Tom Kitt
Ceist:4 Mr. T. Kitt asked the Minister for Enterprise and Employment his views on the prospects for a new national agreement to succeed the Programme for Competitiveness and Work; and if he will make a statement on the matter. [9943/96]
Ceisteanna—Questions. Oral Answers. - New National Agreement.
The House will be aware that there has been much speculation as to the possibility of agreeing a further programme to succeed the current Programme for Competitiveness and Work. The Government is committed to attempting to achieve an acceptable successor to the Programme for Competitiveness and Work. To this end and by way of preparation, the Taoiseach has requested the National Economic and Social Council to prepare a strategy report which, as in the case of previous programmes, will inform the negotiations on any new national programme. In addition, the NESF is also being invited to prepare a report on the elements and consultative process of a new national programme.
Agreement on a new national programme would, in my view, be desirable. I am encouraged in this view by the dramatic economic and social progress that we have achieved in the course of the Programme for Competitiveness and Work and the two previous programmes. It cannot be refuted that the national programmes experience has been to the benefit of all sectors of our society. It was only possible for the three national programmes to be agreed and implemented because all the parties to the programmes were prepared to look beyond short-term interests and to concentrate more on achieving increases in take home pay and in the numbers at work. It is important to reflect on the net take home pay benefits of the partnership approach of the recent past. Comparing the situation now with that which obtained before the Programme for National Recovery, net take home pay at the average industrial wage has increased for single people by 25 per cent in real terms. For a single-earner married couple with two children, real net income has increased by over 18 per cent. Between 1993 and last year, net real pay for a similar couple increased by 5.4 per cent. For a similar family, on three-quarters of the average industrial wage, the increase was 9.8 per cent. The substantial, real net increases demonstrate the value of tripartite consensus approaches with the Government as an active, responsible partner.
I am hopeful, given goodwill from all parties, that it will be possible to agree on a successor programme to the Programme for Competitiveness and Work that will be fair and just and that will enable us, as a nation, to continue our economic and social progress.
Having had a considerable input into agreements in the past, we on this side of the House welcome the Minister's statement that a new agreement is desirable. Such an agreement should, however, be different from past agreements, particularly in the areas of long-term unemployment and taxation. Will the Minister give a commitment that, in negotiating an agreement, the unemployed will have a seat at the table? The INOU has made such a request and the Taoiseach will meet representatives of that organisation on 28 May next. Will the Minister give a commitment that he supports such a measure and will he indicate that there will be considerable emphasis on taxation in a new agreement?
As the Taoiseach informed the House, part of the process of putting together a new programme will involve consultation with representatives of the unemployed. The INOU is represented on the NESF and the NESC which are preparing documentation that will be a precursor to the programme. The Government fully recognises that the issue of tax reform and the tax wedge is a very important ingredient in any future programme. My Department, in dealing with the challenge we face in tackling unemployment and providing fair returns for people at work, has highlighted the need for change in that area. That will be very much the core of consideration in the new programme.
What timescale has the Government in mind for concluding negotiations on a new agreement? I put this question in the context that Ireland will hold the Presidency of the European Union in the latter half of this year and Ministers will be deflected from many national issues during that period. I am concerned at the progress to date. There appears to be a stand-off in the current wave of disputes, particularly in the CPSU, although I appreciate that some progress has been made in that regard. Am I right in saying that the negotiations could last until next year's budget and that part of the concluding strategy of the Government will be giveaway taxation measures in that budget?
I will not go into the details of next year's budget, but I assure the Deputy we will be very conscious of the need to provide good planning in advance of a new programme. Meetings have taken place already to prepare the ground. The terms of the present programme do not end in the private sector until the end of this year, the construction sector in March 1997 and the public service in June 1997. The ground rules will be set and discussions started in advance of that. I assure the Deputy the Government is starting the pre-planning phase early and hopes to be in a position to deal with the matter effectively in combination with our duties under the Presidency.
The Minister for Finance spoke about increasing take home pay through tax reform. In his strategic plan published recently he stated that the focus of Labour policy for the future would be to increase take home pay through tax reform. Is it the Minister's view that that will be the approach taken by the Government in the context of negotiating the successor to the Programme for Competitiveness and Work? In other words we will be talking about after tax income and the Minister will not be going for nominal wage increases but rather using the tax system to increase take-home pay?
The Deputy is correct in saying that previous agreements have been successful because of a willingness by people to accept moderation in headline rates. As I indicated in my reply, low inflation and tax improvements have meant that take-home pay has increased considerably. That should be the approach to any successor to the Programme for Competitiveness and Work because such an approach has resulted in success in recent years, including a strong growth in employment and low interest rates, a factor in improving disposable income for many people who might otherwise face high mortgage costs.
Is it true that the Government envisages the INOU being dealt with in an anteroom while the big boys and girls get together in the main discussion room?
Mostly boys.
The Deputy will be aware that the Government is committed to including the INOU in an appropriate way to ensure its concerns are properly addressed. That is a welcome improvement on approaches taken in the past. The INOU is among the bodies preparing work for the new programme which will ensure that the concerns of the unemployed are at the heart of the approach to putting together a new agreement.
Will the Minister tell me the reason the INOU is treated differently in the context of the social partnership from, say, Macra na Feirme?
The difficulty in formulating an approach to social partnership is that more and more people want to become involved. We must try to accommodate all those interests in a structured way which will ensure that the process remains coherent——
Are they friends of the Labour Party?
——while taking account of the concerns which will inform the programme that emerges. The Government is ensuring the process is structured in a way that will address all the concerns while retaining an effective mechanism.
Stand up to the unions. Let them in.
The definition of the word "appropriate" could be explored further. Some important outstanding issues remain to be addressed in the Programme for Competitiveness and Work and the Government and ICTU have issued a joint statement which is welcome. However, will the Minister tell us when he envisages the framework negotiations dealing with issues in relation to nurses, teachers and the CPSU coming to a conclusion? On the CPSU, will the Minister accept that in any new agreement the wider issue of low paid workers, which is related to taxation, must be addressed?
I thank the Deputy for adverting to the recent agreement which has provided a process for dealing with current difficulties. That is a welcome approach but it would be wrong to put a time limit on that process. It is an element that will help to deal with these issues in a constructive way in accord with the commitments under the Programme for Competitiveness and Work. I know from my colleagues in Government that contacts have already been made to bring forward some of these disputes along this track if that can be achieved. No effort will be spared on the Government side to use this new procedure effectively to deal with these disputes which are a cause of concern.