Conor Lenihan (Dublin South West, Fianna Fail)

I thank Senators for their contributions. While the Government emphasises the importance of the smart economy as the engine for future export-led growth, we cannot forget such basics and staples as the indigenous traded sector in retail, hospitality and - the source of huge foreign earnings - tourism, which represents a litmus test for our competitiveness. It is very clear that deciding to change the minimum wage as we have done will assist people in those sectors to recruit new people where they have laid off many people since the downturn began. It does not affect people with current employment agreements but affects people coming into those sectors for the first time. It is a positive thing; it is absolute positive discrimination in favour of employment.

We all know the figures about our minimum wage, which is the sixth highest in Europe based on a purchasing power rather than the nominal figure, in which we are second highest in the European Union. The common thread running through all the contributions in this House and the other House as we face this extraordinary economic challenge and crisis is that we allowed our cost base and competitiveness to be eroded in recent years. That applies not just to the State sector, but also to the private sector. There is no point in quoting, misquoting or presenting the Forfás and OECD reports on the minimum wage in a partisan or partial manner. As a member of the Cabinet sub-committee on economic recovery I participated in lengthy and intense debates on the minimum wage which went back and forth for several months a long time ago. The Forfás report was commissioned to resolve those differences. We had people telling us that changing it would make no difference, but it is impossible to argue with the fact that only 3% to 5% of employees in the economy are on the minimum wage. However, the 3% to 5% on the minimum wage influences a further 26% of wages above it - in other words wages that are 1.5 times that of the minimum hourly rate. We must take that into consideration as an inhibitor of competitiveness and an extra cost for certain types of business. I know it is very difficult for politicians who, like me, have spent the best part of 13 years taking partnership for granted and assuming that everything that emanated from the social partners was like the Commandments handed down by Our Lord. We need to change our attitude and view in favour of competitiveness because without competitiveness, including competitive wage rates and salary-setting mechanisms, we will move off the map in terms of our capability to drive recovery by export-led growth.

While the increasing salaries and wages did not hit the multinational investors as they did the indigenous traded sector, we need to get the indigenous traded sector up and out into the world. We all know that 76% of our exports are driven from the multinational sector. It is the other indigenously driven 24% that we must motivate, encourage and push in the years ahead. We had the innovation task force to provide much needed innovation capital for companies that are scaling or growing.

One of the other Opposition Senators mentioned that we seemed to be talking as if we were not dealing with the other issue in parallel with the minimum wage, which is the employment regulation orders and the registered employment agreements. These will also need to be reviewed, changed and totally rewritten if necessary. We have a review that will report back to the Government very swiftly on this and there is no premium on delay. Swift decisions are what we need. Members who currently serve on the Opposition here, if they have the privilege to serve in government within a year or two will thank us greatly for the quick decisions we have taken on many different levels. It will be most enjoyable to see some of the disagreements between those major parties of Opposition because we have already seen in this and other debates on the economy the vast differences between Fine Gael and Labour on very elemental matters of economic policy.