I am delighted to be here this morning with you, together with my colleagues, the Tanaiste, and the Minister for Finance, at this,the fifth Plenary meeting under Sustaining Progress, as we focus on the achievements during the first half of the agreement as a whole and the priorities for the remainder of Sustaining Progress.
At the outset, I want to make very clear, the Government's continued strong commitment to pursuing Ireland's economic and social prosperity through the process of Social Dialogue. The Programme for Government set out an agenda for all strategic areas of Government activity aimed at building a fair society of equality and opportunity and of sustained prosperity for everyone. I want to re-affirm, with my colleagues, the Government's determination to continue to deliver on all of its commitments.
Overall Assessment
The primary focus of todays meeting is to take stock of how far we have achieved our objectives at this half-way stage of the Agreement.
We stated together that the overall goal of this Agreement was to continue progress towards the realisation of the NESC vision for Irish society that is for economic inclusion based on full employment; economic development that is socially and environmentally sustainable; social inclusion and a commitment to social justice; and continuing adaptation to change in a period of considerable uncertainty.
We stated that we would do this by sustaining economic growth and maintaining high levels of employment and securing living standards for all, while strengthening the economy's competitiveness and thereby its capacity to resume trend growth in more favourable international conditions.
That goal reflected the considerable uncertainty which marked our negotiations. Against that background, we can already point to considerable success in this process.
The Sustaining Progress Agreement was ratified in early 2003against the reality of an international down-turn and the backdrop 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. This forced us to jointly make some hard choices to ensure that the economy would resume a relatively strong growth path when the international environment improved.
It was thanks in no small part to Sustaining Progress that we weathered, well, the global economic slowdown, which began in 2001.In terms of economic growth, job creation, unemployment and income per head, our performance over the period to date has compared very favourably with the rest of the European Union. That is not to say that we have been unscathed, as evidenced in particular by the worrying increase in redundancies. However, we have come through in much better shape within the framework of social partnership than many of those who see no need of a social dialogue process.
Prudent management of public finances, coupled with an upturn in the economy has resulted in the prospect of a reduced exchequer-borrowing requirement for 2004. Recent very significant overseas investment decisions also point to the strength of the economy. However, this good news is tempered by the continuing pressure of global competition, as reflected in job losses across the sectors. Last Friday's CPI figures clearly warn of the continuing risk of inflationary pressures in the economy, pointing to the need for a special focus to be maintained on our relative competitive position.
European Dimension
The EU has and continues to provide the essential framework for our prosperity, through the economic and business opportunities it provides, particularly in the context of the entry of the ten accession countries into the enlarged EU family. Indeed Ireland's successful Presidency has proved that, together, we have learned,as Government and Social Partners, to become more strategic and to take a longer-term view on our relations with our partners.
This is not one-way traffic the Conclusions of the Spring Council clearly endorse our approach, by calling on Member States to build Reform Partnerships involving the Social Partners, in accordance with national arrangements and traditions. The primary purpose of such Partnerships is to "promote complementary strategies for change, addressing a broad range of policies -economic, social and environmental - encompassed by the Lisbon Agenda".
Ireland's social partnership process is the appropriate vehicle to act as the Irish National Reform Partnership. I look forward to the Steering Group under Sustaining Progress developing an important contribution to the national input into the Lisbon review.
I believe passionately that the EU will continue to be vital for Ireland's future prosperity and well being and that the draft EU constitution, that we have helped to bring to a conclusion, will provide an overarching framework within which the people of Europe can enjoy freedom, peace and prosperity through a strengthened European model.
Mid-Term Review
Last month, we successfully concluded an agreement on pay and workplace related issues, covering the second half of the lifetime of Sustaining Progress. There was a lot of hard work involved - I hope everybody's sleep deficits are now in surplus - but I think the outcome justified the effort.
I said in a speech at the IMI earlier in the year that the Government believes that the series of social partnership agreements we have had since 1987 have been good for employers,good for employees and good for the country as a whole. The same can be said of this latest agreement. It provides for real increases in pay for employees in the private sector and public service, while at the same time protecting our competitiveness. It addresses concerns raised in the talks around low pay, the National Minimum Wage and the level of redundancy payments. And it provides for continuing co-operation in addressing other key issues of concern, such as pension provision, public procurement, partnership at workplace level and employment rights.
It is now, of course, a matter for the employer and trade union organisations to decide on whether or not to ratify the agreement.In making their decision, which will of course be influenced by a number of factors, I would ask them to take into account the overall benefits which social partnership has brought to this country over the years, especially in terms of jobs and industrial stability. I would ask them to consider the particular - and real -benefits which this Agreement will confer on all sides. I would ask them to bear in mind that the Pay Agreement is just one part -admittedly, a key part - of the overall plan for economic and social development which we all signed up for at the beginning of last year.
How we go about setting wage levels is critically important for stability and growth in our economy. Some commentators seem to believe that we should move away from collective bargaining structures, including the well-tried and tested bargaining procedures within social partnership. There are, of course, anti-partnership and anti-union voices to be heard,domestically as well as internationally. For them, the very low levels of union membership in some countries are seen as an attractive goal. They overlook the fact that collective bargaining continues and is a critically important influence on wage levels, even in economies with low union density. Recent evidence suggests that over 70% of employees in Europe have wages set in consequence of some form of collective bargaining.
We have, over many years, demonstrated the importance of successful wage bargaining mechanisms and we have worked hard to refine and develop them. Now is not the time to throwaway the finely balanced and flexible procedures which have served us so well.
I believe the negotiators have done an excellent job, and I would like to take this opportunity to thank them all for the hard work and commitment in bringing the agreement about.
Commercial State Companies
It would be wrong of me not to make reference to some of the major issues which have arisen regarding the future of some of our commercial State companies.
A number of these are operating in the context of very great change and challenge. It is not surprising that, as a result, we have had tension and difficulty. Indeed, we recognised this when negotiating Sustaining Progress 18 month sago.
I want to acknowledge the very legitimate concerns that workers and their representatives have in the face of such change. I acknowledge also the very responsible way in which, for the most part, this issue has been approached by the parties concerned. The social dialogue provides a means to address these issues in a way which facilitates the management of change. I freely acknowledge that not everything that has been done in every instance has contributed to successful change management. Equally, however, I want to stress that simple resistance to change is not an option. What we need is a way of recognising what has to be done and managing adjustment in an equitable and sustainable fashion.
Let me be clear: I see no attraction in the so-called race to the bottom sometimes associated with privatisation and some forms of liberalisation. The fact is that decent employment standards are an integral part of what Irish society is all about. There should be no conflict between the development of efficient, responsive and competitive enterprises and the maintenance and, indeed, improvement of living standards and working conditions, either at the level of the economy or individual sectors.
I am confident that the discussions which we have had, and which are continuing on specific issues, in the context of the general principles I put forward to the ICTU will enable us to find a satisfactory resolution to these issues.
Special Initiatives
The Ten Special Initiatives under Sustaining Progress were chosen because they represent a search for a new approach to managing cross cutting issues, focusing on longer term outcomes in a number of priority policy areas. By definition, therefore they are very complex and represent a major challenge to Government, the Social Partners, and the wider community. They have the clear potential to improve our national well being and the quality of people's lives. I want to acknowledge the efforts of members of the Steering Group who have engaged in a difficult and intensive process, as part of the first phase of its work programme. This process has been worthwhile and the Progress Report circulated today provides a clear pathway for a sharper focus on implementation and delivery.
I understand and acknowledge the sense of frustration which some of you have expressed regarding the slow pace of progress in some of these areas. However, I believe that there has been a very significant deepening of understanding about the issues and the possible responses as a result of the work which has taken place. I know that many of my Ministerial colleagues have welcomed the opportunity to engage directly with the social partners on many of these difficult issues.
I am interested to hear your views about how we might proceed in a number of these areas. After today, I will be asking to be kept personally informed of progress on the Special Initiatives, so that, with my colleagues, I can ensure that the challenges which they represent can be met with imagination and determination.
It is clear that a common thread weaving together the different aspects of these Initiatives is the focus on delivery of quality services to the public in an integrated manner.Finding new ways of achieving synergies in the management of cross-cutting issues is one of the keys to unblocking some of the obstacles we are meeting. This challenge exists not only at national level but importantly at regional and local level also.Addressing this complex agenda effectively is a major priority for the Government for the second half of the Agreement.
The scale of these challenges is evident, even as I list and comment briefly on a number of them.
Education
A National Consultation Process on the Irish Education System has been underway since last January. This process is about positioning ourselves so that the Irish education system develops to reflect societal change, while maintaining and enhancing our international competitiveness. It is also about ensuring that our education system develops as an agent of social cohesion.
Everybody has had an opportunity to contribute to this either byway of direct written submission or through attendance at the series of public meetings which were held around the country.
At the same time a comprehensive review of educational disadvantage programmes has been underway and is currently being finalised by the Department of Education and Science.
Review of National Drugs Strategy
In the context of the National Drugs Strategy, it is recognised that there has been considerable progress but there is still much to be done. I can assure you that the Government is aware of this and will continue to prioritise the Strategy and the work of the Task Forces, as the active involvement of the local community is a key factor in the success of the Strategy. You will be aware, that a consultation process in currently underway, in relation to a review of the Strategy. This will enable priorities for future action to be identified, through a refocusing of the Strategy, if necessary, for the remaining period up to2008.
Health
The Health Reform Programme seeks to deliver world-class care in Ireland and will represent a radical change in the way our health services operate. The aim is to bring about greater accountability,planning and financial management, and to create a system to achieve real change for the patient and the public. Every element of the system, to achieve real change for the patient and the public, from primary care to acute services, has been analysed, and we are now in the midst of the roll out of the Programme.
I note that the social partners will also have a greater involvement with the work of the strategic task force on alcohol in the future and I think this is a very positive step.
Community Development / Local Development
The Government remains committed to supporting community development through the alignment of schemes and processes across rural and urban communities, and of local development programmes. In 2003, a Review Group was established to examine the ways of improving the delivery mechanisms, so as to improve cohesion and thereby enhance social inclusion. Earlier this year, following consultation with community groups and organisations involved in local community development, the Government approved a number of steps towards this, including changes in relation to ADM, and support for community bodies for advancing improvements in linkages, cohesion and sharing resources.
Family Strategy/Policy
Given the major social and demographic changes that have occurred in Ireland in recent years, it is necessary to bear in mind the different forms of family life, in developing policies to promote the well being of individual family members, under social cohesion. The development of a new family strategy began in2003, with a series of regional public consultation fora, and continued in 2004. During our EU Presidency Programme,Ireland hosted a major international conference on challenges facing families in all EU countries.
The aim now is to produce a strategic policy document, clearly outlining the challenges we face and with comprehensive proposals on how Government can support families to meet them.
Community Employment
We are agreed that the participation across the three active labour market programmes will be 25,000. There is a continuing challenge to contain and reduce long-term unemployment,even though it has fallen to relatively very low levels. Active labour market measures of quality are therefore still very necessary. We are also especially conscious of the valuable dual role of these programmes in supporting community and special services. This is a difficult combination of objectives to meet.
Accordingly, we have now started consultation in relation to the proposals for Community Employment and the Jobs Initiative and are raising longer term questions around the Social Economy Programme.I would like to think that we can be positive and creative around these issues to find the best arrangement.
In particular, I acknowledge the critical importance of the community services, delivered as a result of these programmes. I believe we need to be imaginative in looking at how community and voluntary activities can be supported through direct employment, as well as other support schemes. I therefore encourage the social partners to respond fully to the current consultation exercise, and I look forward to the outcome of the consultations.
Delivering a Fair and Inclusive Society
Delivering a fair and inclusive society is central to Sustaining Progress. We can acknowledge steady progress across many areas, while recognising that much effort is still required on social inclusion.
This year has continued to see considerable advances in social welfare provision. Social welfare rates have been raised by 62% overall since 1997 (27% above the increase in the cost of living in the period 1997-2004). The largest series of Social Welfare and Child Benefit increases in the history of social welfare in this country have been implemented. This contrasts with many of our European partners, who are pursuing real reductions in their welfare systems. As a result of this and increased employment -consistent poverty has been reduced by two thirds from 15% in 1994to 5.2% in 2001 (latest figures available).
It follows that the core commitment in the National Anti-Poverty Strategy is being honoured, namely that the real incomes of social welfare recipients will continue to rise.
Under the NAPS, the Government identified a target to be achieved for the lowest rates of social welfare by 2007, through a strategy of increasing social welfare payments as resources permit. I know that the achievement of that target is of central importance for a number of the social partners.
We committed ourselves in the NAPS to develop a greater level of understanding of the contribution of various causal factors to levels of relative income poverty. These are measured and monitored, of course, in line with European practice. I hope that our engagement through the Special Initiatives will contribute to an understanding, which will better inform policy and practice in this critical area.
It is particularly important that child poverty is one of the ten issues singled out for attention by the Partners. The NESC study on the feasibility of developing Child Income Support Mechanisms is a very practical development in this area.
Commitment to Social and Affordable Housing
Housing is a matter of huge importance to this country and that is recognised in the Special Initiative in Sustaining Progress. Last year, I placed on record my personal commitment and enthusiastic support for developing the affordable housing initiative. Government has shown its firm resolve in this regard by committing to an ambitious scale of delivery of affordable housing for the target groups through the Initiative.
Identifying potential sites has been central to progressing the Initiative. In this context, I am pleased to announce that the Government has agreed to the release of further State lands in Kildare and Galway with a potential for 1,000 units. Together, with additional land from the local authorities, the total potential yield for the Initiative is now 8,891 units.
We have also agreed that alternative strategies for fast-tracking delivery should be pursued, including the possibility of swapping valuable sites in return for affordable housing in a manner that ensures more units, quicker delivery and better value for money. I would like to acknowledge the positive contribution of the CIF, as well as the other social partners, in advancing this initiative.
The Affordable Housing Initiative is an injection of extra State resources, in the form of surplus or under-utilised land, to assist people who experience affordability problems. It has not and will not detract from the funding available for existing social and affordable housing programmes. Exchequer spending on the provision of affordable housing, and other social housing programmes will amount to over €1.8 billion in 2004. We remain committed to making the necessary investment in housing as a key part of our national infrastructure and of our community.
The Government recognises that there are many strands to housing policy and many people and organisations that make a contribution,including members of the Community and Voluntary Pillar. To give that recognition practical expression, I am also pleased to announce today that the release of State lands will also include additional lands to be supplied for specific social housing purposes, such as a proposal for housing for the elderly in Portlaoise.
The Community & Voluntary sector will also have a role to play in the Government's new initiative to meet the long-term needs of rent supplement tenants. Under the new measures, the rent supplement scheme will be refocused on short-term income support,while local authorities will assume responsibility for meeting long-term housing needs. The new arrangements will put in place positive solutions for people with long-term housing needs and are being introduced in the context of wider Government action, to reform and develop the private rented housing sector. Central to this wider action is the reform of the landlord and tenant legislation through the Residential Tenancies legislation, which passed all stages on Thursday 8th July and will also help to underpin the new arrangements.
I am grateful for the role played by the social partners in consultations on the new policy and I hope it can be a model for future successful engagements on other difficult issues.
Our successful economic policies have provided the basis for unprecedented levels of housing output and massive levels of public investment. These are complemented by the policy initiatives I have outlined above. The Government is currently examining the Report of the All-Party Oireachtas Committee on Property Rights and I hope to see the NESC report on housing completed shortly. I know that the National Housing Forum will continue its discussions on these and other issues in the autumn and I look forward to our continued partnership in this area.
Government and the Social Partners together must remain focused on the long term and on the big picture, but must also remain flexible enough to be able to respond to sudden change. We have now a consistent economic and social policy framework and I believe the necessary component parts for long term and sustainable progress.The Mid-Term Review has provided us with an opportunity to take stock, to acknowledge the progress that has been made, to hear first-hand and acknowledge the Social Partner concerns. For my part, I want to see a stronger focus on delivery for the remainder of the Agreement and this should be the clear message that we take with us for the remainder of Sustaining Progress.
Thank You
ENDS