Costs are rising and competition is intense: political and union leaders must recognise that excessive wage increases would price us out of the international marketplace and put thousands of jobs at risk, writes Turlough O'Sullivan
Nobody knows whether there will be another partnership agreement to follow Sustaining Progress which expires at the end of this year.
The uniquely Irish process of unions sitting down with employers and government to work together has proven itself and is the envy of the developed world.
These comprehensive social and economic programmes have delivered lower taxes, higher pay and better welfare arrangements and facilitated a doubling of the workforce over the past 10 years.
Eighteen years and six agreements on, it has never been more starkly the case that job security and continued prosperity depend on our ability to sell goods and services at prices that can compete with our trading partners.
A new agreement is unlikely to be reached if debate is pitched in some outdated ideology where the interests of business are assumed to be contrary to the interests of employees. It is in every employee's interest that their own enterprise remains solvent, that Irish businesses compete successfully, that exports boom, and that the country's finances are not squandered as has happened in the past.
In the late 1970s and early 1980s we wrecked our tender economy, but by the late 1980s we had the wit to recognise this and the good sense to turn things around. Ireland is now the envy of its neighbours and as we head into 2006, the country is vibrant. The social partnership agreements did what they set out to do including putting the public finances back in shape, starting the flow of job creation and sharing the wealth with the less well-off in society.
It is time to refocus. Ireland is unlike most other European states in that we must export 95 per cent of what we produce, compared to 25 per cent by the UK. With the increasing pace of globalisation, we have never been more exposed to international factors outside our control.
Irish industry is now caught in a dangerous pincer movement. Our costs are rising at an alarming rate, while at the same time international competition is so intense that we have to reduce the prices we charge.
While costs have been exploding factory gate prices have been falling - by almost 12 per cent - over the past five years. This squeeze cannot continue. It is not sustainable and must be addressed in the next agreement. Can you imagine trying to run your household on this basis?
All costs to business must be hauled back if we are to compete successfully and prosper. If we can broker a deal with trade unions that will enable Irish businesses to compete successfully and secure the jobs in our economy, then it will be worth the effort. If not, the entire exercise is futile. Partnership is not an end in itself.
If any party decides to abandon partnership then this should follow rational discussion on the key issues; it should not be based on a single dispute between one company and one union. Negotiation on the basis of preconditions will not be acceptable in future.
The partnership approach is not simply based on a narrow economic agenda, but includes wider social issues. It should be obvious to all that social benefits can only be paid for if we run a successful economy. Nobody owes us a living.
A successful outcome to any future partnership negotiations hinges on all parties having a realistic goal and working to achieve that. Our goal is to continue to develop this era of Irish prosperity. All involved in the negotiations must focus their minds on this imperative. Excessive wage increases would price us out of the international marketplace and put thousands of jobs at risk. Genuine leadership from politicians, trade union leaders and others should be grounded in this reality.
Some lessons should be learned from the Irish Ferries experience. The dispute has shown us how even the most intractable and highly charged dispute can be resolved within the partnership model. The National Implementation Body, which has representatives of both Ictu and Ibec, devised a formula the Sunday before last which formed the basis for the eventual outcome. It is a pity that it took so long to give effect to the spirit and intent of that formula.
When a matter is of national interest and jobs in many sectors are at stake, it is neither defensible nor strategically wise for the company involved not to engage in public debate. Of course there was misrepresentation and misinformation, but by vacating the public stage, the company was partially to blame for this. Union leadership should never again allow itself to be manipulated by elements within their ranks who are not working towards realistic objectives that are in the public interest.
For politicians, there is something to learn as well. Never again, I hope, will we see them jump into a delicate dispute with no understanding of the facts and realities and no contribution to offer to constructive bridge-building. The wider community is not impressed with them.
Employers are willing to engage with Ictu on their concerns which arise from the Irish Ferries dispute. Where it can be demonstrated that improvements are necessary and will not undermine our competitiveness or attractiveness for foreign investment then we will consider these on their merits.
It is time for common sense, common purpose and an end to rhetoric.
• Turlough O'Sullivan is director general of the business and employers organisation Ibec