Balance can shift to improving reward for work, says council

All things are possible, if the Republic can maintain growth rates of at least 5 per cent a year

All things are possible, if the Republic can maintain growth rates of at least 5 per cent a year. That is the main finding of the latest report of the National Economic and Social Council, a copy of which has been seen by The Irish Times.

This means that we should be able to increase spending on social welfare, public transport, health and education, provide better housing, undertake more social inclusion initiatives, begin funding the old-age pension system properly and give everyone a pay rise.

Whether this is enough to satisfy rising expectations, especially in the PAYE sector, remains to be seen.

The final draft of the NESC report, Opportunities, Challenges and Capacities for Choice, is expected to be agreed when the council meets tomorrow. Commissioned by the Taoiseach, Mr Ahern, to prepare the ground for talks on a new partnership agreement, the report is optimistic about the future for the economy and society at large.

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However, it also warns that the existing model for such agreements is no longer valid and that "a new vision is required to lead us into the next century". It lists four "foundations" for a successful society. These are a dynamic economy, and a participatory society, based on consistent economic development that is socially and environmentally stable, combined with a commitment to social justice.

It warns that this can only be "achieved through recognition of the constantly evolving requirements of international competitiveness", which is "a necessary condition of continuing economic and social success". However, it adds that the goals which have underpinned that success so far are no longer adequate.

"It is now clear that wider aspects of the quality of life, and the sense of fairness in economic and social affairs, have acquired a much greater significance over recent years."

To achieve full employment will require greater adaptability and lifelong learning from employees and the creation by employers of the necessary conditions and facilities to allow this to happen.

"Social inclusion is essentially about full participation in society, and such participation is possible only with access to core taken-for-granted rights" in the areas of education, employment, health, housing and social services.

The report identifies continuing ability to adapt to the global market as essential to achieving economic and social success.

Social inclusion is identified as part of a "reciprocal relationship" which will allow Ireland to perform well in the information society by building "a competitive, knowledge-intensive, high-skilled human resource base, committed to lifelong learning".

Infrastructural development must also be based on balanced regional development. It adds: "A particular priority is the potential for enhanced infrastructure links with Northern Ireland."

The council commits itself to continuing support of the "essential elements" that have underpinned social partnership. These include maintaining low inflation and "an evolution of incomes that pays dividends to those at work consistent with maintaining competitiveness."

One way it envisages rewarding work is by large-scale investments in public transport, and in housing, to improve the ability of Irish people to enjoy a higher real standard of living and contribute to social cohesion.

Childcare is another priority, "to achieve a balance between work and family responsibilities. Childcare is a priority to meet changing labour market developments but also because childcare shortages and high costs erode living standards".

The report also accepts that pay rises are consistent with protecting economic success to date. "With the attainment of high rates of employment and a slower prospective rate of increase of the labour force, the balance between pay and jobs can afford to shift towards improving the reward for work."

It continues: "Rising real disposable incomes will gradually begin to replace employment growth as the principal benefit from further economic success."

However, the report also warns against using the proceeds of growth in a short-sighted way, either by "temporarily boosting incomes and public spending on the basis of an assumed continuation of exceptional conditions" without funding the necessary infrastructure or, at the other extreme, "appearing to withhold justifiable improvements in economic rewards, while also postponing measures to tackle an evident imbalance between economic and social development".