Today that figure is down to just 26,000. That is real progress for real people.
I hear a lot of cynical commentators saying that we have nothing to show for the boom years of the Irish economy. They could not be more wrong. We have achieved virtually full employment. And we have achieved the effective elimination of long-term unemployment. Those are very real achievements indeed and we will work hard to protect them.
Competitiveness
On the economy, competitiveness has emerged as a key issue. We cannot ignore the pressure points that now exist in the economy. Our fiscal situation has tightened and so has our range of choices. Now we must temper our expectations and moderate our behaviour to conform with economic reality. If we do that, our competitiveness will be enhanced and our employment secured. If we do not, the consequences are clear. It will be back - back to the 1980s - back to high unemployment, high emigration, high inflation and low national self esteem.
Today, there are facts that we must all face together. Ireland, is part of a monetary union with an objective for low inflation of less than 2%. International competition is exerting downward pressure on traded goods and is likely to continue doing so for some time to come. International competition for jobs and investment is becoming more intense all the time. Ireland must stay competitive if Ireland is to stay employed. We have to get inflation down to at least 2% or risk losing jobs and losing markets. This is the challenge facing all of us now.
Sustaining Progress commits that the Government, along with IBEC and ICTU, will work together to help put downward pressure on inflation, particularly over the next 18 months. In this context, the parties recognised that an explicit and co-ordinated set of policies could help to slow down the present rate of domestically generated inflation.
The group is developing its proposals in a report to the Government as provided for in Sustaining Progress and these proposals will be fully taken into account in the future development of policy in this area.
But we cannot simply leave all this to the Anti-inflation Group. As a society we jointly face the challenge of securing our future well-being, in the face of a difficult and changing economic environment.
State Companies
The Government is committed to ensuring that the commercial semi-State sector provides services of world-class quality at competitive prices to the consumer.
There has been extensive discussion with the unions about these issues, in particular as they apply to transport. It is vital that taxpayers and commuters get value for money from public transport services. There is a very real concern in Government about, for example, the increased subsidies being paid to CIE - €245m in the current year. We need to change the way public transport is organised and managed in order to increase efficiency and give value to customers. I believe that we should aim to do that in the spirit of partnership. I am quite sure that the CIE unions do not expect the travelling public and the taxpayer to subsidise inefficiency.
There is already a significant measure of agreement through the Public Transport Partnership Forum, for example that new routes should be open to competition, as indeed they are.
The Government has no desire for conflict with the trade unions. I have no intention of pursuing a policy which would erode the wages and conditions of public transport employees in some sort of race to the bottom to reduce operating costs.
What I am clear about is the need for change to promote efficiency. There is no reason why a more efficient Dublin Bus would not win any franchising competition. Our focus should be on service and cost. Our concern is to promote more efficiency and better service.
I am sure that the Government will be able to reach a broad consensus with all of the stakeholders, including the CIE unions, provided there is a clear understanding that change is unavoidable in order to meet the legitimate expectations of taxpayers and the public. Both Minister Brennan and myself share that view.
Government policy is clear and, as I said earlier, there is a fair measure of agreement with the trade unions about the broad direction of development in the bus market in Dublin.
In considering the future for the airports operated by Aer Rianta, the Government will take the decisions which best support their future development.
With regard to the future of Dublin Airport, the proposal for a second independent terminal has to be considered in the light of what is best for the airport as a whole. There are clear and obvious pressures on capacity. They have to be faced up to and the investments that are necessary have to be funded. However, I believe that we need to be able to demonstrate that the overall direction and management of the airport, will be best served by whatever decision is taken about a second independent terminal. The question of the allocation of costs and responsibilities, and the need for a clear strategic direction for the airport complex as a whole will have to be addressed and resolved.
Decisions need to be taken as early as possible. Equally, however, we need to take the right decisions. We will take into account all of the legitimate views which have been expressed. Ultimately, our concern will be to take decisions that are right for aviation policy, right for the consumer and right for the taxpayer. We will take the decisions which we are convinced are in the best, long-term interest of everyone concerned.
The Government is committed to delivering efficient and competitive public transport services. I have no doubt Congress wants nothing less.
Conclusion
Finally, I would like to take the opportunity to express my good wishes to all the officers and members of Congress. In particular, I want to thank you President, for your leadership role not only in your term as President in a long and distinguished career of leadership in the movement and in the teaching profession. I want to express my good wishes also to Tom Wall, the Assistant General Secretary of Congress, who retires this year. Tom has been a most helpful contributor to negotiations and the resolution and prevention of disputes over many years and I wish him a long and happy retirement. In the same spirit, I want to express my best wishes to Joan Carmichael, who will also be retiring from Congress as Assistant General Secretary. Joan has been a tireless champion of equality in society and in the workplace. I know that she has more to contribute to Irish Society in the years ahead.
I must also acknowledge the immense contribution of Des Geraghty who retires as General President of SIPTU later this year. Des has contributed greatly to public life and public service over many years and I know he will continue to make a contribution.
Trade unionists are activists. They are doers and they are achievers. The emerging modern Ireland is in part a monument to their activism and to your leadership. Unions, employers, community groups and Government, have, by working together risen above sectoral agendas. We have avoided the trap of being less than the sum of our parts. We have built an economic and a social model that is admired around the world.
But, we have no time to rest on our laurels. Just as old problems are solved, new ones emerge. Indeed it is worth remembering that if we still had massive unemployment and high emigration it is unlikely that we would ever have had a housing problem. But the fact is that we do and the fact is that we are making progress good progress in solving it. We must remain focused on the long term and on the big picture. Ireland has every component part necessary for long term and sustainable progress. The question that is now to be answered is whether we will have the wit and the will to pull together to realise our potential. If we can do that, we can be world leaders. We can provide not just jobs, but good jobs. We can provide the infrastructure and the housing that will not only sustain a world class economy but provide a decent quality of life as well.
These are the goals that we have set for ourselves. Now, together let us achieve them.
Thank You.
ENDS