The Irish Market in a Globalised Economy: Statements.

Globalisation dominates our economic and social policymaking at national and EU level. It has elicited different responses across the world, stimulating competition and bringing opportunities and challenges to the doorsteps of many nations. It has also brought fears that intense competition will widen the gap between rich and poor countries.

People throughout the world see employment as the litmus test for the success of globalisation. According to the International Labour Office, work is the source of dignity and is fundamental to the stability, peace and credibility of governments and the economic system. To optimise the benefits of globalisation, Ireland has focused on creating the environment in which employment is fostered and grows. Economic growth, however, does not necessarily lift all boats and we must ensure we do not leave people behind in our push for growth.

Mechanisms are required, therefore, to provide confidence about decent standards and fairness without compromising flexibility or adding unreasonably to the burdens of regulation of the labour market. That delicate balance requires the active engagement of all the parties to our employment market. In striving to achieve outcomes which are fair to society at large, a key aspect of our approach has been to foster, develop and ensure to the greatest extent possible policy co-ordination and coherence across a wide policy remit in cross-cutting areas of economic, employment and social policy and to ground these developments within social dialogue. Social partnership is fundamental to the formulation and delivery of these core strands of policy.

The outcome of the recent partnership negotiations in respect of employment standards, which includes new legislation as well as the establishment of a national employment rights authority, will provide confidence for the future in a rapidly changing labour market. It will also ensure Ireland continues to provide an excellent environment for business and job creation. The social partnership process has provided a good mechanism for balancing flexibility and security. The European Commission has recognised this and it is cited as an example of how so-called flexicurity policies can work. There are different models of flexicurity and much has been achieved here under that heading although we have not given it that title. The Commission communication emphasises the need for social dialogue in the development of flexicurity policies, and the European social partners recently agreed joint recommendations on reconciling flexibility and security. Our experience has shown that social dialogue is essential and I hope the well-established partnership process will continue as the mechanism to achieve the balance between flexibility and security.

Innovation is essential to safeguard and deliver high quality jobs, successful businesses and better products and services. The quality of our workplaces and their levels of innovation and change are critical to our ongoing transition to a dynamic, highly skilled and knowledge-based economy. The Taoiseach launched the national workplace strategy in 2005 to focus on stimulating workplace change and innovation. The strategy is the Government's blueprint to transform workplaces for the future with action concentrated on five priority areas: commitment to workplace innovation, capacity for change, developing future skills, access to opportunities and quality of working life. The strategy also recognises the critical role social partnership can play in this process.

The strategy identifies the need for greater innovation in products and processes and for more organisational innovation and related improvements in internal workplace cultures. It also highlights the need for improvements in organisational culture that facilitate the delivery of high quality services in private, public, community and voluntary sectors. The Taoiseach recently announced the establishment of a workplace innovation fund, accessible to individual companies and the social partners, which is being used to enhance the capacity for change in workplaces.

The competitiveness challenge outlines key policy recommendations that would help to restore our international competitiveness. To support the continued availability of a well-qualified workforce, the National Competitiveness Council suggests three policy areas that need to be addressed: participation, upskilling and attracting skills from abroad.

Participation is so important to the efficient operation of the labour market and for competitiveness in a global economy that we must continue to increase participation rates in the workplace. This involves increasing the rate of participation by women and excluded groups while facilitating the ongoing contribution of older, more experienced workers. Appropriate work-life balance policies and practices are essential to help us accommodate diversity. Senator Mary White has been very involved in ensuring older people make a positive contribution to society in the workplace and beyond, and she has a keen interest in these statements.

The Government is committed to a two-pronged approach to making workplaces more family friendly by providing statutory entitlements through legislative measures and through the voluntary approach in enterprises. The national framework committee for work-life balance policies encourages this approach. Earlier this year, the committee undertook two initiatives. One was a guide, entitled Work Life Balance: A Planned and Systematic Approach at Enterprise Level, providing practical advice to assist employers and their staff in developing a work-life balance. It recommended that employers develop a policy on work-life balance setting out the organisation's commitment to flexible working arrangements for staff. It should ensure there is no discrimination against staff availing of such arrangements and that work-life balance arrangements take account of staff diversity across the nine grounds covered by the equality legislation.

The second initiative involved establishing a panel of suitably qualified consultants funded by the committee. Businesses will be able to benefit from their support and expertise for training and advice in developing new work-life balance initiatives and interviewing and developing further existing work-life balance arrangements. Details of the panel will be announced soon in the national press and will be available from the national framework committee. This expanded support programme will enable organisations to put in place arrangements that suit the needs of business and employees alike. The correct balance between work and life in the workplace will benefit everybody in the long run.

The National Competitiveness Council has stated that further reforms of Ireland's labour tax system are required in addition to improved facilities for child care and better incentives and enabling structures for lone parents to participate in the labour force. The development of a knowledge intensive workforce is a long-term source of competitive advantage and policy efforts aimed at improving the quality of the labour force are essential. We have made substantial progress in this area recently, with significant increases in investment and improved outcomes in education and research and development. Our track record in education and skills investment has been a fundamental element of our recent economic success but we cannot rest on past success. Research by the expert group on future skills needs has made it clear we must continue to invest heavily in educating and upskilling our workforce, and making those without employment job-ready, so to speak, if we are to continue to attract blue chip companies, domestic and foreign owned, to provide the quality jobs our people deserve.

The competitiveness council recommends that additional training for workers with low levels of educational attainment should be a priority and that use should be made also of industry-led networks to support lifelong learning. The council has called for the development of greater incentives for individuals to participate in, and educational institutions to develop services for, part-time education.

Under the national development plan, my Department will invest €7.7 billion in upskilling the workforce to maintain access to the highest standards of education and training for all our people. Without such investment we will not be able to supply the labour skills required to compete in the knowledge-based, innovation-driven global economy of today.

The investment is divided between two areas. Approximately €2.8 billion will go towards upskilling people in employment, including new skills for those affected by industrial restructuring, as well as expanding and enlarging the apprenticeship system and further training for school leavers. Approximately €4.9 billion will be used to provide employment and training services to groups outside the workforce, including the unemployed, people with disabilities, women, lone parents, Travellers and ex-offenders.

The enterprise strategy group report highlighted our need to pursue a knowledge-based, innovation driven economy to maintain competitiveness into the future. A key labour market initiative is the implementation of a strategy based on the findings of the expert group on future skills needs report, Towards a National Skills Strategy. The objective of this strategy is to ensure that between now and 2020 we have the skills required to remain competitive in the global marketplace. This envisages that by 2020, a total of 48% of the labour force would have qualifications at national framework of qualifications, NFQ, levels six to ten, while 45% would have qualifications at levels four and five. Within this objective, Ireland aims to build capability at fourth level and double its PhD output, level 10, by 2013. This vision will be achieved by maximising the skills of the resident population through both education and training and at the same time continuing to attract a highly skilled migrant cohort from abroad.

To achieve the vision, a little more than half a million additional individuals will need to progress by at least one level of educational attainment above their current highest level. Some 300,000 of these workers will need to be trained up to leaving certificate level and the national skills strategy will encompass the One Step Up initiative that had been endorsed by the enterprise strategy group. In response to these changing demands for training and upskilling of workers, FÁS has already significantly increased its services to encourage and assist training for companies and people in employment. FÁS's strategy statement, Building on our Vision, focuses on the continued need to upskill the workforce to meet competitive challenges of the future. It also addresses the need to ensure greater access by all groups to FÁS services by increasing flexibility and customising FÁS services to clients' needs. In tandem, FÁS has developed a new training strategy identifying the nature and mix of FÁS training programmes and services required for the future. These strategies jointly provide the framework within which FÁS is contributing to the achievement of a knowledge-based economy.

Skillnets has also responded to the changing upskilling needs by developing and focussing its enterprise-led training networks. In addition, and in line with our commitment under Towards 2016 to engage with redundant workers and people facing the prospect of long-term unemployment to ensure that the period out of work for a substantial number of people is kept to a minimum, FÁS has developed a process of engagement with redundant workers. This process is flexible and adaptable to meet the needs and circumstances of company closures. The process generally involves establishment of a task force and agreement with all parties as to their responsibilities, with particular emphasis on the role FÁS has to play and how their services are to be provided. Information sessions in conjunction with skills audits and subsequent training provision form the backbone of interventions. Investment in human capital will, of course, run in tandem with the many billions being invested in our education system at all levels, from primary to post-graduate which, taken together, should make this country the place where indigenous entrepreneurs and foreign-owned enterprises look to set up base and grow their businesses, providing the employment opportunities for all.

As regards the National Competitiveness Council's third priority of attracting skills from abroad, there is increasing recognition in the EU that the mobilisation of skills across the EU is crucial to becoming the most dynamic and competitive knowledge-based economy within the new global economy. The labour market in Ireland is currently buoyant, with the total number of people in employment in the State at more than 2 million for the first time in our history. However, it is important that we are not complacent and continue to work to maintain and develop a dynamic economy that responds effectively to the evolving demands of international competitiveness. Ireland is fully committed to playing its part in managing the EU transition to knowledge-based investment. In May 2004 we, along with the UK and Sweden, opened our borders to the workers of the ten new member states and the success of this policy has been remarkable. Today 240,000 people in Ireland's workforce are foreign nationals and almost half of these are from the new member states. The presence of these workers has made a significant contribution to our economy and society, helped to maintain economic growth at rates far above the European average and addressed labour and skills shortages. A continuing challenge for the Irish labour market is to bring in from outside the European Economic Area, EEA, those skills which we cannot source from within the EEA and which we need to progress our economy to one that is knowledge-based and innovation-driven. Our implementation, earlier this year, of a new green card system for highly skilled non-EEA nationals was an important initiative in this regard.

There is no doubt, however, that with labour mobility come responsibilities. I am referring to areas such as education, public services and housing. The current economic climate offers Ireland opportunities to not only reform its immigration programmes, but also a key challenge in implementing a robust integration strategy. Our positive early experience of migration does not automatically mean that migrants will integrate sufficiently into Irish society or the Irish economy and a vibrant civil society is pivotal to successful integration. Therefore, in working towards integration we should adapt our mainstream policies and services, rather than create separate services for migrant groups. How do we successfully adapt social policy to the needs of a growing and increasingly diverse population? This growing scale and diversity provide the overarching context for future policy making. Integration is a process that is multi-dimensional and we therefore need to deal with the economic and social issues which it raises in a way that is joined up. We also need to be flexible in the way we respond to changes and issues as they arise.

In conclusion, I believe Ireland is now at an exciting moment of transformation which, if well managed, can deal with the challenges of globalisation and bring better, more adaptable services provided by people who feel increasingly confident in their ability to address the needs of a more diverse Ireland.

I will be as brief as I can because I am choking with a cold this morning.

Follow that, Senator.

This is the first time I have seen the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Billy Kelleher, in this House and I welcome him and congratulate him on his appointment. The Minister of State's presentation was very good and I agree with almost all of it, though there are some areas where change is required and this gives us an opportunity to discuss those issues.

I agree with much of what the Minister of State said, particularly on the subject of globalisation. Many left-wing groups in this country and around the world have problems with globalisation but I feel it has presented more opportunities than problems for Ireland in recent years and that we have largely succeeded in adapting globalisation to suit our requirements. We must ensure we continue to do this in the coming years.

The Minister of State's early remarks focussed on social partnership and I was going to address this matter at the end of my comments but I will instead begin with that subject. There is no doubt that social partnership has served the country well since the late 1980s and has been a major contributing factor to the economic transformation that has taken place here in the past 15 to 20 years. However, I have been in this House for six years and many senators have raised questions regarding the future role of social partnership. There is a real lack of democratic accountability in how the social partnership model that has evolved in this country continues to operate.

Initially social partnership was an arrangement between the social partners and the Government whereby wage moderation was exchanged for a lowering in taxation and this worked well. However, a variety of public policy areas have come into the ambit of social partnership, particularly in the most recent social partnership deal. There has been very little debate in the Houses of the Oireachtas regarding the policy formation that was discussed by the Government and the social partners in the most recent deal. For the sake of democracy there should be a more integral role for the Houses of the Oireachtas in the next round of social partnership. In the lead up to the election Fine Gael's finance spokesperson, Deputy Richard Bruton, proposed that before social partnership talks take place there should be discussion of the matter in both Houses of the Oireachtas. The guidelines for social partnership would thus be laid down by the Houses of the Oireachtas and subsequent to agreement among the partners there would be a debate and vote in the Houses of the Oireachtas.

There is a need for a more hands-on approach from public representatives in this regard and, while social partnership has served us well, it is questionable whether unelected employers and officials of unions have a greater role in the development of public policy than elected Members of both Houses of the Oireachtas, whether in Government or Opposition. This deficit in the current social partnership system must be addressed before we enter the next round of social partnership, which is due to start next year. There has been huge expansion in the areas discussed in social partnership agreements, including energy, telecoms, overseas aid, transport, arts and the environment. Many areas that were not part of the original social partnership discussions of the late 1980s have become part of discussions now and we should have a broader role for the Oireachtas in discussing these issues in the context of social partnership.

It is unfortunate that the Taoiseach and his Ministers are calling for wage restraint at a time when we have seen that they do not practise what they preach. This will lead to difficulties in the social partnership negotiations next year. There have been significant changes in the economy since 2000 but no corresponding changes in the social partnership process. Our competitiveness has deteriorated by more than 30% and our share of world trade has declined by a quarter. Some 30,000 jobs have been lost in manufacturing. The balance of payments, meanwhile, has moved from a position of surplus to a deficit of more than €7 billion. These are significant changes. To compensate, we must radically restructure the way social partnership has operated heretofore.

The Minister of State focussed much of his commentary on the need for upskilling of workers. There is no doubt that this is key to maintaining our competitiveness in a globalised economy. The Minister of State referred to some €7.7 billion of funding under the national development plan, some €2.7 billion of which will be targeted at upskilling those already in the workforce. This funding is inadequate. A recent report indicated that by 2030, the workforce will expand from its current level of 1.4 million to 2.4 million. A significant proportion of those already in the workforce will require upskilling if we are to be confident they will still be in employment in 2030. The investment included in the national development plan is a step in the right direction but must be increased significantly in the years ahead.

There is no doubt that the notion of the job for life to which we have been accustomed no longer exists. There is an essential need to upskill the workforce at every opportunity. The statistics relating to ongoing education and training are startling when compared with those for other EU member states, particularly our nearest neighbour. For example, some 14% of those aged 25 to 34 in this State are in further education or training while the corresponding figure in Britain is 35%. If we are serious about enhancing our competitiveness into the future, we must seek to meet if not exceed that target. There is little evidence, however, of the necessary urgency on the part of the Government to meet that aim.

In 2005, the unemployment rate for those aged 25 to 64 with a third level degree was just 1.8% compared with 7.4% for those whose highest educational attainment was at secondary level. It is clear, therefore, that education is a key element in developing our workforce and economy. It has been shown that one of the main contributory factors to our economic success in the last 20 years is the level of educational attainment of the workforce. We must aim for higher targets in coming years. Significant numbers of people still do not complete second level education, for instance, whereas most of the Scandinavian countries have attained completion rates of almost 100%. Numerous reports indicate that the group most likely to seek further education and training later in their careers comprises those who are well educated before they enter the workforce. We must ensure the maximum numbers complete secondary education and move on to third level before entering the workforce.

In the midst of our economic success in the last 15 years, there has been a pull factor for secondary school students to leave early. The boom in the construction industry, in particular, has meant significant numbers have left school before sitting the leaving certificate and have succeeded in securing employment. Such people have done well in recent years. However, the latest figures indicate a significant downturn in the economy, particularly in the construction sector. We will see more of such statistics in the coming months. Many of those who left education before completing second level or attaining a third level qualification will find themselves in choppy waters as activity in the construction sector declines. The number of house completions has fallen dramatically this year and may fall even further next year. Particular focus must be placed on those employed in this sector in recent years because there will be a significant decrease in employment there.

I agree with the Minister of State's comments on the positive impact of the contribution of foreign workers to the economy. However, many of those who come here from overseas are working in jobs unsuited to their level of educational attainment. People with third level degrees are generally not securing employment in skilled professions where their abilities might be better put to use into the future. The immigration that has taken place in recent years has been hugely positive. However, the Minister of State hit the nail on the head when he said we cannot rest on our laurels in regard to integration and simply hope everything will be rosy.

There must be a change of attitude in the education system. The policy heretofore of training people for employment must be adapted to one of training people in employment. There must be another transformation akin to those that took place with the introduction of free secondary education in the 1960s and free third level education in the 1990s. What is required is a rejuvenation of the education system to adapt to the immediate challenge that lies ahead.

During the recent general election campaign, after issues relating to health, education and the other perennial concerns, I found that the issue constituents raised most frequently was the availability of broadband. I am sure the experience of the Minister of State and other Senators was the same. If we are serious about upskilling the workforce and improving Ireland's competitiveness, we must ensure sufficient technological resources are available throughout the State. Most urban centres have access to high-speed broadband connections but the same is not true in many rural areas. If the Government is to tackle the challenges posed by an increasingly globalised economy, there must be significant investment, whether under the auspices of the national development plan, through the Department of Communications, Energy and Natural Resources or otherwise, in the roll-out of broadband infrastructure.

On behalf of my colleagues on both sides of the House, I compliment and congratulate the Minister of State, Deputy Kelleher, on his first formal presentation to Seanad Éireann. The young people in the Visitors Gallery should be aware that it is the first time this young Deputy from Cork has sat in this Chamber as Minister of State. He only recently received this honour, which is the aspiration of all who enter the Houses of the Oireachtas.

I compliment Senator Phelan on his measured response to the Minister of State's speech. My experience in the last five years is that the Senator always sees the positive in initiatives while also putting forward his own thoughts. He does not knock for the sake of knocking. I always listened with pleasure to his responses, as spokesman on finance in the last parliamentary term, to the Minister for Finance, Deputy Cowen.

We are all aware that the labour market is changing at an increasingly fast pace due to globalisation and various demographic factors. For companies to compete and remain competitive, and for workers to thrive and retain jobs, they must be open to change. We all know change can be difficult for everyone but it is also a challenge and opportunity. Employers and employees must become adaptable and respond in a positive manner.

I looked up the word "flexicurity", and the múinteoir and young people in the Gallery should know this debate, in essence, relates to that concept. It means having flexibility and security, as it relates to employment. For example, a job may not be rigidly from 9 a.m. to 5 p.m. or Monday to Friday. I will return to this later. The word is not in the dictionary.

The aim of flexicurity is to create an environment conducive to the creation of more jobs while at the same time promoting the active inclusion of all people in the labour market by helping individuals adapt and to take advantage of new opportunities. At the EU level, the concept of flexicurity has been the catalyst for lively discussions on the need for Europe to respond to the challenges and opportunities of globalisation. Arising from discussions, it was agreed and accepted by member states that there could not be a one size fits all approach to flexicurity. Each of the 27 member states in the EU could have a particular and suitable flexicurity system.

I would define flexicurity as having three main components. First, there should be flexible and reliable contractual arrangements, from the perspective of both the employer and employee. Second, as the Minister of State has indicated, there should also be comprehensive lifelong learning strategies to ensure the continuous adaptability and employability of workers. Third, there should be effective and active labour market policies which help people cope with rapid change, reduce unemployment spells and ease transitions to new jobs.

The Minister referred to my policy document. It is a document with which Senators John Paul Phelan and Quinn will be familiar. I will send a copy to Senator Alex White.

In the policy document, entitled A New Approach to Ageing and Ageism, I made 28 recommendations on ageing and ageism in Irish society. The document was drawn up after detailed research and discussions at many public meetings I arranged on the subject.

If only I could convey the feelings expressed at these meetings. There were pleas from men and women approaching 65 who did not want to give up their jobs. Women described how they had to give up their jobs when they got married, which was the case until we joined what is now the EU in 1973, when Ireland was forced to abolish this discrimination against married women. Women at many of my public meetings cried that they were being discriminated against for the second time, as they had to retire when they married and had to retire again at 65. People have called me who are only 60 but are dreading that they will be forced to retire in five years.

The legislation should be changed.

Senator Mary M. White, without interruption.

I will tell the Senator about that later as I have prepared a Bill.

In 2007, a retirement age of 65 is out of date. Mandatory retirement at 65 was introduced when life expectancy was only 65. With greatly improved standards of living and better health care and nutrition, the average life expectancy of a man aged 65 today is 80. For a woman aged 65 today, the average life expectancy is 84. As this is the average, some people will live until 90 who are 65 today. As a result, many people do not want to retire at 65.

There are four key reasons for abolishing mandatory retirement at 65. An Agreed Programme for Government for 2007 promised to abolish mandatory retirement. I must boast that I worked hard to include this, first in the Fianna Fáil manifesto and then the programme for Government. I will track the matter until it is delivered. The second reason is that as the population ages, people remaining in employment longer will remain as financial contributors to the economy. It is common sense that if people do not wish to retire and draw on their pensions, they should be allowed to continue working. Forced retirement at 65 is a clear example of age discrimination.

The first recommendation in my document, A New Approach to Ageing and Ageism, is that mandatory retirement at 65 in the public and private sector be abolished. Continued employment should be subject to the same assessment of competence and ability used by employers in the case of employees of all ages.

My second recommendation from 28 in total was that the Government should introduce phased retirement options to allow employees to gradually retire. It is very blunt for a person to have an important job one day, complete with social and intellectual interaction with colleagues, only to abruptly retire at 65. There should be innovative options for people to retire in a phased manner and be allowed to work to supplement a pension. We have introduced an allowance but this is not enough, as people are only allowed to earn approximately €100 per week in such cases.

At a meeting of the Fianna Fáil parliamentary party last night, I pleaded with the Taoiseach, the Tánaiste and Minister for Finance, Minister for Enterprise, Trade and Employment and my party colleagues to introduce this change. I asked why it should not happen, as Deputies and Senators do not have to retire at 65. Why should anybody else in the public and private sector have to retire at that age? I cannot understand why this change has not already occurred. People raised arguments about complications, which we all know.

The pensions programme we discussed last year from the Pensions Board indicated that people may have to stay in their jobs beyond 65. I am talking about choice, as many people are in jobs they wish to get out of. Not everyone wants to stay in a particular job but people should be free to take up another opportunity. Some may be bored as their potential has not been developed and they may want to leave their jobs. We should not introduce rules meaning people would have to stay until they are 67 but there should be a choice as to stay or go at 65.

It is a pity Senator Fidelma Healy Eames is missing as I drew up a bill on flexible working arrangements. I was in full flight with it before I run into some stubborn walls. I warned my colleagues at the meeting last night that I will persist with the issue, whether they get sick of listening to me or not. That is the reason I am here.

Returning to my Bill on flexible working legislation for parents, modern communication technologies have delivered an unprecedented ability to work away from the standard office setting.

The Senator has one minute remaining.

I do not wish to criticise the Leas-Chathaoirleach but I was watching the clock when Opposition Members were speaking. With Internet access, conference calls, wireless communications, mobile phones, laptops and e-mail, there is no reason a person must be under a particular roof from 9 a.m. to 5 p.m. to do a job. Conference calls and e-mails mean that the standard office setting no longer exists for many jobs. Accordingly, the argument that an employee must be in an office from 9 a.m. to 5 p.m. has been greatly challenged by modern technology.

In my White Paper on a new approach to child care in 2006, I called for the introduction of a flexible working Bill that would allow parents to spend more time with newborn babies. The Bill has been drawn up and would be ready to go if I could get the momentum from my colleagues. The proposed legislation would allow working parents who have been employed in a job for at least 26 weeks and who have a child aged under six or a disabled child under 18 to apply for work flexibility. Employers, in turn, would have a statutory obligation to consider the application seriously. While the legislation does not provide an automatic right to work flexibility, it aims to encourage both employees and employers to find solutions that would suit them both. The employer is required to follow specific procedures to ensure applications for work flexibility are considered seriously.

I do not have time to outline the benefits to both the employee and the employer, but the Minister of State's speech outlined that our vision is for all people to be able to work. The two cases I have addressed today are older people, those at the peak of their experience whom we currently tell to get lost, and young parents, who should have a legal entitlement to apply for flexibility and to negotiate in order that they can work from home.

We are delighted for the Minister of State, his family and his constituency in Cork that he has been granted the tremendous honour of serving as a Minister of State in the Government. His speech was a credit to him. I will keep and use it for the next few years because it contains everything we want to know about the labour market.

That is a fact. The Senator was not here for the speech.

I read it. It is very good but the Senator should not get carried away.

It was a pleasure to listen to it because a lot of thought was put into it. It was first class.

I notice the Leas-Chathaoirleach is being lenient with time so I will be happy to judge it correctly.

I am bound by the order of the House.

Of course. I also welcome the Minister of State, Deputy Kelleher, who was a Member of the House for the first five years I was here. It is great to see him back here. I found the Minister of State's speech, and the two other speeches, very useful, particularly the positive attitude of Senator John Paul Phelan and the experience of Senator Mary White and the way she speaks from the heart.

I approached Senator Mary White last year when I was invited to South America to make a speech to see if she could help me with a book her husband and former Minister Ray MacSharry had written. It was a fascinating book, just as it was a fascinating challenge to explain the Irish success story to people in South America. One of the reasons for that success I found in that book and from own experience was social partnership, a crucial area. In preparing my thoughts, I was aware of the benefits we have had and the success we have enjoyed and hope we can continue that in the future.

I do not believe in re-inventing the wheel and, therefore, I will rely heavily on a recent report by the expert group on future skills needs on the very topic we are debating today. First of all, I pay tribute to the excellent work of this body, and the foresight of those who set it up. It embodies precisely the kind of forward thinking we urgently need in this country but too often it is a need we ignore. In this case our fault is different — we have the thinking, and the conclusions from the thinking, all set out clearly before us but we, for the most part, ignore it when discussing the subject.

In preparing this report, "Tomorrow's Skills: Towards a National Skills Strategy", the expert group carried out detailed research to underpin the development of a national skills strategy. This included the identification of the skills required for Ireland to develop over the period to 2020 as a competitive, innovation-driven, knowledge-based, participative and inclusive economy. Those words are very similar to those in the Lisbon strategy that set out what Europe is trying to achieve, "to become the most competitive knowledge-based economy in the world, capable of sustainable economic growth, with more and better jobs and greater social cohesion." If Europe is trying to achieve that for all member states, we must recognise we are competing against other European economies that are looking at what happened here.

There are three steps along the road to the conclusions the expert group reaches. First, it identifies the skills we need for Ireland to make the transition to the kind of economy we want to have by 2020; second, it makes projections of the labour force's skills profile we will need to make the transition to that kind of economy and, crucially, compares that ideal profile with the one we will have if we continue as we are at present; and third, it outlines the training and education objectives where gaps and deficiencies are clear between the desirable situation and the likely supply. After all this careful research, its conclusion is clear — we cannot get to where we want to be simply by carrying on as we are.

That is the bad news. The good news, however, is that we can get to where we want to be if we put in place the right training and education objectives. There is still time for us to achieve our aspiration towards leadership in the knowledge society, but only if we roll up our sleeves and focus our national efforts on what we need to do.

The headline conclusion and recommendation in this report is that sustained and enhanced investment in the educational and training infrastructure is essential to our economic and social development. It therefore reinforces a point I have been making repeatedly in this House in recent months, namely, that our number one national priority must be to invest more — much more — in our education system, and to maintain and sustain that investment consistently over the next decade at least.

This report tells us that employees in all jobs will be increasingly required to acquire a range of generic and transferable skills, including people-related and conceptual/thinking skills. Work will be less routine, with a requirement for flexibility, continuous learning and individual initiative and judgment. Science, engineering, ICT and research and development skills are an integral part of a knowledge-based economy and their promotion remains important. Importantly, however, the report stresses that all occupations will become more knowledge-intensive. In many cases, this will result in a rise in the requirement for qualifications and technical knowledge.

Part of the problem is that we have an exaggerated impression of how our education system does when pitted against the rest of the world. Far from being ahead of the pack, as we are sometimes inclined to believe, we are behind on most of the key benchmarks that are used to measure investment and achievement in education. In 2004, only six out of 27 OECD countries had a worse performance than Ireland in terms of the percentage of the labour force who had only attained up to lower secondary qualification.

Looking forward to 2020, the report identifies clearly the gap in qualifications levels that will exist. I refer to what is called the national framework of qualifications, NFQ. I am sure the Minister of State knows that TLA stands for a three letter acronym and NFQ is such a TLA that I like to use.

At the top of the scale, that is, at the national framework of qualifications levels eight to ten, there will be a slight shortage of people. However, below the very top of the scale, that is, at NFQ levels six and seven, the report foresees a significant shortage of people. Most significantly in terms of its social impact, the report foresees a significant surplus of people at NFQ levels one to five. At present only a relatively small number of people are unable to find jobs because their lack of skills makes them unemployable. This report suggests that by 2020, a much larger number of people will be unemployable for that reason.

This is the situation to which we must face up. There is no dispute about what we must do to reach the levels of skills that we must achieve by 2020. The issue does not pertain to wondering what we need to do as that is clear. However, we lack a clear awareness of the problem facing us and the disastrous consequences for society unless we reach out and firmly grasp the nettle.

I will summarise in terms I have expressed in the House previously. I believe that our overwhelming national priority at present should be to invest a considerably greater share of our resources into the field of education and training. The conventional wisdom in this area is that education already gets more than its fair share of the cake. That is incorrect and we follow such wisdom at our peril.

I recently visited Estonia, which I had never visited before. It is a smashing and interesting country to visit and is considerably smaller than Ireland. However, a much higher percentage of people there are able to read and write and are computer literate than is the case in Ireland. It has a much higher level of broadband use than does Ireland. We operate in a competitive environment in which the rest of the world is examining the Irish success story and asking how it was achieved. One reason for my invitation to South America and my being questioned in Estonia is that people want to be told about such success because they wish to emulate it.

The Minister of State used the word "complacency" and I believe there is some danger of it. There is a danger of overconfidence among the younger generation in particular who do not have the experience of knowing what the 1980s were like. We must be aware that we operate in a competitive world and success depends on ensuring that we take all the necessary steps. While the steps outlined in the House today are certainly important, above all, a greatly increased degree of investment in education should be our priority.

It is particularly useful to have a debate on the position of the Irish labour market in the globalised economy given the present state of the global economy and Ireland's position within it. Recently I listened with interest to Senator Quinn's observations in a radio programme on the role played by Dr. T. K. Whitaker in Ireland's economic development. Senator Quinn gave a fair treatise on the fact that, largely on his own but with the help of other significant political figures who were mentioned in the programme, Dr. Whitaker brought Ireland into the real world in respect of global economics. Until that time Irish economic policy was based on the notion of self-sufficiency that suggested we could meet all our needs from within our own resources and that we needed to protect the local market in so far as possible. As Members are aware, this led to stagnation, mass emigration and the failure to develop an indigenous entrepreneurial economy. Consequently we should be grateful for the success of the programme for economic expansion and Dr. Whitaker's role in it.

The world has advanced significantly since then and what we now understand by globalisation is a matter for debate. Undoubtedly, while a globalised economy has increased total planetary wealth, major questions arise as to how such wealth is distributed around the world as a result of such economic policies. Heretofore, it has been the case that globalisation has led to the further enrichment of already rich countries and Ireland can consider itself fortunate to be on that side of the divide. Our economic policies in the past 15 years in particular have wedded Ireland to being one of the most open economies possible in a globalised market. While we have been successful in increasing our standards of living and gross national and domestic product, we also have exposed ourselves to being reliant on larger economies. Were such economies to catch cold, we would be at risk of catching influenza, if not pneumonia.

Strangely, we may be coming full circle. I do not refer to a return to the de Valera days of self-sufficiency but to a need for a balanced economy that at least incorporates a strong indigenous economy that will meet a bedrock of our needs. Such an economy would enable us to build on the entrepreneurial success that we have achieved in the past 15 years to produce indigenous companies that face outwards towards the world. The problem has been that although it has been both significant and beneficial, we are still highly reliant on foreign direct investment and its associated expertise. We should view the current position as an opportunity to reassess and alter slightly the direction of economic policy and some factors in our favour exist that will help us to do so.

For instance the environmental crisis should be viewed almost as an opportunity as we examine means of using technological and entrepreneurial approaches to deal with the real problems faced by the planet and Ireland's contribution to their resolution. Since the Green Party's accession to Government, I have been struck by the number of people from the business community who have visited me at my constituency office or who have sought meetings with me in Leinster House. While I would have treated such meetings warily in the past as I wondered what was the agenda, I have been struck by the ingenuity of people's proposals regarding entrepreneurial ideas to address environmental problems in the fields of energy efficiency and waste management. Ireland can shine in the aforementioned two sectors. I also heard a mini-debate on radio recently in which the commentator Tom Savage spoke of the ability to define a clean, green image as our selling point as we face outwards toward the global market in future. While there has been too great a willingness to compromise this in the past, we should now consider it to be one of our greatest assets in the future.

As Senator Quinn noted, real changes are required in terms of greater investment in education, which is badly needed. Standards must improve in particular areas that are required for economic improvement. Changes also are required in the related area of research and development. We are well below the Lisbon Agenda targets and the levels of research and development that exist in Ireland are still overly dependent on that which is brought in by those companies that are multinational in scale and that do so as part of a production process. Such processes often originate somewhere else, go somewhere else afterwards and the added value of the research and development is not what it could or should be in Ireland.

The budget offers a good opportunity and I am hopeful the Minister for Finance will respond to many of the representations made to him in this respect. I refer both to those made by the Green Party as Government partners and by bodies such as the Irish Taxation Institute. One of the central messages in the budget should be to increase incentives towards research and development that would induce more people to come into this country with value-added research and development processes and, more importantly, would develop a culture of research and development within Ireland itself, which has lagged well behind in this regard. The proportion of research and development carried out in Ireland that is performed by Irish-only companies is pitifully small. Until it can be done from within our own resources, our ability to protect ourselves in the event of a global downturn will be seriously diminished.

The onus is on Government to ensure we progress these areas because we have been deluged with reports on enterprise culture in recent years, including the Telesis, Culliton and O'Sullivan reports. The analysis of what needs to be done is clear. Now that we have an opportunity due to the change in the global and national economies, it is time to share that analysis and put in place those recommendations. It is an opportunity we can grasp. To do so would be to put in place our economic prosperity for generations to come.

As we are coming up to lunch time I will do what I can for my colleagues. My gentle banter across the floor with my namesake Senator Mary White should not be interpreted as showing ingratitude to the Minister of State for presenting his thoughts to this House. It is good to see the Minister of State here and it is important we have this debate. It is a stimulating debate for us and it is a pity more people did not have the opportunity to be here and contribute to it, however they have plenty of other things to do. At this time of year when we approach the budget, which is the key opportunity in the year for us to debate economic issues, it seems over the years we have become less inclined to debate these wider economic issues, even at the time we should debate them. In the budget we concentrate on the most important aspects, ensuring the show is kept on the road and the books balance. That is the first task required of a Government and a Minister for Finance, but this is about more than balancing the books. The impact of globalisation on our country, labour market and society is a significant question for our economy and society.

Senator Boyle said globalisation has had positive effects on our world. It has also had a differential impact on different countries. Ireland is fortunate to be in the "club" of countries that has done relatively well in the past ten years from the changes in the world economic order. That will not necessarily always be the case. I welcome the fact that the Minister of State is here. I am not sure whether we called for this debate, but I am pleased we are having it. That there has not been a clamour for it might be the basis for saying it is one of the most important debates we have had.

It is important we look to the future. The television news frequently reports the loss of 100 or 150 jobs. The evidence is that those jobs have gone to the Far East, China, India or elsewhere. There is almost a sense of powerlessness. This is not a party political point. We feel as though that happens in the big world and this country can do little to address it. A multinational company's decision to move a plant from Ireland to China cannot be stopped or addressed by the Government. However we can examine how to ameliorate the worst effects of those changes, not just in a remedial way, but to address what kind of economy we want to build for the future. We use phrases such as "innovation economy" and "knowledge based economy" but we must work out specifically what that will mean in policy terms. I commend the Minister of State on setting out the agenda points for that debate in the future. He goes further than that. It is a wider debate than just examining the financial position of the country in the context of the budget, important as that is.

I wonder about the quality and level of debate on this issue in our country. As the Minister of State pointed out in his speech, organisations such as FÁS and NESC have addressed these issues and have tried to foster a debate on competitiveness, skills, investment and the knowledge economy. They have tried to tease out that more clearly than has been done heretofore. However there is a danger that we see these forces as beyond our control and pull back from addressing them. We need a framework to allow us to grab hold of these issues and have a wider public debate, and to make decisions on the direction in which we want to go.

Although I agree with the Minister and other speakers who said the partnership process is vital, and nobody could gainsay that, it has been an indispensable element of our success in the past 20 years. However there are weaknesses in that process from the point of view of the political system. I compliment Senator Mary White on her efforts in these areas. If we are here for any purpose it is to lead debate on these major issues for the future. They are more important than those that can be left to the partnership process. One of the achievements of the partnership process has been to take people beyond their immediate sights. The trade unions and employers must see each other's arguments. However they are inevitably hidebound by their own direct and immediate interests. The point of having a political system and a democracy is that we have a forum for debating the issues without any of us being hidebound by a particular point of view, although we each have our own views and politics.

Although the Minister of State set out areas where the national development plan and other initiatives related to upskilling and education, we are behind internationally. Senator Quinn's point that we are behind in our funding of and attention to education is unanswerable and cannot be denied. Any serious international comparison will show that is the case. If we compare Ireland with other smaller globalised countries, the share of Government spending of GDP is relatively low. When we talk about public expenditure the conventional wisdom is that we should reduce it. While we do not want big, overarching Government in the traditional sense, this area may lead us to the conclusion that we need more active engagement by the Government and its Departments. That requires us to have skill sets in the public service, which we have, but to improve on that in order that the economic policy makers in the Departments such as Enterprise, Trade and Employment and Finance take a lead role and that this is backed up by investment through the budgets, particularly in areas as important as education.

I agree with what Senator Quinn said about skills. He said we need skills associated with newer industries, such as IT, and we want people who have skills that can be immediately employed in work. He also said we need people with conceptual skills and a wide grounding and an ability to move from one sector to another. We are also educating citizens, not just cogs in a wheel. We must ensure when we fashion our education and training policy we do not have a narrow sense of skilling people for a particular sector or industry, which could quickly disappear, given the way the economy has changed. There is a pragmatic reason for that but also a wider principle that we should have an education system that makes available a broad grounding for people of all ages through the important role played by further and second-chance education, as Senator Mary White said. The vital role that plays in the overall picture should not be forgotten.

I also agree with other speakers who emphasised the importance of entrepreneurial genius. There is an entrepreneurial ability and genius in this country and it should be fostered and promoted. As leader of the Labour Party in this House I have no difficulty associating my party with the promotion of policy that will foster an entrepreneurial spirit and new business, promote business and ensure there is economic development based on the skills and entrepreneurial abilities of our people.

However, I am anxious to make a point to which I hope the Minister of State will respond, although there might be an element of tension between us on it. Whereas we must press for development of innovation and our economy, we must also have fairness and equality. The Minister of State mentioned it briefly but I am seeking action on it. We have discussed the issue of immigration. We cannot have a situation where agency workers in this country are only filling a gap for employers who wish to avoid the traditional responsibilities of employers. It is happening too often. The Minister of State and others claim there is only anecdotal evidence of this but why would SIPTU, the largest trade union in the country, and Tesco, an exceptionally successful British retail chain, conclude an agreement on this issue, as they did recently? Tesco does not make agreements with trade unions unless there is a perception that there is a problem.

The parents of the chief executive of Tesco, Sir Terry Leahy, are Irish.

That is all the more reason for doing it. The trade unions have made a reasonable demand for legislation on agency workers. I have twice asked the Leader of the House when that legislation will be introduced but I have received no reply. I am pleased the Minister of State, Deputy Kelleher, is present; perhaps he can give me a reply. Will he also assure the House that he and the Government will abandon their association with two or three other European Union member states in blocking or delaying the implementation of the draft directive on agency workers? That directive will give the vital balance we need in this debate. Yes, we need development and innovation but we also need workers' and employees' rights to ensure there is no continuation of the exploitation of agency workers. I ask the Minister of State to address this as it is a vital issue in the overall debate.

I welcome the Minister of State. I was not present to hear his speech as I was attending a meeting but I have read it and am very impressed. One of his comments, which he quotes from the International Labour Office, is that work is the source of dignity. This is vital and is the essence of the philosophy of my political party. There has been recognition of this over the past 25 years. Earlier contributions referred to the state of the country in the 1930s, 1940s and 1950s and what had to be done. There were concerted national efforts to get the country on its feet and make it the prosperous country it is today. The seeds were sown by people such as the late Mr. Lemass who recognised what had to be done. That is the great thing about politics, that when one is a politician for one's country and the country needs a big gesture, one is able to provide it and, many years in the future, the country can reap the rewards.

The concerted efforts made in the past include the social partnership, which the Minister of State mentioned. It has been hugely important and influential in terms of delivering a peaceful environment in which we could prosper. It provided a level of security through industrial peace. There were benefits all round for workers, employers and the country at large and it brought us to the position we have today. However, as Senator Quinn said, we cannot continue as we are.

Ireland is a model for other EU countries and countries that wish to join the Union. One such country is Ukraine which I visited 18 months ago. It is trying to replicate what Ireland did. It was the philosophy of my party, of a low taxation regime, which I am glad has been adopted by all political parties, that delivered this prosperity. We must recognise how important low taxation has been and keep an eye on it. As has been proven, it has generated more resources. The Minister of State spoke about ensuring there are no unreasonable burdens of regulation, which I presume include taxation and labour.

The Senator should talk to the Minister, Deputy Cowen, about back-pedalling on income tax.

One cannot put a burden on people that stops them working. It is my political philosophy that one rewards enterprise and effort and does not burden people through over-taxation. A lower taxation economy has delivered results for all people.

Take the example of France. I know somebody from France who has come here to locate their business. It is a modest business employing four or five people but this country was chosen because it was easier to employ people here than in France. France is now going through huge change as a result of the inflexibility that is part of the working environment there. It is unsustainable. We should observe what is happening there.

This brings me to one of my hobby-horses, tax harmonisation in Europe. Tax harmonisation would be detrimental to Ireland. Much of Europe is seeking this harmonisation; only two or three countries, which are unfortunately smaller countries, are resisting. It would jeopardise Ireland's competitive edge. Ireland is on the periphery of Europe and we cannot forget that. Doing business from a peripheral island location is not the same as from mainland Europe. In addition, Ireland is small in size. I have complimented the Minister many times on his work in trying to stop harmonisation but I am frightened that it could be railroaded through. A certain momentum might start, so at every opportunity I raise this matter. It would sound the death knell of Ireland's economic success. We must realise that and prepare.

Another issue that should be raised is pensions. We had a good debate on this last week and a Green Paper has been produced. There was a great deal of information in the weekend's newspapers about the cost of various pensions. It is alarming, particularly with regard to public sector pensions. If we are to continue being able to employ people and to cater for them in their retirement, we must plan for it now. For that reason the debate we held last week, early in the consultation process, was welcome, and I look forward to seeing the final deliberations. It is a difficult task because we must provide for the future generation.

Everybody prefers to see the benefits of whatever policies they are implementing in the immediate future, so they can be rewarded at the next election for it. However, this issue will require a great deal of combined planning, not just on the part of politicians but also on the part of employers and trade unions. There must be recognition that a flexible environment is needed. We operate in a fluid economy so we must introduce a certain level of flexibility.

The Minister of State also spoke about the importance of education. Naturally, training and the continuation of training over a person's lifetime is important. It is also important that people be trained appropriately to their own needs. Not everybody is suited to the formal education system and we need to ensure everybody is provided with an education that will bring out the best in him or her. This also applies to older people who missed out on a formal education. The Government has been doing great work, especially by giving responsibilities in this area to Ministers of State.

It is important we develop a broad indigenous industrial base which will safeguard us against the flux of international markets in which corporations may find us attractive today but not tomorrow. However, flexibility is also important in an environment in which multinational corporations can just get up and go, so to speak. We must recognise this because, as the Minister of State said, the most important way of giving dignity to people is to allow them to work and provide for themselves.

I join others in welcoming the Minister of State to the House. Although I was not present during the earlier part of this debate, I listened and watched upstairs and heard the Minister of State's contribution and the comments of different people. I will start by quoting a number of figures which set the entire debate in context, namely, the gross domestic product per head of population in Ireland and a number of other countries. The figures are from last year. In Ireland, the GDP per capita was €139,000. The equivalent figure in Poland was €58,000 and that of Turkey was €28,000. Those figures represent many different things, such as living standards and the values of currencies in these countries. However, one fact they indicate which is pertinent to this discussion is the huge differences in the competitiveness of these economies. For example, in a country such as Turkey, income and purchasing power are a fraction of ours. This will have a profound impact on the ability of our country to be competitive in the future.

A sign of these developments, as I mentioned in a previous debate on this subject, is that the more competitive countries are now advertising this fact in the business press. A number of months ago Estonia had a full-page advertisement every week in The Economist, and for the past two weeks it has been Turkey, with an advertisement co-sponsored by Hyundai which points out how cheap it is to do business in Turkey, how little people need to be paid, how educated the workforce is and how high the productivity. The reason I mention this point is that it would be easy for us — but a huge mistake — to underestimate the phenomenal power of globalisation and the way in which the competitive sands upon which our economy and society are built are shifting every day. It is a relentless turmoil in which something that is competitive one day or month or year is no longer competitive the next.

All of these figures are deeply relevant to my experience of working in an industry which is affected by this. As I listen to the speeches people make in this and the other House, I am struck by the difference in the quality and passion of the contributions of people who have been involved with the industries affected by this. Something that we in the Oireachtas need to consider is the degree to which the sectors that produce this wealth and employ people are under-represented in the Oireachtas. Senator Mary White has experience in employing people and running a competitive business. That is all I did for ten years before I came to the House. With the potential exception of energy security, this is the most important challenge we will face as a country in the future. These two issues — keeping our labour market competitive and maintaining access to energy supplies — are those on which we will stand or fall.

While preparing for this debate I read the report of the National Competitiveness Council from 2006 in which it was mentioned that we need to focus on these two issues. I am concerned that the urgency of the competitiveness issue is not appreciated. This is not a point about the Government, as I refer to politicians of all parties. We do not give this the weight and credence that we need to. It is the responsibility of us all, and I will illustrate this with a number of facts.

In 2004 only six other OECD countries had a worse performance than Ireland in terms of the percentage of our workforce that did not have secondary education. A total of 32% of our workforce did not go to secondary school. This is an overwhelmingly important and frightening point. In addition, the report of the expert group on future skills needs, to which Senator Quinn referred earlier, made the point that 14% of the age cohort between 25 and 64 is involved in continuous learning, while the equivalent figure in the UK is 35%. If we view all these figures together we can see the major change that must be made in terms of education.

The recent report on the national skills strategy mentioned that, if things do not change soon, around 200,000 people in our economy will find themselves unskilled for the type of employment being generated. There are 500,000 people whose skills need to be improved if they are to contribute to the economy. When I consider the decisions made by politicians of all parties in the history of our country, I think of the effect of the changes made by former Taoiseach, Seán Lemass, and the actions of Garrett FitzGerald on our economy and our society. The same urgency is needed now in planning the future education of our workforce.

It strikes me that we always seem to leave the important points until the end of a speech.

It is the essence of a good speech.

Maybe it is. We need to get the facts in place and build up the passion to get to the main points.

Before I came to the Seanad to make this speech I gave my old secondary school a call. I asked the people at the school what type of institution people think of when they consider furthering their education. The answer that came back was the Central Applications Office, which is for people who want to get into third level education. We need to instill two things into the boys and girls in primary and secondary school. The first is basic literacy. We cannot have anybody leaving our schools without being able to read and write and do basic mathematics, although there are such people at the moment. Second, every boy and girl needs to know how to access lifelong learning in the future. They need to know what FÁS is and what the successor to FÁS will be. They must be as familiar with these as people are with the CAO at the moment. If we do not do these things, the relentless turmoil that is the global economy will undermine the foundations on which our society is built. We will not be able to do everything else we discuss, such as funding the health service, because our economy will not deliver the wealth to do it. The time we spend in this House debating these issues and deciding how we want to change them is worthwhile. There are few topics more important.

I welcome the Minister of State, Deputy Kelleher, who I have not met previously. I certainly welcome the fact that he stayed for the entire debate and I look forward to hearing him sum up.

I chose to speak on the challenges and opportunities to the Irish labour market in a globalised economy because, like many of my constituents in Galway from whom I receive constant feedback, I have been concerned about our over-reliance to date on the construction industry and what has really been a one-horse economy. It is clear that we live in changing, vulnerable and uncertain economic times.

Last week Deputy Leo Varadkar, who is the Fine Gael spokesperson on enterprise and trade, and I held a think-in in Galway among the business community. There were people from small businesses, Enterprise Ireland and the enterprise boards, that is, representatives of State agencies as well as people running their own businesses. Some of the feedback I am sharing with the Minister of State came from that session.

The main finding was that there are two main tasks we need to do in the Irish labour market to be able to compete in what is now a globalised economy. First, we need to encourage more people to be new employers, preferably indigenous, and second, we need to mind and support the current employers. Employers, after all, are our multipliers. They are our economic generators. We depend on a thriving economy and on the value, money and revenues that come from that to fund the health and education systems. Our economy is the driver for social gain.

On the issue of how we can create an environment to create more employers, we first need to find real and creative ways to help employers make, rather than take, a job. To do so, there should be no employers' PRSI in the first five years of new business start-ups. I say this following much feedback from business and constituents but also having myself been an employer. Employers' PRSI is a tax on being an employer, the very person we need to encourage and help, not penalise, in the early days. The employer will keep young people and jobs at home and will keep the economy going.

As a start-up employer, I found having to pay employers' PRSI a major turn-off. It is a tax for which there is no obvious credit and from which one would not necessarily get credit from one's employees. It was much more appealing for me in that case to have my people work as self-employed contractors, but that was not always possible.

One must look at how the State encourages and supports employers. It is ironic that the first agent of the State a new employer hears from is the Revenue, which informs the person of his or her VAT, PAYE and PRSI responsibilities. This is not the way to stimulate business excitement and hope. Equally, start-up business should hear from Government agencies offering help and encouragement, for example, in the form of mentor programmes where there is the so-called much experienced buddy helping the start-up buddy in business. In a way this is a form of real education practice on the job. The one point I will make about business people is that they live, not always in the theoretical world but in the real world. Any practice such as mentoring that can help them in their day-to-day jobs often has far more value for them.

Let us consider the type of individual an employer is. They are largely risk takers, imaginative, creative, with a goal oriented, can-do attitude. The threat of bills, excessive regulation and fear of breaking the law through regulation can curb this spirit in the early, start-up days of a business and, according to business people, leads to worrying times and has a negative impact on them. The last thing we want to do is stifle this creativity which is the lifeblood of business ideas.

One of the strongest recommendations that came from that Galway think-in of which I spoke was the urgent need for the Minister, Deputy Martin, to implement the recommendations of the forum on small businesses. He is slow to implement them. One of the main recommendations of this report is the need to take away some of the excessive regulation stifling start-up business.

It appears that the days of foreign direct investment are gone due to the high cost of doing business in this country.

That is ridiculous.

It is critical that we support our small businesses before we kill them off with regulation. For example, people running private crèches are so regulated it is unbelievable. They are visited every month and it costs them a great deal to stay in business. The interesting point is that entities such as the rat-infested health centre in Oranmore, an example I cite again this week, do not face half the amount of regulation when it is an arm of the State regulating itself. These are double standards.

Another area with which small and medium-sized enterprises urgently need help is venture capital to match the employers' investment in the business and to help them afford to pay wages in the early days until they come to make a profit. It is worrying that there is no bank in this country which will back people's ideas. The enterprise boards spoke to me about the worrying prospect of small business owners going to the bank, for example, to pay ten weekly wage packets. It places a heavy toll on the man or woman investing his or her money and time in the early days. One must remember that this person is the economic generator who has the potential to do the economy a great service. He or she needs to be supported with a matched venture capital input and there are models available whereby the Government can insure against this risk which I recommend should be explored in the short term.

As other Senators have said, we need to find creative ways to stimulate entrepreneurship. We need to breed an ethos that employers are now competing globally, not just locally, with the globe as the new marketplace. This means we need to embrace new modern technologies and, in this regard, an audit of small businesses is needed to see who needs training and upskilling to help businesses compete in the marketplace.

As my colleague, Senator Donohoe, said, there are 600,000 people in this country with qualifications of junior certificate or lower and 10% with no qualifications at all. Enterprise Ireland finds that urban-based businesses experience more organic growth whereas rural-based businesses still relying on more traditional ways of doing business which are no longer adequate to compete.

We also need to invest in infrastructure. We in Galway, for example, still have the poorest road network in Ireland and our railway is still coming, but the one major area in which the Government should make major strides in a hurry is broadband. Not only is broadband not broadly available, its speed and the bandwidth is inadequate and businesses are encountering significant costs by having to use satellite broadband. A town such as Tuam, which is quite large, still does not have broadband available.

We also need to view second level schools as hotbeds in which to stimulate entrepreneurship. We invest a good deal of money in research and development at third level, but none of us knows the outcome of that. What are we getting out of that?

Coming from the education field, I make this recommendation. The Minister should look at finding unique ways to invest in entrepreneurship and research and development at second level while all those children are still at school. One still has use of compulsory attendance until the age of 16. Although I have not done research on this, I would bet that of the people who drop out at second level, more try their hand at business than in any other area and this is a unique area which has not been tapped. In private business I work with thousands of students from throughout the country and 50% of students in any of my classes will eventually go into business of some form. That is a vast untapped market.

I hope my presentation has been in some way useful and that there is some exchange which may be worthwhile and which the Government would take on.

I thank the Senators for their contributions.

I want to outline the background to this debate. I was asked what I would like to discuss if I came before the Seanad. I thought about the area of social partnership and other areas under the auspices of the Department, including health and safety, but globalisation, in the context of the labour market and the economy, is fundamental to what we are about as a nation.

I thank Members for their contributions with which I will deal individually. If I repeat some of the points made by Senators I do so because I believe the contributions made here are valuable in the context of what we are trying to achieve.

Reference was made to social partnership. I accept there may be a perceived democratic deficit in the context of social partnership but we must always remember that the Government, which is democratically elected by the people, is central to any partnership talks. Government is a partner and the honest broker in terms of what the social partnership model is about. That model arose primarily out of a desperation in the late 1980s — Members will be aware what was in place at that time — and it has evolved organically. It arose first in the context of wage restraint, industrial harmony and the need to sell a positive image of Ireland but it has evolved and brought in the community and voluntary sectors, non-governmental organisations and others.

The social partnership model has a valuable contribution to make in terms of the way we plan for the future. One of Ireland's main selling points in recent years, not only in terms of low taxation as referred to by Senator O'Malley and others, is the fact that we have industrial harmony. That is an important factor which people should acknowledge. We have a Labour Relations Commission, a Labour Court and the National Implementation Body to ensure that if disputes arise they do not fester and result in full-scale strikes. That is something of which the social partnership model should be proud in terms of what it has achieved in the context of industrial harmony. I am aware pressure points exist but we must deal with them as they arise. In that regard I ask employers and unions to consider what we have achieved in that context. In addition to low taxation, investment in education, infrastructure and so on, the most fundamental aspect is employment harmony which has helped sell this country abroad.

Regarding the opportunities available in the entire globalised market, we have made choices as a society and that is reflected in the way people have voted. They now accept that low taxation, in terms of employment taxation and corporation tax, is an accepted practice. They have also made the choice to have high wages and we want to become a knowledge-based society. Those issues have been discussed in social partnership and endorsed by the public in numerous elections. We cannot be complacent, however. I was in Hong Kong recently where we were given statistics on what is being achieved in China. Globalisation has benefited that country enormously. Some countries, particularly those in the African continent, have struggled to deal with globalisation but others have embraced it and become very successful. We may not always agree with their political philosophies and the way they deal with certain aspects of human rights but the way they have taken on the challenges of globalisation has been very effective. I went to Hong Kong in the knowledge that Ireland was a successful economy that had achieved a great deal but if we sit back even for a moment in the context of where we want to go in the future, we will be lost.

A pertinent point was made about graduates and bringing skills into the country. Our labour market has benefited greatly from migration, mainly from eastern Europe, but there is a bigger issue at stake, namely, attracting graduates here from universities throughout the world. We will not compete in manufacturing alone. It is fundamental that we promote research and development and high end upskilling. We can produce highly efficient people in research and development but if we are to broaden our base and our minds we must attract the top class university graduates throughout the world to our universities, link them up with businesses and research and development and sell that positive message abroad in future years. One of the best ways to make links with the globalised economy is through graduates who have studied here and forged links with our country. In future years they will become entrepreneurs, business people and academics and will have a very positive view of Ireland.

A number of areas were referred to by Senator Mary White. I must acknowledge, from my party's point of view, the work Senator White has done in several areas but the issue of the retirement age is being examined in a number of contexts. There is a financial imperative in addressing the question of mandatory retirement. Demographic changes and the challenges ahead were referred to by other Senators also. Those are issues we must address now. This was acknowledged from a financial point of view in the context of setting up the national pensions reserve fund, for example, but the human capital and the loss of talent and ability——

——is something this society cannot sustain in the long term.

Reference was made to longevity. A recent statistic indicated that the average life expectancy of girls born this decade will be 100.

That is a long way off but it is food for thought and will present us with many opportunities.

We had a shortage, until recently, in the labour market but the skills and leadership levels these people have acquired over many years is something we will have to examine. That is in the context of the Green Paper on pensions and the way we deal with retirement. Should there be a cut-off point or should people be allowed phase out of the active labour market over a period of time and pass on their skills and knowledge to the next generation?

The issue of lifelong learning has been acknowledged by the Government and society as a whole. We value education here. That was always one of our strengths, even in times past when people——

Bringing in the multinationals in the 1980s.

——were leaving this country but at least they were leaving with a reasonable education. I acknowledge, however, that a challenge remains in the area of adult literacy and numeracy, something we must address.

We can talk about having a knowledge-based and an entrepreneurial society but if people do not have the basic fundamentals of being able to read and write, as well as basic computer skills, many of them will be left behind as we forge ahead.

Senator Quinn highlighted a number of areas, which we accept, but in the context of what we are trying to achieve with the skills strategy, we examined all of that when the economy was strong and people were coming here in droves to find work and address the labour shortage. We acknowledged that the major economic growth could not be sustained forever and that we had an obligation to those in the labour market, the long-term unemployed and people who dropped out of formal education early to ensure that in the event of a change occurring they would not be left behind. The skills strategy and lifelong learning is of fundamental importance to us as a nation. We must do whatever we can to change the mindset that when someone finishes national or secondary school, an apprenticeship, third level or finds work, their formal education ends at that point. We must foster the idea that their education should be updated and that they should continually upskill. That must become part and parcel of people's thinking. The Government can do so much in that regard but there must be a shift in people's view of life in general.

Regarding quality of life and work-related issues, we will announce in the near future a measure whereby small firms will be able to access funding by hiring a consultant to examine their working arrangements with a view to making them more family friendly. People will be able to apply to——

More funding must be put into lifelong learning.

This is not to do with lifelong learning; it is to do with quality of life.

I am going back to the Minister's previous point.

I will refer to that towards the end of my contribution. We have a great deal to do in that context. The work environment must be family friendly. It must be conducive to employees looking forward to going to work and not impacting negatively on their quality of life and that of their families. We are examining that issue and it is hoped that in the next few months we will be rolling——

We do not need another report.

The report has been concluded. This is action.

Senator Alex White was going well while referring to a number of issues, but then he mentioned the thorny subject of agency workers. I am glad I left time to address it.

I was still going well at the stage.

The Senator was going better.

Two issues are involved. Regarding the European directive, we gave a commitment in Towards 2016 that we would regulate agencies. In that context, we will introduce a Bill and a memorandum will soon be sent to the Government. The matter is taking time because there are issues regarding the European Court of Justice's findings on the free movement of goods and services throughout the EU and the question of whether agencies regulated in one country are regulated elsewhere. The court decided that regulation in Poland, for example, as the country of origin would be sufficient in another country. We needed to get around that issue. There are complexities involved, but we are committed to ensuring a legislative framework for the regulation of agencies.

Is there a timeframe?

The commitment is to have a framework shortly. The memorandum will go to the Government to ask for permission for a Bill to be drafted.

The temporary agency workers directive will be discussed at the Council of Ministers meeting on 5 December. As I stated in a recent interview, Ireland will continue to play a proactive role in terms of our situation, what we are trying to achieve and flexibility and security in the workplace.

Fostering entrepreneurial instinct was mentioned. Let us be under no illusions. Sometimes, people believe there is something wrong with a person making profit. Profit is a great motivator. It encourages people to think outside the box and should be encouraged. If a person is successful, we may try to do him or her down, but the opposite should be the case. If a person steps outside the box to create or do something, we should encourage him or her.

Through the business expansion scheme, we have acknowledged that people should be encouraged to invest in venture capital, but more profit was to be made in recent years through investing in property, the construction industry and stocks.

There is still more to be made.

There was no financial incentive to——

For which reason we need to create new ways.

Becoming an entrepreneur is not inexpensive.

I hope that the scheme will be an encouragement and that the property market will not be as conducive to investment. The scheme has been altered to allow for people investing in venture capital.

It is not enough in and of itself.

The Minister of State has run over time. As we are finishing early, I have given latitude.

I thank Senators.

The Minister of State is good and we should let him finish. He has been excellent.

Flattery can get me into trouble.

We are impressed.

We value education and are trying to move towards the high end, such as by investing in fourth level and doubling the number of PhDs, but these are not the end. People will not be able to access that education because they dropped out earlier. They must be continually upskilled. Many went into trades, which are fine in and of themselves, but people must be skilled in other areas as an economy evolves. Conceptual training should be considered.

There is much food for thought. Ireland is well positioned to grasp opportunities and to meet the many challenges arising from globalisation. As a society, we must have the confidence to know that, if we put our minds and resources to something, we can meet every challenge.

In the context of the budgetary position for the coming years, the national development plan will be fundamental in terms of investment in infrastructure, increasing knowledge-based activity——

——and training and education. These issues are of paramount importance to Government policy. I thank Senators and the Cathaoirleach.

Sitting suspended at 1.35 p.m. and resumed at 3.30 p.m.