Deputy Quill spoke a good deal of sense about the necessity for Dáil reform — I am not disputing that — but, as I see the thrust of the Labour Party motion, it is about setting up a committee to tackle unemployment; it is not about Dáil reform. Despite what we have heard this evening the contribution of the new Minister for Finance last evening made clear that it is the intention of the Government to vote down the motion before the House to have established, on a statutory basis, an Oireachtas social and economic committee to confront the current unemployment crisis. The Minister devoted his contribution almost entirely to undermining the mechanics and terms of reference of the motion rather than addressing the concept of such a committee.
There is no more urgent challenge facing this Dáil than the worsening, horrific unemployment crisis causing such heartache, hopelessness and hardship to so many families. There is no more important work that could engage an Oireachtas committee than seeking to influence a response to that crisis. Surely the concept of a committee that would facilitate the emergence of an informed cadre of Deputies and Senators with expertise and influence on economic issues is one deserving of welcome rather than ridicule? The tenor of the Minister's speech betrays hostility on the part of the Department of Finance and, by extension, on the part of the Government towards the emergence of any rival focus of power on economic policy. Clearly the Department of Finance want to arrogate to themselves exclusive influence in the formulation of economic policy. Equally clearly, the Government believe, despite the abundant evidence to the contrary, that they are the repository of all knowledge and power within the economy.
The extent of participation afforded the social partners is being exposed as a fig leaf by the cruel winds of declining economic growth. The Government are not prepared to take advice from an all-party Oireachtas committee but are very agreeable to continue receiving advice from the same unelected vested interests, posing as independent commentators, whose policy prescriptions have failed in the past. It is disingenuous of the Government to pretend that partnership is a cornerstone of their economic policy and then oppose the elected Members of the Dáil being afforded the opportunity of meaningful participation. It is also plainly ridiculous to argue that a committee such as is being proposed would undermine the rights of those Deputies and Senators who would be excluded from membership. Deputy Martin continued to advance that argument this evening.
The greatest crisis and challenge facing the country and the Government deserves the concentrated focus of a small number of Oirechtas Members prepared to inform themselves, to garner the expertise and avail of proper backup resources in an attempt to mount a coherent assault on unemployment. Political crises may come and go but it seems that the jobs crisis goes on forever in Ireland.
The Workers' Party yesterday published our views of an employment strategy in a document entitled "Back to Business; the Real Crisis is Unemployment". The document sets out our broad strategy as to how Irish society might deal with its greatest problem. We are finalising a further document, a review on industrial policy. In my view these are the issues that ought to have been the focus of this debate. For example, it is cynical and untypical of the Minister for Finance to argue that the appropriate forum for any discussion of NESC or ESRI reports is the full assembly of the Dáil or Seanad. Even Deputy Roche disagreed fundamentally with the Minister on this point last night. The Minister knows that in so far as time has been provided to debate such reports, the debate comprises an unconnected series of monologues, as Deputy Roche said. The Workers' Party would see the proposed committee as a well-resourced think-tank on unemployment that would study available analyses and publish specific recommendations for legislative action in the Oireachtas where necessary.
Our own document argues that action is required under three headings, namely, the revision of industrial policy, the extension of democracy in the workplace and throughout our institutions — not just electoral reform, which has some fascination for Deputy Martin, although on whose behalf he is running with it I do not know — and the radical reform of tax and social welfare systems with a view to their eventual integration to stimulate employment creation and to tackle the poverty trap.
We need to dispose of the idea that unemployment is inevitable and that nothing can be done. Why are people so fatalistic about unemployment? There are several reasons. The problem is a big one. Every year the numbers who enter the labour market far exceed the numbers leaving it, plus the number of net new jobs. The experts never seem to have solutions that work. Ordinary people who often have practical and workable solutions usually get pushed aside by the lack of democracy in local industrial and political institutions. Certain ideologies also breed apathy and fatalism. People have been led to believe that the market must be left to its own devices and that "interference" is wrong. They say, "Look at Eastern Europe" and claim that attempts at social and economic planning are doomed to failure. What can individuals possibly do? The development of the Single European Market and Ireland's marginal position and size within that market also make people feel that national policies, even if they could influence them, are increasingly insignificant. The idea of influencing EC policies to Ireland's advantage has not yet caught on. Public apathy and fatalism suit Governments who will not tackle the jobs crisis effectively. We are told that the problem is too big to cope with and would cost too much to solve.
The size of the jobs crisis is indeed huge but the cost of unemployment is horrendous. According to official statistics, over 20 per cent of the workforce is unemployed. That is the worst in the EC but it is not the full truth, having regard to the extent to which the figures are massaged. When one takes account of the pre-retirement allowance and various training courses, the figure is worse than 20 per cent. The true cost of unemployment is difficult to quantify. The direct cost in terms of social welfare and lost taxes is around £2,000 million or 10 per cent of GNP. The output which is lost as a result of 20 per cent or more of the labour force being jobless could be up to 20 per cent of GDP. Irish society can ill-afford such a loss.
Unemployed people suffer much more than a loss of income and society suffers much more than a loss of output or taxes. Unemployment is the main source of poverty. It breeds lack of confidence and self-esteem. It can cause poor health, mental as well as physical. It can be linked to crime. These can all lead to further problems, both for the unemployed person and for society as a whole. Everyone's confidence and security are undermined. Even the people with jobs are affected. Unemployment keeps wages down and taxes up. It reduces your chances of ever changing jobs voluntarily and increases your risk of becoming stale and dissatisfied, hanging on to a job you dislike because there is no other job available.
We would need approximately 35,000 extra jobs every year for the next ten years even to reduce official unemployment to the 1980 level of 100,000, which was then considered intolerable. About the year 2010 when the fall in the birth rate starts to show up in the jobs market, this dismal picture might change. Do we have to wait till then, as some people are suggesting? What about the children who are already born and at school? Do we really want them to be forced to emigrate, encouraged by cuts in welfare and obvious Government inaction on jobs?
We are told that this callous agenda cannot be rejected, that there are so many obstacles to employment in the existing economy that they are insurmountable. The usual obstacles trotted out to explain why nothing can be done are the size of the population, the size of the country, our location and infrastructure, high wages, low productivity, high taxes and high debt-GNP ratio. The Workers' Party recognise that there are problems relating to each of these factors, but we do not accept that they add up to a huge, insurmountable barrier that can never be overcome. The "too many children" theory which is fashionable is the first and worst recipe for despair. Admittedly we caught on to a limited form of family planning rather late and the young people are already there. They will need jobs and we must meet this challenge. Other countries have done so. Why not Ireland? Our people must be seen as an asset, not a burden.
As for the small size of the Irish market, this is no longer a real barrier to progress. We have the huge EC market at our fingertips, if only we can grasp the nettle. The costs of transport and communications are falling so they are no longer such major disadvantages. Our physical infrastructure and our modern financial services sector are not serious obstacles either. Ireland's wage costs are among the lowest in the EC. Productivity growth during the eighties was the highest. Personal taxes are indeed high, but this is because too few people are paying them and the burden is not fairly distributed. There is little or no tax on wealth, companies or property. There is still underpayment by sections of the self-employed and avoidance and evasion are still widespread. As recent business scandals have clearly shown, the scope for avoidance runs into millions of pounds for those who are already wealthy enough to set up off-shore companies, engage in various tax scams and squeeze through whatever tax loopholes are visible to their accountants.
Genuine tax reform, as opposed to tax cuts for the wealthy, would be of great benefit to job creation. For us, this means reforming both the tax and social welfare systems, the harmonising of them in such a way as to ensure that every individual has an adequate living income, while everyone with an income in excess of this amount, whatever its source, pays tax on that income. Radical tax and social welfare reform of this kind would provide a truly favourable climate for enterprise, a climate in which every individual released from the insecurity of inadequate income support could make a more active and creative economic contribution than is possible at present.
The first lesson from our economic history is that no country can afford a static industrial policy. It must keep changing and adapting to new conditions. These days the latter are themselves changing more rapidly than ever before. Irish industrial policy has a habit of changing too slowly. We clung too long to protectionism, then to a policy of reliance on attracting foreign investment and now we cling to a policy of over-generous subsidisation of both native and overseas business. We were advised by Telesis in 1982 to focus more directly on the development of indigenous firms and industries, but the advice was resented and resisted for too long. Now, nearly a decade on, people are looking in that direction again.
Indigenous industry is certainly one key to job creation, but at this stage it will not be the only one. A successful industrial policy which will carry us into the next century will comprise several different and distinct strands. We need much more productive enterprise in Ireland.
Contrary to the claims of some of our political opponents The Workers' Party are not anti-business or anti-enterprise; we oppose corrupt business and parasitic enterprise, as do most people in Ireland and most of the business community. Also contrary to many claims, we are not too bothered whether enterprise is public or private, native or foreign, as long as the firms create secure well paid jobs from an activity that is socially, economically and environmentally desirable. They not only need to be enterprising but efficient and democratic also. Therein lies the difficulty. Where are such firms to be found and how are they to be created?
We favour commercial public enterprise and regard privatisation as a distraction from job creation: as Greencore showed, this can be a major distraction. The question of ownership, while important, is no longer the main issue, if indeed it ever was. The issue is how and why an organisation succeed in motivating their workforce and fulfilling their objectives be they social, economic or whatever and who benefits from this success. Neither is the issue of size as crucial as it once appeared. Very often the successful firms are the ones which are large and can afford to have their own research and development, marketing and so on, to compete and expand further. Ireland has traditionally been at a disadvantage in this respect. Only one Irish firm features in the European "Top 1,000" and then near the bottom of that list. Three-quar-ters of all Irish manufacturing firms employ only one-quarter of all manufacturing workers. The other 75 per cent are employed by the remaining 25 per cent of firms, of which many are subsidiaries of multi-nationals with their R&D and marketing based abroad.
We need more large, successful indigenous firms or rather a strategy to raise them since they are not inclined to grow up by themselves. It is also clear that not everyone will be employed by such firms in the future or will even want to be. Therefore, a strategy for small, successful enterprises is also important, particularly if the problem of rural poverty is to be addressed. To date, this issue has been seriously neglected. There are obvious difficulties about developing large, indigenous enterprises. According to an IDA survey only about 150 firms currently have the potential to "grow employment" and of these one-third are actively trying to do so, one-third are thinking about it and one-third are not interested. This latter group of large Irish companies prefers to make steady profits without major investment or risk taking. However, experience elsewhere shows that firms which do not change generally fail.
An industrial policy is required which will direct the development of large successful indigenous industry, allow small enterprises to flourish and provide guidelines and standards for businesses of all kinds. In future, State intervention and assistance must be more selective than in the past, more highly targeted, less wasteful and better geared towards supporting enterprise that will compete successfully and expand employment levels.
The Workers's Party also recognise that the role of the nation state is declining both in the global economy and the single European market. To be effective, Irish industrial policy must have a strong EC dimension. It must be part of an EC industrial policy. This appears difficult at present because the EC is preoccupied with agricultural policy and is avoiding the issue of a common industrial policy. However, as resources are redirected from the Common Agricultural Policy EC funded industrial policy could be developed given the political will to do so.
I strongly favour an interventionist EC industrial policy with convergence of the regions as a major target. Jobs must be brought to the people, not the other way round. Most Germans would welcome less industrial congestion, just as we would delight in new jobs in Ireland. Socially and environmentally it makes no sense for the present centralisation of employment to continue. However, it will take a great deal to reverse, counter or even slow down the strong economic forces which favour centralisation and which are currently seen as sacrosanct. Intervention and interference with market forces are dirty words these days.
Is it Utopian to imagine that firms could be encouraged through a common EC industrial policy to locate divisions in the poorer regions? I think not. Others in Europe, even in the richer states, are starting to favour this, to see an active interventionist policy as necessary and desirable to achieve convergence and equity. Significantly, the EC has the largest stock of foreign direct investment in the world, well ahead of the United States and Japan. Therefore, there is a great deal at stake.
EC intervention is also needed to encourage European multi-nationals to co-operate with each other, merge and invest in other EC countries, especially on the periphery. Only the EC, centrally, has the potential power to direct these companies and be heeded. While I favour the development of multi-nationals I want this to occur under the eagle eye of a truly democratic body which represents the interests of workers and consumers as well as shareholders; in other words, a more democratic EC than exists at present.
Deputy Martin in his contribution claimed that democratisation was part of the solution to this problem. I agree with him but he did not extend the argument beyond proposing a single seat electoral constituency to this House. The vital ingredient of our job strategy which is omitted is the question of democratisation of all our institutions be they local, industrial or political. A good industrial policy is useless without the active involvement and commitment of our people. At present most people feel excluded from the places where important decisions are made. They are excluded at work, in politics and even in the home. Greater flexibility and democracy in the workplace are essential if people are to co-operate to their mutual advantage and that of society in the production of modern goods and services. These days no one wants shoddy products of whatever sort and those who produce them will not survive in the marketplace for very long. Increasingly, successful enterprises are the ones in which a team of workers operating more or less as equals pull together to produce a really good product. Hierarchical structures, pyramid shaped firms, are seen to be not only distasteful but also given to waste and inefficiency.
What is needed is a clear and new direction for Irish industrial policy. Many old myths and clichés have to be abandoned. People must be convinced that it is possible to overcome whatever disadvantages we have by making better use of our advantages. Our people are not the problem. They are highly skilled and educated, a tremendous asset. Ireland's size and location are not big problems either with modern transport and telecommunications and the Single European Market. The fact that we are the closest part of that market to the US is now seen as an advantage and our green image in the environmental scene is also a major advantage in an increasingly polluted Europe.
The Workers' Party believe that the selective development of large indigenous industry is essential and must be encouraged not just by new fiscal measures but through insistence on democratisation and the highest environmental and business standards. Nowadays these standards are not merely desirable but absolutely necessary. What matters is not so much the framework within which this happens or who owns that framework but the fact that it happens and that the beneficiaries are the workers, consumers, and taxpayers as well as the financiers, shareholders and traditional beneficiaries.
The concept of the multiple stake holder in every enterprise must be recognised and extended. For that reason, a Leas-Cheann Comhairle, I do not believe the Labour Party motion was ever intended to be taken up, as Government speakers so far have decided to interpret it, as being about Dáil reform and the establishment of a committee. In my view the Labour Party proposal to establish a committee is incidental to what that committee were intended to do. That committee were intended to devise a strategy to tackle the size of the unemployment problem with which I have dealt in my contribution.
It is an insult to the anger, hopelessness and despair among people when so many families are affected by the scourge of unemployment; almost 300,000 people are heading rapidly in that direction according to some of the so-called independent commentators that the Government quote when it suits them. It is an insult to those people to interpret it, as I have heard Government speaker after Government speaker, as a motion about Dáil reform. I think the Minister for Finance, Deputy Ahern, called it a mishmash of a proposal that would not do a first year organisation student justice. That is the kind of rhetoric that has contributed not one iota to the solution of unemployment during this debate.
If the Government wish to alter the terms of reference of this motion I am quite sure the Labour Party would take that on board. The facts of the matter are that it is about time a specialist committee of this House was given the opportunity to garner the expertise, knowledge and information to influence the direction of economic policy. It is a nonsense, as has been argued by the Minister for Finance, that it would be taking away rights from other Members of this House if we were to have such a specialist committee in conclave. To argue that authoritative studies of the economy by NESC, ESRI or whatever is the proper forum to debate them and that they ought not to be subjected to minute scrutiny by such a specialist committee is a nonsense. Whatever the defects in the terms of reference of the motion I think it is correct against the background of issues we have debated in this House, unfortunately, for the last four or five weeks that the emphasis should be on unemployment. That is what this motion is about and it is correct, proper, overdue and too late that this House should be focusing its attention on the greatest problem that confronts this society.
