Wednesday, 26 October 2005
Lisbon National Reform Programme: Statements (Resumed).
As a member of the Joint Committee on Foreign Affairs, I was privileged to be present when our Australian friends made a submission to the committee yesterday. I am particularly pleased they are present in the Chamber as I speak about the Lisbon national reform programme. I am sure they will understand that Mr. Frank Forde, one of two former Australian Prime Ministers from my home county of Leitrim, would have been very proud to have been here today. Mr. Stanley Bruce was the other former Prime Minister from County Leitrim.
Mr. Forde served briefly as the interim Prime Minister of Australia for one week in 1945, following the death of his predecessor, Mr. John Curtin. Despite the fact that Mr. Forde came from County Leitrim, he was not re-elected as Prime Minister because he did not get enough votes, as the late Mr. Frank Cluskey would have said. He went on to serve as an ambassador for Australia during his distinguished political and diplomatic career. I am particularly pleased that our friends from Australia are here for my contribution. Their presence emphasises once again the strong link between Ireland and Australia.
I have started my speech positively, although I had intended to commence on a negative note by saying the Lisbon reform programme has been a failure. If one remembers the discussions which took place when the programme was first mooted and the concepts which underpinned it at the time, one will recall that it was intended to put in place a ten-year plan to lift the European Union from its economic malaise and put it on the world stage as a region of strong competition, high employment and increased prosperity for all. That we are discussing a relaunched Lisbon Agenda tells its own story. While the Lisbon Agenda has been a failure since its establishment, the economy has been outstandingly successful during that time. I agree with Senator McDowell that the agenda has not worked because the differing social models throughout the European Union have led to a lack of consensus.
Senator Quinn has mentioned that one no longer hears anti-Irish jokes in this part of the world. I am not sure whether people tell anti-Irish jokes in Australia — those who try to do so probably get punched in the face. The anti-Irish humour of English comedians was the bane of our lives for many years. Senator Quinn correctly states such jokes are no longer heard because it is now cool and sexy to be Irish. One cannot call the people of a country thick or stupid if that country is doing as well as Ireland.
As a member of the British-Irish Interparliamentary Body, I was present last week at a function at which an initiative being pursued by the Federation of Irish Societies, the umbrella body for Irish societies in England, and the Irish Embassy in London was launched. Members of the parliamentary UK Labour Party were invited to the function which was hosted by Lord Dubs, a Labour peer who is a vice-chairman of the British-Irish Interparliamentary Body to hear at first hand the concerns of the Irish community in Britain. The function was graced by the presence of the UK Deputy Prime Minister, Mr. JohnPrescott, who spoke about the various social models within the European Union. He said he had been present the previous week at a meeting in Brussels at which the matter was discussed. He said that when he mentioned the Anglo-Saxon social model at the meeting, one of his French colleagues asked whether France was included under that definition. He responded by saying he meant the British-Irish model. While Mr.Prescott's remark brought a wry smile to those in attendance, it had further significance for me as an Irish parliamentarian. Not only was it interesting that a UK Deputy Prime Minister attended an exclusively Irish function in the House of Commons to talk to the Irish community about Irish interests, it was also significant that Mr. Prescott put Ireland on an economic par with the United Kingdom. The significance of his remarks show how far we have come and was not lost on the Irish politicians present.
I am sure the Government has considered, in the context of the various social models found throughout the European Union, that the main reason the French and Dutch electorates voted against the proposed EU constitution was that they considered, in their own way, that their social model of protectionism and regulation was somehow under threat. They did not necessarily base their judgments on the wider European vision, or the sort of things about which we talk nobly inside and outside the House — being good Europeans and advancing the European agenda. They voted with their concerns about the money in their pockets and the bread on their tables in mind. All of us in Europe, not least Ireland, face a real challenge to ensure the debate on the proposed EU constitution is kept separate from such regional and local issues. We need to meet this challenge if the European Union is to make strong progress at a global level.
The economy is strong. I noted a significant comment in the Minister of State's excellent presentation. When civil servants prepare draft speeches, they sometimes fail to outline what they are thinking in stark terms. I accept that the Minister of State makes a strong input into his own speeches. He said:
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.
Some economic statistics released into the public domain last week clearly indicated this country's over-reliance — I use the word advisedly — on the construction sector. As Senator Brian Hayes said, we are in serious danger of seeing a significant reduction in employment levels and consumer spending, if not quite back to the bad old days, if we do not strengthen the other building blocks of our economic success, as outlined by the Minister of State in his presentation. The construction sector has traditionally been the engine room of this country's economy. It has always been the case, even in the bad times, that when the construction industry does well, the country does well. While I do not want to sound a note of warning, I have to state I am concerned about this country's economic outlook. I welcome the macro-economic and micro-economic guidelines in the Lisbon national reform programme for that reason.
The Minister of State also referred to productivity. We all know this country is losing its manufacturing base rapidly, a trend that is noticeable throughout Europe. We need to consider the number of jobs which continue to haemorrhage from this country's manufacturing sector, as well as the huge increase in the services sector, which is partly driven by migratory labour. I heard someone say on radio yesterday that we should thank God for migratory labour because we do not know what we would do if we did not have it. Who would run our hotels and our services sector in general? I am not an economist, but I know, just like everyone else, that that sector is driven by consumer demand. If people get a feeling that the sentiment is not with us and that there might be a need to put money aside for a rainy day, they will cut down on consumer spending, for example, on an extra meal a week or an extra weekend break. What impact this will have on our economy is not yet known.
The Minister of State said: "A greater emphasis must be placed on productivity by encouraging greater levels of innovation and entrepreneurship." While we all agree on that point, the Minister of State went on to say rather abstractedly: "A range of key initiatives is under way to drive this development." I do not believe any Government would have an answer to this. If the manufacturing base is moving to low-cost countries because we have a problem with competitiveness and wages and the cost of living are too high, no Government would last five minutes if it was to suggest it would dampen economic demand, increase taxes and try to smooth out the economy. Ireland cannot do this because it now has a deregulated economy. The thrust of Irish economic performance in the past ten years has been deregulation which has taken place across the economic field.
Senator McDowell, who is ideologically a socialist said he could not——
Ideologically, he is on the left. In the absence of Senator Hayes, Senator McDowell admitted that, from his perspective, he did not and could not support the sustaining of work practices in the public sector that would not be accepted in the private sector.
All of us agree on that point. Senator McDowell went into some detail but did not want to discuss specific cases because we all knew what he was talking about. I would be the first to support the public sector. Like all Members, I have always believed in a strong, vibrant public sector. I have never taken the view that everything should be thrown to the private sector, particularly as I come from a rural area where there is a need for public service delivery. However, I suggest to the Minister of State that it is on the question of delivery of public services that the future prosperity of the country will lie. A key question in this regard is how efficiently the Government can deliver public services.
Some ten years ago, when I joined the National Economic and Social Forum, NESF, Ms Eithne Fitzgerald was the Minister of State at the Department of the Taoiseach responsible for it. I asked a question then that others and I have repeated since, namely, given that this is a Europe of prosperity and increased cohesion, with a free market and free movement of goods, services and people, why is it at least one third cheaper to buy a range of products in the United States that are generally available in this country and elsewhere in Europe? Nobody has adequately answered that question. I suggest it goes back to my original point on the lack of consensus on social models and the regulatory nature of the European business sector. Until we get these right, I and many others will continue to ask why it is cheaper to purchase goods across the consumer spectrum — compact disc players, DVD players and fashion items — in a country of 280 million people when the European Union is supposedly an unregulated free market of 400 million. I will leave the question open.
I endorse the welcome of the House to the Australian delegation led by Senator Alan Ferguson. In particular, I acknowledge the presence of Senator Ursula Stephens, all the way from Wicklow. It is great to have the delegation present. We had a successful occasion yesterday and it is good to see the delegation members again.
I thank Senators for their contributions to an open, fair, frank and positive debate. There is consensus on the issue of Europe, the Lisbon Agenda and the national reform programme. While we may not see eye to eye on everything, there is broad consensus among us on the overall goals of the Lisbon Agenda and the particular priorities for Ireland. We are at an interesting time on the European journey. On the one hand, the results of the referenda in France and the Netherlands on the European constitution are evidence of the need to make the European Union more meaningful to its citizens — the man and woman on the street. On the other, the member states must work together to address the issue of globalisation. Failure to do so risks holding back or undermining economic and social progress in Europe.
I would like to respond to some of the issues raised by various speakers. Several Senators referred to the level of public debate on the Lisbon Agenda. Part of the reason for the relaunched agenda is that it was seen as too remote from the man or woman on the street. Under the new arrangements, it is for each member state to promote and pursue its own policies aimed at growth and employment and to connect with its citizens. Few people know much about EU policies and the Lisbon Agenda but everyone understands the importance of economic growth and jobs.
Reference was made to the issue of pensions. In recognition of the importance of the issue the national pensions reserve fund was established in 1999 by the current European Commissioner for the Internal Market, then Minister for Finance, Mr. McCreevy. Some 1% of GNP will be allocated to the fund each year until at least 2055. The fund was worth over €13 billion in June and it cannot be drawn from before 2025.
Many speakers referred to the construction sector and I agree with many of the points made. The indications are that housing demand will remain strong for a number of years. In addition, an extensive ten year programme of transport infrastructural investment will be launched shortly. Therefore, while it is right to be aware of the sensitivity of this sector, the indications are that we can manage it positively into the future.
Many speakers referred to broadband. The Government is playing its part by investing heavily in metropolitan area networks, popularly known as MANs, and subsidising community broadband initiatives. Some €165 million is being invested in these programmes by the Government. Industry, in particular the telecommunications sector, needs to play its part by improving availability of broadband for consumers at affordable rates. In fact, this message is being clearly delivered by the Taoiseach at a telecoms conference today.
Reference was made to education and educational disadvantage. Earlier this year the Department of Education and Science launched a five-year action plan to ensure equality of opportunity for all, which has been the hallmark of the education system. A macro decision taken in the 1930s concerned the broad education Act of the time which was followed by the decision in the 1960s under the late Donogh O'Malley to ensure equality of opportunity for all. We are still pushing to improve opportunities at different levels for different segments of the population. Senator Brian Hayes made an important point on opportunities for those in their 20s, 30s or older to be allowed into the system and for incentives to be put in place for lifelong learning. The social partners attached importance to the issue of equality of opportunity for all which is one of the ten special initiatives in Sustaining Progress. Many specific actions and initiatives are being pursued by the Department of Education and Science to tackle the important issues in this regard. The indicators show we are making good progress but we will continue to work for improvements. Historically and by political performance, we all have a strong commitment. It is the will of the nation that Governments and parliamentarians continue to support and invest in education at all levels.
Several speakers referred to innovation, science and technology. A major part of the jigsaw for Ireland concerns increasing overall investment in science and technology, in particular research and development, a point on which many speakers agreed. To be fair, this view is shared by the Government and, for this reason, the national reform programme goes into much detail on the measures now being taken which will be supplemented by further measures under a strategic implementation plan being worked on by the relevant Departments and agencies.
Reference was made to FÁS. Its funding has been targeted away from the unemployed towards training for those in the workforce. As recognised in the European Commission's continuing vocational survey, Irish companies devote considerable resources to employee training compared to many other member states. The report of the enterprise strategy group stressed the importance of further increasing workforce education and skill levels. A substantial increase in funding of some €36 million was provided for FÁS this year for the expansion of training programmes for people in employment, including basic workforce education. A significant part of this funding has been absorbed through existing FÁS measures. In addition, training has been provided through projects, managed by private organisations on a contract basis. This training will cover basic skills provision, occupation-specific upskilling, functional and general management training and entrepreneurial developments.
The World Economic Forum's growth competitiveness index showed Ireland moving from 30th position in 2004 to 26th in 2005. In its 2005 competitiveness report, the forum has developed a new measure of competitiveness across a more complex range of indicators, known as the global competitiveness index. On this index, Ireland is placed 21st overall. The top four in the index are the US, Finland, Denmark and Switzerland. A large factor in the determination of our position on these indices lies with our research and development performance, where it is acknowledged we need to do better. However, much work has been done to address this at many levels. In contrast, Ireland scores highly on the macro-economic indicators and the quality of public institutions.
The Government is committed to taking macro-decisions, as far as is possible, on an all-island basis. Specifically in the case of preparing national reform programmes, the British and Irish Governments agreed to make a common contribution on North-South co-operation. This important development in Annexe III of our programme commits the two Governments to work together to identify areas for co-operation, to develop joint approaches on particular issues, and to learn from their respective experiences. The Government is working closely on both a North-South and East-West basis.
The relaunched Lisbon Agenda strikes a good balance between mapping out the overall goals and, at the same time, letting each member state decide on the policies and measures appropriate for its own particular circumstances. This is welcome, provided that each member state selects and implements policies which foster and underpin economic growth, create more jobs and, ultimately, contribute to a richer quality of life for all citizens of Europe. The emphasis on jobs and growth is not, by any means, to the exclusion of sustainable development or social inclusion. These are two critical elements of overall policy not only at EU level but at national level. While they are specific programmes and fora in their own right, they also form an important backdrop to policy setting for both jobs and growth.
Over the next several years under the new Lisbon Agenda, certain key priorities will be pursued. The Government will continue to manage the public finances prudently and pay close attention to competitiveness generally across our economy. It will strive to provide an environment where enterprise can flourish and consumers are protected, building further on our recent progress in research and development, particularly by adopting and implementing a new strategy to underpin the Government's research and development action plan. We will work hard to support enterprises to become more innovative and knowledge based. A new national development plan will be put in place for the period from 2007 to 2013. Details of a new ten-year plan will be announced for transport which will be implemented and supplement the already excellent work done.
The Government will press ahead with its ambitious but necessary regulatory reform programme. The sustainable use of resources and the strengthening the synergies between environmental protection and growth will be encouraged. A range of measures will be provided to support people seeking to enter the labour market and those already in it who wish to improve their skill levels. This will be achieved while ensuring the labour market policy contributes to making our economy more knowledge based and innovation driven. Work permit arrangements will be codified, protections for migrant workers will be improved and a new green card system to contribute to overall labour supply in Ireland will be introduced. The Government will continue with a programme of specific measures to combat long-term unemployment.
Investment in our education system and the promotion of greater participation at all levels will continue. The Government will implement the national framework for the development of lifelong learning. A national reform programme will be implemented over the next three years to build on our strengths, improve on any remaining shortcomings and keep Ireland at the forefront of building a competitive Europe with strong economic growth and employment.