Noel Treacy (Galway East, Fianna Fail)

Is cúis áthais dom an deis seo a bheith agam labhairt i Seanad Éireann faoi chlár athchóirithe na hEorpa chun slí eacnamaíoch na hEorpa a fheabhsú faoi Chlár Lisbon. Tá mé ag súil go mbainfimid taitneamh as an díospóireacht agus go nglacfaidh a lán daoine páirt inti. I am pleased to have the opportunity to address the House with regard to Ireland's national reform programme under the relaunched Lisbon Agenda.

In 2000, the then 15 member states set the ambitious objective of making the European Union by 2010 "the most dynamic and competitive knowledge-based economy in the world, with more and better jobs and greater social inclusion". This goal was to be achieved by an extensive reform programme, including the establishment of an effective internal market, boosting research and development, and improving education. While much of the work involved in implementing the Lisbon Agenda appears complex, it is really about people's lives. It is about the bread and butter issues which are important for every citizen and every community, both here in Ireland and across the EU. They are bringing about tangible benefits in the daily lives of our citizens — supporting workers in their employment, assisting the business community in managing the transition to a knowledge-based economy, protecting our environment and promoting greater social cohesion. This is a challenging agenda. It is unique in that while it sets common goals and targets across member states, they can only be achieved by acting in partnership. European institutions, national governments and all stakeholders must therefore work together towards the common goals.

Under the Irish Presidency of the EU in 2004, a mid-term review of progress across the EU was initiated. This found that the overall results were disappointing. The outcome of the mid-term review acknowledged the scale of the challenge facing Europe, in particular the widening growth gap with other major world economies. Failure to address this gap would see Europe experience further economic decline, with inevitable pressure on its social and environmental policies. In this context, the European Council earlier this year agreed that the Lisbon Agenda would be relaunched as a partnership for growth and employment. It would focus particularly on two urgent priorities, growth and jobs. The overall process would be simplified and streamlined. Each member state would produce a three-year national reform programme setting out its national priorities and commitments to improve economic growth and create further employment. For its part, the EU Commission would focus on measures to be taken at EU level to reinforce the programmes being undertaken by member states.

While the European Council agreed to focus on two urgent priorities of growth and employment, it also endorsed action in two complementary areas — promoting social cohesion and sustainable development. In terms of social cohesion, the Commission's communication on the social agenda addresses vital issues of tackling poverty and disadvantage. This social agenda will help achieve the Lisbon objectives of full employment and social cohesion. Likewise, the new focus on growth and employment expressly acknowledges the importance of the environment and overarching role of sustainable development. The declaration on guiding principles for sustainable development, which was adopted in June last, is a basis for achieving sustainable growth.

The member states and the Commission agreed on an integrated set of 24 broad guidelines to be considered during the preparation of the various national reform programmes. These guidelines, covering macro-economic policy, micro-economic policy and employment policy, replace the broad economic policy and employment guidelines which were previously reported on in two separate processes.

Ireland is fortunate in that, owing to the broad range of policies being pursued in recent years, we are performing well, according to many of the key economic indicators. Over the past ten years, GNP has increased at an annual average rate of 6.3%, and is forecast to continue to grow at close to 5% over the term of the national reform programme. Expressed per capita, our GNP has almost trebled since 1994. Government debt is down from close to 90% of GDP in 1994 to less than 30% in 2004. Unemployment has fallen from 14.7% in 1994 to 4.4% last year. The employment rate rose from 52.2% to 66.7% over the same period. Overall, we are making solid progress towards the Lisbon Agenda goals and starting from a relatively strong base with our new three-year reform programme.

Many factors have contributed to this strong performance. The programme for Government, agreed in 2002, provided the framework for action across the entire policy spectrum and is entirely consistent with the Lisbon Agenda. Two of the central pillars of the programme for Government are sustaining economic growth and maintaining full employment in the economy. To achieve this, the Government committed in its programme to maintain the public finances in a healthy condition and to keep down personal and business taxes in order to strengthen and maintain the competitive position of the Irish economy. Within these constraints, the Government reaffirmed its determination to concentrate the available resources on improving the quality of public services and delivering further real improvements to pensioners and people on low incomes.

Underpinning these aims, we have a strong track record under our social partnership model of forging consensus with and among the social partners on the right measures to take. Over the past 18 years social partnership has provided us with a much needed framework to take corrective measures to address the problems of the mid-1980s and, since then, to build up and improve overall economic and social progress. Bringing together the various key sectors — employers and trade unions, the farming sector and the community and voluntary organisations — to work in partnership with Government has served this country well. It has helped to create the necessary conditions and consensus to give rise to growth, jobs and better social provision instead of rising taxation and spiralling debt. It has contributed to providing stability and certainty over a multi-annual timeframe and has unquestionably yielded significant benefits in terms of industrial peace. Not surprisingly, successive Governments have reaffirmed the centrality of social partnership to economic and social development.

In the broader context, it is clear that the Lisbon Agenda is consistent with our own national goals and priorities. It is hardly surprising, therefore, that when the member states committed last year under Ireland's successful EU Presidency to create national reform programmes to engage more closely with the social partners, it was decided that our existing social partnership model would serve as Ireland's reform programme.

The current partnership agreement, Sustaining Progress, runs to the end of 2005 and nobody underestimates the challenge of securing a new agreement. However, drawing on the experience of the past, we know we stand a better chance of tackling problems by working together. In some respects it might suit us better if the national reform programme did not have to be prepared for another few months. That said, we will update our Lisbon programme in the light of the outcome of future engagement with the social partners.

The Government is acutely aware of the need to maintain competitiveness and improve productivity, despite our recent impressive performance. No matter how successful we have been in recent years, we cannot simply rest on our laurels. We are fully committed to the important linkages between our economic performance and our social policy to achieve a fair, just and inclusive society. It is fitting, therefore, that the national reform programme gives us an opportunity to put together, in an integrated way, the policies and initiatives that are being implemented to ensure continued success.

I will outline the content of the programme in the areas of macroeconomics, microeconomics and employment guidelines and in line with the priorities which we have set. The range of structural reforms envisaged under the Lisbon reform programme must take place in a stable macroeconomic environment, with a particular commitment to sustainable public finances. As I have already outlined, our public finances remain in a good position. Nonetheless, we must remain alert to the risks to our economy, particularly the high level of oil prices. Our levels of competitiveness must be closely monitored and, in particular, the ongoing reliance on the construction sector for our current level of output. We must be sensitive to the potential impact of an eventual reduction in construction output levels.

It is vital that Europe becomes more competitive, in its actions as well as its words. We must accept that the global picture is important, given that the EU now competes directly with other regions of the world for mobile investment in knowledge and research. Europe, therefore, must remain an attractive location for future global investment. Improving our competitiveness within the domestic economy and internationally is critical to Ireland's continuing success. By 2004, Irish income per capita had overtaken the EU 15 average, driven largely by increases in employment. In future, further improvements in living standards will depend less on increasing employment and more on increasing productivity. Ireland's economic development strategy is now aimed at developing a more dynamic, enterprising and innovation-based economy. Our competitiveness will be enhanced over the period of this programme by the creation of an environment where enterprise can flourish and consumers are protected.

Research and development is an area which can have a major impact but is one where we are still under-performing relative to international benchmarks. Consequently, continuing to increase research and development investment, capacity and output is a particular priority under this programme. Ireland's gross expenditure on research and development is approximately two thirds of the EU average, at 1.62% of gross national product for 2005. However, that is not to say that we have been ignoring research and development up to now. Government investment in research and development increased fivefold, from €500 million between 1994 and 1999, to €2.5 billion under the National Development Plan 2000-2006. Several key steps have been taken to build further on this positive start. Earlier this year, the Government adopted a new national action plan for research and development and an interdepartmental committee is finalising a proposed implementation strategy, such as science and technology, energy, environment, marine and agriculture.

Strong foreign investment, exports and domestic demand have led to sustained reductions in unemployment over the past decade. A greater emphasis must be placed on productivity by encouraging greater levels of innovation and entrepreneurship across the enterprise sector. A range of key initiatives is under way to drive this development, drawing on the work of expert bodies such as the enterprise strategy group and the small business forum.

Ireland's level of public investment, at close to 5% of GNP, is among the highest in the EU and is approximately twice the Union average. Public investment under our national development plan is targeted at addressing the infrastructural deficit to improve the potential growth of the economy in the longer term. The Government is now in the process of setting out a new blueprint for investment for the seven-year period after the expiry of the current plan. The new national development plan will focus on priorities for investment in public, economic and social infrastructure in areas such as transport, environmental services, housing, education, health, child care and research and development. In particular, we will continue to build on the major investment that has been made in our transport infrastructure through the ten-year capital envelope for transport.

We must ensure that where it is necessary to regulate, we do so in the best way and with proper consultation. The 2004 White Paper, Regulating Better, sets out the Government's approach to better regulation. Guidelines on consultation for public sector bodies were published in June of this year. The Government has established a group on better regulation to oversee the implementation of the commitments and action plan arising from the White Paper. In addition, the Government has introduced a policy of systematic regulatory impact analysis across all Departments and offices. In the business sector, a new business regulation forum has been set up to report to the Minister for Enterprise, Trade and Employment on burdens imposed on business by outdated, inefficient or disproportionate regulation and to advise on business regulatory issues.

Economic progress and improving social inclusion and quality of life must go hand in hand. Ireland's strategic approach to social inclusion is set out in the Government's national anti-poverty strategy and the national action plan against poverty and social exclusion 2002 to 2005. Increasing access to employment has been a key part of Ireland's strategy to combat social exclusion and significant reductions in unemployment have contributed greatly to rising living standards. We must continue to facilitate participation in employment as a major strategy for tackling poverty and social exclusion.

Under the national reform programme, we will work to encourage the sustainable use of resources and strengthen the synergies between environmental protection and growth. Ireland is already well on track to meet the target under the EU renewable electricity directive for 13.2% of electricity to be generated from renewable sources. In addition, the decoupling of energy and emissions growth from economic growth began in 2002, with economic growth at 3.7% in 2003 and energy consumption remaining flat at 0.2%.

Ireland has continued to achieve high levels of employment. Employment growth continued in the second quarter of 2005, with the number of jobs up by 93,000. This represents the largest annual rise in employment since 2000, with the number of persons in employment now at 1.929 million. The long-term unemployment rate remains extremely low, both by historical and international standards, at 1.4% or, in figures, 27,600.

Under the national reform programme, we will ensure labour market policy contributes to making the economy more knowledge based and innovation driven. A wide range of initiatives are in operation, designed to prevent and counteract long-term unemployment. FÁS assists those who are longer than six months on the live register to gain employment, training or to enter active labour market programmes. Other initiatives are ongoing and are aimed at expanding the workforce and include lone parents and redundant workers. An independent review of the prevention and activation process is under way as well as an expenditure review of State supports for the long-term unemployed.

In addition to these measures, we are committed to increasing investment in human capital through better education, skills and lifelong learning. Our national education policy aims to ensure that all young people leave the education system with a high quality education and with qualifications. A total of 85.3% of those aged between 20 and 24 years have completed upper secondary education and a majority of these go on to third level education.

To reach those at a disadvantage in society, the Department of Education and Science published a five-year action plan for educational inclusion, Delivering Equality of Opportunity in Schools, in May 2005. This plan will be implemented on a phased basis and will tackle literacy and numeracy as well as attendance issues, progression, retention and attainment. Early school leaving policies have been shown to have a positive impact, with a rate of only 12.9% of early school leavers in 2004. This is clear progress towards the EU average rate of 10%.

Higher education has seen major expansion over the last two decades in terms of numbers and investment. This is reflected in an increased participation rate for school leavers of 55% in 2003 compared to 20% in 1980. A particular challenge is to upgrade the competencies and qualifications of the workforce, particularly those with low skill levels and in low level occupations. This challenge will be addressed through a range of initiatives, including implementation of the national framework for the development of lifelong learning, continued priorities in the implementation of this framework, including addressing skills needs and widening access to lifelong learning, tackling disadvantage and addressing access barriers.

Increased labour supply will be met from the underlying population increase, increased participation by the unemployed, access for those outside of the labour force and migration. We are experiencing a significant influx of workers from the new EU member states. The net inward migration figure for Ireland in the year to April 2005 was 53,400 people, of which over one third were nationals of the ten new member states. Legislation is being introduced by the Minister for Enterprise, Trade and Employment to codify work permit arrangements, improve protections for migrant workers and allow for a new green card system.

I am satisfied Ireland is unquestionably playing its part in helping the European Union as a whole to realise the goals of the Lisbon Agenda. It is appropriate that the relaunched agenda places greater emphasis on member states pursuing policies appropriate to national priorities and circumstances. That said, we must all work together to bring our Lisbon goals back into sight. Member states cannot just look over their shoulders at each other, but must look outwards. Globalisation is a fact of life and we must deal with it. The threat to Ireland, and Europe, is increasingly global, whether from the Americas, India, China or from other new tiger economies. Standing still is not an option, regardless of how well or badly we are doing. This goes back to the 1970s when former Taoiseach, Mr. Jack Lynch, said standing still was not an option. We had no option but to join the then EEC and we are now members of a successful Union in which we played our part. The Government, as this new national reform programme demonstrates, is fully committed to working in partnership with other member states and the EU Commission, to ensure Europe's economic and social future, in the challenging and exciting years ahead.

I wish to warmly welcome our visitors, particularly those from Northern Ireland.