Last Friday, the latest figures confirmed the State has one of the lowest unemployment rates in Europe. We have turned around a situation of "growth without jobs", and clearly translated growth into progress for people throughout the country.

For example, independent research shows a dramatic reduction in consistent poverty, defined as those who are unable to afford a generally acceptable standard of living. There's still much to be done, but we have to recognise that a lot has been achieved.

We achieved this progress by adopting new approaches: we changed the way we did things, rather than repeating the mistakes of the past. The high deficits and wage/price spirals of the past were successfully replaced with an approach which has seen significant increases in the incomes of all groups in society. We deliberately avoided the destructive, conflict-driven politics seen in other countries and managed to build a unique approach which has led to our unique success.

Our new economy is giving people options for the first time and a large number of well-paid professional jobs have been created as well. Where only a decade ago a large proportion of our graduates had to leave the country to find employment, we are now in the middle of the largest return of people in our history.

There is no doubt the scale and pace of development in the last few years is leading to very significant pressures throughout our society and economy. In spite of the provision of major multi-annual funding programmes, the development of our social services, infrastructure and much more is constrained by a range of factors which cannot be wished away. Every significant area of employment is experiencing difficulties in attracting people.

Permanent, well-paid jobs in the public sector always had huge attractions, particularly when there were few of the newer professional jobs available and when unemployment was high. But new situations require new approaches.

The challenge of managing this period of transition for all public servants is considerable. In moving forward, we have to be very clear in one thing - new challenges cannot be addressed by a return to the old way of doing business.

There have been major, and welcome, structural changes in the nature and level of employment in this country. These changes have happened rapidly but will be longterm in their impact. Our new economy requires new ways of addressing the position of traditional professionals.

Over the last year, all public sector unions have voiced their concern about the ability to attract and retain people. The Government very much shares this concern and that is why the Programme for Prosperity and Fairness includes a specific mechanism for addressing this issue.

The benchmarking process has been much commented on, but too few people seem to have stepped back and examined what is involved. The process is designed to include all parties in objective and detailed work on how to ensure "in the context of the rapidly changing labour market situation, that the public service is in a position to attract and retain the staff needed to deliver the quantum and quality of services that the public are entitled to expect" and will "provide a basis for ensuring equity between employees in the public service and the private sector".

It is difficult to see how this process could more closely reflect the concerns of public servants and their unions. It says, without equivocation, that we are in a situation where we have to accept serious issues must be addressed and major change must be examined. The agreement has provided for pay increases for most public servants of 19 per cent and tax cuts which will be worth an average of a further 10 per cent. As such, it provides both immediate increases and the opportunity to have more fundamental issues addressed.

Each of the teacher unions has made it very clear to Government that they believe the existence of private-sector opportunities will make it increasingly difficult to attract graduates to teaching. While the number of students applying for teacher-training continues to outstrip the places available, definite shortages can be seen in various subject areas.

Perhaps the most significant move for teachers is the fact that the Government has put in place a programme, contained in the PPF, to hire 2,500 new teachers. Classes are getting smaller and new subjects are being supported. At primary level, we now have the smallest average class size in our history and last year's move to target new posts at schools with the largest has had a significant impact. At second level, the pupil-teacher ratio is now below the OECD average and falling.

What these all add up to is the fact that the Government is committed to, and is implementing, a wide range of improvements in the conditions and supports for teachers: we still have much to do, but there has been significant progress.

In the PPF, provision has been made for substantial basic wage increases, the first instalment of which was paid last month and amounted to 8 1/2 per cent. A means of seriously addressing the longer-term, more fundamental issues about the future pay and conditions of the profession has also been made available.

The benchmarking process is designed to cater for exactly the concerns which have been voiced by teachers. It is a clear and effective way towards ensuring a bright future for the teaching profession and it is capable of delivering a lot more than a return to the types of disputes which were too much a part of our past.