Caring, immigration and pensions are three vital issues that cannot be dealtwith without some measure of agreement in society if we are to avoid serious problems in the future, writes David Begg.
I would much prefer to refrain from making any comments on the merits or otherwise of social partnership at a time when there is so much uncertainty about its future. In fact it may have all ended in tears by the time this article is published. Nevertheless, I feel compelled to try to correct the misconceptions about the motivation of Congress contained in Jim O'Leary's article of last Thursday.
I do not think it is possible to prove one way or the other whether the economic achievements of the last fifteen years are due to social partnership.
A plausible view is that the economic planets all came into alignment at the same time. The key elements: a booming US economy providing firms there with the profits to invest abroad; a low rate of tax on manufacturing profits to attract them to Ireland; the lure of a large pool of well educated and hard working workers; the creating of a single European market that could be served efficiently from English-speaking Ireland; and the stability created by successive social partnership agreements.
So I would not claim that social partnership was the sole cause of the economic transformation of Ireland but it was a significant factor in that process. If it was not why would government, employers and unions - all having divergent interests - try so hard to keep it alive?
But I do not accept Jim O'Leary's contention that there is unanimous support for partnership. Indeed it seems to me that there has been a sustained attack upon it by economists of the liberal persuasion since it began in 1987.
In more recent times people like Jim Power, Shane Ross, Peter Clinch, Frank Convery and Brendan Walsh have all been vocal in their opposition.
The bottom line is that most liberal economists see the involvement of trade unions in economic and social policy formation as an unwarranted intervention in the market and they are opposed to that on ideological grounds.
I hope I do the gentlemen mentioned no injustice in interpreting their position in this way. No doubt they will say so if I do.
The value of consensus is frequently denigrated by those who are ideologically opposed to social partnership but let me trail just three issues which are of vital importance to Irish people in the medium term and which cannot be dealt with without some measure of agreement in society. These issues are: caring, immigration and pensions. The cost and availability of childcare is a major problem and a major capacity constraint in the economy. Likewise, care of the elderly is a developing issue now that people are living longer and more women, the traditional carers, are working. There has to be some coherent and principled approach to the question of immigration which takes account of the capacity of our economy to accommodate people otherwise there may be race relations problems as there are in Britain 40 years after immigration first became an issue there. Lastly there is the matter of the inadequacy of occupational pension schemes and their coverage which is nothing short of a demographic time bomb. It seems to me to be of the first importance that some measure of consensus should be achieved around issues like these if we are to avoid serious problems in the future. Social partnership is about building that consensus. What is particularly important also is the external perception of the importance of social partnership in an Irish context. I had the privilege some months ago of addressing all of the EU ambassadors in Ireland on the subject of the Congress submission to the Forum on Europe. This occurred at a time of some strong public exchanges between IBEC and ourselves about the possibility of negotiating a new agreement.
It surprised me that a good 50 per cent of the question and answer session was taken up with this topic. It is also a fact that there is a mini tourist industry associated with visitors from abroad coming here to discuss how social partnership transformed the country. If social partnership dies it will not be without consequence in terms of how other countries view Ireland.
When Congress decided to engage in this process in 1987 it did so with the objective of transforming Ireland into a modern European social democracy. This remains our objective today.
The characteristics of such a country would be a capacity to give equal importance to economic efficiency and social justice. These are ends not capable of being achieved through wage bargaining alone. They can only be achieved if there is a broad consensus that they should be achieved embracing the political realm and civil society.
The intellectual platform underpinning the consensus is provided by the National Economic and Social Council on which all social and business actors are represented as well as government.
The current discussions on a new partnership agreement are based on the recently published NESC report An Investment in Quality: Services, Inclusion and Enterprise. But at the end of the day it is the government that calls the shots.
The social partnership process is, always has been and always should be subordinate to the political process. The essential value of social partnership is that it engages civil society in the process of governance in a way that achieves a greater level of democratic participation and accountability in society. Those who doubt the value of this should take a closer look at parts of the world where civil society cannot engage in this way.
It is widely accepted that, while we have managed to move from a position of having a GDP per capita ratio equal to 60 per cent of the EU average to having a ratio now of 122 per cent over the 15 years of social partnership, we still have serious deficits in the areas of social provision and infrastructure.
Correcting these deficits over time requires higher levels of public expenditure and this implies higher levels of taxation. We now have taxation and public spending levels which are amongst the lowest in Europe and we will never have European quality public services unless we invest in them.
The problem is that, since income taxes and indirect taxes are more or less at European levels, the only practical way of increasing tax income is to expand the tax base into areas of wealth and business, including, inter alia, corporation taxes. Unfortunately, we are going in the wrong direction as far as the latter is concerned.
David Begg is general secretary of the Irish Congress of Trade Unions