I move:
That Seanad Éireann approves the Programme for Economic and Social Progress.
Programme for Economic and Social Progress: Motion.
For any of us as individuals, if we were setting out on a journey, we would decide in advance where we wanted to go. And then we would decide on the route we would take. We could then assess our progress by checking that we have followed that route and finally we would arrive at our destination.
It is just as important for us as a country, as well as for individual enterprises, to have clear goals and strategies for achieving them. And in the 1990s every business needs to have the support and commitment of all of their staff if they are to be successful.
In the recent NESC Report, "Ireland, a Strategy for the 1990s", the importance of comprehensive longer-term planning was fully acknowledged. The Government fully endorsed the request from the Irish Congress of Trade Unions that a new programme should be set firmly in the context of a ten-year plan.
The Programme for Economic and Social Progress gives us those overall goals which we need if we are to be able to plan ahead in any real sense. It goes well beyond the general aspirations which have almost become clichés by now and which are often so vague as to be useless as signposts or as ways of assessing whether individual decisions are the right ones. Indeed, its scope is unprecedented. It builds on the success of the Programme for National Recovery and carries the consensus approach to a logical conclusion.
Before being too critical of this approach, of the development of the consensus involving the major economic and social interests, we should stand back and see how much even the more limited consensus of the Programme for National Recovery has achieved. Five years ago, we had suffered from six years of declining employment, losing a total of 80,000 jobs. With the help of the Programme for National Recovery that decline was halted and has, indeed, been turned round to three years of growth, with 40,000 more jobs. Five years ago, inflation was in double figures. Now we have the lowest rate of inflation in the EC — and who would have believed this could ever happen?
Just a few years ago, wage rises were unpredictable and too high to protect our competitiveness and yet, despite high wage rises, our real disposable incomes were declining. We pulled off the feat of combining low wage rises with assuring growth in real incomes, thanks largely to the wage restraints and tax reform elements of the Programme for National Recovery.
I hope that these few examples illustrate just how great has been the improvement in our circumstances from the consensus type approach of the Programme for National Recovery. Looking back, we can see that the Programme for National Recovery was adopted at a time when the international environment was more favourable. World growth rates meant that the right policies led to real progress. Now we can all see that, at least at the outset of this programme, the environment is much more hostile. Our exporters face dwindling demand in the UK and in the USA; our other markets are also slowing; the Gulf War could have unforeseeable but far-reaching consequences; projected changes in supports to the agricultural sector are at best ominous.
Faced with these difficulties, it is even more important for us to get our own domestic policies right. We cannot afford to compound any difficulties on the international front with mistakes of our own. The programme offers unique benefits for all the main parties — Government, the employers, the unions, the farmers. All benefit from the consensus approach. Individuals benefit from improved social services; workers benefit from better industrial relations and real wage increases; the unemployed benefit from improved social services; businesses benefit from improved competitiveness and better strategic planning. Everyone benefits from a stable economic and industrial relations environment.
We cannot be content just to rest on our laurels. We should all share the aims of the Programme for Economic and Social Progress. We all want to meet the challenge of emigration and unemployment, especially, long term unemployment. We all want the best quality of life for ourselves and our families. None of us likes being counted in among the more disadvantaged areas of the European Community. To improve our standards of living, create the jobs we need and eliminate disadvantages, we have to work together towards the common good.
As I said earlier, the programme is unprecedented in its wide coverage. Its importance does not rest solely, or even mainly, on its pay provisions, vital though those are for the economy. It tackles fiscal policy, where it aims to reduce the national debt — GNP ratio towards 100 per cent by 1993, down from 131 per cent in 1987. The longer-term target is a level on par with the European Community average. It tackles health policy, most notably is proposing free access to hospital consultant services for the whole population.
Another major benefit is the extra funding being provided to health boards for community health services to help the handicapped and the elderly to live in their own communities. It introduces a wide selection of improvements in the education system. It will reduce pupil-teacher ratios at both primary and secondary levels; it extends a six-year cycle at secondary level to all children; and it offers additional help to the educationally disadvantaged.
Perhaps most important to the future of education and, therefore, to our economic and social development, is its commitment to a wide debate on education through a Green Paper to be published this summer, a White Paper next year, and an Education Bill in due course after that. There have been complaints that all these targets were negotiated in a forum apart from the Oireachtas. I would stress, however, that the implementation of the programme will require the approval of the Oireachtas in respect of introduction of items. For instance, the detailed fiscal and taxation provisions fall to be debated in the Finance and other Bills, and the short term decisions on health and education funding will also be discussed in the course of debates on each Vote. And, of course, Green and White Papers are wonderful opportunities to ensure that all possible views are taken into account before again, quite properly, coming back to the Oireachtas for the approval of detailed proposals.
Turning back to the goals of the programme, I think everyone agrees that one of the key objectives of any strategy for the 1990s must be to bring down unemployment. The Government's role in this must be the encouragement of a climate of enterprise and growth; we cannot return to the expensive and ineffective policies of creating jobs that the economy does not need or cannot afford. That role underpins the economic strategy of this Government's overall policy and the strategy underlying the programme. It is up to employers to take up the chances of economic expansion and, therefore, of job creation. In this, the Government will of course be adjusting our policies to favour job creation rather than capital investment and we have targeted the indigenous sector in particular in respect of measures to facilitate job creation.
My particular concern is the priority needs of the long term unemployed. They are the ones who find it difficult if not impossible to benefit from general improvement in the economy. They often suffer from multiple disadvantages, such as poor qualifications and out-of-date skills, and many live in areas where there is a high concentration of unemployment and poverty.
For years FÁS has run a number of programmes for the long term unemployed, and of course there has been massive assistance from the European Social Fund for re-training and work experience measures. Other State Departments have schemes which help the unemployed to top up their education or to gain experience in real jobs. While these have been very successful, they have only been available in a piecemeal way. With the exception of Youthreach schemes for young people who could not find a first job, there has been no coherent intervention for the long term unemployed.
I have been very concerned for some years about this situation and indeed one of my motives in establishing FÁS was to facilitate the integration and rationalisation of programmes for the long term unemployed. I am, therefore, delighted that the new programme contains a major new integrated programme which will harness the resources of local communities and of the relevant State agencies. The new programme will concentrate on local areas. Local communities will be the primary movers, with help if necessary. Existing schemes and initiatives will be combined and the principle of "progression" will be incorporated. At the end, participants should get relevant qualifications and therefore have a far better chance of getting a real job.
I have already launched the first three programmes, on a pilot basis, in the high unemployment areas of Tallaght, Cork north city and Dublin's inner city. Six more will be launched later this year and we hope to use the best models to go nationwide by 1993, as resources permit. One particular difficulty for the long term unemployed can be financial. It is difficult for someone, especially with family commitments, to take up a job opportunity which, in effect, results in loss of income. In the short term, I feel that the improvements in the family income supplement scheme and child-related marginal tax exemptions will make real progress in addressing this problem. These improvements will cost over £16 million.
As an example of the gain to an individual family from these improvements, a family with four children on £160 a week will now be 36 per cent better off working than if they were receiving unemployment and pay-related benefit. A substantial contribution to solving the problem of low pay is made by the joint labour committee system. This sets down legally enforceable minimum rates for specific categories of workers. As the committee includes both sides of industry, it strikes a balance between market forces and the needs of individually vulnerable employees. The recent Industrial Relations Act strengthens that system.
While at the moment only 40,000 workers are covered by joint labour committees, I expect this go grow. The Labour Court are completing an investigation into setting up a joint labour committee for the retail trade, which could add a further 40,000 or so workers. I expect their findings next month.
The Labour Relations Commission will also now be able under the Industrial Relations Act to consider whether new committees are needed or whether their terms of reference should be amended. The problems of low pay are also addressed by the provisions for minimum increases in the pay agreements. These are essential if we are to avoid widening the gap between the better-off and those on low pay.
In this context I would like to take the opportunity again to rebut the argument that the levels of pay increases were too high for the public sector. It is invidious to expect workers to work for less just because they work in the public sector. Their products are essential to the community. We must remember that despite the significant reduction in their numbers they have continued to maintain and, indeed, expand services.
Another area where the new programme provides for further work is in the area of labour legislation. I have always adopted the approach in drafting new or amending legislation that it is best to adopt a balance between the interests of the two side of industry. A tri-partite approach was adopted in the 1989 legislation on occupational health and safety, and is being continued in the Health and Safety Authority. Concerning the most recent labour legislation to come before this House, the Industrial Relations Act, extensive consultations were conducted with both sides before I formulated a Bill. I have taken the same approach in drawing up the proposals to extend statutory protection to regular part-time workers. The Bill is at present before the Dáil and Senators will shortly have an opportunity to debate the matter in this House as well.
The new programme also includes commitments on other elements of statutory protection, such as unfair dismissals, the payment of wages and employment equality, which have for some time been recognised as needing up-dating, and also on new items such as agency workers. By the mid-1990s I hope that we will have a body of legislation which is up-to-date, relevant to current needs and which offers the optium balance between the legitimate needs of both sides of industry.
We must remember that the future of not only our economy but also of each of our enterprises rests on maximising the co-operation and teamwork of both sides; those who manage at national and local levels and those whose work fuels the system. In the light of ever-increasing competition for a slice of the cake whose growth rate is now under threat, we must all pull together to succeed.
The relative industrial relations harmony which we have enjoyed since 1988 has underpinned our growth. It has enhanced our attraction for new investment and improved our productivity. I hope that moves to facilitate employee involvement in the private sector under the auspices of the Employer-Labour Conference will further increase the degree of consensus in our enterprises.
Finally, I welcomed the strength of the endorsement of this consensus approach by all sides — employers, unions and farmers. They showed judgment, maturity and a sense of reality in accepting a package which undeniably will serve to restrain expectations of individual benefit in favour of ensuring real improvements to the community overall and in particular to the weaker elements. In steering of our country through the challenges of the 1990s, we have to aim for a fairer, better society at the end of ten years. The programme rests firmly on this goal and adopts the best and, indeed, the only realistic strategy to reach it.
I want to thank this House for the opportunity to say a few words on the programme. In conclusion to what I have been saying I want to acknowledge the effort of the social partners and the time and the work that was put in by the farming bodies, the employer bodies and the trade unions, all working with the Government and endeavouring to produce a programme that is of substance. During this debate I asks no more than that people should reflect seriously on what they said in 1987. I decided today in the other House not to come and adopt the political ploy of quoting what was said in 1987 because perhaps somebody will do that some day to me and it is not nice to be made a fool of.
It is right that people should be cautious and should ask us not to run away with ourselves. In framing this programme in the four and a half months of detailed discussion which took place over many nights and weekends, I think everybody was realistic. The social partners and the Government are not a group of people who come together easily. Some of the comments that are now being made would lead one to believe that we were all in the one camp and that we were all old travelling friends for generations. Nothing could be further from the truth. The social partners and the Government came together first of all out of a sense of necessity, based on the Congress of Trade Unions, 1986 document on the jobs crisis, on the NESC and ESRI reports and on the surveys of 1987 which attempted to halt the slippery slide that this country had begun towards national bankruptcy. Unemployment was rising, inflation was out of control, morale was at a low ebb and both Houses were becoming unrealistic and were failing to provide leadership. I think the social partners and the Government and general support for the programme have led this country back into a strong position. We have been praised by the greatest of financial magazines. This has been followed by a resurgence of money into the country and the creation of investment opportunities. All of this comes from a very small cycle.
I listened to what speakers were saying in the other House and let Members of the Oireachtas not forget how every aspect of our economy is tied in. Other countries do not have moderate pay increases and those are essential. Moderate pay increases allow industries to improve their competitiveness; they allow them to sell quality products at competitive prices which help exports and allow us to compete against international trading partners. That is the start of the battle. If we succeed in doing that we create stability in our own economy, enabling us to plan our export strategy and to see where we are going. It also helps Government planning.
For years in successive Governments we have seen the Minister for Finance on budget day get up and talk about the figures for the year in billions and thousands. About a month later they would then start negotiating the pay levels, which is one of the biggest parts of the whole programme.
At the end of the year, the markets and all the other right-wing agencies that affect our day-to-day lives, would ask why we were so much out-of-date. The reason was that provisional figures were put in to allow Ministers for Finance to carry out certain policies, and those policies could not be carried out because the percentages were always too small. There were huge over runs which produced leapfrogging; inflation rose because the expectations of workers were going up. The Government then had to borrow money externally because the internal markets were not aware that that would happen and everyone chased everyone else. In trade union terms, everyone starts at the floor and runs to the ceiling. What happened here was that everyone started at the ceiling and tried to go through the roof, and the economy of the country suffered massively.
We stopped that in 1987 and this programme will continue to provide that control. We have moderate pay increases again, helping lowly paid people especially, by giving £15, £5, £5.75 and £4.25 respectively to different groups. They are the people who will benefit. We were very careful during the negotiations to ensure that low paid workers would benefit most by receiving the floor increases in the programme along the with family income supplement and by being taken out of the tax net at the bottom or by PAYE and PRSI reduction. After that we fixed increases at moderate levels. I am grateful to workers in the public and private sectors, from the biggest to the smallest company for making that sacrifice. It is sacrifice because they have to pay taxes and will suffer other reductions arising from those pay increases. They are not net increases but gross increases.
That policy will reduce inflation. We will have none of this running from the ceiling to the floor, or through the roof. Let us be honest about this. Nobody told me in 1987 that we would go from being high in the league of OECD countries in regard to inflation to the present lowest level of inflation in Europe. That shocked even President Delors who had the graciousness to admit that quite recently. Low inflation allows us to do many other things. Everybody shouts "wolf" about health policies, education policies and other policies, but if you do not have money or credit-worthiness you cannot do anything. It is only by having moderate pay increases, low inflation and a competitive environment that something can be done in these areas because they are service areas that have to be funded almost exclusively by the Exchequer with a little help from structural funds.
The Exchequer reflects what the economy can afford. Low inflation keeps interest rates down. We are now within two per cent of the German interest rate figure. Three years ago we were eight per cent above the German figure. If that is not a substantial improvement I do not know what is. Low inflation and interest rates, or at least interest rates that are controlled vis-á-vis our partners generate investment here and will continue to do so. We have a growth rate of four to five per cent and we are increasing our exports. Moderate pay increases, if we have trading competitiveness, stability in our planning and our monetary figures in our budgets — not only the budgets of the country but the budgets of every private sector company — will generate investment, increased growth, and exports. That is when we will get jobs and not until then. You do not just pull jobs off the top of a tree without first building up its roots and branches. It is useless for people to think otherwise. We have seen how countries in Eastern Europe and elsewhere have tried to pull jobs out of the hats, jobs without foundation, and they have come to nothing. One must go through all other processes. If we create jobs and help the long term unemployed, we can then generate wealth to provide the types of social services we all want.
I do not believe that there is a better economic model. For long enough in this country we did all the wrong things. We are doing the right things now and I am glad of support from people who are serious about economic policy. We are the envy of other countries. People will recall that we were in the depths of recession and depression back in 1986. "Today Tonight" and other programme teams went to Scandinavia to look at the models of society used there to bring people together. No model as comprehensive as this was adopted in Scandinavia in the seventies or the eighties. They had very good pay models but they did not have models that drew from the services sector, and from indigenous industries before matching and managing them as we have done in this programme.
This programme far surpasses anything negotiated in Europe in modern times and the credit for that goes to the social partners, to John Dunne and his team, to Alan Gillis and his team, to all the farming bodies, and to Peter Cassells. I want to single out Peter Cassells particularly because what he has done for us is not a three year programme alone. The Congress of Trade Unions has set out a path which, if Governments follow it and honour the commitments involved will produce ten years of stability. Considering what we have achieved after three years, surely it is not beyond the imagination of anyone to foresee progress. We have had some setbacks — I admit we had a number of breaks in the Programme for National Recovery— I hope people will not be watching for a slip. If people concede these benefits, then in ten years, we need not be harping away about social services and why we cannot afford this, that and the other; we can feel proud of what we will have achieved. We have set an economic blueprint for achieving that and I want to thank this House for the opportunity of saying a few words on this programme. I look forward to the debate and I commend the motion and the Programme for Economic and Social Progress to the House.
I would like to welcome the Minister to the House. He is always very welcome here and I know he listens carefully to our debates. I would like to congratulate him on the part he played in bringing about this programme. I know he worked long and hard and that he has used his own personal skills of persuasion effectively in bringing about agreement. I would also pay tribute to the social partners for their committment and for their involvement in bringing the programme to a conclusion.
I must say that there are some good things in this programme. Clearly people who worked long and hard, with the commitment of the people involved, would not produce a document which did not contain some good things and some points of significance and interest. When the Minister talks about the Irish economy and of what we are doing being a model for the rest of Europe, and when he talks about the Scandinavians looking at us to emulate what we have done, I would say to him to hold on a while. We would, first of all, like to see the results of this programme when it is in action and to see the effects of some of its aspects. I would also say that the central defect in this programme is that it is based on an assumption that nothing can be done to alleviate the level of unemployment or to stem the flow of emigration. It is a programme essentially for those who have, for those who are in employment now. It does not in any creative or realistic way address itself to the central problem of this economy which is job creation. That is its central weakness. I would ask the Minister to hold on before he begins to hold out what has been achieved as a model for the rest of Europe.
In one sense the debate here today is pointless. The consultations have taken place, agreements have been reached outside these Houses. There has been no discussion or involvement by Members of the Oireachtas as such and yet today we are being asked to endorse lock, stock and barrel something over which we have no control, no input and no role to play. Many of us, not just on this side of the House but many of the Members of the parties Opposite in the other House have asked themselves what is the point of this debate here today. When this point was made in the other House the Taoiseach, in his most lofty and Napoleonic persona, said that it was the role of Parliament to approve what Government had done. I do not accept that. If Government want to continue to shove the Houses of Parliament into irrelevance then so be it, but do not ask us for our approval or our connivance.
This is not just some academic debating point nor is it a case of sour grapes. The Taoiseach claims that this document is the product of national consensus. Up to a point it is; it is the consensus of the organised, the powerful and the articulate. It is a consensus which excludes the old, the sick and the unemployed. It excludes also the elected Opposition parties of both Houses of the Oireachtas and, indeed, the backbenchers of Government parties here and in the other House. When the Government talk about trying to achieve consensus they are right. Maybe it might raise a smile or two in those who saw the way the Government behaved when in Opposition but when the Government talk about consensus it is a most laudable goal.
Countries which have pioneered consensus, as against confrontational style politics — I refer in particular to the Scandinavian countries and Federal Germany — believe that the starting point for a consensual approach must be within parliament itself, parliament and the diversity of groups represented here in Parliament. Any process which begins by excluding Parliament can hardly hope to be termed, or deemed to be, a successful consensual approach. Parties must be represented in the formulation of a consensus not, as in this case, having a consensus imposed upon us. That is the very negation of a consensus.
Government, I believe, are making a mistake in giving us here today a fait accompli, in asking us in a sense to have a pleasant debate, perhaps an interesting debate, but essentially a debate which changes or influences nothing. What we say here on this or on the other side of this House, or in the other House, makes no difference whatsoever, apart from the Government speakers who, no doubt, will queue up to congratulate the Minister and the Government on what has been achieved. The Minister and the Taoiseach said in the other House that many of the proposals contained in the document will come here ultimately as proposals couched in the form of legislation and we will be asked then to put them through. If that is going to be the case, and given what is included in the programme, the legislative performance of the Government would need to be a great deal better than their track record to date. If they are to get many of these commitments into reality this rather barren Order Paper will need to be fairly firmly augmented over the coming months. We will have to wait and judge on that.
The Taoiseach and the Minister said that we will have the right to examine the legislation when it comes here in detail. If that is what is proposed we accept that, and we look forward to seeing the legislation come here firmly an clearly laid out, the aspirations translated into the literal reality of parliamentary proposals. But that is something we have to wait for; we cannot judge now. We have had aspirations before. Each year we see a list of the proposals which the Government have. They list proposals which they tell us will eventually take the form of legislation. We have seen very few of them to date.
This programme, to an extent, being in the Seanad, reminds me a little of Mr. de Valera in 1934. In that year he decided to abolish the Seanad, he succeeded in abolishing it in 1936, but a year later he came back with a model for this Seanad. He was asked at that time why he was bothering and he said, "a bad Seanad is probably better than no Seanad at all". In some ways the most that can be said about this present programme is that a bad programme is better than no programme at all. There is a certain merit in having a programme for the next three years. It gives some degree of certainty; it provides for some degree of stability and allows people to plan ahead with some idea of knowing what the environment will be, but only some idea because the small print in this programme and the small print as it will find its way into legislation, does warrant a great deal of very careful scrutiny.
What we have here — with all respect to the Minister and the model, the stupor mundi, which this document has made of this Government with the rest of the world looking in to see what we have achieved — is a proposal which falls very far short of a coherent, well thought-out strategic plan which would allow companies and the other elements in the economy to plan ahead for the coming three years. It is very far short of the hyped-up, super-document which the Government's very effective PR machine would have the country believe it got in this agreement. What we have is not even a national wage agreement but a whole series of agreements with cunningly concealed clauses which, before too long, are certain to trigger inflation and to get us back on the spiral which the Fianna Fáil Government of 1977-81 initiated and fed and which we spent the rest of the 1980s trying to sort out.
This Fianna Fáil-Progressive Democrat plan has many danger signals in it. Promises of corrective action by the Taoiseach, should it become necessary, are meaningless. It took one of the sharpest political operators — and I am sure he will not mind me using the word — Deputy Charlie McCreevy to spot that. He knows very well that when a process of concessions and pay deals begins it is virtually impossible to halt that process. So talk at this stage of corrective action, if things go wrong, is meaningless. If I may quote Mr. Colm McCarthy, one of the most realistic economists, who endorsed much of what the present Government did in 1987-89, he has been quick to point out his sense of incipient danger in this document, his sense that there are so many hidden mechanisms in here that we may well be starting something which will be very difficult to control a year or two down the line.
Promises of corrective action are meaningless because we all know, especially as we move closer to elections, that it is almost impossible to put the brake on a process like that. What we have is what we will get and I believe that the long term judgment on this document will see it as being the turning point in the fortunes of this Government, the end of a period of relatively good Government and the beginning of a return to the bad old ways. We are perilously close to being, not as the Minister said, on the beginning of a ten year planned out programme but at the beginning of being back to short term territory once more. We are back in a situation of living for today and to hell with the consequences. It had to come sooner or later under this Government; the pity is it has come so soon.
The principal and the enduring failure of this programme is easy to pinpoint; it is in the area of job creation. The proposals here are threadbare, they lack credibility and are an admission of failure. There is no strategy in this document for job creation. There are a series of proposals, frequently unrelated, with no underlying strategy. We have aspirations but very few hard plans. A central admission of failure in this programme is that it unashamedly accepts that unemployment and emigration will be as high in three years' time as they are today. The National Economic and Social Council estimate that even if economic growth over the three-year period of the programme is almost twice as much as the Government project for this year — and that figure itself is now seen as being a little doubtful — emigration will still be running at 19,000 a year and unemployment in 1994 at the same level as today. These are frightening figures and these are the figures which this document fails to address. It is the background against which the document was framed and this is the central dilemma we find ourselves in today. This programme does not live up to it. It is hard to escape that reality and yet the programme flies in the face of it.
There are many aspects to the job problem today but one central point is that we now have whole geographic concentrations of joblessness. The expansion and creation of jobs in recent years has barely touched many of these areas, some of which are mentioned in the Minister's speech. There is little point in telling the young people in these areas that the financial services sector will look after them. They have not got the qualifications and, in any event, the performance of the financial services sector in creating new jobs is falling very dis-appointingly short of what was predicted, even some of the more modest predictions at the outset. Only a fraction of the promised new jobs are likely to materialise and this was one of the great hopes of the Government for job creation.
Tourism is another area mentioned in this programme. Again, we are into aspiration. Yes, progress has been made, but we saw in the budget the curtailment of certain BES schemes which, rightly or wrongly, were curtailed but certainly they are going to have an adverse effect on the tourism infrastructure this year. Tourism is something over which, unfortunately, we do not have full control. We still do not know the effects of the Gulf War on the tourism prospects for this coming year. Tourism is an area in which we must work but is not an area upon which we can bank with any certainty that it will provide secure all-the-year-round, reasonably well paid jobs.
The area of biggest disappointment has to be the food industry. Over the last number of years this Government, perhaps rightly, have seen the food industry as the main growth area for the creation of new jobs. We were promised a Department of the Marine, which we got, which was going to ensure that the fish processing industry would be modernised and that we would be into the export of fish in a major way with the consequent creation of a great number of jobs at all stages. That has been virtually a total failure. We were told that our whole horticulture section would be revived, revitalised, that it would be brought into the world of new marketing techniques and so forth. Unfortunately, we have seen very little results and success in all of that.
I suppose the central problem here is that the food industry has concentrated entirely on the processing of food, putting milk into cartons, making of cheese, putting beef into the shops and so forth. We are now faced with a situation, emphasised even today by Commissioner MacSharry, where the volume allowed to us will go down. Milk will go down 2 per cent as mentioned today. Intervention will probably disappear in a couple of years time. We have a situation in the food industry, where we have shown far too little inventiveness in finding new products, where the basic volumes allowed to us are going to go down. We have shown very little innovation in facing up to the problems. As the food processing industries become more efficient, as some of them increase their production levels, become more efficient and more cost conscious, this is done at the expense of jobs. The key factor today in the agri-business and in the food industry is cutting costs, in trying to get more and more efficiency. Unfortunately, that has resulted and will continue to result in jobs being lost rather than jobs being created.
I would love to think that this country, which God created to supply good food to other parts of the world, could become a major profitable source of food production. More important than that, it could give significant substantial employment to our young people. But, unfortunately, all the trends in agriculture — and the Government do not have control over them by a long shot — are now indicating bigger, more efficient units but with fewer people working in them and outside market forces are going to put further constraints on the amounts we can supply. I am afraid the food sector has been an enormous disappointment as the source of the new jobs we were all promised and hoped for over the past number of years.
I could go on but there is not time to look at other sectors where jobs are promised. I want to look for a brief moment at some of the educational provisions in the programme. Some of these are worthwhile and my colleague Senator Joe O'Toole has certainly done a very good job for his union members in the deals he negotiated. I never doubted that he would do a very good deal for his people and I am glad to see education given a degree of prominence in the programme. Quite frankly, most of the educational proposals there were in the pipeline for a long time. They were normal trade union demands or, in some cases, were merely cosmetic changes, a sort of conscience money to those who will not get jobs and who are unlikely to get jobs and there is some sort of a sop being thrown to them in the form of retraining. There is a good deal of aspiration in the educational section but nothing really radical or fundamental.
The Minister mentioned FÁS. I know FÁS is the Minister's baby, that he was the progenitor of FÁS, the midwife who brought it into existence but I say to him that I detect a great deal of unease about the role of FÁS at present. I believe there is a strong view that the money being given to FÁS are not being spent nearly as well as they might be. It has become over-large, cumbersome, not particularly good at reacting as quickly as it should. I am reflecting views I hear from people who are in business, civil servants, people in education, people who would like to see FÁS working but are concerned that it is not fulfilling its role as was intended. I would like the Minister to say how he sees the continuing role of FÁS in this area.
There is one section in the Minister's speech that leaves me puzzled, where he deals with the provision of local education. What strikes me there is that these educational pilot schemes will be in Tallaght, Cork and in a number of other areas. They are there to train local people but I would like the Minister to elaborate a little, to train them for what sort of jobs? Are these centres going to generate employment themselves or are they going to train people in the hope that the jobs will follow the training? It is an interesting idea and I would like the Minister to spell it out a bit more in his reply.
I said this programme has some good points. There is some certainty in it, there is some consensus, there is some innovation and it would be churlish to say otherwise. However, it is also, I believe, a very flawed document. It is flawed for four reasons: the consensus base is too narrow; some of the pay claims it concedes will spiral and will undo much of the good work which underpins the Minister's inflation figures for the past few years; the reforms which it includes, especially in the area of education, are largely superficial and cosmetic and, most of all, there is no hope in this document for realistic job creation, very little hope for those who must emigrate, virtually no hope for those who are unemployed. That is the key fundamental defect with this programme and everything else it achieves pales into comparison beside it.
In dealing with this programme it is appropriate that we should look back on the usefulness of the previous Programme for National Recovery. Every Senator knows that this programme was introduced at a time of economic stagnation, a time of financial crisis which threatened the very economic life of our country. The Minister said we should not look back and try to be political but that was the factual situation as we found it.
We found at the time of introduction of this programme that the national debt had doubled over the previous three or four years. Employment was getting out of hand. Confidence generally in business and in the private world was at a low ebb. Now, three years later, we can stand back and see the great benefits of the Programme for National Recovery and the biggest achievement was in the area of inflation. We have been the envy — and the Minister commented on this already this evening — of many nations of our low inflation competitive economy which, of course, is essential for economic progress. This is surely the best basis for increasing employment, reducing unemployment and stopping the emigration of our young people to so many parts of the world.
These fine achievements were possible because of the support and willingness of the social partners in our society to come together with the Government to establish an agreement necessary to restore the public finances and secure economic and social progress. As I said and, indeed, as the Minister said, we have been the envy of other nations. This cannot be denied.
The success of the programme just finished has been praised by many international economic commentators and there is no reason to believe that the present programme will not continue the onward progress of our nation. Obviously a continuance of the approach of the previous Programme for National Recovery was the right way forward. The success of the previous programme has encouraged the Government and the social partners to engage in further discussions with a view to embarking on a new programme and to continue the success story of this great nation. The Minister has commented on the type of discussions and negotiations. They were not simple matters, they involved tough, hard talking. He had indicated fairly that this programme was arrived at over a period of three or four months in a tough manner with tough people negotiating the best for their interests and the interests of the nation. I can recall that three years ago we had many a doubting Thomas. We had them on our own side of the House. They felt that the programme would not, and could not, be a success. They have now been proved wrong.
This Government clearly want the best possible opportunity for our people in the area of education, health, social welfare and, indeed, in many other areas of life. It is only right and proper that growth be given an opportunity to continue for the years ahead. I see nothing wrong in important bodies like the trade union movement, the farmers, or the employers, all coming together with Government to set forward a programme for the years ahead. Obviously we are encouraged by the success of the previous Government and the previous programme and I am confident that this one will be equally as successful. We had more than one doubting Thomas on the previous programme. We have them again on this occasion and we have them on our own side of the political divide too.
I find the criticism different on this occasion because we are not so much saying we are criticising the programme itself but the fact that it was prepared in a manner — as indeed was the other one — outlined with the social partners and it is suggested in some way that the Oireachtas feels that their role has been reduced. We have had, and the Minister has confirmed very lengthy discussion and negotiations with the interested groups. Essentially this programme in its composition does not differ very much from the Programme for National Recovery just finished. Without the consensus the negotiations and the discussions with the social partners the programme could not be successfully concluded.
In the overall programme of commitments made by the Government in economic and social areas, the social partners have themselves made a number of very important realistic commitments on major key issues. Of course it can be said that to give effect to many of the commitments in the programme for financial legislative approval of the Houses of the Oireachtas is necessary. I have no doubt that these matters will be discussed in greater length in both Houses of the Oireachtas when the time comes for such debate and will be scrutinised in great detail.
It will be said too, that some of the provisions extended beyond the life span of the Government. My understanding of this is that it is normal for Governments to make financial and legislative proposals which can extend into and beyond the lifetime of a Government, and any subsequent Government would obviously be free to propose changes if they felt those changes were necessary. Therefore, I do not think we are reducing, or causing any diminution in the role of the Houses of the Oireachtas in regard to the negotiations of either programme.
The programme is now before the Seanad for approval, having been discussed and approved by the other House last week, and I would make the point that the approval we are seeking today gives the ultimate democratic mandate to the programme. The specific legislative, financial and other provisions of the programme will come in time before both Houses of the Oireachtas for full debate, full discussion and decisions in the normal course of Parliamentary procedures.
In dealing with the programme, I wish to speak on a number of issues, in particular education, health and social welfare. It is important to make the specific point that within the full programme there should be, and there is not, a letup on sound, firm, fiscal approach. This is very clear throughout the programme. It is a correct and proper approach. If we change or deviate from this outlook we certainly risk the chance of losing many of the vital ingredients necessary to continue in improvement in our standard of living and of damaging the climate for more jobs and the investment necessary to create jobs and to sustain these jobs.
I would specifically refer to the area of education. Quite honestly, I found Senator Manning's approach very simplistic indeed. The area of education is very important to us. I certainly would have to pay tribute to my Athlone colleague, the Minister for Education, Deputy O'Rourke, who is very strong in the belief that there should be a lot of consultation. That is obvious in this programme. She obviously had a great deal of discussion with the various teacher unions and has worked out a programme which will, I believe, greatly enhance the quality of our educational system. The list of the principal measures within the programme in education is endless. Some of them more than others appeal to me — obviously one of them is the one which says we will improve the pupil-teacher ratio.
The move to provide greater resources to remedy disadvantages in education must surely be seen as very important. We will now have a six-year cycle of post-primary education, which surely the unions will welcome. This will create additional employment for teachers. The provision of an extra 8,800 third level places to respond to additional demand for higher education, which has been a bone of contention, is something I welcome and which the people and educators will also welcome. There is also an expansion of the adult education programme and my hope is that greater continuance will be given to the whole area of literacy, an area which I have a particular interest.
On page 33 of the Programme for Economic and Social Progress reference is made to the higher education grants. This matter was debated at length at a Westmeath County Council meeting last Monday. The question raised of increasing the income eligibility limits for families with more than one child attending third level institutions is something that is beginning to be discussed. The Minister has rightly indicated that it is an aspiration in the programme and it is something, obviously, that I welcome. In addition, of course, the Minister promised us in the programme a Green Paper on Education, which will be issued by this summer, a White Paper later on next year and then an Insurance Act. All of this is proof, if proof were needed, of the concern of the Government to provide the highest standards in teaching facilities for all our children.
In the area of health — and this is an area in which I have always had a particular interest — the Government clearly are committed to a radical overhaul and development of our health services. That is based on a number of key principles which are referred to on page 24 of the document. The first is:
The overriding principle is to provide a comprehensive, equitable and efficient health-care service based on prevention, diagnosis, treatment, management and rehabilitation.
The second is:
The focus is to be on the patient at all times.
Again, the principle measures contained in the programme should be touched on. One which is obvious, and which is very important in the whole programme, is the development of community-based medicine which will develop and expand services for the elderly, the physically and mentally handicapped or disabled, and will establish local health centres and expand the dental services. This programme will be developed over seven years and will cost £190 million, commencing with the provision of £8 million which was made in this year's budget.
In addition, there are other features, such as uniformity and consistency in the assessment of medical cards. I would certainly like to think that there you have an element of flexibility, because a medical card to many people is something they appreciate and wish to have. The might seldom use it, but the fact that they have it is very important to them. There is also the improvement of health services for women and a charter of patient's rights. A point which I think is very important, is the question of better and more comprehensive health promotion, again something I welcome. I believe that money in the area of health promotion is money well spent and time will prove that to be the case.
There is reference to the spiralling cost of drugs. This year the cost is £150 million, or 10 per cent of what is spent on our public health service. While the fundamental approach is that a patient is entitled to have available to him or her the medicine necessary for their illness, nevertheless I believe there is an obligation on the prescriber to ensure that the correct volume of drugs is prescribed so that extra drugs are not left lying around people's homes. If there is an equally efficient drug available which cost less, than that drug should be prescribed.
The programme is very important for the health service because it outlines in a very positive way how our community care services should be developed. I believe that when we develop our community care services further it will take the pressure of the hospital services. Daily we know of people who are put in hospitals who might be more appropriately left at home in the community. The programme spells out very clearly the direction in which we are going in the development of our community services. We have in the Minister for Health, Deputy O'Hanlon, a Minister who totally understands his role, a very caring and understanding Minister, and certainly he deserves our full support.
Social Welfare is by far the biggest spending Department, with a budget of something like £2.7 billion. The social welfare commitments in the programme are far-reaching and comprehensive and they set out the agenda for the next ten years. They represent a realistic strategy for the reform of our social welfare system so as to make it more responsive to changing needs and better equipped to tackle the problems of poverty in society today. The elderly, the lone parent family, the unemployed, the sick, the disabled, can rest assured that they will have a share in the prosperity which the programme is designed to create. Already, important steps have been taken to implement a portion of the programme. Indeed, the Minister for Labour in his address touched on one of them — the family income supplement. He told us that the programme recognises the important role the family income supplement scheme plays in directing resources to lower paid workers with children while preserving the incentive to work and he gave us an example of the gain to an individual family. A person with a family of four children on £160 a week will now be 36 per cent better off working than receiving unemployment and pay related benefit. This is the kind of initiative I certainly welcome. It is wrong that people should be better off on social welfare than working.
The Minister also talks about the role of the voluntary organisations and I would like also to pay tribute to them. We in Ireland are unique in the extent of the voluntary social service work carried out by people in our own communities. Certainly, the new charter for voluntary social services proposed in the programme will set out a clear framework for partnership between the State and the many voluntary groups.
I have touched on only a few areas of the Government programme. It contains many impressive illustrations. It is a very impressive document and worthy of our support. Like the previous speaker, I, too, would like to congratulate both the Minister for Labour, Deputy Ahern, and the Minister for Finance Deputy Reynolds, who were involved on the Government side together with the social partners. In approving the programme here today we are taking a number of important decisions that will enable our economy to grow, improve our standard of living and allow us a better way of life. It is an opportunity the Irish people would not want to miss.
In the course of discussion with Members on the other side of the House today I was asked, rather naively I thought, by a Senator on the Government side if I was going to support the Government on this matter. I would like to put on record that I do not intend to support the Government on this matter today.
The first item in this programme under the heading "The Need for a Long-Term Strategy" reads:
The Government, the ICTU, the FIE, the CII, the CIF, the IFA, the ICMSA, the ICOS and Macra na Feirme have agreed this Programme to succeed the Programme for National Recovery.
I want to put on record that to me this is not the Government's programme. To me, this is the programme of the social partners. I am delighted the Government have lent their name and their support to this programme; they are one partner. A number of commentators, particularly on the political scene, have immediately taken this programme as being the Government's programme and which, therefore, must be opposed. I do not see it in that way. I see this as a consensual response to a set of needs that were put forward by all the different interests I have mentioned. This is the position at the end of the day. This is something that I have voted in favour of and for that reason I support what is in the programme. I support it in the same way as I expect the Government to support it. I support it in the same way as the farmers, the ICOS, the Confederation of Irish Industry, Irish employers, etc., support it. This document is the consensual response of all those groups to the set of needs outlined.
Because of the restricted period of time we have to debate this matter I need to restrict myself to certain areas of it also. Without a shadow of doubt the distribution and redistribution of wealth can only be considered in the context of wealth creation and I have maintained consistently in the trade union movement that the creation of wealth is probably the sole common objective of employers, management, Government, workers and the trade unions. There can be no distribution or redistribution without the creation of wealth. The job of the trade union movement is to ensure that that created wealth is spread around and to ensure that those at the lower end of the scale — workers, unemployed, those in poverty, those in poor housing — share in the benefits.
From my point of view I want to concentrate on the area of education. Certainly, from the teacher's point of view we did have a shopping list going into the discussion on this programme. We had a shopping list which was given to us by parents, management and those authorities running primary schools right through Ireland. We were faced with a position where we had the largest classes in Europe. We had, therefore, a mandate, a directive and a requirement to improve class sizes, to improve the pupil-teacher ratio.
Similarly, we had the appalling position where we had more than 2,000 young teachers — fully qualified, fully prepared to work — unemployed or gone abroad. We had a mandate and a directive to ensure that any programme would improve the position for those unemployed people in the education system. We saw teacher unemployment as being the source of the problem of large classes. The problem of large classes and the problem of the worst pupil-teacher ratio in Europe's primary schools could be resolved simply by employing the unemployed teachers who were out there.
The other issue which was raised with us time and time again by school management authorities and by teachers in schools, particularly in small schools throughout rural Ireland, was the difficulty of organising the delivery of education in a school which could not afford to heat, to clean, employ caretakers, employ clerical assistants in the schools. That became a requirement for us.
Certainly, there were those three things: the need to improve class sizes; the need to wipe out or make a serious attack on teacher unemployment; the need to ensure an extension of the caretaker and clerk typist scheme for primary schools; and, coming through all that, the need to address the problems of disadvantage in primary education, whether that be disadvantage arising from educational disadvantage or socio-economic deprivation or underprivilege. We needed, therefore, to find a response from Government and the social partners in the areas of class size, of teacher unemployment, of ancillary services — meaning the caretakers and clerk typists in schools — and also to address in a positive way the needs of the disadvantaged in the educational services.
Those were, as it were, the riding instructions; those were the parameters of negotiations. From my point of view my support for this programme has been determined by its response on those four main issues in the education area. I do not have the time to go beyond the education area as we speak this afternoon. Certainly, the members of my union, the INTO, have clearly been influenced by a variety of factors, including the provisions on pay, but especially in the light of the specific commitments on the various social and educational issues that are covered in the programme. The Congress negotiating team tried to ensure that every relevant issue that has come before the ICTU in recent years has been taken into account in the protracted and at times very difficult series of negotiations that have taken place among the social partners over the past three or four months.
The major attraction of this programme is that it covers many facets of social and economic activities, but many of the commitments in the programme that have been given in respect of the educational service have been the direct result of three years of discussion and negotiation in the Primary Education Review Body. At an early stage in these negotiations the Irish Congress of Trade Unions put before the main negotiating team the set of recommendations that had come from the Primary Education Review Body, and that document itself was the consensus achieved through negotiations among parents, teachers, inspectorate, management, departmental authorities and representatives of the Government. That document, with its 107 recommendations, was the result of an agreement achieved after almost three years of negotiation. That then became the basis on which Congress negotiated on behalf of the primary education sector in the course of these discussions.
Those demands were made really in an effort to defuse the anger and resentment of parents and teachers following what could only have been described as the hamfisted proposal by the Government in 1987 to worsen the primary school pupil-teacher ratio. It will be recalled that that anger and resentment was demonstrated in massive protest marches at that time by teachers and parents in cities, towns and villages throughout the country. There is no doubt that this has led to the position we are in today and the Programme for Economic and Social Progress in a sense reflects those needs and demands at that time.
The programme includes various proposals to improve the educational service and vital commitments have been entered into by the Government to bring about a gradual reduction in the size of classes. It is only a gradual reduction, and the whole direction of the Minister's presentation today has been that we should look at this in the context of a ten year development. From my point of view the ten year development, in terms of the pupil-teacher radio, has to be, of bringing the Irish class size down to the European average. That will take time. It is something that can be achieved through a commitment from Government over the next seven or eight years. I want to put on the record that I see this, from the Government's point of view, as a commitment by the Government to make an investment in primary education. It is an investment from which, I have no doubt, the State will reap due benefit and profit.
Without a doubt, the implementation of the programme will begin the lengthy process of bringing our grossly oversized clases down towards the European average. Unfortunately, far too many pupils are still caught in grossly large classes in primitive school conditions. Provided the commitments of the programme are honoured, over the next three years we will move towards a situation where our schools will be more adequately staffed and resourced and the educational and employment opportunities of young people will be greatly enhanced. That is the reality at which we are looking at this time.
Without a doubt we have to look at the impact of the programme, but we also have to look at its shortcomings and we have to ensure that the commitments given in the programme are honoured. Without doubt, the early parts of it have already been set in motion; the early commitments have already been responded to by Government and by those in a position to do so at this time. For instance, to identify a gap in the programme, I refer to smaller schools, schools with 100 or fewer pupils, which is the majority of schools throughout the country. At present those schools are judged to be too small to participate in the extended scheme for caretakers and clerk typists. For that reason we must be more careful than ever to look at the needs of those small schools in the future, and we must also respond to the needs of the smaller schools in staffing terms. We have to look at the smaller schools as being the focal point of many rural communities.
We discussed last week, and we are discussing again tonight, the problems of the rural sub-post offices. In the same context one could discuss the importance of the local primary school, which very often is the local point of a village or a cluster of houses in many parts of Ireland. It is critical that we see to it that the service being delivered in those schools is top class. It has the potential to be that, but the reality is that the funding for those schools meant that it has not been possible for them to clean, to heat and to maintain their buildings properly and adequately. We have now decided that under the terms of this programme there will be a huge increase in the grants being given to schools to cover those areas but the increase applies only to schools with a hundred or more pupils so we have to look at the position of schools with fewer than a hundred pupils. Many of the representative in this forum will know schools of the kind to which I refer. In the programme it is said that this can be dealt with through an extension of the FÁS scheme. I certainly would like the Minister for Labour to take on board that commitment in a special way. It is unfortunate that he had to leave just before I could make this point. I ask the Minister of State present to ensure that it is brought to his attention, as I have no doubt he will. The Minister of State will certainly be aware that even in the school which is only 100 yards down the road from himself the need for caretakers in particular is vital.
At present many of these schools are being serviced through a FÁS social employment scheme but the problem, and what the Minister has failed to understand, is that since FÁS has been broken up into ten different areas throughout the country, ten independent republics, many of them have forgotten what the social employment scheme is for and particularly what the "E" in the SES stands for. Whereas most FÁS projects are training projects to bring people into preparation for employment, the SES is different. The SES is an employment scheme on its own. It is a social employment scheme, but unfortunately it is being operated in a different way by many of the FÁS offices.
One of the problems that schools are facing in this area is that, once they have found somebody to employ as a caretaker or clerk typist under the SES, they are only allowed to retain that person for a year and they then have to go and look for somebody else, or they might not be allowed to have somebody for a second year. This means there is no continuity. It shows very scant regard for the difficulty in a small rural community of getting somebody who is prepared to work on a part-time basis for £80 or £90 per week, which is what it is at the moment, particularly when it will have all sorts of impact on any other benefits to which that person is entitled. That needs to be tidied up, in particular to allow schools who employ people under the SES either as caretakers or clerk typists to continue to employ such people beyond the period of one year. It is a very small thing. There is no extra cost involved. I would certainly ask Members on the Government side to take on board that point when they are speaking, because I have no doubt it is something that has been brought to their attention time and time again by authorities in small schools throughout the country. It is a marginal request, a marginal demand, and it is one the Government should respond to immediately.
Special provision has been made in the agreement to improve the facilities for disadvantaged pupils and existing provision and programmes will be extended to many more schools than currently benefit from such support services. This is one area we have to address more than any other. Senator Manning, when he was speaking earlier, said that this was a programme to benefit the employed. As I have already outlined, two of the major plants which the INTO asked that the ICTU would put forward were, first, to deal with the problem of teacher unemployment and also to deal with the problem of disadvantage in the educational sector. Both of those, I would put it to Senator Manning, are issues which do not relate to the employed; they refer to quite the opposite. I ask Senator Manning to note that, because this is the reason I am speaking in favour of this report. We need to be realistic. I do not have all I wanted in this report. I could have a list of demands as long again as the report but one needs to be pragmatic in approaching problems, especially in attempting to find a consensus. In attempting to meet the demands of all the different groups I mentioned at the beginning it is necessary to make certain compromises.
I am convinced that this programme will, first, improve the pupil-teacher ratio down to 25:1 within the next two years and improve it further beyond that point. Second, it will create at least 1,500 jobs for teachers who are at present unemployed, it extends the caretaker and clerk typist schemes to schools of 100 or more pupils and it allows for the expansion and extension of the FÁS scheme to give support to the smaller schools. Finally, it also allows intervention to take place on behalf of the underprivileged in society through extension, expansion and the creation of new schemes to deal with disadvantage in primary schools. For me those four points were where I began and those are the points on which I now support the programme.
I also believe there will be a monitoring of the programme and I saw this happen through the course of the last programme. The question of non-delivery of commitments will not arise because peopole have signed on the dotted line and commitments have been entered into. Those commitments will be honoured. The programme also includes a policing element to ensure that any difficulties that might arise in the implementation of any of the proposals are dealt with.
Employment opportunities should also be created under this programme for a considerable expansion of the employment schemes in many different areas. I also believe that in the tortuous negotiations on pay the Congress objective was to ensure that the annual increases would keep wages ahead of inflation or at least maintain purchasing power throughout the period of the agreement. It is not necessary to remind ourselves that the level of income tax is a significant issue for our members in unions and in employment through the country. In these negotiations it has been possible to extract from Government what can only be described as modest commitments, but commitments nevertheless, that the tax burden will be eased somewhat over the next three years and that the standard rate of tax will be reduced to 25 per cent over that period. This, of course, will be of special benefit to those on lower incomes, and that includes a very high proportion of workers in the trade union movement.
I see this programme as the basis for growth, as the basis for making progress and as something that should be given a chance. The final determination of its effectiveness or otherwise will be the employment it creates and the successful efforts to allow people at the bottom of the scale to share in the benefits of increased wealth and economic growth. At the end of the day it will be the business of the trade union movement to ensure that those at the lower end of the spectrum will share the benefits that will certainly accrue over the next number of years.
I welcome the opportunity to speak on this very important motion. At the outset I congratulate the Minister for Labour, Deputy Ahern, for his contribution, which has been recognised by all who were involved in negotiation of this programme, in bringing about this extremely successful and forward looking programme that will, I believe, make an enormous contribution to economic development over the next few years. Without people who can be forward looking and able to see the arguments from many different sides, this type of programme could not be negotiated.
I congratulate also all the other parties involved but I would like to single out the efforts of Peter Cassells. For a number of years I have been a great admirer of his contribution and of the way he has led the union movement in this country. What is important is that the old archaic view of a union's role is largely changing into a much more modern and a much more forward-looking approach to the development of the whole economic area. The unions see themselves as a key player in helping to bring about economic development, whereas in the past the old role was much more protectionist and defensive where they saw themselves really only coming to the fore if there was a strike or a dispute in a company. This was really the limitation that in many ways they put on their involvement. Peter Cassells, and others involved, and Bill Attley in particular, have made an enormous contribution——
Could I ask the Senator not to name individuals in the House? I appreciate that possibly the Senator was praising them but this would invite others to do the opposite.
I was simply agreeing with what the Minister said. I was here for his speech and he did the very same thing in his opening remarks. I was going down that road in a complimentary way. I would not do it if it was the other way, where a person was not here to defend himself. It is important that we recognise the contributions of all these people in bringing about this programme.
At times we tend to forget what a programme like this embraces. The first thing to be said is that to have in existence a programme of this nature is a tremendous achievement in itself. While it does not involve all vested interests in this country, or even among the political parties, while it does not involve everything that we would want, nevertheless the fact that we have now got the ability, after many years of failing, to bring all the social partners together into such a programme is a tremendous step forward.
If we look back at the Programme for National Recovery, at the economic situation in the country at that time, our inflation rates — we were outstripping everybody in the league table, the league table we did not want to head — we see that in the short space of four to five years we have totally redressed that position. In 1986 and 1987 I remember looking at all the current affairs programmes and the constant message was to look at the Nordic countries, look at Denmark and what they have done, look at the miracles in those areas. Being married to a Dane I lived with it on a daily basis for a long time and to the jocose slagging I had to put up with on the many visits I had to make to those countries, that we would never achieve it. I am happy now to return to those countries and show them what we have done. Indeed in many ways we have gone far beyond what they have been able to achieve.
The important thing, of course, is that we see this document, this agreement, as a process of growth not only in the areas it outlines but indeed the areas that it begins to have an impact on beyond what is contained within the programme. I recognise the value the contribution in the areas of health and labour relations, in the development of FÁS and the changes to be brought about in the educational area.
I would like to move beyond the programme but what I say is contingent on it being expansionist within what it can potentially achieve, particularly as it is set in a framework of ten years, which is the decade of the nineties which will bring us into the next century. It is in that context that I would like to make two points which, in a loose way, were referred to by the Minister for Labour earlier.
The first point is that the integration of the EC internal market provides a new challenge and a new opportunity for Ireland. The challenge, of course, is to place a far greater emphasis on skills and on the development of natural resources, which will bring sharply into focus the fact that industrial development policy must be based on ascertaining and promoting those enterprise sectors in which Ireland can have a relative, real economic advantage in comparison with our international competitor countries. If we see the framework of this programme as a springboard into the potential economic areas, that means it is a framework for the next ten years. This is why I want to expand and make two points which I believe the Government, and indeed all political parties, should be looking at.
I want to make this argument for the following reasons. When the EC internal market is ultimately complete, resources will naturally move freely to geographic regions of best comparative economic advantage. In my view — I believe the Minister said this earlier — it would be a very great mistake for Irish industrialists to dismiss the potential challenge from the countries of central and eastern Europe. These countries are not necessarily under-developed in an overall economic and social sense, East Germany, for instance, which is now the eastern part of Germany since the unification of Germany on 3 October 1990.
As a point of interest, the former German Democratic Republic, the GDR, had a GNP per capita based on purchasing power parity in 1988 which, even at that time, was 23 per cent higher than that of Ireland. The preliminary assessment of the EC Commission is that about 70 per cent of the former GDR is within the less developed region definition whereas the entire island of Ireland is still classified in the less developed area. The Czechoslovokia GNP per capita in purchasing power parity terms in 1988 was almost identical with that of Ireland. This brings into focus the evolvement of Europe and where, as a Community, we might be going. It should force this country to look more sharply at our developing economic role. Based on these comparisons it is obvious to me that the capacity exists within certain of the countries of central and eastern Europe to progress rapidly towards economic and social cohesion with at least some of the countries of the European Community. Some of the countries of central and eastern Europe must be an attractive proposition for potential investors and traders because of their consumer market size, relatively low transport and distribution costs and development potential.
One of the biggest problems in economic growth that we face in Ireland is this chestnut of peripherality. Peripherality for Ireland is undoubtedly a fact of geography but it is also influenced by history and by attitudes. If you like to look at it from the European point of view, Ireland is a peripheral island off the west coast of continental Europe. However, Ireland is also the nearest part of western Europe to North America.
Although Finland, for instance, is, in a geographic sense, more peripheral than Ireland, Finland's GDP per capita in purchasing power parity terms is 70 per cent higher than Ireland, and Finland's unemployment is less than one-quarter of the Irish State. Thus, relative to Finland, Ireland has still a society in transition. This is saying to us that we need to identify and develop our own strengths. However, a European view — this is a point which should be seriously considered — of Irish peripherality is a very negative concept and a more balanced picture can be got by looking to the west as well as to the east.
An indication of how Ireland can be strategically positioned to gain from the interaction with the west as well as with the east can perhaps be obtained by looking at Denmark. The Danes live at the north-eastern periphery of the European Community and they depend partly for their economic well-being on their interaction with their Nordic neighbours, Finland, Norway and Sweden. However, Denmark is a member of the European Community but is also joined with her neighbours in a Nordic union. This, of course, means that Denmark has the best of both worlds and has obvious economic advantage by being able to be a full member of the European Community but yet remain within a very strong Nordic union bloc.
The question I am posing here — a question that many people in industrial circles in Ireland and political circles too, are posing — is there a message in this for Ireland? Could Ireland join in a North Atlantic union with the USA while still remaining firmly within the European Community? I believe that a North Atlantic union would be a trading arrangement which would work to the mutual benefit of the participants.
I believe it is not a question of Ireland going cap in hand to the Americans looking for something saying, "We need you". It is nearer to the reverse. Ireland has a lot to bring to such an arrangement. Ireland is a trading nation which already exports 80 per cent of the goods which are manufactured here. Ireland is the trader who, in my view, being on the periphery of Europe, is proportionately on a par with Luxemburg and Belgium, the traders at the centre of the European Community. This view of Ireland painted on the broad world canvas places Ireland strategically at the centre rather than on the periphery between the USA and Europe. It is a much more positive approach than the negative view of peripherality off the western extremity of continental Europe. A positive view of Ireland on the wider world stage can change our perception of geography and point the way to transform Ireland into a wealthy, developed, international trading centre.
When we look at the logic of this I cannot see any particular argument that does not bring to this equation an equality between what we can offer on the American side and what they can offer us. After all, we are an integral member of the EC, looking to develop our economy, and we accept that is becoming more difficult because of the development of Eastern Europe and the likelihood of countries there becoming part of the European Community.
Therefore, our peripherality from a European view pushes us further from the centre. The United States has a huge vested interest in the European market but it has also enormous fears with regard to the European market. We have an advantage in our position. We have an advantage in the language we speak, the language of commerce and of the United States of America. We have one of the most highly developed telecommunications systems to be found anywhere in Europe. That is crucial to the development of the type of areas where Ireland has the expertise.
The link between Ireland and the USA has already deepened in the international trade and services sectors. The combination of highly qualified and skilled people, together with an Irish modern telecommunications infrastructure, means that Ireland is now a desirable location for US financial service companies which want to locate in Europe. Internationally traded services do not necessarily suffer from the infrastructure cost disadvantages associated with a small island location. We can see that by the type of companies that are locating here. The global office is viable in any place in which skilled people exist provided there is a high quality communications network to support it. USA companies which want to engage in international financial services and other data-based services can use Ireland as a strategically located base to beam into all continental Europe with the advantage that Ireland can work for the US during the offpeak hours because of the time differential between Ireland and the USA. I see that as being consequential on the Programme for Economic and Social Progress. These are the kind of things that, in a ten-year framework, we should be thinking about and how we can get the job.
We can do so much within this country but we will be dependent on the European Community. Do we necessarily and totally have to look at the European Community for total economic advantage? Are there ways outside the Community that can bring us the economic advantage and, more importantly, the jobs that we require to generate in this country? It is because of the dangers of the expansion into Eastern Europe and the location of the greater manufacturing plants into markets where the greater number of people are that we in Ireland must look at alternative ways to create more job opportunities.
Ireland should be looking to the areas where we have these major strengths. They include the high technology industries, knowledge-based industries, internationally traded professional services, internationally traded financial services and education and training services. It is vital that Ireland should concentrate on those areas in which we can overcome the geographic problem of peripherality by way of those greater infrastructural improvements. Greater emphasis on activity is the key to our real comparative advantage.
Strategic trade alliances, particularly but not exclusively with the US, should be developed and examined. If other countries in Europe find it necessary and convenient to enter into these types of alliances, it is inevitable that there will be a strategic alliance in the framework of the European Community, for the strength and advantage of those countries. One that worries me is the talk of Danubian alliance with the countries in that area possibly coming into the European community. This further reduces our position with the Community and it further emphasises our need for the cohesive economic and social progress that we want. The framework is in place. The Government have done a tremendous job in putting a framework in place that involves all the social partners. These are issues that could be brought to such a forum, could be discussed, should be put in the marketplace in this country for open discussion. It is totally legitimate for us as a country to look at those opportunities, seize upon them and go down that road.
A secondary issue which I am anxious to mention is the financial services centre. It is unquestionably a great success and was a very sound idea. The other area in Ireland that we are missing is the shop window of how we actually market and sell our goods and some of our services outside the country. There are tremendous examples throughout the world of how this could be done. I am convinced that within this country we need something like the World Trade Centre. That may sound grandiose but it has enormous practical application. If we even look to the St. Catherine's Dock development in the UK. We can see that there is no reason why we should not have such a development here. I would envisage this as a strategically located world trade centre which could become a commercial showcase for the export of goods and services from this country. I believe that over the next few years this will happen. When the idea of the financial services centre was floated, people thought it was something beyond our capacity to achieve. I do not believe any of these ideas are beyond us. We have identified within the EC strategic ports for the delivery of our services and our goods out of this country.
From the passenger side, we have the Rosslare route which is obviously the fastest route to Europe. In my constituency of Waterford, Waterford Port is being designated as the fastest route for delivering goods and services into Europe. If we decide to use the UK as a landbridge for the delivery of goods and services, we will automatically have built in for all time an economic cost disadvantage that we will never be able to surmount. Because of the designation and the development that is being decided by Government at national level and agreed at EC level, that this is the way our goods and services should be delivered, the linkage into that is a world trade centre located in the south-east, in Waterford, alongside port development.
It is important to mention that. It may seem to be coming in a local context but this is an idea that has been floated by industrialists in Northern Ireland, in Dublin and throughout the country.
I am comfortable talking about this issue and floating it from a national and economic point of view. I am sure there are many other people in both Houses who have good ideas that should be floated. We need to get talking about them, get a consensus on them and make decisions on them. The pace of development of eastern Europe is phenomenal and the integration of those eastern European countries within the EC makes it much more urgent for us to look at ways in which we can protect and develop our own economic advantage.
There are many who are critical of the trade union movement for agreeing to this programme but that arises because they do not understand what the trade union movement is about. There are some critics of the movement in the political circles. Some of this criticism might be due to envy that the trade union movement is involved in discussions on many topics and in these situations it might appear they were usurping the functions of some of the politicians. That is not the situation.
There is only the one fixed principle in the trade union movement, that is the improvement of wages and conditions for workers. However, they just cannot say that is what they will do and nothing more. Life moves on. If they want to play a constructive role in helping to establish a new society, trade unions have to widen their functions. They will have to alter their structures and update their services. They, and particularly the leadership, will have to be in a position from now on to measure the trends and possibilities of production and distribution so that they can look at how the wealth is shared.
In any debate about a national programme that may be agreed by the social partners from time to time, everyone must accept that it also involves the community as a whole. I say that very deliberately because for a long time the community was excluded by both the employers and the trade union movement. Perhaps it is possible now that the community could appropriately be designated as the silent partner in this situation. Most of its contribution usually passes unheard but it is there. I would like to emphasise the importance of the community and ask Senators to look at it this way. If the community fails in doing what is expected of it, capital, labour and management will also fail in the performance of their respective roles. For example, if the community fails to provide the natural resources and powers that underlie all production, industry will become a vast mechanism out of gear, it will move along, finally come to a halt and be silent. That is the situation with regard to the involvement of the community and is a reason the trade union movement become involved.
The community has to be admitted into a partnership. It provides the natural resources and the powers. The community in various ways maintains Government, foreign relations etc. They are the important people, responsible for law and order, for transportation, communications, credit, banking etc, a whole list of things. They can never be left out of any national bargaining. It has been done down the years. More enlightened people would probably have recognised that in other national programmes. The opponents of such involvement never seem to take into consideration the value of the community and the obligations we have to enable society to participate in discussions. Instead of talking about the parties to industry being three in number, namely, capital, management and labour, let us bear in mind that it is capital, management, the community and labour. There are always four partners, never just three and let us keep that uppermost in our minds. Does this mean I am totally and utterly in agreement that everything in the programme was exactly what we needed? Certainly not. I have some reservations about the programme but I will always be supportive of the principle of consensus in economic and social planning. I welcome this programme like all national programmes I have welcomed. I was not happy about some aspects of the former programme but this one deserves a good trial before we enter into any knocking progress that would be so detrimental. We can all put down motions in the Seanad or Dáil about support for families through increased child benefit payments over a ten year period. We can talk about the pay rounds in conjunction with the budget and all these things but the most effective way to deal with these matters in this kind of economic and social development programme. We can lay emphasis on those discussions on how the community based health programmes should be dealt with, how the reduction of the pupil-teacher ratio should be achieved. These are all pertinent matters that can be raised in the context of that programme. For that reason, it is a valuable platform. It puts a lot of order into society. We have much work to do with regard to protecting what has been done in these agreements and developing them. Certainly they have not reached the point I would like to see but they have achieved considerable improvements. Our economy became industrialised quite recently so there are certain barriers to be broken down.
The real bone of contention with the trade union people is the failure to produce sufficient jobs. This has been a problem from day one and will continue to be a problem for a long time to come. We always run away from the idea of the State getting involved in manufacturing processes but there is nothing wrong with getting involved in manufacturing processes if they produce the right results. There is evidence of such results, as in the case of the ESB and a few other enterprises. We have had wonderful results during the years with the electricity industry.
The worrying aspect of this whole question of job creation is that it appears the Government seem to have accepted that the vast majority of the long term unemployed will never work again, although I do not think they have said it in that way. It seems to me that if they have not got targets and programmes of incentives to employers to fill vacancies from the dole queues, if they have not got a concerted programme for employers in the public and private sectors we will not realise this aspiration. We will have to press a bit harder on it.
Is the desire amongst private people to produce the jobs still lacking? Down through the years my criticism of the private sector was that there really was not that drive or initiative amongst them to get into job creation. I welcome the Programme for Economic and Social Progress, I hope the programme will ensure further developments in the future.
Debate adjourned.
Sitting suspended at 6 p.m. and resumed at 6.30 p.m.