Gerry Adams
Question:1. Deputy Gerry Adams asked the Taoiseach if he will report on the recent contacts he has had with the social partners. [39841/14]
Ceisteanna - Questions (Resumed)
Social Partnership Meetings
Gerry Adams
Question:2. Deputy Gerry Adams asked the Taoiseach if he will provide an update on his process of social dialogue. [39842/14]
Gerry Adams
Question:3. Deputy Gerry Adams asked the Taoiseach the groups he has met as part of the process of social dialogue. [39843/14]
Lucinda Creighton
Question:4. Deputy Lucinda Creighton asked the Taoiseach the reason the National Economic Social Council is still devoid of any representation from the small and medium sized enterprise sector; the way the concerns and interests of the self employed and small business are represented on the council; and if he will make a statement on the matter. [40959/14]
Micheál Martin
Question:5. Deputy Micheál Martin asked the Taoiseach if he has met with the social partners recently; and if he will make a statement on the matter. [40968/14]
Joe Higgins
Question:6. Deputy Joe Higgins asked the Taoiseach if he will report on recent meetings he has had with social partners; and if he will make a statement on the matter. [41692/14]
I propose to take Questions Nos. 1 to 6, inclusive, together.
This Government has consistently said that while we do not intend to return to the rigid social partnership structures of the past, we continue to engage in a wider process of social dialogue on an ongoing basis. This means that the primary point of contact for interaction between representative groups and the Government is with the relevant Minister or Ministers who have functional responsibility in a policy area. All Ministers and their Departments engage in regular dialogue with sectoral interests in their relevant areas and the Government values these interactions and contributions.
In regard to public service issues, the Minister for Public Expenditure and Reform was responsible for negotiations with the public service trade unions which led to the Haddington Road agreement. He has recently indicated the Government's willingness to enter discussions with the trade unions later in 2015 on public service pay following the expiry of the Haddington Road agreement. The Minister for Jobs, Enterprise and Innovation has lead responsibility for wider industrial relations issues and has had discussions with trade union and employer representatives on issues such as collective bargaining and sectoral pay agreements. He is also establishing the low pay commission, which will include employer and employee representatives.
I also meet with many social partner organisations during the course of my work. The following are examples of engagements since December 2013. I recently spoke to the new General Secretary of the Irish Congress of Trade Unions, Patricia King, to congratulate her on her appointment. I met representatives of the IFA on 12 June 2014 and representatives of the ICMSA on 19 June. I had the opportunity to meet members of the wider farming community at the National Ploughing Championships on 25 September and I also addressed the IFA annual general meeting on 27 January. I met representatives of the Construction Industry Federation on 12 June. I addressed the IBEC CEO conference on 12 February 2014 and the IBEC president's dinner on 18 September.
In addition, multilateral engagement between sectors and the Government also takes place through the National Economic and Social Council, NESC, chaired by the Secretary General of my Department.
The council continues to provide a valuable forum for dialogue on the economic, social and environmental challenges facing the country and submits reports to Government on a regular basis.
Appointments to NESC are made in accordance with the National Economic and Social Development Office Act 2006 and the National Economic and Social Council (Alteration of Composition) Order 2010. In accordance with these provisions, the council includes four members nominated by business and employer interests, including IBEC, Chambers of Commerce Ireland and the GIF, as well as nominees from the Irish Congress of Trade Unions, farming and agricultural interests, the community and voluntary sector and the environmental sector. The council also includes independent members and representatives of a number of Government Departments. Arrangements for the nomination and appointment of members will be considered again when the council next falls to be reappointed.
The Government remains committed to this approach of social dialogue and remains open to further deepening its relationships with representative groups across society as we seek to sustain the ongoing economic recovery. Sustainable recovery will only be possible if we retain the competitiveness and commitment to reform required of a small open economy in a single currency zone while ensuring that the benefits of recovery are shared across society. However, we do not support a return to an overly centralised model of social partnership such as operated in the past.
Ar dtús, ba mhaith liom comhghairdeas a dhéanamh le Patricia King faoina ceapachán mar ard-rúnaí ar ICTU. Táim ag súil le bualadh le Patricia agus an cairdeas idir Shinn Féin agus an ICTU a fhorbairt. I wish Patricia King well on her recent appointment as ICTU ard-rúnaí.
The Taoiseach has outlined the way he will engage with the social partners and given us notice that the Minister for Public Expenditure and Reform is working on a follow-up agreement to the Haddington Road agreement which is due to expire next year. It would be useful to get some indication of the likely direction the new agreement will take. In his contact with the social partners and others, has the Taoiseach discussed this matter?
The farming community, in particular small and hill farmers, in my constituency of Louth and elsewhere are very concerned about the future given the age profile in the sector. Many of our farmers are elderly or are becoming elderly and there are not enough incentives and tutorial supports etc. to bring young farmers into the agriculture industry. That industry has also been badly affected by the forced emigration which has taken place.
The Haddington Road agreement was opposed by many workers and there were varying degrees of industrial action across the State. In fact, in 2013 Sinn Féin criticised the way the financial emergency measures in the public interest were rushed through the Dáil by the Minister for Public Expenditure and Reform, Deputy Howlin. We said that union members should have been given more time to decide on the Haddington Road agreement. If he agrees that there was confusion and upset, can the Taoiseach set out some propositions to prevent that and spare people the muddle that surrounded the conclusion to the previous negotiations? More importantly, can he guarantee that those on average pay scales will be protected and that any cuts will come from the top?
When it gets on message, the Government talks about the success of the economic recovery, but it is a two tier recovery. The Taoiseach acknowledges that it is very fragile and that many people have not felt its benefits. That is hardly surprising given the alarming and appalling impact of austerity policies on families and communities. I have asked many times whether the Government equality proofs any of its proposals and to my knowledge it does not. Poverty levels are at a shamefully high level, especially for children, while we see stealth taxes, including water and family home taxes, the ongoing crisis with more than 500 people on trolleys in hospital corridors this morning and difficulties in education. The Taoiseach ignores the fact that 500,000 citizens have been forced to emigrate.
If he is so confidant about the recovery, the Taoiseach might comment on recent suggestions by the leader of SIPTU, Mr. Jack O'Connor, who called on the Government to tear up the Haddington Road agreement. At an event at the weekend to mark the death of James Larkin, Mr. O'Connor went on to say that his union would seek pay increases of 5% across the public and private sectors and a minimum living wage of €11.45 per hour. Since the recession, the Government has imposed almost €2 billion in wage and pension cuts on the public sector. As such, is the Government prepared to enter into discussions with the trade union leadership on a replacement for the Haddington Road agreement and can the Taoiseach provide an update on what the Minister for Public Expenditure and Reform announced when he said he was working on a follow-up agreement?
I thank Deputy Gerry Adams for his question. I note his comment in respect of young farmers, including hill farmers. I had discussions with the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, and he is in a position to introduce the GLAS scheme, which is an environmental scheme to replace REPS which was ended. The scheme will allow 30,000 farmers to be included for payments in most cases of €5,000 but climbing to €7,000 for some. I acknowledge that there were difficulties in the beginning on flexibility, the requirement for 50% participation of active farmers, issues surrounding the planner who would be involved and where there might or might not be objections. These matters were all attended to following exhaustive consultation between the Minister, his people and the farmers involved. The vast majority of those particular problems have been ironed out. I am going to Brussels later this week and hope to meet the Commissioner for Agriculture and Rural Development. I would like to think that the application forms for GLAS can be circulated at a reasonably early date so farmers can see that it is actually in their interest to participate in the scheme, meet the conditions and obtain payment in due course.
Exceptional interest in the Irish agri-sector is now clear arising from the forthcoming lifting on the restrictions on quotas for dairy produce. The Minister has pointed out on a number of occasions that Ireland will become the most productive dairy unit on the planet once the investment in place kicks in and the restrictions are limited. I note the investment yesterday of €25 million at a number of locations around the country and the investment of serious money by a number of innovative food companies, including Glanbia and Kerry Group to name but two. This will have serious implications for up to 5,000 more jobs on farms and in the paddock over the next number of years. I further note to Deputy Adams that the interest among young farmers has changed completely from where it was eight to ten years ago. All agricultural courses are booked up and all agricultural colleges have waiting lists. As a business, farming and the agri-sector has become the No. 1 choice of many young people who can see the future ahead. In a broader sense, it is expected that 10 billion people will have to be fed worldwide by 2050 which means food production, food quality and food integrity will be very important in this country. I hope the platform now in place will add greatly to that.
Deputy Adams mentioned the FEMPI legislation.
The Minister for Public Expenditure and Reform, Deputy Brendan Howlin, has signalled his intention to begin this year the engagement with the trade unions on a successor to the Haddington Road agreement on pay and further structural reform. These discussions will not be without their difficulties. While I note the comment of Mr. Jack O'Connor of SIPTU, there is an agreement that was accepted by the vast majority of the trade unions and which lasts until July 2016 and I expect both sides to honour it.
The Minister for Finance, Deputy Michael Noonan, is to deal with taxation issues as the year proceeds. The Government approved the terms of reference for a low pay commission, which will be under the aegis of the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and handled by the Minister of State, Deputy Gerald Nash. He has placed the public advertisements for expressions of interest to serve on the board of the commission and I expect the first meeting to take place around the end of February. I expect the commission to report before the end of the summer and the Government will act on the report in the best interests of everybody.
The Government expects to have 500,000 removed from the USC net in the forthcoming budget in October. This will be an increase of 80,000 on the current number of 420,000. As the Deputy knows, the Government reversed the previous Government’s reduction in the minimum wage. Many of the changes in social protection are focused on the lower paid or those on social protection payments. The two lower rates of USC were reduced for lower paid workers. In respect of those in receipt of social protection payments, we want to make it very clear that it should always pay to work. The establishment of the Intreo offices allows for a much better presentation of the experience and profile of those who are on the live register and drawing social protection payments but who wish to work. Some 140,000 left the live register last year. The figures to be published tomorrow are very encouraging and heading in the right direction.
The Government has made it clear that a person who returns to work will retain his or her medical card for three years. The housing assistance payment will be tapered over a period; therefore, there will not be a sudden break with the assistance of which a person is in receipt. The Minister for Social Protection, Deputy Joan Burton, has increased child benefit and the child support payment of €30 per week will be paid to persons who wish to return to work. Employers clearly are favouring the JobsPlus scheme which gives them a contribution of €10,000 for the support of workers whom they employ and who have been out of work for longer than two years. This is a strong trend. As the fragile economy continues to gather strength, we hope that during 2015 the figures will continue to improve. The line of inward investment is very strong; exports have never been stronger and it is much easier to set up a business.
Ministers have worked very hard to establish new credit facilities for small and medium enterprises in order that these entities can hire new staff and expand their businesses. There is support for those in the retail sector to get online, while local enterprise offices in the local authorities operate as one stop shops. These initiatives are all focused on increasing employment, which is the key to getting out of poverty and the difficulties in which many people have found themselves. The two anchors for the Government are fixing the finances and putting people back to work. The Minister for Finance, Deputy Michael Noonan will leave shortly to comment on Ireland’s first ever sale of 30-year bonds and give the details of what it means and will mean for the future. The Minister for Public Expenditure and Reform, Deputy Brendan Howlin, will engage with the trade unions on the successor to the Haddington Road agreement on pay and structural reform in order that we can continue in the good direction in which the country is heading, given that it is still fragile and we still have a distance to travel.
Sometimes I think the Taoiseach and I live in different Irelands, although it could not be the case, given that this is such a small place. Although some are doing well and there may be an improvement, it is a fact that one third of children live in consistent poverty; this is not made up. The ESRI told us that the top earners would benefit the most from budget 2015, while the lowest income households would gain the least. The Taoiseach is bound to know this. Pay cuts and pension levies have been imposed on almost 300,000 public sector workers. The Taoiseach did not even ignore what I said but prattled on. In eight years 500,000 taxpayers have left the State which, I presume, has a population of approximately 2.5 million taxpayers. The people we lost were mostly young people.
In the past year the Taoiseach established a low pay commission. What on earth is it for? Is it to tell us it is not good, nice or pretty to live on low pay? We know this and the commission has not even been set up yet. On Saturday Sinn Féin is sponsoring a living wage conference. Perhaps the Taoiseach might come. I will send him the details, if he wishes. It will examine not a minimum wage but a living wage, what it takes to look after children, spouses and elderly relatives, in the way the Taoiseach and I would look after ours.
There is good news. It is good that the restrictions on dairy production have been lifted. However, not all farmers are big ranchers. The Taoiseach mentioned the world food shortage. On the other hand, given that some have the money and a grá for the good, green food we can produce, the agricultural industry could thrive in the future. Just over one week ago the IFA was lobbying about how GLAS was being worked out and farmers had to jump through so many hoops and regulations to receive what should be their entitlements. The Government is out of touch and needs to listen to what the social partners are stating. Farmers, the trade union movement and the voluntary and community sectors could be the experts on how to get what the Government has not yet achieved, namely, equality, an anti-poverty strategy and a move away from the disastrous social consequences which we have consistently warned are bound to happen, given the cuts the Government has implemented.
I would not object to having a debate on poverty, particularly child poverty. Various elements are drawn in from the statistical world to produce these figures. Perhaps the end of the term, before the Government makes its spring economic statement, might be an appropriate time to have it. We do not live in different worlds.
I have outlined all the available options the Government puts in place for people who are in receipt of social protection measures. In terms of incentives, it is very important for people to be able to know whether, if they go to work, they will lose their medical card or housing support, or whether they will continue to receive the increasing rate of child benefit or draw the €30 per week per child family support. These are important measures that the Government has recognised such that we can tell people perfectly legitimately that we do not live in a different world, we know exactly the pressures they are under and here are the opportunities to get out of that particular dilemma and go to work to better themselves and their families.
Of course, there has been emigration from our country for a couple of centuries. Where I come from there is not a house that does not have people in England or in the United States. The trend now is such that by the end of 2016 I expect more Irish people will be coming home than leaving. Some leave to get experience or because they want to go away for a year or two, while they are young, to get a job or whatever. Nobody wants to see people leave. The challenge for us all is to develop our own infrastructure around the country to the point where the business and tax environment is conducive to people coming back and for people to want to do business at home. I had a call from somebody in Singapore who has a good job and could employ people. He said in the past few years it was not feasible for him to come back here. Now he sees the trend of some flexibility being given in terms of tax reductions and I support that.
The Low Pay Commission is not a study. For years people were asking what should be paid as minimum wage and how would it be made up. There was never a scientific basis in reality for all those charges. The Government has reversed the minimum wage. It is now €8.65 per hour, an increase of €1 per hour but we want to move to a point where we consider the conditions and the issues surrounding low paid workers and put in place a proper system for analysing those so that a decision can be made on it. The terms of reference for the Low Pay Commission are published and available for Deputy Adams. It is a nine member body; it will report before the summer: three members are appointed from among persons who, in the opinion of the Minister, have “a deep understanding of the interests of low paid workers", a very good knowledge and experience of working on behalf of workers’ interests or representing workers, particularly low paid workers, or a proven track record in an advocacy or representational role on behalf of the low paid. Three members are appointed from among persons who in the opinion of the Minister have a deep understanding of the interests of employers, particularly small to medium sized employers and those operating traditionally in low paid sectors and who possess a good knowledge and understanding of how business actually functions, particularly in regard to labour costs. There are two members who have knowledge or expertise of some or all of the following - labour market economics, employment law and proven competence in analysing these matters.
This is not a study, to say this is awful or that could be improved. This is a commission that is due to report to the Minister for Jobs, Enterprise and Innovation and in particular to the Minister of State with responsibility for business and employment, Deputy Nash, for consideration by the Government on what it should do in all of the circumstances surrounding low paid workers. It is the first time this has been done. It will have a benefit in that Government has said it will act following receipt of the report. It will be obliged to take into account changes in earnings since the most recent order for the minimum wage, changes in the currency exchange rates. The euro has weakened because of the decision of the European Central Bank, ECB, which means there is greater value for people coming to Ireland from Britain and from the United States, because of the dollar and the pound. That means our hospitality sector has greater things to offer. It also means that business costs go down and there is greater access to credit. I hope that variable mortgage rates can be implicated and reduced. For exports this is a real opportunity for business and if the business environment is right for further employment that is an issue.
The questions of employment, unemployment and changes in income distribution are for the Low Pay Commission to consider, as per the terms of reference and to report back to Government, and Government will act on that. I hope that will in some way reflect a genuine consideration for those caught in that trap. I have no difficulty about having a genuine discussion here on child poverty and letting people give their views on it. I hope that with our strengthening economy, coming from a very fragile base, more young Irish people who went abroad in recent years will come back with experience and add it to the progress the country is undoubtedly making.
In his preamble the Taoiseach unfortunately failed to address the specific question I asked. Why is there no formal representation from the small and medium sized enterprise, SME, sector on the National Economic Social Council, NESC? It was a clear platform of the Fine Gael Party before the last election, which gave a clear commitment in advance of the election that in future discussions and negotiations the SME sector would have a voice through the NESC. The SME sector continues not to have a voice, notwithstanding that it is the sector which provides the largest employment across the country and it is struggling. I would like a clear and succinct explanation for why it is not represented on the NESC.
I thank Deputy Creighton for her question. Appointments to the NESC are made, as I said, in accordance with the National Economic and Social Development Office Act 2006 and the National Economic and Social Council (Alteration of Composition) Order 2010. In accordance with those provisions, NESC has members nominated by business and employer interests which include the Irish Business Employers Confederation, IBEC, Chambers of Commerce, and the Construction Industry Federation, CIF. I do not think that anybody who represents Chambers Ireland, which represents small businesses all over the country, would accept that it does not represent SMEs. It does. The Small Firms Association, SFA, is a constituent part of IBEC and is formally represented on the council.
One can divide it up into so many different sectors and segments and when the new council is appointed consideration can be given to that but there will be divisions of business wanting to be represented. The SME sector is represented by Chambers Ireland and it represents 60 member chambers which represent more than 13,000 businesses and make their voices heard at the council. There are five main areas of activity - representing business interests; supporting SMEs; training and development; international services and strengthening the chamber network. That is its remit. It has representation on the council and voices those opinions regularly and vociferously. In addition, the SFA, with which the Deputy is very familiar, which represents the needs of small enterprises, has more than 8,000 member companies throughout the country, is a constituent part of IBEC and is thus represented on the council and makes its case as well. It is not a question of having somebody to speak for the SME sector, it is represented there and makes its case very cogently indeed.
I do not believe that the representatives of the Small Firms Association or ISME would agree with the Taoiseach that their specific interests are represented on the NESC by IBEC. There is a difference in terms of function. The Small Firms Association exists in the first instance to specifically represent the concerns and interests of its members.
The Mazars report of 2013 indicates, shockingly, that the small and medium sized enterprise contribution to the economy in Ireland is the lowest across the European Union. In other words, Ireland's SME sector makes the lowest contribution of all the SME sectors in all of the member states across the Union. That is worrying and should be a cause of concern for Government. It is a matter that should be jolting the Government into action. I know from my extensive and constant contact with small business owners, self employed persons, entrepreneurs and investors in small business across the country, as well as in my own constituency, that they believe that Government policy does not reflect their interests and is not supportive of them. They often feel targeted and believe that they do not have the same access or ear in government as, for example, do the multinationals or larger firms located here.
A shocking statistic that emerged from CSO figures a few months ago is that in 2011, when the Taoiseach took up office, 92,000 SMEs or self employed people had other employees in their companies. In other words, they were employers of people other than themselves. By August 2014, that figure had decreased. At a time when overall employment is increasing the number of self employed people who employ others has decreased. That is a cause for significant concern. It is important that the Taoiseach and his party in government honour the commitment they made prior to the last election and give a formal voice to this sector. It is clear from the Statutory Instrument of 2010 - I have it before me on my ipad - that the Taoiseach has the capacity to make appointments to the NESC. That is the Taoiseach's role. There is no reason, logical or otherwise, he cannot do so, other than an unwillingness to rock the boat. Unfortunately, the attitude when it comes to the SME sector is "continue as you were". There appears to be no imperative or sense of urgency at Government level to prioritise and strategically position Ireland to support the enterprise sector.
The Mazars report of 2013 indicates that the SME sector in Ireland makes the lowest contribution to the overall economy. According to recent statistics, exports from Irish small and medium sized businesses equates to only one-eighth of exports by the SME sector in Denmark, which is a cause for significant concern. It is not good enough to simply say that in 2010, the former Taoiseach, Brian Cowen, appointed X organisations and, therefore, we must allow the status quo to continue. We need to see change. We need dynamism and leadership in government and we need the SME sector, including self employed people and entrepreneurs, who are the people we are asking day-in and day-out to take risks and who pay more tax than anybody else in this country, to be given a voice and to be listened to.
I do not accept Deputy Creighton's charge. The Deputy is well aware, because she was a member of the cohort of Ministers in 2011, that on this Government taking up office the country from an economic point of view had about three months' resources left to pay everybody, including teachers, gardaí, nurses, other public servants, pensioners, social protection payments and so on. The economic collapse affected hundreds of thousands of people and thousands of companies. In the ensuing period everybody had to face many challenges, including the loss of 100,000 jobs in the construction sector and many more in other areas. It is true that small companies lost serious numbers of employees. However, under the most recent budget every person received the same tax reduction, whether self employed or a PAYE employee. Persons not paying tax were not entitled to a tax reduction.
Last Friday, I attended a meeting in Ballina at 8 a.m., at which there were 200 people representative of small businesses. They were at that meeting to hear about what is now available for small and medium enterprises, including what assistance they can get, the function of the local enterprise offices and the function of Enterprise Ireland in terms of export assistance and the spin-off of foreign direct investment for services and so on. I do not take the view that these people were beaten down. They have faced and come through many challenges and are now focused on where they go from here. Of assistance in this regard will be the strategic investment bank, the implications of the ECB decision, the ease with which companies can now be formed and can take on employees and the JobsPlus scheme under which an employer receives €10,000 for taking on a person who has been on the live register for over two years. Some of the multinationals are now profiling that register and are retraining and upskilling people who did not think they would have the opportunity to work again and are now very happy to do so and to make their contribution.
Deputy Creighton makes the point that I have the power to make appointments. I do not, except in limited circumstances. The majority of appointments made to the NESC are based on nominations from specific sectors. Nominations are received from business and employer organisations, ICTU, farming and agricultural interests, the environmental sector and the community and voluntary sector in accordance with the legislation. I do not have that power of appointment. I do have the power to appoint public servants from the Departments of Finance, Education and Skills, the Environment, Community and Local Government, Jobs, Enterprise and Innovation and my own Department to ensure a complement of staff on the NESC relevant to its work. I also appoint eight independent people to the NESC. These appointments are made following careful consideration of the knowledge, experience and expertise relevant to the function of the council, as is required under the legislation. For example, some of the appointees are academics and include representatives from the associate research professorship in the ESRI; economists from NUIG, including Professor John McHale; Professor Mary Daly, professor of sociology and social policy, University of Oxford; representatives of the department of geography in TCD and so on. All of these people are independent academics who have particular experience and expertise.
When appointment of the next Council arises, the question of SME representation might be more focused. In regard to changing the Act in so far as it provides a requirement that nominations be sought from business and employer organisations, a question arises as to what is a business organisation? Is the Small Firms Association a business organisation? Are the employer organisations business organisations? Of course they are. They speak with knowledge of how business operates and the challenges for business, including all of the difficult challenges they faced over the past number of years, which are now easing in terms of exports.
Sorry, Taoiseach, there are two other Deputies in this group that I would like to allow in at this stage.
In regard to Question No. 5, there have been conflicting messages emanating from the Government over the past months in terms of negotiations with the public service and wage talks in general. The Minister for Finance, Deputy Noonan, has been saying fairly consistently that there will not be any wage increases. Labour Party Ministers are falling over themselves saying there will be increases. The Minister for Public Expenditure and Reform, Deputy Howlin, who is verbally dexterous, continually speaks about what might happen in 2018 and 2019. In this regard, he has even referred to 2020. In other words, if one looks over the rainbow things might happen. The Minister, Deputy Howlin, also has great confidence in his political future and that of his party in that he believes they will be determining these issues in 2019.
One gets the feeling that there is political positioning going on as opposed to any real action on content or substance. The low pay commission was mentioned. The Tánaiste was elected as leader of the Labour Party last July, at which time she trumpeted the low pay commission as a significant catalyst for change.
What is happening is that we are now talking about the end of February before the commission will be established, while "by the end of summer", as I know from previous experience, the Government means the end of September or even October. In reality, nothing will happen on this issue during the lifetime of the Government.
The Taoiseach’s claim that it never happened before is not correct. Legislatively, the Labour Court had the facility to determine the minimum wage, for example, when the trade unions and employers could never agree. In the past decade there were successive increases in the minimum wage as a result of this legislative mechanism. Inevitably in such cases the Labour Court would rule in favour of an increase and, accordingly, split the difference between the trade unions and employers.
The Government needs to firm up on what will happen in the next 12 months because there is much posturing. For example, two years ago gardaí were being screwed on allowances. Eventually, the Government gave in and the allowances on which gardaí had depended were restored. Yesterday we saw the Taoiseach, the Tánaiste and the Minister at a parade in the Garda College in Templemore. By the way, yesterday’s event dangerously politicised the Garda. While I accept that Ministers can attend these events, looking at the photographs I had the sense that an election was coming. The Tánaiste and Minister for Social Protection would not normally attend graduation ceremonies at Templemore, as that is the role of the Minister for Justice and Equality. No matter what is going on, the Labour Party must have a nominal person at such events just for the photo opportunity. The Taoiseach might smile, but that is the reality.
The more substantial point is that there has been a growing casualisation of the workforce with zero hour contracts. Young people, in particular, have been affected most by this dramatic change. In most developed western economies there has been a reduction in incomes and a decrease in wages. In this economy there has been an actual income reduction when one looks at Central Statistics Office figures and so forth. There has been much commentary internationally that the middle class is shrinking. When one talks about competitiveness, it always seems to mean wage reductions. There is a fundamentally changed dynamic in this regard, one which I do not believe the low pay commission has within its remit. It should not just be about the minimum wage but also the fundamental issue of the role of the State in incomes policy and ensuring the gap between rich and poor does not grow exponentially, as it has and continues to do. The work of Thomas Piketty is instructive on what is going on in this regard. Corporations all over the world are telling national governments to make their workforces more competitive. These very corporations are prepared to make fortunes on the backs of a dollar a day workers in other jurisdictions, while expecting those in more developed and affluent economies to purchase their goods on reduced wages. I accept that these are global issues, but I am not clear on whether the Government has a strategy or, as a state, we have properly interrogated the challenges of globalisation, its impact on wage structures within the economy and our society. Over 600,000 people in the economy earn less than €30,000 per annum, a figure that is growing. In Britain a recent report showed that the average wage for somebody coming out of university was €15,000. The issues are job quality, pay levels and the activities that can attract high value jobs that can enable people to aspire to reasonable remuneration in key sectors of the economy. This applies to financial services and technology, as well as trades.
The Taoiseach has stated the commission will have three union representatives who understand the issue of low pay, three employers and two labour market experts. In essence, it will be a kind of revamped Labour Relations Commission or a Labour Court type of commission that will arbitrate on the minimum wage. The issue, however, is far more profound. We need to go hard on the casualisation of the workforce. There needs to be proper engagement with corporations, companies and employers. It is also in their interests that we have a productive workforce that can aspire to progression and a decent wage that will enable them to participate in the economy.
There is a need for a more enhanced social dialogue. The teacher strikes this year would not have happened if there had been proper dialogue. The former Minister for Education and Skills, Deputy Ruairí Quinn, simply ignored the recommendations of the National Council for Curriculum and Assessment and decided, unilaterally, that there would be 100% self-assessment in schools. He announced that he would ram this through and drove the teachers wild. The teachers, rightly so, were angry and now there is residual and embedded opposition to junior cycle reform because of this ham-fisted, absence-of-dialogue approach to dealing with the social partners and valuable stakeholders in education. His successor, Deputy Jan O'Sullivan, must now pick up the pieces.
The Government has been pretending to all and sundry that it can now do everything again. Every morning, when one opens a newspaper, one sees the latest initiative for this, that and the other. I added all of the commitments announced by 13 January and the figure came to €3.4 billion. There have been more since. The Taoiseach needs to get real with the people in that not all of these can happen. There is a value in determining priorities with the social partners. Is it the deprivation index about which we all heard last week for children living in poverty? Is it about the inability of people to put a roof over their heads? Should we change the rent cap or the rent allowance regime which has pushed many families into homelessness? Is it about the health service in which there are over 502 patients on hospital trolleys today, in which waiting lists are going through the roof and in which many elderly people are waiting for a fair deal scheme place? Is it about education, with special needs children having proper access to therapies? The Taoiseach needs to be straight with the people. He cannot pretend to promise everything, but that is what is happening. I get the sense that the engagement with the social partners is choreographed and orchestrated with an eye on the next general election. There is no beef or substance to it.
I thank the Deputy for his comments. His addition has been out on a few occasions in the past. I am not here to bring forward a proliferation of promises that cannot be matched. On more than one occasion I have said the situation, in so far as the economy is concerned, is fragile and certainly not complete. The priority has to be to secure recovery. The more jobs we can create, the better it will be for the country. This requires careful analysis of the progress the economy is making. Whatever is to be delivered must be delivered within the 2016 budget. The economic statement we will set out at the end of the spring will look beyond this to the next three to five years. Whatever the people do when it comes to the general election, political stability will lead to economic stability which, in turn, will lead to confidence, investment and more jobs. It is so easy to lose all of these by making the wrong set of decisions.
The Taoiseach is already electioneering.
I am not going down the road of electioneering at this stage. For several years we have had to deal with issues such as pyrite, Priory Hall, symphysiotomy and the Magdalen laundries. The Deputy knows that the hepatitis C compensation scheme will continue for 50 years in some cases. The priority has to be delivery of front-line services to those who need medical attention. The other day the Minister for Health spent seven hours at Limerick hospital to check its accident and emergency department. Like those in many hospitals, it has not been up to standard for many years. We do not, however, have the endless resources required to address all of these issues overnight.
The low pay commission will deal with the issue of low pay specifically. It will not deal with the broader issue of the Haddington Road agreement, its successor or pay increases in the private sector, which are being dealt with by the Department of Jobs, Enterprise and Innovation.
The Minister for Public Expenditure and Reform will now engage with the public service unions in respect of the successor for pay and reform to the Haddington Road agreement. The low pay commission is dealing with low-paid people, looking at the background and the conditions that apply, and it will also deal with the question of zero-hour contracts. When we launched the action plan for jobs last week, the Minister of State, Deputy Nash specifically referred to this, as did the Minister for Jobs, Enterprise and Innovation. That was launched in a company that had five employees, I think it was back in 2005 or 2006, and now has 11,000 employees nationally.
The Deputy referred to a visit to Templemore yesterday. Leaving aside the fact that the visit took place, the economic impact on the small town of a living, vibrant college where people will be coming through - people who have to serve the country, sometimes in very difficult circumstances, as Deputy Martin is well aware - is very important. The recruits have been chosen through a very specific process and have, in many cases, much more life experience than their predecessors.
I hope that by October we will be able to remove 500,000 people from the requirement to pay USC in the first place. The Deputy mentioned that the middle class is shrinking. While they are not all millionaires, last year there were 93,000 new cars bought. The figure is expected to exceed 100,000 in 2015. That is progress.
Questions of social dialogue will continue through the National Economic and Social Council, NESC, as I have pointed out to Deputies Martin, Adams and Creighton. The low pay commission will report to the Minister of State, Deputy Nash and to the Government before the summer and Government will act on that. The Minister for Public Expenditure and Reform will deal with the trade unions in respect of the successor to the Haddington Road agreement for pay and reform. The Department of Jobs, Enterprise and Innovation is dealing with the question of pay rates in the private sector. That is where the priority lies - to secure the future and create more jobs.
I wish to put a more fundamental point to the Taoiseach in asking him if he agrees that the very concept of so-called social partnership is, in fact, faudulent and a sham. Is the idea that employers and private corporations that exploit and abuse their workers on the one hand while on the other hand the workers themselves are partners not a contradiction? The Greyhound waste company last year peremptorily called its workers in to announce a 35% pay cut with their failure to accept it meaning redundancy. Is that partnership? Another example is JJ Rhatigan & Company, the beneficiary of huge State contracts for building schools and public buildings from the current Government. This company is behaving appallingly, coercing bricklayers and other workers to become bogus sub-contractors, for example, in order to savage the level of legal wages in the construction industry.
The Deputy was not listening.
That goes on unhindered under the Taoiseach's rule, yet he speaks about partnership. Are the house-building firms and banks that saddled a generation of young working people with 40-year mortgages and unsustainable levels of repayment to finance the profiteering that went on during the bubble now their partners?
The Taoiseach will remember that so-called partnership was begun by no less a personage than the late Deputy C.J. Haughey in 1987, in reality to co-opt the leaders of the unions into trying to head off a movement of huge social protest against the cuts then being imposed. Savage cuts were being implemented and thousands of hospital beds were being closed It was the 1980s version of austerity. Is it not the truth that while the concept of so-called partnership was embraced as long as it was useful to the Government and employers, when the ship crashed on the rocks of the profiteering and speculation of the property bubble, the trade union leaders who had become far too cosy inside the tent were unceremoniously booted out in the cold? They have been in hiding for the most part since then. Partnership means that workers and working-class people were left with a bill of €64 billion while their partners went off to enjoy the huge resources they had salted away. Then the Croke Park and Haddington Road agreements were brought in to continue and to implement the austerity by which working people were paying for this.
Is it not the case that the Government continues to represent the elites in our society in the financial markets through, for example, the access they have to the clearing house and to the IFSC? What working people need now is a fully independent movement to overthrow this vicious austerity and get the wealth that is there into investment, job creation and so on. We need an entirely different and independent situation. Then perhaps we can talk about real social solidarity.
There will not be time for a reply as there is only one minute and 30 seconds left. A ten-second intervention is possible.
It was a good long speech, though.
I want to ask about the issue of the working poor and what is contributing to this growing phenomenon. I had one of the JJ Rhatigan workers telephone me yesterday----
Let us not get involved in that.
I am talking about low pay.
We have only a minute. Would Deputy Boyd Barrett please put his question?
There are widespread allegations arising out of the JJ Rhatigan dispute about the abuse of bogus sub-contracting and the abuse of the RCT-1 system in the construction industry. The allegation that was made to me yesterday was that the net revenue from the RCT-1 system is in negative figures. We are getting less than nothing----
We cannot deal with allegations. If we have facts----
It was based on a parliamentary question. The point is that the abuse of the sub-contracting system in the construction industry, which has been at the back of this dispute, is widespread in the industry and is contributing very substantially to driving down wages in the industry to poverty levels. Is there going to be an investigation by the Government into this abuse?
I thank Deputies Higgins and Boyd Barrett for their questions. The legislation has been passed in respect of sub-contractors and I would invite the Deputies to give me the examples to which they refer and where they see abuse in the system because we will carry out an investigation into it. I would be very happy to hear from both Deputies.
Social partnership as it existed before was not adequate to deal with the problem because it was all carried on away from this House. All of those discussions took place in rooms far from here. That is not going to happen in the future. We are not going back to that structure. I see an opportunity here arising through the spring economic statement as to how we can change this so that this House, the representatives of all the people of the country, can have their say, their view and their proposals in respect of the challenge we all face ahead.
Deputy Higgins mentioned the mortgage situation. I met with a number of the personal insolvency practitioners last week and I am not happy with the conduct of a number of the banks in this regard. These people were appointed to do a particular job, to work out a solution for people who are in mortgage distress but they are not paying attention to what they should be doing. I will return to that subject again later.
Written Answers follow Adjournment.