TWENTY-ONE years ago, agreement was reached between the social partners on a Programme for National Recovery that helped to transform this State from an economic basket-case to one of the wealthiest in Europe.
It wasn't easy. And it wasn't painless. With inflation running in double figures, unemployment at 15 per cent and a national debt ratio of 115 per cent, trade unions accepted annual pay awards of two per cent. The quid pro quo was a commitment to build a fair and inclusive society with quality public services.
Since then, the partnership model has changed significantly but its core element still involves pay. And as we enter a period of great economic uncertainty, it is a worthwhile exercise to examine the benefits social cohesion and wage restraint have brought. Forced emigration has ended. Poverty has been reduced to historically low levels. Standards of living have never been higher. And more than a million extra people are at work. While a fair and inclusive society with quality public services is still a work in progress, there is no denying the advances that have been made.
No sane person would want to resurrect the bad old days. And in order to surmount new and threatening obstacles, we have to work together. That involves a sharing of responsibility and of fiscal pain. Taoiseach Brian Cowen has undertaken to protect those vulnerable people who are most dependent on public spending programmes. And he criticised pay increases for top line executives in the private sector that set a bad example for others. He should also reconsider last year's special pay awards for top public servants. Government ministers deferred their increases for 12 months following a public outcry. But that gesture would carry more weight if further increments for this entire group were put on ice as a contribution to equity in national pay talks.
Towards 2016 is an unusual, ten-year agreement that was ratified in 2006. And the first pay phase is due to expire. Trade unions have sought pay increases to insulate workers against the cost of living and ensure a fairer distribution of profits. They also want a mandatory pension scheme along with legislative protection for agency workers and for collective bargaining. Those demands are still on the table. Negotiations stalled while Bertie Ahern left office and the Government campaigned in the Lisbon Treaty referendum.
Irish Congress of Trade Unions general secretary David Begg and Peter McLoone of Impact have rejected a proposal by employers' body, Ibec, for a general pay pause within the public service, arguing that workers would not vote for it. That rejection was repeated by other union leaders as they entered Government Buildings for further talks yesterday. But there must be some recognition of the job security these employees enjoy.
Confronted by these differences which are likely to be exacerbated by deteriorating exchequer finances and imminent cutbacks in Government spending, the challenge facing Mr Cowen is to generate the climate necessary to secure a responsible pay deal. It will be a major test of his leadership.