Dáil debates

Wednesday, 5 July 2006

National Wage Agreement: Statements.

 

4:00 pm

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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I am very glad of this opportunity to have an early debate in this House on Towards 2016, the ten-year framework draft social partnership agreement, negotiations on which concluded on 14 June last. Deputies will be aware that we have already had a debate on the draft agreement in the Seanad on Wednesday, 21 June.

As I said in my reply to questions in this House last Wednesday, I recognise that all parties have dedicated a great deal of time and effort to the negotiations and I again record my appreciation of their continued commitment, both to the immediate goal of securing a new agreement and to social partnership itself, often in the face of difficult negotiating conditions and misguided criticism, to which I will return later.

Towards 2016, if ratified, will be the seventh social partnership agreement we have negotiated since the process was initiated in 1987. I am glad to say that our economic and social circumstances have been radically transformed for the better since those early days. Social partnership has been central to bringing about that transformation. In particular, the industrial relations environment, which has been transformed, has been critical to our success in attracting increased investment.

As with previous social partnership negotiations, the present draft agreement has reflected the NESC strategy, which provides a strategic analysis of the key opportunities and challenges facing us. A shared understanding of those issues and a consistency of approach in responding to them have been central factors in our successful adaptation to change over many years.

The evident track record of successful economic and social change through social partnership has been recognised and attracted very positive comments, from many international organisations and agencies, including the IMF, the OECD and the European Commission, which have understood its role in the transformation of our economy and society. It is why the European Council urged all member states to develop national reform partnerships, like Ireland, to underpin the Lisbon Strategy for growth and jobs, since neither governments acting in isolation nor public policy alone can deliver the change required.

Some have argued that the draft agreement, in so far as it relates to pay and the workplace, is really relevant only to a minority of private sector employees who are trade union members and that it is essentially a public service pay agreement. This displays a grave misunderstanding of how the Irish labour market works. While it may be true that a majority of employees in the private sector at any one time are not organised members of trade unions, it is equally true that wage determination is always shaped by the organised sectors, within the context of underlying labour market conditions. Wage norms and trends are strongly established, especially in small labour markets.

We know from our own experience the dire consequences when these norms are out of kilter with conditions across the economy generally. Collective bargaining across Europe is a powerful influence on wage setting, even in countries with much lower rates of trade union membership than Ireland. What matters is that the bargaining takes place on the broadest basis possible and with full awareness of the economic and social context. That is precisely what the partnership process secures.

Our model is successful precisely because it is flexible enough to take account of the wide diversity of situations in employment across the economy, while providing certainty and confidence that can successfully and effectively guide not just the setting of pay rates, but also all aspects of the employment relationship, in the right direction.

Employment standards issues arose, in admittedly a small number of companies, in the latter part of last year and caused widespread upset and passionate concern among many thousands of workers and citizens over the potential for displacement and a "race to the bottom" in the labour market. This demonstrated the need for mechanisms to provide assurance on decent standards and fairness, without compromising flexibility or adding unreasonably to the burden of regulation of the labour market. Setting that delicate balance requires the active engagement of all of the parties in our employment system. We are fortunate that the social partnership process provides precisely that opportunity. The proposals in the new draft agreement regarding employment rights and compliance represent a fair balance between the legitimate interests and objectives and will provide confidence for the future in a rapidly changing labour market.

The terms of the pay agreement are quite straightforward, with 10% payable over 27 months in four instalments of 3%, 2%, 2.5% and 2.5%. An additional 0.5% will be added to the payment from 1 July 2006 for those earning €10.25 per hour or less. As with previous agreements, provisions are included which enable employers to plead inability to pay or to seek offsetting productivity changes where circumstances require it. In addition, the parties have agreed to make a recommendation to the Minister for Enterprise, Trade and Employment as regards increasing the national minimum wage with effect from 1 January 2007. The proposed level of pay increases strikes a fair balance between the pressures on the enterprise sector to be competitive in international markets and the need to secure the living standards of our workforce.

The public sector pay terms are the same as for those of the private sector, except that the first payment will fall due on 1 December 2006 rather than 1 January 2006. As was the case under Sustaining Progress, these payments will only be made after the delivery of verified changes. The changes include better opening hours, more flexible operating arrangements, the application of ICT to achieve greater efficiency and improved promotion and recruitment practices, including in particular opening up more senior jobs to competition from those outside the public sector. The second benchmarking body is due to report its findings by the end of 2007. A parallel benchmarking process in respect of the pay of craft grades and related non-nursing and general operative grades is to be completed by the second half of 2007. Again, payment of any recommended increases will be dependent on ensuring the delivery of substantial change and flexibility.

The agreement is about much more than pay. The draft agreement addresses the need to maintain a supportive macro-economic environment to enhance productivity and competitiveness, the successful management of and response to social needs and social change and the imperative of building a more inclusive society. Put simply, it is about mobilising our collective resources to improve people's lives. Draft copies of the agreement have been circulated among Deputies, so I will only briefly set out the main elements.

Chapter two describes the macro-economic context to the agreement. A certain level of economic growth is assumed in the short to medium term. The draft agreement endorses the key national strategies, such as the NSS and NDP, which will inform investment and planning over the period. It also details key actions planned or already in place in terms of sectoral strategies in key areas such as science, technology and innovation, better regulation, public enterprise, manufacturing, transport, housing, energy, telecommunications, education and training, the environment, rural development and the agri-food sector.

Social partnership provides an effective mechanism for driving progress on the social agenda over the next ten years. As well as acting as a forum for dialogue and engagement between the key actors, it provides the means for us to work together to deliver better outcomes for the most vulnerable people in our society. In the developmental welfare state report published last year, NESC suggested that our strong economic performance could serve as a new context within which to seek major improvements within the social sphere. This requires a process of reinvention and repositioning of our social policies and the critical recognition that economic progress and social well-being are equally important and mutually reinforcing. The NESC analysis recognises that increases in social welfare alone will not overcome many of the difficult social problems we face as a society. The delivery of quality public services is essential. We also need to be proactive in encouraging innovative and pioneering responses to social challenges. Community and voluntary groups throughout the country have a key role to play in delivering these responses.

Towards 2016 sets out an ambitious agenda aimed at delivering tangible social change. It adopts a longer term perspective, recognising that many of these social challenges are particularly complex and require coherent and strategic responses. Significantly, the agreement puts in place a new social policy perspective based on the life cycle framework. This approach seeks to move us away from a situation where policy is developed along departmental lines to one where the focus is on the outcomes we need to achieve for people at different stages of their lives. The agreement sets out a vision and long-term goals for children, people of working age, older people and people with disabilities. It also highlights a number of emerging challenges and includes measures for responding to them. These include, for example, the integration of migrant communities, the acute needs of children in disadvantaged communities and support for the role of the community and voluntary sector in the future.

A range of priority commitments are set out under each life cycle stage to be pursued over the first phase of the agreement. For children, a number of measures aim at increasing the supply of child care and improving educational outcomes. For people of working age, there is a focus on measures to promote employability and access to employment, in recognition of the key role that employment plays in helping people to escape poverty and to improve their opportunities. For older people, the social partners have agreed to work together to develop an effective infrastructure of long-term care services on the basis of principles set out in the agreement. The social partners have agreed that the implementation of the national disability strategy provides the most appropriate mechanism for delivering the outcomes we wish to see for people with disabilities. A number of key issues have been highlighted so that they can be addressed through the Disability Act and the sectoral plans process. These goals cannot be achieved during the usual three year agreement. In this context, the Government and the social partners recognise that a ten year framework agreement is more appropriate for this type of effective social dialogue.

On the criticisms made of social partnership, it never ceases to amaze me that the most voluble critics, who denigrate social partnership and, therefore, the social partners, and deny its role in our economic and social transformation, never enlighten us with their suggestions for an alternative. Social partnership works and, despite the difficulties that have occasionally arisen, has proven itself a reliable and effective means of identifying, analysing and addressing key social and economic challenges.

One of the loudest and most often repeated criticisms is that social partnership is anti-democratic. Since its beginnings almost 20 years ago, social partnership has been based on an invitation by the Government of the day to the social partners to join it in discussing how to jointly develop policies and behaviours which better serve the needs of our people. It is entirely appropriate and democratic to recognise the independent roles and contribution made by various social partners.

At the same time, the partners fully recognise and accept that the Government must be able to exercise fully its prerogatives within the framework of political accountability. The Government entered these negotiations on the basis of our published programme for Government. We have been no different in this respect than previous administrations. We have maintained close ministerial oversight at all stages of the negotiations and the terms of the draft agreement were approved by the relevant Ministers in a process led by the Tánaiste and me. We are satisfied that the outcome is entirely consistent with our programme. In implementing the agreement, we will be fully accountable to the Oireachtas. The substantive elements of the agreement require the introduction of 12 Bills, each of which will be subject to close scrutiny and debate here and in the Seanad. The expenditure implications will be dealt with in the budgetary and Estimates process in the normal way, with the normal full accountability, approval and oversight by the Oireachtas. All the implementation arrangements of the last agreement were reported on regularly to the Oireachtas. My ministerial colleagues were also answerable in this House in respect of their particular responsibilities under the agreement. This will continue. I welcome greater parliamentary scrutiny of the process and hope Oireachtas committees will take a greater interest in the substance of social partnership. I also see particular value in direct Oireachtas engagement with the chairs and directors of the social partnership institutions, NESC, NESF and NCPP. The social partners would also be happy to avail of opportunities to share their experiences and their views on the process.

The ten year duration of the draft framework agreement does not bind future Governments unreasonably. The ten year perspective is a realistic acknowledgement of the scale of the development objectives we share with the social partners, arising from the NESC analysis. While the detailed arrangements, including pay, set out in the agreement pertain to the first phase, it is right that we should set out a longer term agenda for social dialogue. It will be for each Government over that period to engage in the detailed discussion on the basis of its electoral mandate. The democratic process and social partnership are, therefore, complementary aspects of modern governance and I look forward to continuing engagement as a means of expressing this complementary relationship.

While talks on the farming sector have not yet concluded, the farming pillar has participated in the negotiations on the non-pay agreement. The draft agreement will now be subject to ratification over the coming weeks, in line with the internal procedures of each social partner pillar and organisation. All concerned will recognise the benefits of the new agreement for themselves and for the country as a whole. Therefore, it will be ratified and we will continue our successful experience of partnership to the benefit of all our people.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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I thank the Taoiseach for bringing this document to the Houses. It is extraordinary that we are setting out programmes for the next decade when the Dáil never had any role in Sustaining Progress. There was no prior debate on the framework within which it should be negotiated, no discussion on its proposals, no adoption or ratification by Parliament and no monitoring report of the numerous commitments and programmes agreed. There is an unhealthy relationship between the social partnership foundation that is so important to the economy and the parliamentary system, which is equally vital. Anyone who has looked at arrangements over the past years will notice the dismal failure to create a bridge between social partnership and the Oireachtas.

Social partnership was born out of crisis and has been an important vehicle for unity of purpose across employers and trade unions and, gradually, a wider initiative. This was underpinned by the political initiative of Alan Dukes, the Tallaght strategy, which offered a level of social partnership within the political system to a Government dealing with intractable problems. At its birth, Parliament had a role in social partnership but this has decreased. The Oireachtas has been entirely eclipsed in its role in contributing to decisions on the distribution of scarce resources and legislation. Very few interest groups will approach parliamentarians for assistance with a major struggle about an important decision. Instead, they will go up the back stairs to meet Ministers and use monitor groups and steering group meetings within the partnership system. That is an unhealthy development. Major decisions on the distribution of available resources should be resolved primarily in these Houses. This is not a criticism of social partnership but of the way it has developed.

The basic institutional framework of social partnership provides an example. There are two implementation bodies, four research agencies, nine high-level policy committees and four major progress reports delivered each year. That presents a stark contrast to the support available to the Oireachtas for democratically elected representatives to deliver their mandate in crucial areas of decision making. We must examine developing a proper relationships between the institutions of social partnership and the Oireachtas.

I am disappointed the Taoiseach did not take this opportunity to do so. This debate is welcome but is merely a debate of one hour at the end of the process. It offers no real basis for participation by the Oireachtas in the next ten year strategy. We need a role in how the agenda is set. It is predominantly set by the NESC, which does much good work. As elected representatives we should be able to shape the agenda of partnership.

We must also have a role in the development proposals. The heads of Bills are supposed to be presented to Oireachtas committees so they can have an input at an early stage. This has been done in only two cases. There is no sense that the Government shares with Parliament as it does with social partners. This was clear in the debate on employment protection. No attempt was made to reach consensus in this House on the matter. All debate took place between employers and trade unions.

Members of the Oireachtas represent civil society in its broadest sense. Those at social partnership talks represent vested interests. This term may imply criticism but they come from a particular angle and represent a particular group of people. We must make sure those with a broader mandate have greater participation.

Social partnership has been successful in many areas and was important in dealing with runaway debt and leapfrogging pay claims that caused inflation when Ireland was losing jobs hand over fist. It had a strategic role at that stage but has been less successful at dealing with the current reform agenda. It comes as no surprise that the social partnership model dominated by producer interests, namely Government, trade union or employer interests, has not addressed the needs of consumers. At a basic level, we see this where consumers feel disenfranchised and ripped off. We have been slow to open markets and the interests of those in markets have dominated public thinking rather than the interests of consumers, who are not represented at the social partnership table.

This Government resorted to stealth taxes after the last election. Consumers were seen as the soft touch because they were not represented in the partnership model. It was easy to impose higher charges on them. The Labour Party recently produced a document detailing 50 examples of stealth taxes.

Our pattern of housing development has been described as dysfunctional by the NESC. The interests of producers and developers have had an influence rather than the consumer, the first-time buyer or the family seeking housing with decent facilities such as schools and health services. The special development zone, a good concept of balanced development, has been used only once, in Adamstown, to achieve balanced housing development. Our dysfunctional housing system is vulnerable and is not providing the standard of service we require. We cannot blame this on social partnership but the ears of this Government are open only to some.

In the privatisation of Eircom, the interests of the workers and the State were looked after but those who had retired were given no recognition for building up the asset. The consumer was forgotten and the punter who bought the shares failed miserably. The scheme may have served some insiders and the Government but it did not cater for the national interest. Members on both sides of the House agree this was badly planned. We must learn from this and ensure we do not hear only those represented at the table.

It is disappointing that social partnership has not focused on public service reform. Everyone knows this is a key issue. The Government has spent a considerable sum on health but people feel discontent. Many of the working practices in the health system must change. They are holding back capacity to deliver to the front line. Partnership, however, has stepped back and not addressed them. It has not helped to create the momentum.

The Taoiseach correctly said recently that consultants are tough negotiators and will not give up contracts. If we accept that this is a key obstacle that must be moved, we must enlist the support of the broadest base to insist that this change and to face down the vested interests wherever they are found. That has been missing in social partnership. We have not faced down vested interests in the public service to ensure we get delivery to the front line. That is why people have been disappointed. They still see laboratories working for only certain hours of the day and consultants not being in accident and emergency departments when they are needed to make critical decisions about discharge, retention or admission. These issues afflict our capacity to deliver services.

We still have not put performance accountability into the public service systems. The unions in the education sector, for example, have not yet conceded the obligation to have proper accountability at school level. We are moving away from the level of accountability that must be in place to achieve best practice standards in education and other areas. The key issue in this regard is public service reform.

Fine Gael was first to point out that benchmarking would be paid without getting the reform to match it. We urged that it not be paid until that reform was in place. Looking back on that process many people now agree that we were absolutely right. The Government had not pushed the reform agenda. No union was forced to go beyond any difficult existing position. One did not hear screams from any group that benchmarking was asking it to deliver too much change. If it was a serious programme of reform, it would have caused that. We must ensure that we create a public service that is achieving the highest professional standards and is seeking to achieve best practice.

That is what benchmarking is about — achieving best practice in the delivery of education, health and so forth. Personnel are then paid because they are delivering best practice. That was the hidden ingredient. It was not simply a dead process of looking at comparative pay, estimating the gap and paying it. It was supposed to be about examining what is done in successful organisations and moving the public service organisation to do the same. That is what benchmarking must be about if it is to continue.

Under this agreement, it is due to continue. I welcome its continuation but it must be based on the Government establishing a real agenda of reform. Scarcely was benchmarking paid on the last occasion when we heard the Minister for Justice, Equality and Law Reform state that the way prisons were run had to be reformed and the Minister for Health and Children saying that the administration of hospitals had to be reformed. However, those reforms were not included in the benchmarking negotiations to secure such change when the opportunity presented, an opportunity with a €1.3 billion price tag.

We must develop social partnership so it has the opportunity to confront the serious challenges we face. Those challenges must be put on the agenda and the voices of consumers and users of public services must be heard. We must also hear the voices of families who are being squeezed, whether they are first-time buyers or are trying to cope with child care or the many other pressures families must endure. We must hear the concerns of communities. The Taoiseach correctly pointed out that community is struggling to survive in the new, dysfunctional housing environment that has been created. That must be addressed but it is not being addressed sufficiently through the partnership process. I believe we must retain and develop partnership and make it confront the greater challenges that exist.

I welcome the life cycle debate that has been opened in this partnership agreement. I have long believed that we do not take note of the pressures on people. Our welfare system has largely been based on the old set up of the breadwinner being a man, the woman being at home and all the State had to deal with was unemployment and sickness. The truth is, however, that for families trying to cope with the difficult task of rearing children in the current tough environment, we must develop far more sophisticated interventions and supports. I welcome that element of the agreement and the NESC has been far-seeing in pushing for it.

My time is concluded. Fifteen minutes is not enough to do justice to what is supposed to be the start of a ten-year strategy but I am grateful for the opportunity to speak on it.

Photo of Ruairi QuinnRuairi Quinn (Dublin South East, Labour)
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I compliment all the negotiators who compiled this document. The duration of the negotiations is an indication of the necessity to shift from the old tax trade-off against wage moderation, which is long past its sell-by date. Another approach is required. That is reflected in the comments made by the Taoiseach and by many of the commentators who were directly involved in this process.

I was involved in the process in the past and am familiar with its internal operations and mechanisms. Most of the time it is the social partners and the civil servants who are involved, as the Taoiseach would be the first to admit. Political involvement is limited and tends to come more or less in a Supreme Court manner rather than in a District Court manner, when many of the options have been teased out.

Much work has gone into the agreement and I salute all the people who gave their time to it. Reading the document is wonderful and if its content were to be achieved, we would have heaven on earth. However, I doubt the capacity of this Administration to deliver. The Taoiseach this morning, in response to Leaders' Questions, damned his own competence and that of his Government when he said that after nine years the Government is still trying to talk to the consultants about getting them to the negotiating table or about getting €500,000 worth of equipment operating after 4.30 p.m. The Taoiseach is a man of many talents and abilities but if he can come to that conclusion after nine years, only he can provide the answer.

Last night, I launched a book by Paul Williams entitled The Untouchables. It is about the history of the CAB, which has been in existence for ten years. The Taoiseach will recall that a Private Members' Bill, which was renamed the Proceeds of Crime Bill, was brought forward by the current Minister for Arts, Sport and Tourism and was supported by all sides of the House. By the end of July, within four weeks of the death of Veronica Guerin, the House had passed six Bills. The CAB was up and running and was statutorily empowered by October when the House returned after the summer recess. When this House was united following the atrocity of her murder and, indeed, the murder of Jerry McCabe, which preceded it, we moved very quickly.

Looking at this document, little of which I disagree with, although we need more time to examine it in the future, what is strikingly obvious is the absolute inability of this Administration to deliver. I can offer some examples, but I will be positive and discuss the good parts first. On behalf of the Labour Party and the wider labour movement, I welcome the section on employment rights and what the Government proposes to do in that area. As I said to the national council of ISME two weeks ago, the people in the private sector who secretly take pleasure in the demise of the trade union movement as a representative force — approximately one sixth of the workforce is now represented by trade unions and the bulk of that one sixth is in the public service — should be careful what they wish for because what will replace it will be far worse.

What is facing small companies, in particular, and those companies that refused to allow trade unions to represent their workforce is the employment lawyer, who knows adversarial confrontation and will take employers to the cleaners in terms of costs. We have already seen this happen in the Taoiseach's Government offices. Individual public servants are now rushing to lawyers rather than to their public sector unions to address confrontations where there are perceived wrongs in the place of employment.

We have already tried, through the establishment of the PIAB, to get the lawyers off the back of the insurance industry, where 42% of the cost of insurance was due to legal costs. Those who think the retreat of organised labour in the shape of traditional trade unions will make their job easier with regard to employees are seeing a false dawn. The labour movement has transposed individually negotiated rights, whether in Guinness or Jacobs or any of the other old benchmark firms, on to the Statute Book of this republic and they are in place for all. That is the first point that should be made about the role of trade unions in social partnership.

Senator Shane Ross once asked in the Seanad what right trade unions have to negotiate if they only represent a minority of the workforce. They could represent a larger section of the workforce if certain companies allowed them to organise. Many people thank God for the presence of the trade unions at the negotiating table because it is more than their jobs are worth to get a trade union into the workplace.

The norm that is struck in social partnership pay negotiations will filter out beyond the corral of organised trade union members into the entire workforce. To that extent, it is of benefit to people who would like to be represented by trade unions but cannot be. Equally, it offers protection to employers who can rightfully say that the agreed rate is so much and they will not go beyond it. It provides a role and a benchmark that is clear and productive and adds to the marketplace in an open market economy an element of certainty that is necessary in terms of going forward three years.

I will not comment on the terms of the pay deal; that is for individual workers to vote upon in due course. I am talking about the process rather than the terms set out in the second section of the document.

I draw the Taoiseach's attention to a last minute "Jesus we forgot something, we'd better get it in quick" instance. The five objectives on page five are set out, with the last including deepening capabilities, achieving higher participation rates and more successfully handling diversity, including immigration. Those last two words are where someone said we have left something out and we must put it in. It screams at the reader. The contents do not mention a word of it except when it comes to work permits.

Ten years seems like a long time, but it is only as far back as 1996. Like yesterday or tomorrow, it is very close. If migration rates are maintained at current levels, 10% of the population of the Republic of Ireland — 400,000 people — will be foreign nationals. They are not just workers from 9 a.m. to 5 p.m. They come with families and have children who present at national schools. They have cultural attitudes and linguistic problems of integrating in society.

The rest of the northern European experience is crying out to us in this respect. We should talk to our Danish and Dutch colleagues or to the Swedes who opened their borders to immigrants about the problems of cultural respect and integration at the same time. We have so many lessons to learn. The Netherlands, a tolerant, open society from the time of the reformation, took in Sephardic Jews expelled from Portugal and Spain and Protestants driven across the border from Catholic France and transformed the country. That open, tolerant, liberal society, which maintained that tradition until the 1990s, has now gone into reverse because of the convulsions it is experiencing in migration.

There is a free market neoliberal option of saying we need the workers, that we can forget about them once we no longer need them, and that we do not have to integrate them. The failure to integrate migrants into Dutch and Danish society, however, has transformed two open, tolerant countries into reactionary, conservative countries with a nasty tinge that none of us wants to see happen in this country. We will certainly not be Ireland of the welcomes for those people unless we are careful. We have no excuse because what we can see in the EU in a similar environment is what will happen here within ten years, only as far back as 1996. The increase of 400,000 people is the same as the populations of Cork, Limerick and Galway put together. This document does not deal with that.

Irish parents are now presenting their children for junior infants at overloaded primary schools where there are 36 children in the class, half of whom do not speak English as their first language. The parents are running to wherever they can to find another place for their children. We have a great national school system but no teacher can cope with that situation. On top of mainstreaming children with learning difficulties, schools must cope with children whose mother tongue is not English. We are overloading the system.

There is a gap between real thinking and aspiration in this document. The aspiration is to address the infrastructural deficit, as outlined on page 21. I agree with every word; there is still a significant infrastructural deficit. I have two cuttings from today's newspapers which demonstrate how we are not dealing with the infrastructural deficit in a strategic manner. The Macroom bypass and the Fermoy bypass are reported. The Taoiseach knows from his time in a local authority how long it takes to secure the paperwork, to hold public hearings and to make the compulsory purchase order for a bypass. This is nonsense. We should be looking at the road from Killarney to Rosslare with one hearing, one inquiry and one team.

Money is not the object. The Taoiseach already said this morning that there is a problem spending the capital budget. Part of the problem is that the Government is taking small bites when it should be swallowing loads. The Planning and Development (Strategic Infrastructure) Bill will not address this problem if the mentality in the National Roads Authority and the Government still focuses on bypasses. We would never have completed the gas pipeline from Cork to Dublin if we had used the bypass mentality. It was a single project with a single hearing, we took it in stages and it delivered. The Taoiseach knows that the construction work, which is now coming in ahead of time and under budget, is only a third of the timeframe for a project. Two thirds of the timeframe is taken up by planning, preparation and the legal process.

Fianna Fáil and the Progressive Democrats are stuck in a bypass mentality. There is no great vision. The infrastructural deficit is on the Government benches. The capacity deficit is in the Government after nine years of unprecedented wealth. Not since the building of Leinster House was there such prosperity in Ireland, but this Government is incapable of getting expensive medical machines to work after 4 p.m. in the public sector and is still locked in a bypass mentality for infrastructure. Having said that, I want to see this document implemented and the Government that will replace the current Government next May will proceed to do it.

I endorse the Taoiseach's comments about the democratic deficit in social partnership. It is an open, participatory, inclusive process. When we return in the autumn, we should put in place a structured reporting mechanism where we take this document, if it is ratified, and divide it into sections for Oireachtas committees, establishing quarterly meetings with the relevant players from the social partners. During the Government that was formed in 1993-94, we tried to set up the NESF to address what we thought was a democratic deficit in the role of Oireachtas Members. We found that Oireachtas Members did not want to attend, however, and the level of participation was poor by all parties. Oireachtas Members want to be in the Chamber, not elsewhere. Therefore, we should bring in the social partners responsible for negotiating and implementing this agreement to our various committees in order to get a progress report and hold them to account in a manner that suits the culture and tradition of this House.

Photo of Arthur MorganArthur Morgan (Louth, Sinn Fein)
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I wish to share time with Deputies Finian McGrath, Connolly and Sargent.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Is that agreed? Agreed.

Photo of Arthur MorganArthur Morgan (Louth, Sinn Fein)
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I am extremely disappointed with the amount of time that has been allocated for the discussion on this partnership deal. It would have taken several days to deal adequately with this issue. In his address, the Taoiseach said that some people who are critical of the agreement have no alternatives to offer, but he is wide of the mark. People such as myself are critical of the current social partnership model but would be happy to submit an alternative model that would be all-embracing and would deal with the real issues affecting low-paid migrant workers as well as indigenous workers.

The two demonstrable outcomes of social partnership are its manifest failure to halt a trend towards increasing inequality — not to mention reducing or eliminating inequality — and the decline in trade union membership amongst workers. The new social partnership deal is not underpinned by an objective of bringing about a fairer distribution of wealth. That should be at the core of this deal but it is not even there. Its greatest flaw is that, like its predecessors, it fails the low paid completely.

While I welcome the fact it includes measures to improve the enforcement of labour law, it was outrageous that trade unions were forced to bargain for the rights of workers to be free from exploitation — imagine that in the 21st century. Vulnerable workers have had to await the outcome of a social partnership deal before seeing their existing rights enforced. The proper enforcement of existing labour law should not be seen as a concession to unions or used as a bargaining chip in negotiations. The requirement for workers to bargain for basic rights and entitlements is, along with the democratic deficit created by the process taking precedence over this House, among the fundamental defects of the social partnership process as it is currently structured.

A deal such as this must be deemed inadequate when the wage increases that have been conceded amount to a mere 10% over 27 months. This pay rise barely covers the rate of inflation over that period. Irish inflation is already soaring at significantly higher rates than the EU average of2.2%. At 3.9%, it is close to double that figure. At a time of growing income differentials between the highest and lowest paid workers, the additional miserly 0.5% increase for low-paid workers is derisory.

A recent NESC report found that in the Twenty-six Counties the richest 20% of the working age population now earns 12 times as much as the poorest. That represents one of the highest levels of income inequality among OECD countries. While increases contained in the new deal may seem significant to some higher paid workers, low-paid workers lose out where, as in this agreement, percentage wage increases are applied. Where are the measures to reduce wage differentials between the highest and lowest paid workers? These should have been at the core of any agreement dealing with pay issues.

I agree with the comments made earlier in the debate by Deputy Bruton, that special interests need to be faced down in the public service. However, there are even more pressing needs to face down the significant private sector interests. Much of what is contained in the agreement is broadly aspirational and reflects Government promises, already given, to implement legislation. In the past, it has taken the Government years to deliver on promises contained within social partnership deals. For example, the Dáil has only recently passed legislation on a commitment to parental leave contained in the last deal. The inclusion of the inability-to-pay clause means wage increases conceded in the agreement are inextricably linked to the term "competitiveness". If giving a pay increase is not in the interests of business and its competitiveness, the get-out clause lies in that argument.

Unfortunately, I do not have time to address many of the other issues concerning this agreement. On the whole, the deal as it stands is unacceptable and has been found wanting on many levels.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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I am grateful for the opportunity to contribute to the debate on the new national wage agreement, the ten-year framework social partnership agreement 2006-15. I pay tribute to workers, members of the trade union movement and the Irish Congress of Trade Unions. I thank and commend all workers for their contribution to the development of the economy. When I hear people going on about the Celtic tiger, it gets up my nose when many of them forget to mention the magnificent, hard and dedicated work of Irish and foreign workers in this State. They have made a great economic and social contribution to the development of the economy. Their sweat, money and taxes have built the country. I thank and commend our workers as well as our foreign nationals for their great contribution to the country.

As regards the broader issues in this debate, it is essential that our workers are well paid for their labours. I challenge the employers on this matter and demand justice and fair play for all workers. Exploitation and low pay should never be tolerated. Anyone who exploits their staff should be strongly challenged.

I welcome the sections in page 5 of the agreement dealing with integrating an island of Ireland economy, as well as reinventing and repositioning Ireland's social policies. I strongly support the ICTU and I urge the Government and employers to listen seriously to its constructive views. The ICTU's solutions are sensible options to resolving many conflicts on this island. Congress is and should always be a major player. I commend again Irish workers for their magnificent contribution to the broader economy.

Paudge Connolly (Cavan-Monaghan, Independent)
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We have had social partnership for over two decades and I have advocated it for all those years. I am delighted we have concluded a social partnership agreement, entitled Toward 2016, which will help us on our way forward. I generally agree with the concept of social partnership in that it allows us to plan for the long-term and permits companies to know their costs well in advance. A number of issues must be addressed, however, if the agreement is to receive universal acceptance, which it has not received. When it comes to voting on the agreement, I believe it will be quite a tight vote. We must address the issues of house price inflation and the amount the Government takes in stamp duty. We must also examine the faults in our health service, in addition to energy costs for consumers, which include a State take in excise duties.

The sum of 10% over 27 months sounds good but many people on lower incomes are left further behind after each national wage agreement. We must address that problem by expanding the back-to-work scheme, child care services and medical cards. We must take these matters on board if we are to take this group of people along with us.

A number of workers' rights have been stitched into the social partnership agreement, including term time and parental leave. These are all welcome developments but they often come at a cost to the public who are denied the service that these people would normally be asked to provide. It is all right to give somebody a day off but such leave should not take away from the public services these people would normally provide. They should be replaced by someone else in the public service. Cash-strapped Departments can use this mechanism — giving staff all the unpaid leave they want — to save money. That is not good enough, however, because people deserve a service, so staff on leave should be replaced. We must address these issues and cannot allow them to continue unchecked.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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On behalf of the Green Party, Comhaontas Glas, I acknowledge the hard work of all those who worked to bring about this agreement, Towards 2016. Much of the agreement, especially the social provisions, is aspirational. Commitments need to be more concrete. Other aspects of the agreement are simply a rehash of existing policies. Many commitments are belated. I would be interested to hear why it has taken nine years for the Government to even consider drawing up a national strategy for family carers. However, aspects of the agreement, such as special pay increases for those on very low incomes and the belated decision to establish the office of the director of employment rights compliance with 90 labour inspectors and measures to address displacement of workers with cheaper labour, are welcome.

Some concern has been expressed that the social partnership process bypasses our democratic institutions. I share that concern. The commitments contained in the agreement are binding on succeeding Governments and because of this, it is important that the Dáil has a meaningful way of engaging with the partnership process and the finalising of agreements. That way is not, as the Tánaiste has suggested, through the Government.

The Green Party has consistently called for the establishment of a special Oireachtas committee to oversee and interact with the social partnership process. I repeat that call. My colleague, Deputy Boyle, our finance spokesperson, has stated that any Dáil debate on the agreement should be structured around a motion on whether the Dáil will agree or reject the agreement. With regard to the involvement of the State's democratic institutions, I am pleased to note that the agreement states, in a section on monitoring and reviewing arrangements, that "a meeting of all the parties to this ten-year framework agreement with the political process, chaired by the Taoiseach, will take place annually". I raised that issue on the Order of Business this morning. Will the Taoiseach elaborate on how this engagement with the political process will take place? I have yet to receive a formal invitation to such a process. I hope this is not an indication that the Government considers Opposition parties to be outside the political process.

Whether the social aspect and its life cycle approach and the other aspects of the agreement deliver for individuals is very much dependent on who is in Government until 2016. The Government has distinguished itself as a failed guardian of important aspects of previous agreements. For example, the commitment to provide 27,000 social housing units in the next three years, while welcome, will not be achieved if the parties opposite remain in Government. I also note that the commitment falls short of the National Economic and Social Forum recommendations. Moreover, I ask the Taoiseach to indicate clearly what his interpretation of "honouring" this commitment means, given his rather liberal interpretation of honouring previous commitments on social and affordable housing.

The Minister for Justice, Equality and Law Reform has observed that it is the meat in the sandwich that makes the difference. I was interested to read the speech of the Minister's party colleague and close ally, Senator Morrissey, in the Seanad on the issue. The Senator indicated that the agreement would not bind Progressive Democrats policy. I observe that the Taoiseach's partners in Government do not intend to take social partnership too seriously. I am sure this fact has been noted by putative parties to the agreement.

The successful implementation of the agreement depends on good Government and a sound economy. With this in mind, I have listened with interest to the Taoiseach's recent radio interview on the agreement. I welcome the fact that the Taoiseach has acknowledged that energy is a major driver of inflation. However, his insistence on producing an inflation figure with energy excluded is puzzling. It seems in no way relevant to the individual trying to feed his or her family or pay for medical treatment. Energy is the economy fundamentally. I hope this will spur the Government to adopt a more ambitious approach to energy policy.

Significantly, the Taoiseach appeared to convey the impression that he is complacent about the level of inflation which is approaching 4%. The Taoiseach also appears to be satisfied with house price inflation at 15%, even though one in five first-time buyers are being forced to take out 100% mortgages to buy houses that have an average price of more than €300,000. Judging by the way he has repeatedly talked up the housing market, he appears to want house prices to continue to rise rapidly.

The 27-month pay deal comes to 4.05% per annum. Inflation, excluding house price inflation, is at 3.9% and is likely to continue to rise as the Taoiseach has admitted. I put it to the Taoiseach that if he maintains his complacent attitude to inflation and continues to spur house price inflation with his public pronouncements, the value of the pay deal and other aspects of the agreement will be wiped out. In this context, it would be fair to include in the agreement some kind of safeguard which would allow changes in the pay deal if inflation reaches certain thresholds.

In its editorial on the social partnership agreement, The Irish Times observed that "there are economic storm clouds on the horizon". If the Taoiseach's policy and public statements continue to push inflation and personal debt, I fear it may be correct.

I welcome aspects of the agreement but I observe that it is only as good as a Government that implements it. Whether its provisions are delivered depend on the ability of Governments in office until 2016 to manage the economy in the face of domestic pressures, such as housing demand and inflation, international pressures such as rising energy costs and the Government's desire to have a trustful relationship with representative groups and with the people. Unfortunately, the Government is failing on each of these fronts.