Bernard Allen (Cork North Central, Fine Gael)
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Question 56: To ask the Tánaiste and Minister for Finance if he will make a statement on his objectives in the negotiations of the forthcoming Social Partnership Agreement. [7753/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Government's objective in entering talks on the Social Partnership Agreement is to achieve a sustainable agreement compatible with improving competitiveness and productivity.

Towards 2016 is a ten-year framework social partnership agreement covering the period 2006 to 2016. The current national pay deal — the first pay agreement under Towards 2016 — expires at various dates in the private sector and at the end of September 2008 in the public service. Talks on a new pay agreement are expected to commence in April.

Public Service pay must develop in a manner that is consistent with competitiveness, price stability and budgetary policy. Government policy on public service pay is that the public service should be in a position to attract and retain its fair share of good quality staff at all levels. It should neither lead the market not trail it.

Pay developments in the period immediately ahead must reflect the more challenging economic and competitiveness scenario that we now face and be more directly linked to changes in productivity.

It is crucial that wage expectations are kept in line with the rapidly changing economic environment in which we are operating. Over the last number of years, wage increases have exceeded productivity growth, with a resulting loss in competitiveness. Regaining market share will require an approach to wage determination which takes greater account of productivity developments as well as labour cost developments in our major trading partners.

One of the core strengths of Social Partnership has been its strong foundation in realism regarding the nature of the competitive challenge for Ireland. It is important that all of us in the public service continue to work to ensure that the services we provide are the best possible, within available resources. The structures we have put in place in the public service pay agreements are an important mechanism to help ensure that we achieve that goal. We need to build on that base in what is agreed in the coming negotiations.