Reports from the National Economic and Social Council have played an important role over the years in the negotiation of successive national programmes. The latest NESC recommendations will again provide an important input to the talks on a successor to the Programme for Competitiveness and Work. In many areas the report calls for a continuation of the kind of policies which have been implemented in recent years, but it also argues for important new approaches in some sectors. The proposals are significant, as they have been agreed by a council involving representatives of the trade unions, employers and Government departments. The strong conclusion is that a new national programme would be a better approach than returning to local bargaining. However the members of the council are clearly unhappy with some aspects of the PCW, particularly the level of tax reductions offered to the average employee.
Most taxpayers have benefited from gradually improving living standards in recent years, due to a combination of pay increases and tax reductions in successive Budgets. However, many rightly feel that their gains have not been commensurate with the strong growth in the economy and that spare Exchequer funds have been directed more towards increasing spending than cutting taxes. Meanwhile, employees in more successful industries have felt frustrated at not being able to demand higher increases.
Profit sharing in companies is one way of allow employees to share in the fruits of corporate success, the report suggests. At national level, the NESC wants a commitment in any new programme to a specific level of tax reductions. It also wants improved payment levels for social welfare recipients and better measures to address poverty and long term unemployment. To pay for this, it suggests tighter control on overall public spending. It believes that this will allow the promised tax reductions and continued improvements in the public finances.
Difficult negotiations lie ahead if a new programme is to be agreed. It remains to be seen, for example, how specific the Government is willing to be in promising tax concessions and new measures to tackle long term unemployment. The Government will want to ensure that any promises do not upset Ireland's drive to meet the budgetary rules for qualification for EU monetary union. And there will no doubt be lengthy argument about where tax reductions can best be targeted and how Government spending can be restricted to a real increase of 2 per cent per annum.
The trade unions will also be looking for commitments to strong "local partnership" arrangements allowing them a greater say in how companies are run and a share in any sharp rise in rising profits. Employers are likely to resist this approach. Representatives of the unemployed will be arguing strongly for new approaches to long term joblessness in particular. The priority now is for genuine talks on a new national programme to get underway in earnest as quickly as possible. The shadow boxing, has gone on long enough. It is time to start talking.