Brian Cowen (Laois-Offaly, Fianna Fail)

I propose to take Questions Nos. 5 to 17, inclusive, together.

Agreement was reached on the review and transitional agreement 2008-09 on 17 September 2008. The transitional agreement sought to provide certainty and stability during a period of great change and difficulty facing the economy while maintaining the orderly conduct of industrial relations.

The transitional agreement was subsequently ratified by the Irish Congress of Trade Unions and the main employers' body, IBEC, on 17 November.

I have noted the recent letter from IBEC to ICTU on the application of the pay terms of the agreement in the private sector. I understand that representatives of ICTU and IBEC have had direct discussions on this and other issues related to the implementation of the agreement. In this regard, I believe it is important to note that the transitional agreement contains robust "inability to pay" provisions specifically designed to take account of current economic realities. I was disappointed that the Construction Industry Federation, CIF, did not consider it possible to ratify the agreement last November. While recognising the very real difficulties experienced by CIF member companies, I am of the view that these difficulties could be addressed successfully within the social partnership agreement, provided all parties approached the issues in a constructive way.

In the period subsequent to the conclusion of the transitional agreement in September, there has been a serious deterioration in the global economy, greatly exacerbating domestic economic and fiscal pressures. The Government responded by bringing forward the date of the 2009 budget and subsequently published a framework for sustainable economic renewal in December, which outlines a set of measures to support a return to sustainable growth and jobs in the medium term, while also identifying the need for short-term measures to stabilise the economy and public finances.

The Government invited the views of the social partners on implementation of the framework for sustainable economic renewal and on the immediate fiscal adjustment required in 2009. The social partners engaged in extensive and meaningful discussions on these issues over recent weeks.

On Wednesday, 28 January the Government and social partners agreed on a framework for a pact for stabilisation, social solidarity and economic renewal. That framework acknowledged that urgent and radical action was required to restore stability to the public finances, to maximise short-term economic activity and employment and to improve competitiveness.

Last week there were intensive discussions between the Government and social partners to attempt to agree within that framework on the key elements of the fiscal adjustment required.

In the context of the discussions, the Government tabled proposals to achieve a full-year saving of €1.4 billion through the introduction of a pension levy in the public service. The unions decided that they were not in a position to agree to that proposal. While this is regrettable, it does not mean that the engagement was a failure. The overall framework for eliminating the current budget deficit by 2013 was agreed and the need for a €2 billion adjustment this year on a credible basis was also agreed. The need for a significant contribution to be made by the public service pay bill in achieving that adjustment was also agreed, as were the links to the economic renewal strategy published in December.

The Government's decisions last week on achieving the €2 billion adjustment were taken within these parameters and in accordance with principles agreed with the social partners. In respect of the public service, implementation will be discussed in the normal way with the public service committee of ICTU.

The social partnership process focuses on engagement and the sharing of analysis, as well as the forging of specific agreements. The discussions over the past few weeks have deepened the shared understanding of the challenges facing the economy. The inability of ICTU to agree to the Government's proposals does not mean that the partnership process has failed. The overall framework agreed with the social partners remains in place and the Government, for its part is committed to its implementation. We are available to continue discussions on the implementation of the overall framework.

I am chairing a Cabinet committee which will implement the Government strategy for economic renewal. A senior officials group chaired by my Department supports the work of this Cabinet committee. Relevant Ministers will report regularly on progress in the key action areas, as well as bringing forward new proposals consistent with the strategic direction of the framework in their respective areas of responsibility.

Given the importance of focusing on the agenda for economic renewal, and the role of investment in infrastructure in that regard, the work of the Cabinet committee on housing, infrastructure and PPPs, and its supporting cross-departmental team is subsumed by these new arrangements.

Apart from the pay provisions, the transitional agreement contains a comprehensive set of commitments dealing with such issues as employment rights and compliance; workplace learning and upskilling; employee representation; the regulation of employment agencies and temporary agency workers; and pensions and public procurement.

Following ratification of the agreement, work has commenced on the implementation of these commitments which, in the employment law area in particular, will involve several significant new Bills. In addition, a monitoring and review process with representatives from IBEC, ICTU and all relevant Departments has been established to oversee progress on all of these issues.

The agreement also sets out an agenda for public service modernisation which builds on the extensive commitments contained in Towards 2016. There is an ambitious programme of work getting under way in this area on foot of the publication last November of the report of the taskforce on the public service and the Government statement on transforming public services. The Cabinet committee on transforming public services will oversee this transformation programme.

The national implementation body, NIB, which comprises representatives of Government, the Irish Congress of Trade Unions and IBEC, and is chaired by the Secretary General of my Department, continues to meet as necessary to oversee delivery of the industrial peace and stability provisions of the Towards 2016 transitional agreement.

The NIB has dealt with several important disputes in recent months, including the issue of restructuring Aer Lingus, and is overseeing a process undertaken by the Labour Relations Commission which is aimed at supporting the implementation of a 37.5 hour working week for nurses. Meetings of the body also provide opportunities for informal discussions on some broader issues relating to the social partnership process and the industrial relations climate generally. These discussions are held regularly.

The National Economic and Social Council's last few meetings discussed Ireland's current economic crisis and will continue to contribute to the evolution of thinking in this regard. Its work programme for 2009 also includes the following studies — the role of the European Union in Ireland's economic and social development; preparation of Ireland's first social report; climate change and sustainable energy; standards and accountability in human services in Ireland; and innovation — widening and deepening Ireland's innovation policies in the context of globalisation.

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