I would like to begin by thanking you for the opportunity to address you here this morning.
The theme of this year’s conference – Rules of Engagement – is indeed important and opportune.
It is a theme that the new Government has had to get to grips with very quickly.
As Head of the Government, I see it as my job to get the best out of my people, the Cabinet and the wider public service. Engagement involves driving actions and then communicating the decisions.
It is this collective engagement that should motivate, encourage and energise all workers and people to turn around the country and regain our economic sovereignty.
Economic Outlook is Brighter
And I have great confidence that we will achieve this goal.
We all know Ireland has many strengths, and this small island of ours has enormous potential.
Despite our current difficulties, we have a bright future ahead.
I know that many of you agree with this assessment. I understand, for example, that IBEC is predicting growth at twice the European average for the Irish economy in coming years.
We have a young, dynamic, flexible and highly educated workforce.
We have growing levels of R&D activity, an attractive corporate tax regime, and a hub of internationally trading businesses.
We have improved our competitiveness significantly. Business costs have fallen across the economy, and productivity grew last year at the highest rate since 2002.
Our record for attracting inward investment is exceptional, and has remained strong despite global economic conditions.
In recent weeks I have had the privilege of visiting new investments by leading international companies right across the country, from Coca-Cola in Wexford to MSD in Tipperary, from Pfizer in Dublin to EA Games in Galway.
However, as we all know, the international situation remains unpredictable. We are working with our European partners on solutions that will improve the way the Eurozone works as a whole.
In the meantime, we must focus on those things that are within our direct control.
In particular, we must make the decisions and budgetary adjustments necessary to get our borrowing back under control, and this will involve difficult choices in the weeks ahead.
Our progress to date is being rewarded. Despite the international turbulence in the past few weeks we have seen some very positive news:
Irish bond yields on the secondary markets have fallen considerably;
The budgetary situation has stabilised with tax revenues slightly ahead of target in the first nine months of the year;
The Central Bank has revised upwards its growth forecast for this year;
Yesterday’s Live Register figures showed a seasonally adjusted drop of 5,400 which represents the first annual decrease on the Live Register since April 2007.
The funding situation for Irish banks has stabilised.
Support for Business
We need to build on this momentum.
Continuing to meet our government deficit targets is fundamental to confidence and credibility. The interest rate reductions secured by Government has provided a welcome budgetary buffer against any deterioration in global economic prospects in 2012. But we must reduce the deficit to at most the 8.6% of GDP target that we have agreed with our EU partners. Attempting to re-negotiate our deficit targets with our EU partners would be a major setback to the credibility that Ireland has rebuilt in recent months.
I have said on many occasions that I want to make Ireland the best small country in the world in which to do business.
We are working to improve our cost competitiveness, minimise regulatory burdens and invest in vital new infrastructure such as water, energy and telecommunications as part of the recently launched NewERA programme.
In relation to small business, one of the key areas that we are working to address is the difficulty of accessing credit.
As part of the jobs initiative, work is advanced on the design of a Temporary Partial Credit Guarantee Scheme.
The Government is also developing a suitable micro-finance fund for the micro-enterprise sector.
The Government under the umbrella of the recently announced Strategic Investment Fund, and building upon ongoing work by Enterprise Ireland and the NTMA, is seeking to attract more venture capital funding for Irish businesses.
These Schemes are a step towards a more sophisticated and accessible financing environment for SMEs in Ireland.
Of course, the funding situation for both our banks and businesses could be further improved if corporate treasurers in Irish industry voted their confidence in Ireland’s economic prospects by repatriating the corporate deposits transferred overseas in recent years.
Public Service Reform & the People’s Recovery
I firmly believe that when recovery comes about, it will be the people’s recovery. When people abroad look at Ireland, they see our difficulties. But they are amazed by how we, as a people, deal with these challenges together. Ireland is an example of success through collective hard work and determination.
The public service has been and will continue to be at the coalface of the recovery effort. There are large challenges for the Government in engagement and management of the process of cost cutting and structural reform.
In many instances it should not be seen as a burden but as a great opportunity. This is why at the heart of this Government’s agenda is Public Service reform.
We have established a dedicated Department which combines expenditure and reform under Minister Brendan Howlin.
We aim to improve performance, both of individuals and organisations.
We aim to ensure that public services are produced as efficiently, but also as effectively and strategically, as possible.
In short, we must "do better with less". I know IBEC has taken an interest in public sector pension policy. The recently introduced single scheme for public service pensions will provide for an economically sustainable, straightforward and efficient structure for the management of public service pensions.
Furthermore, the Programme for Government also commits the Government to ending income tax relief on contributions to top-tier pension schemes that deliver incomes in retirement of €60,000 per year or over, whether in the public or private sectors. This is something that will be worked on in the coming weeks and months as part of the budgetary process.
Crucially, at a time of great change, we need greater flexibility in the deployment of people and resources.
We have identified specific targets including, for example:
establishing shared backroom operations in areas such as HR, payroll, finance and pensions;
using new techniques to reduce costs and improve customer satisfaction; and
enhancing Leadership by developing the Senior Public Service, focusing on key skills and addressing under-performance when it arises.
This change agenda will pose a huge challenge to public service managers.
We are appointing a Programme Director, following an open competition, to lead a new Reform and Delivery Office within the Department of Public Expenditure and Reform.
In delivering on this change agenda, we will take on board the best practices and expertise from the private sector, while retaining the best values and qualities of the public service.
Above all, we want to work with public service staff to allow them achieve their full potential.
Social Dialogue
The road to economic recovery will present challenges to all workers and leaders in all sectors of the economy. This is why the Government and Ministers will be engaging with employers’ representatives and trade unions in the weeks and months ahead as we tackle the problems facing the country.
There are real benefits for a country such as Ireland from effective social dialogue, to give greater certainty to investors to maintain industrial peace and strengthen social solidarity.
Social dialogue of this nature is well-established, not just in Ireland but throughout Europe.
However, this will not amount to a return to the rigid social partnership structures of the past. We must retain a more flexible, adaptable model, which can support, not hinder, change. We must learn from the past failures of social partnership, including the need to respect the role of Government and the Oireachtas. But, given the scale of our difficulties, we must also try to find ways to work together in the national interest.
Employment Regulation Reforms
One of the important areas where the Government is already engaging with IBEC, as well as other stakeholders, is reform of employment regulation.
The Minister for Jobs, Enterprise and Innovation is pursuing an ambitious reform agenda in this area.
Reforms to the Joint Labour Committee and Registered Employment Agreement mechanisms will overhaul the system and make it fairer, more competitive and more flexible, taking account of the recent High Court ruling.
The Minister is also working to transpose the Directive on Temporary Agency Workers in a way that respects the employment rights of agency workers, while safeguarding the labour market flexibility that Ireland must maintain to maximise the opportunity to retain and grow employment.
The Minister is engaging in discussions with IBEC and other representative bodies on this matter. I believe that in the current challenging economic circumstances, every effort must be made by all parties to maintain and grow employment and to smooth the way to recovery.
Conclusion
As I said I believe that when economic recovery comes about that it would be the people’s recovery. The product of the effort and drive of everyone who is working harder for the collective good.
Everyone in this room has a role to play in this national effort. Whether its HR managers working with staff to get the best result for their businesses or CEOs designing business plans to capture even more export market share, it will all count towards the shared goal of regaining economic independence and creating a better future for families and workers alike.
I look forward to working closely with IBEC and all your member companies as we tackle the challenges facing Ireland in the years ahead.
Thank you again, and I wish you the very best for your conference.