merrion street

President of Congress, Jack O’Connor

General Secretary, David Begg

Delegates and Friends,

I am very pleased to have the opportunity to address you at the

beginning of your Delegate Conference here in Killarney. We meet

at a critical time for the future of our country. You and I have a

shared commitment to the well-being of the people of this island,

especially those at work or looking for work. I want to outline to

you here this afternoon what my Government is determined to do to

resolve this crisis, and how we can work together to make that happen.

This Government has an unprecedented majority. The people have

entrusted us with the task of fixing our broken economy and

re-establishing our economic independence, while restoring trust in

society and respect in the international community. That is the

task. It has to be done, urgently and comprehensively.

Let me assure you this afternoon: I am up for this challenge. The

Government will not fail the people. We have begun with energy and

determination, and that is how we will continue.

The crisis that we face has many strands to it: the NESC described it

as a five-part crisis, and they were right. We have to stabilise the

public finances, we have to restore economic growth, we have to fix

the banking system, we have to deal with the employment challenge and

all of its social consequences, and we have to deal with the

reputational damage incurred by the country, by many of our

institutions and by politics and public administration.

I am under no illusion about the scale of the challenge. But I know

that avoiding it, deferring it, or equivocating on the scale of it, is

pointless. The Irish people know that. You know it, and the

members of trade unions right around this country know it.

We cannot change the past but we can influence our own futures, above

all by doing what it takes to restore our economic independence, so

that we have control of our own affairs without being dependent on the

wishes or the approval of outsiders.

We need to build the confidence required to enable us to re-enter the

financial markets, as lenders accept our capacity to run our own

affairs. That means making the necessary adjustments to ensure that

our spending and revenue are on a sustainable path, while we make the

structural changes to restore competitiveness and make Ireland an even

more successful location for investment, enterprise and jobs.

We have met all of our obligations to date to our funding partners

under the Programme of Assistance. We will continue to do so. We

will take the necessary steps to bring spending into line with our

capacity to fund it, and we will enhance the revenue base of the State

in ways which are fair, sustainable and facilitate growth and

employment.

The decisions we will have to take are not easy, and we know that many

will not be popular. But I can promise you this: they will be fair,

they will be balanced, and they will support our strategy of getting

the country back to work.

We have embarked on a comprehensive review of public spending to help

us in this process. For the first time, we are looking rigorously

and in the round at all aspects of spending. Nothing is excluded

from consideration. We will probably conclude that there are some

things that the country simply cannot afford, and they will be

dropped. There are some things that we cannot afford unless they are

done very differently, at a lower cost, and they will be changed.

There are some things which may be better done by the private sector

or the voluntary sector, within a framework set by the Government, and

we will be focused on the ends, rather than the means.

And there are undoubtedly other things which the country needs and

which only a well-managed and cost-effective public service can

provide. These will be maintained, and expanded where necessary.

We also need to consider whether assets that are owned by the State

are producing the best social and economic results, or whether they

would be better placed into other hands, where investment and

innovation are more likely to be possible, for the common good. A

careful objective assessment of that option is also taking place. You

are aware of our commitments in the Programme for Government in this

regard.

How we fund activities which are necessary in the public interest must

also be considered. The Government’s position on income tax rates is

clear. But there are many other sources of revenue, and there are

sources of revenue which many other countries rely upon, and which we

will introduce as part of a balanced and fair system for funding

necessary public services.

At the heart of our efforts is the maintenance and creation of jobs.

While showing some signs of stabilization, the reality is that the

number of those who are unemployed is far too high. Equally

unacceptable is the continuing fall in the numbers in employed.

The economic and fiscal crisis leaves the Government with little room

for manoeuvre.

But within those limits, we have introduced the Jobs Initiative to

help restore confidence in the economy and generate some momentum.

Here in Killarney its appropriate to note that a central focus of our

efforts is the tourism industry.

This year we have already seen growth in the sector: trips to Ireland

for the first three months of 2011 increased by 8.6 % compared to last

year.

We want to build on this progress.

That is why we have reduced the level of VAT on a range of

tourism-related services from 13.5% to 9% with effect from last

Friday.

This new 9% rate will apply to restaurant and catering services, hotel

and holiday accommodation, and entertainment services like cinemas,

theatres, museums and amusement parks.

It is essential that every business reflect the VAT reduction in their

prices, immediately, and in full.

Last week I also launched the Visa Waiver Scheme – perhaps the most

radical change in Irish immigration policy since the coming of the

Single Market.

This will encourage more visitors from emerging markets to come to Ireland.

As part of the Jobs Initiative we also halved employers’ PRSI on jobs

paying up to €356 per week.

This will reduce the cost to employers of sustaining existing jobs,

and of creating new ones.

We have also provided an extra €40 million for the 2011 School Summer

Works Scheme, and an extra €75m for shovel ready transport projects to

help create and sustain jobs.

Given the demands placed upon the hard-pressed taxpayers of this

country, there must be absolute clarity that the Irish public service

is operating to the highest possible standards, at the lowest possible

unit cost. Any excess cost means unmet needs among our citizens,

unreasonable pressure on under-resourced public services, and a delay

in achieving the economic and social goals which we all share. That

is why the full implementation of the terms and the spirit of the

Croke Park Agreement is so important.

I recently met with the Chairman and members of the Implementation

Body for that Agreement. I congratulated them on their work to date

and I commended the public service unions and their members for the

scale of the adjustments which have already taken place. I share

their view that there has been much unfair and unreasonable criticism

of the Irish public service over recent years. I acknowledge the

hard work and commitment, and indeed the flexibility and innovation of

so many public servants across all the branches of our system.

But I am equally aware of the frustration, and even despair of many

committed public servants at the outdated structures, the inadequate

processes, the fragmentation and arcane work practices which blight

their working lives and frustrate our objective to have the highest

quality public services available to those who need them.

That is why nothing less than public service transformation is

required. It is why the Government established a new Department of

Public Expenditure and Reform to provide effective and focused

political leadership for the task of managing change. The progress

to date under the Croke Park Agreement has been impressive, but it is

only the beginning. If we are to maintain the agreed framework of

Croke Park – and the Government is fully committed to doing so – then

we must have the pace and scale of change that makes honouring those

commitments possible.

There is an onus on management and staff at all levels of the public

service to make the Croke Park Agreement work in their own areas of

activity. There is an onus on those who manage the system at senior

levels to make the changes that can only be made at a strategic level,

to liberate the rest of the system to get on with delivering services

and programmes, knowing they have the support of world-class back-up

systems.

Our future has to be based on facing into, embracing and indeed

driving change, rather than resisting it. I can give you this

assurance: a public service and its representatives that embrace this

change, that recognise that the public interest and their own long-run

interest are one and the same, that show the determination and

creativity of which I know they are capable, will find in me their

best champion, and their most willing partner.

In addition to reducing expenditure and increasing revenue, the task

of this Government is to accelerate recovery and renew growth in the

economy. And there is much to give us confidence in this task. The

impressive performance of our export sector, the quality and dynamism

of our tourism sector, the skills and flexibility of our people, the

international outlook of our business community: all of these have

been evident over recent months. The return to growth is slow and

has yet to impact on our unemployment problem. But we know the path

ahead. We know it involves not only restoring competitiveness, but

making the structural changes to maintain it. That’s why it is

critical that banks not only demonstrate that they have new credit to

lend, but demonstrate that it is actually happening for new business

and new jobs

Some of the necessary change is painful. I acknowledge that workers

across the public and the private sectors have, in many cases, had to

accept significant reductions in their earnings in order to sustain

jobs. Work practices, staffing levels and settled ways of doing

things have all been challenged and, in many cases, totally

transformed. I acknowledge the constructive spirit in which trade

unions and their members have met that challenge when faced with

incontrovertible evidence about the risks to employment.

Of course, the burden of adjustment should not fall on ordinary

workers alone. At its first meeting the Government reduced the pay

of the Taoiseach and Ministers, and most recently Minister Howlin has

brought in further reforms to the highest levels of public sector,

including the pay and bonuses of semi state chief executives. Senior

managers have to set an example, not just in the public service, but

right across the economy. We are all in this together. We all have

to play our part and show example in how we approach our own

responsibilities. Those who neglect to play their part can expect no

sympathy from this Government. That goes for those operating in

sheltered sectors of the economy, in the professions and in other

areas where extraordinarily high incomes have persisted even in this

time of deep recession. That has to change, and it will change.

Both the cost of living and the cost of doing business in Ireland

remain too high. Such high costs and prices remain a barrier to

strong economic recovery.

There has been, rightly, a lot of focus on changes in the way in which

wages are set and regulated. At a national level, I know that there

has been a continuing dialogue between Congress and employers in the

private sector, just as the Croke Park Agreement has provided a

framework for partnership in the public service. Wage determination

is primarily a matter for the parties, whether at national or local

level. The Government, for its part, has no ideological position on

how wage bargaining should be structured, and we will continue to

dialogue with all sides in exploring how this should evolve over the

months and years ahead.

But I will say this: how we behave in the labour market, how wages

evolve by comparison with our competitors, and how costs generated

within the economy evolve over time are critically important for

recovery and jobs. The approaches taken by employers, trade unions

and the Government should be consistent with each other and with the

objective needs of an economy struggling to recover and grow

employment. That is the imperative. How we organise ourselves to

achieve it is a matter for a discussion in which I am happy to

participate.

I want to comment briefly on the ongoing discussion about the

regulation of pay and conditions in certain sectors. First of all,

let me say there should be no ambiguity about where the Government

stands on the protection of vulnerable workers. This is the

Government that insisted on reversing the unwarranted cut in the

National Minimum Wage. We felt that was unfair and unnecessary, and

we acted. That required a renegotiation of the EU IMF Memo of

Understanding

When it comes to the wage-setting machinery of Joint Labour

Committees, Employment Regulation Orders and Registered Employment

Agreements, the fact is that everyone has long accepted the need for

change. That has been the common view of employers and Congress for

some time.

The radically altered circumstances of recent years have turned that

into an imperative for radical change.

The thrust of the reform agenda has to be to retain employment and

create new jobs.

The sectors and occupations where the greatest job losses have

occurred in the economy generally coincide with the sectors where

statutory minimum wages are most prevalent. 82% of the fall in

employment in the first quarter of this year was in the retail,

accommodation and hospitality sectors.

The categories of workers covered by Employment Regulation Orders are

most vulnerable precisely because they suffer the highest rates of

unemployment.

While demand in these sectors is clearly a key factor, labour costs

represent a relatively high proportion of total output costs in these

locally traded sectors.

We must not only stem the haemorrhage of jobs in these sectors but we

must move to generate new job opportunities. Our commitment to

fairness to those on low incomes must embrace those locked out of

employment opportunities. We must move quickly and decisively to

ensure that our labour market institutions are reformed so that they

respond appropriately to this crisis of unemployment.

The analysis carried out in the Duffy/Walsh Report, the submissions

made by interested parties and the discussions which have been held by

Minister Richard Burton have all been a valuable input to clarifying

the shape of the radical changes which are most appropriate to our

current conditions. The Government have not yet reached a conclusion

about the precise changes to be made, but it is clear that there is a

very large measure of common ground. Our decision will be a careful

and measured one, taking account of all of the important

considerations which have been legitimately put forward by the

Congress and others.

This is a time of great change. That much is clear. Indeed, I note

that you are discussing at this Conference changes in the way the

Congress itself is organised and does its business.

When I addressed the National Economic and Social Council recently, I

said that this Government does not have all the answers, and neither

does the public service that works on our behalf. We are open to

ideas from every quarter in framing our policies in order to achieve

our goals and honour our commitments in the Programme for Government.

In that context, I want to assure you that I am very much open to the

views of the Congress on the many issues of concern to you.

And why would I not be open? The Irish Congress of Trade Unions is

the largest civil society organisation on this island. Your members

are at work across every sector of the economy, in every part of the

country and at all levels of skill and experience. The Government is

extremely interested in your views, and that of your members, that

flow from that range of experience and knowledge.

There are many arrangements and institutions through which that

contribution is being made, in the industrial relations and training

areas in particular and, in my own Department’s area of activity,

through the work of the National Economic and Social Council.

It may be that formal Social Partnership Agreements are not

appropriate at this time. But I recognise that social partnership is

a status which derives, not from formal agreements, but from the role

played by key interests in civil society, including the trade unions.

That is a valuable European tradition and I will uphold it. In

particular, I plan to follow up on my recent meeting with your

President, your Vice President and your General Secretary with further

meetings to review the broad areas of mutual interest and concern, so

that a structured dialogue can take place with a whole-of-government

perspective. I propose to engage with the other social partners in a

similar spirit.

In concluding my address this afternoon, and in wishing you well in

your deliberations over the rest of this Conference, I want to

encourage you, as representatives of your members all across this

island, to approach your task with energy, ambition and confidence.

I applaud the work of the Congress as an all-island body for its

steadfast championing of peace and reconciliation across troubled

communities and the resolute rejection of sectarianism and violence.

I would like to congratulate Mr Eugene McGlone on his election as

President. I wish him the very best in his new role. I would also

like to acknowledge the work of your outgoing President Mr Jack

O’Connor. He has been a very effective President and I wish him well.

The economic challenges which we face are daunting, but they can be

mastered. That is our common challenge and has to be our common

conviction.