Remarks by Mary Harney, Tánaiste and Minister for Enterprise, Trade and Employment at the plenary meeting of the Social Partners Dublin Castle Tuesday 28th July 1998

The development of social partnership over the last 11 years is one of the most critical factors in the extraordinary socio-economic progress made in Ireland in that time. Given where we have come from we cannot now throw it all away and return to the wage spirals that so many of us around this table were only too familiar with prior to 1987.

There may be, on the part of some, a perception that we have arrived at the end of the journey to economic well being; a kind of socio-economic nirvana. Let those few tell the serried ranks of unemployed people that another slice of the public cake will reduce the numbers on the Live Register or give someone trying to break into the labour market a better chance.

Let those who advocate a return to a free-for-all tell us how we can emulate the great strides of the last ten years. The last ten years gave us the highest levels of economic growth in the history of the State without significant price inflation. They gave us real increases in take home pay for ordinary workers in tandem with significant tax reform and modest headline pay increases. We now have almost 250,000 more people at work, a staggering performance compared with our own historical performance and the recent relative performance of our European partners. We increased the participation of women in the workforce by 44% or 158,000.

On the industrial relations front we have seen the number of work days lost due to industrial action reduced dramatically. In the period of free for all bargaining between 1982 and 1987, 355,000 work days were lost in 121 strikes on average year. By contrast in the ten year period from 1988 to 1997, over the period of the partnership approach, only 110,000 days - less than one third - were lost in an average of 41 strikes.

Can I ask the people around this table one simple question - do you want to return to the industrial relations carnage of the past?

We have also seen a sustained drop in the numbers who are unemployed. However at over 9% it is still unacceptably high. Even on that criterion alone we certainly have not reached our version of nirvana.

Clearly, the goal of an inclusive society is not a reality for many Irish people.

Nor will it ever become a reality if we do not adopt shared objectives and a shared approach to solving them.

Achieving these objectives depends on adhering to terms of P2000; Government is committed to meeting its commitments. Failure to do so on anyone's part will put at risk hard-won achievements of the last decade.

We must continue to build on the progress of recent years; increasing economic prosperity gives us the opportunity to build a truly more inclusive society in this country, a society in which everyone who wants a job, can find and keep a job.

It would be selfish at this stage to deny them this opportunity.

The Government are committed to ensuring that increased economic prosperity is shared, and that those both in work and seeking work are increasingly rewarded by way of reform of the taxation system and the welfare system. This can only be done if there is strict control of the public finances.

Otherwise, we run the risk of letting the public finances run out of control, with disastrous consequences for the Irish economy. We went down that road in the 1970s and 1980s and we don't want to go down it again.

The Government has set limits for the rate of growth in public spending. Prudential management of the public finances means that the resources available to fund extra spending in any year are finite: the challenge for government is how to apply those resources for the greatest good of society in general.

The Government intend to use whatever extra resources are available to build a fairer society, to tackle our major social problems and to address the needs of those groups who do not have loud voices to speak on their behalf - people like pensioners and carers and those with disabilities.

The Government will honour its commitments to improve the range of services which we provide to help people move from welfare to work, from exclusion to inclusion.

The Government could conceivably use the extra money available to fund generous increases for some public sector workers, in excess of what has been agreed under the partnership process.

We will not do that.

I am not saying that public servants aren't entitled to a real dividend from our current economic boom - of course they are. But so are people in the exposed sector of the economy. What I want is a solution that offers a dividend to both groups. One group cannot claim precedence over the other. One cannot claim to be more deserving than the other.

It took the best part of ten years to lay down the foundations for our current economic success. A wage spiral could destroy them in just ten months. Inflation would lead to a loss of competitiveness, and that, in turn, would lead to a loss of jobs. We would be back to the days of emigration, stagnation and desperation.

There is a better way. Changes in the tax system, properly managed, can yield a generous economic dividend for every worker in this country in both the public and private sectors. Those on low and middle incomes can get a better deal. Those seeking work can be encouraged back into the workplace or into work for the first time by a fair reward for work through reduced taxation and a minimum wage.

For its part the Government intends to honour its P2000 commitments. I feel sure that everyone around this table can say the same. I look forward to that reassurance.