Michael Kitt (Fianna Fail)

I am pleased to have the opportunity this afternoon to address the Seanad on the social partnership process. Senators are particularly well placed to evaluate the role of social partnership and to lead a wider public debate about its place in Irish governance.

I welcome the launch last week in Dublin Castle of talks on a successor to Sustaining Progress. Talks were unavoidably delayed last year so it is good to see that they are now under way.

Social partnership has played an important if not pivotal role in Ireland's dramatic economic and social development since 1987. Over the past 18 years, the six social partnership agreements have reflected the unique challenges and opportunities of their time and injected a substantial measure of stability and confidence for all sectors of the community, including investors.

Bringing together the various key sectors — business and employers, trade unions, the farming sector and the community and voluntary organisations — to work in partnership with Government has served this country well. The facts are there for all to see: since 1987, Ireland's economic growth has averaged over 6% per annum in GDP terms, well ahead of the EU average of 2.3% over the same period. Average industrial earnings have increased by 75% in real terms, taking into account tax changes and inflation. Most striking has been the phenomenal growth in employment, where the number in employment has grown from 1.08 million to about 1.95 million in 2005, an increase of over 80% or 900,000 extra jobs. As a consequence, unemployment has fallen from almost 17% to 4.3%.

The radical turnaround in our unemployment situation, including long-term unemployment, has had a very positive impact in the area of social inclusion. The falling rates of consistent poverty during the 1990s are a further indicator of the success of Government policies and the social partnership framework in this regard. Over the period from 1994 to 2001, the percentage of persons said to be in consistent poverty was more than halved from 8.3% to 4.1%.

In addition, the economic growth and stability fostered by social partnership has provided the Government with the scope to deliver a series of re-distributive budgets from which the poorest in society have gained the most. The ESRI has described the budget for 2006 as one of the most progressive this country has seen in many years. It delivered the largest ever social welfare package worth €1.12 billion, taking the total expenditure on social welfare in 2006 to €13.5 billion, double what was spent in 2000. The increases to social welfare rates, pensions and child benefit in recent budgets have all been well ahead of inflation and demonstrate the Government's commitment to reducing the level of poverty and inequality in our society.

Needless to say, social partnership was not solely responsible for the dramatic turnaround in our economic and social fortunes but it was a key factor because it enabled us — Government, employers, trade unions, farmers and, in due course, the community and voluntary sector — to develop a consensus about the overall direction of our economic and social policy and to work together to achieve our shared vision of the future.

The search for consensus is the key to social partnership. It is difficult to see how we could have arrived where we are at today with the adversarial system that some people seem to favour. There was plenty of adversarialism in the pre-social partnership days, with an annual average of over 317,000 days lost through industrial disputes in the 1980s, compared with under 21,000 days in 2004, the lowest number of days lost on record. That did not do our economy and society any good.

There is no denying that as we enter a new talks process, we face a number of difficult issues, including the issue of employment standards, which has been flagged by congress as a core agenda item for the talks. The Taoiseach has made it clear that the Government does not want to see a race to the bottom in the Irish labour market. We do not want to see people building competitive advantage based on poor wages, casualisation of labour, low health and safety standards or other poor compliance practices. We believe the contrary, that the future of our country depends on quality employment and the development of new products and services. With goodwill and determination on all sides, we can develop an approach to the issue of employment standards that is balanced, effective and fair.

Of course, this is not the only issue for the talks so far as ICTU is concerned. Other issues mentioned by congress last week include health care, caring for children, older people and people with disabilities, upskilling and lifelong learning, pensions and the role of the semi-State companies.

These are just the key items for one of the social partners. IBEC and the other members of the employer and business pillar are coming to the table with their own agenda, focusing on managing the threats and opportunities of increased globalisation and the provision of quality public services. The farming pillar will be focusing on the nitrates directive, the WTO negotiations, the CAP review and agriculture supports. The community and voluntary sector wants the talks to address the issue of effective structures, delivery mechanisms and outcomes, income adequacy, service provision and participation and activation mechanisms.

The Government shares many of the concerns raised by the social partners and we are anxious to address them. As employers, we of course, also have our own agenda based on the continuing need to make progress in modernising the public service. We will be negotiating on a full agenda of improvements in this area, focused on achieving more responsive and better quality customer services, better management of performance, better financial and human resource management and greater flexibility and openness to change.

The recent publication by the NESC of its strategy report, People, Productivity and Purpose, copies of which have been laid before the Houses of the Oireachtas, provides a guiding vision for the coming years for economic and social development in Ireland, and more immediately for the framework within which the negotiations on a new agreement should take place.

For our part, the overall Government strategy is aimed at developing a more dynamic, enterprising and innovation-based economy, which can sustain higher living standards and a better quality of life for all. With the NESC, the Government sees this as embodying the core elements of a vision of Ireland in the future.

The Government is pursuing this vision through a responsive and flexible approach that includes maintaining a supportive taxation regime and prioritising policies in the fields of enhanced consumer and competition policies, human resource development, entrepreneurship, research and innovation, regulatory reform, promotion of equality, major infrastructural development and public sector reform.

Realising our vision of Ireland requires longer-term strategic planning which incorporates a core emphasis on the need for flexibility. Changes such as the anticipated population growth over coming years and the more diverse character of Irish society, make this longer-term planning an absolute necessity. This need, in turn, is reflected in the development by the Government of major policy instruments such as the proposed second national development plan, the national spatial strategy and Transport 21, our ten-year strategy for transport infrastructure.

It is for these reasons that the Taoiseach has proposed that the approach to the negotiations on a new agreement should be based on the shared vision of Ireland proposed by the NESC and should reflect the need for a medium to longer-term policy, planning and reform framework. Specifically, the Taoiseach has asked that the social partners consider agreeing a ten-year framework for the process so that it can be aligned with and contribute to the development and implementation of this longer-term agenda. This longer-term approach would be accompanied by specific pay agreements of a shorter duration. Such a rolling medium to longer-term perspective could be supported over a shorter period by specific policies designed to enhance competitiveness, upskill the labour force, provide sustainable employment opportunities, improve workplace conditions and help build an inclusive society. The approach should aim to build up what the National Economic and Social Council describes as "the developmental welfare state", with policies on incomes, services and innovative measures to ensure activism and full participation.

I turn now to the issue of democratic accountability. Some commentators would have us believe there is a so-called democratic deficit in the relationship between the process of social partnership and the democratic process, which is rooted in the Oireachtas. This assertion does not stand up to close scrutiny. Each of the six social partnership agreements to date has been negotiated by successive Governments on the basis of the primacy of the Government in inviting the social partners to engage in the process, setting the parameters within which negotiations would take place and deciding what terms it would accept for each agreement, based on the respective programme of the Government in question. Implementation of each social partnership agreement has required Governments to take specific policy decisions, allocate resources and initiate legislation, as appropriate. All of this has been subject to parliamentary scrutiny and agreement in line with democratic procedures.

In formally launching the talks on a new agreement at the plenary meeting of the social partners in Dublin Castle on Thursday last, the Taoiseach again asserted the primacy of overall Government strategy in the context of negotiating a new agreement. His ministerial colleagues, the Tánaiste and Minister for Health and Children and the Minister for Finance, who attended the plenary meeting, also set out the Government priorities for a new agreement. They emphasised that if we are to enhance competitiveness, protect jobs and living standards and provide top quality public service, realistic aspirations and openness to change will be essential in the negotiations.

Far from social partnership being undemocratic, it is an asset to parliamentary Government and, in many respects, a school of democracy. It is not divorced from the system of parliamentary democracy. The social partners are important and, in many aspects, powerful actors in civil society. In addition, they would be significant influences on economic and social life in any event.

Participation in the social partnership process is not just about negotiating to achieve sectorial interests but involves active engagement in analysis and reflection on the economy and social trends and, in particular, in the institutions of the National Economic and Social Council, National Economic and Social Forum and National Centre for Partnership and Performance. This means listening to the views and problems of other partners, the views of independent experts and the experience of Departments and other Government agencies. In this process the social partners are encouraged to view their role and interests in the context of the wider national interest. Obviously, they do not abandon their own concerns and priorities but are helped to find solutions which maximise the overall benefit, while meeting their particular concerns. This is true of pay bargaining as well as the wider framework of goals and targets which make up each partnership agreement. Through this process, the many participants in social partnership negotiations are brought to a better understanding of how society works, its problems and how interdependent we all are on this small island. As a result, we have created a social basis for greater consistency in our approach to public policy and the behaviour of the main economic agents. This process has produced stability and confidence in the economy and labour market, from which we have all benefited.

The monitoring and review of the implementation of the social partnership agreements operates at a number of levels within the Oireachtas. The detailed quarterly progress reports on implementation, keynote speeches and other relevant documents are laid before the Oireachtas for closer scrutiny and probing. More than 40 key documents related to the most recent agreement alone have been laid before both Houses. Since 1997, the Taoiseach has taken well in excess of 300 oral questions on the partnership process in Dáil Éireann. He also referred to it this afternoon in the Lower House when he agreed to speak on it tomorrow. Ministerial colleagues have also engaged in extensive debate on social partnership related issues, whether in the form of specific policy initiatives or legislative proposals.

As Senators will be aware, the Oireachtas strand of the National Economic and Social Forum, a key social partnership institution, comprises Members of the Dáil and Seanad. I welcome this opportunity to make a statement on social partnership to the Seanad and I would like this type of engagement to become a more regular feature of the social partnership process in future. I am delighted to be present in my role as Minister of State at the Department of the Taoiseach. My colleague, the Minister of State with responsibility for labour, Deputy Killeen, will be present for the remainder of the debate.

Critics of the social partnership process offer little by way of an alternative and appear to believe that free-for-all negotiations will somehow serve the country better. It has never been clear to me what alternative they propose and perhaps they do not have one. The Government is in no doubt about the value of social partnership agreements from the overall national perspective and is intent on engaging purposefully in the current talks. We live in a complex, interdependent society and social partnership is the best approach yet found to manage such complexities and interdependencies. The extent of international interest in our approach is proof of that. Now, as in the past, partnership offers the best way forward and its record of success in underpinning our economic and social transformation constitutes the best argument for its continuation.