Joe O'Toole (Independent)

I am delighted to have the opportunity to contribute and welcome the Minister of State, Deputy Kitt, to the House. Two of these three organisations are reasonably well known, the NESF and NESC, and while the public are still getting to know the National Centre for Partnership and Performance, the work done by Peter Cassells and Lucy Fallon-Byrne has been extraordinary.

We all know social partnership but as far as most are concerned, it is something that happens in Kildare Street, where the trade union movement, the business community and Government and various other groups meet at the top level. One of the problems is that one can agree to something across a table in Dublin but to get that agreement understood in a small workplace in another part of the country is difficult. As politicians we have seen this in other ways. The NCPP is trying to deepen the concept of partnership.

We need to give a clear guideline as to what goes on in the partnership talks and what these three bodies are doing. In every partnership discussion going back to 1987 — I was involved in every one — we would begin with the most recent report from the NESF and NESC and on that would build the partnership process. That is how important these organisations are. They are not prescriptive but they outline the situation. Issues are agreed in principle, then they are fleshed out in negotiation.

How does this process work? One important point is that the process requires people to develop a coincidence of objectives. They must have an understanding and agreement as to where they are going. The first issue is one that some in the trade union movement would argue is not their business, and one that some in the business community would argue is not the business of the trade unions. It is only when one can force people to sit around a table and listen to each other that progress can be made on this first issue, which is that of wealth creation. There is no point in my arguing from the trade union side about redistributing wealth if there is no wealth to redistribute, and the same applies to the management side. We must all agree to create the conditions necessary to create wealth. That is the basis of the Celtic tiger, and involves issues such as employment, labour law and, in particular, competitiveness.

We must be competitive. When one hears a discussion on competitiveness, it almost always boils down to how much workers are being paid, which is only one small part of the issue. The job of the trade union side has been to say it is not only that and that it is about profits, etc.

Over the past 20 years, the level of wealth creation — in other words, the growth in the economy each year — has been quite extraordinary. This year growth will be 5% to 5.5%. With the exception of the blip around 2001-02, the development of wealth in this country has been quite extraordinary. We have moved from a time where the per capita wealth of the country was way below the European average. It is now above that. I am only using that as a measurement or a benchmark. It does not mean anything for many people who do not share in that wealth and that is why we need further social partnership.

When we create the wealth, we must decide what to do with it, which is the crucial part. We have grown the wealth of the country by 5% this year, so what should we do with it and who should get it? How difficult is that? The longer one spends thinking about it, the more difficult it gets but one can begin with the top-line issues. Some of that money will have to be reinvested in industry or in whatever is creating wealth and in research and development to ensure our industries develop and more wealth is created. If we do not do that, we will have no future. That is crucial for the following reason. We will no longer make widgets or have huge manufacturing industries. Any add-on value we create will come from intelligence — intellectual add-on and investment. That is why we need research and development in new products, new markets, new industry and new services. If that is not done, we will have no future.

I refer to that dirty word "profit". It was years before the people I represent became comfortable with discussing the idea. We must accept that profit is a motivator and is part of the deal. Some of us might not like to see too much of it around but it must exist. It is the job of those of us on the left or the labour side to ensure we hold down the profit level so there is more left for the share-out. However, the shareholders, risk-takers and entrepreneurs in a company deserve to get their cut.

When industrialists here talk about how much they are being overtaxed, they have no argument. This country has the lowest tax regime in Europe in terms of capital gains tax and corporation tax. I have argued with Government for 20 years that it does not need to be quite so low. The reality is industrialists are getting a very good deal and whether it is right or wrong, nobody can argue with the fact it has worked and has created wealth. Industrialists are operating in a very relaxed regime.

Tax money is spent on services such as those provided by the school in Dunquin, the hospital in Drogheda and the jail somewhere else. There must be money for health, education, justice and social welfare. What do the disadvantaged in our society, voluntary bodies, pensions, etc., get? Suddenly it all becomes very clear. It is easy to do a flow chart of the above.

Everyone must agree on the conditions needed for the creation of wealth. Those conditions include interest, competitiveness, inflation, etc. The next question is what we do with the money generated. Some of it must be reinvested in research and development, some will be taken as profit, some will be used to pay workers and some will be used to pay tax. The Government uses tax revenue to run the country and look after people, including some of those who have taken a profit because they still send their children to school, avail of the health service, drive on the roads, use the airports, etc. These are real issues and as soon as we bring them together, we recognise that is what social partnership is about.

Social partnership is important because if we did not have it, we would have a comfortable situation where people would not go outside their own tents. The trade unions would never have to eyeball or do face time with those on the other side of the argument. If the social partners did not have to deal with each other, they would never have to hear the arguments of those on the other side. If those on the business side did not have to argue their point or listen to the other side, life would become very easy.

The guy who makes the most extreme demand or comment gets the loudest applause at meetings with his own crowd and everybody leaves the meeting with a feel-good feeling. However, if he is brought into Government Buildings the following day, lined up with the Government, the farmers, the voluntary bodies, etc., on the other side and told to listen to responses to his argument, he will hear things he never heard. That is the value of social partnership and that engagement is crucial. People might dislike it and might not like what they hear but they must listen.

There is always compromise and every national agreement is a sell-out by all parties. There has never been an agreement where all parties have got all they looked for. What we can have with a partnership agreement and which we have had many times is what I refer to as a "Chinese bargain" where every party gets something positive out of it. No party gets all it looked for but each gets some of what it looked for.

In all of that, we try to raise the boats of all groups. However, we have failed to look after people who need more help because this has become a competitive and survivalist society. Recently I listened to a French person living here whose view was that this is a great country in which to live if one is healthy, doing well and working in a good job but that it is a difficult one in which to live if one needs support or help. That is why we must welcome this legislation.

This legislation copper-fastens much of the basis for the above, which is why I commend it. It is the way forward. Even if there is no partnership agreement, there will always be partnership. If there is no partnership, we would spend our time pulling each other apart. For many years, we have had the best industrial relations record in Europe. No country has had fewer strikes. In fact, public service strikes are almost unheard of in Ireland these days compared with what we have seen in France, Belgium, Italy and Germany in the past year where there have been strikes over pensions, public services, investment and labour law, issues which are dealt with in partnership negotiations here and, as consequence, it is a boost for the economy. This legislation is important as it gives a statutory basis to the various bodies.