The National Competitiveness Council has called on the social partners to resolve current problems over public service pay within the context of Partnership 2000 and to ensure that another national agreement is made. The chairman of the NCC, Mr Brian Patterson, says that social partnership has been "a winning formula and it would be absolute lunacy to throw it away".
He was speaking at the formal introduction of the NCC report on `Social Partnership' yesterday. The council, on which business and trade unions are represented, comes out strongly in support of maintaining national social partnership agreements "in order to consolidate and build further on the social and economic progress that the agreements have helped sustain".
The report lists the progress made since 1987. Pay rates had risen by 30 per cent in real terms over the past 11 years. This was two-and-a-half times greater than the EU average and four times the average pay increase in the US. About a third of the rise in takehome pay is due to tax reductions, the report says.
Since the mid-1990s employment has increased by 30 per cent and unemployment has fallen by two-thirds, to under six per cent.
The profitability of capital invested in Ireland has almost doubled over the past decade and the profitability of Irish based companies has risen by 75 per cent. The EU average was just over one third.
Fixed investment has increased by 80 per cent during the 1990s, further boosting the economy's productive capacity. The operating environment for business in Ireland has been "enhanced by an extended period of industrial peace". This has been a key element in raising foreign direct investment (FDI). The stock of US manufacturing FDI has almost doubled from $3.8 billion in 1994 to $8.1 billion in 1998.
However, the report also warns that the basis on which social partnership was created - the financial crisis that threatened the state's economic and social stability in the mid-1980s - no longer exists. The social partners now require "an internally generated sense of common purpose which acknowledges that a shared set of goals ... can contribute to the achievement of higher living standards for all sections of Irish society".
Mr Patterson, who is a director of Waterford Wedgwood, said at the introduction of the report that he did not see much future for social partnership without a new pay agreement. The pay element of such agreements was "the glue that binds everything together".
While he accepts that recent scandals exposed by public tribunals have "upset all of us", they did not constitute an argument for giving groups such as nurses extra money.
