Address by An Tánaiste and Minister for Health and Children, Mary Harney, T.D. at the Plenary Session of Social Partnership
We are nearing completion of the sixth of our partnership agreements over 18 years.
In this time, particularly in the last ten years, our country has been transformed. We have achieved tremendous economic and social progress so far. Social partnership has undoubtedly contributed to this achievement. Our achievement should not be downplayed, set aside, or taken for granted.
It has been a social success as well as an economic one. Talk of a successful economy but an unsuccessful society is very wide of the mark. We would not have achieved greater social progress with less economic success. The Government and the social partners have always recognized the need for an integrated economic and social strategy and we have always implemented one.
Many other countries would be very pleased to achieve what we have done. Observers continue to analyse and praise our success. While it’s gratifying to hear praise, we know ourselves that social and economic progress is never achieved once and for all. It needs constant work, constant reform and new ideas.
We know the familiar challenges we are addressing. To mention just some: building up roads, transport, waste and water facilities; achieving continually higher education attainment, from early school to post-doctoral level; and finding a sustainable and fair way to finance and provide long term care.
We know too that there are new challenges for us in a rapidly-changing European and global context: winning more high-value business and jobs; competition from developing economies, whose people deserve their chance too; how to develop free and fair trade in open markets; the financial imbalances arising from ageing populations and excessive debt in some parts of the world.
How can our partnership process help us address these familiar and new challenges?
Partnership in reality
Partnership is best when it is a partnership in reality, that is, when it helps us deal with plain realities. It is best when it involves a clear agreement on a small number of important, relevant, achievable priorities, and delivers on them. It is best when it promotes reform and change in the interests of all our people.
Partnership was founded when the reality staring us in the face was a disastrous economy in the late 1980s. Thankfully, we don’t face that sort of meltdown now. But we’ll still do best in partnership if we recognize upfront and openly some present realities, and make them count in what we do.
One plain reality is that the jobs we have and the prosperity we enjoy come from competing and winning business in a highly competitive world. We are an open, trading and investing economy. That’s the way we have to continue. There is no other economic future for us. If we make ourselves uncompetitive, we will lose. If we constantly work to stay competitive, we will continue to win.
If we seek to make things too easy for ourselves, as if the world owes it to us, we will find out very quickly the world will ignore us. We cannot wish away this reality.
Private sector engine of public resources
Another reality remains as true as ever. The resources for public investment and spending will be generated in the private sector. We can only safely and sustainably grow public spending within our economic capacity. Positively, that challenges us to expand our productivity and remove the barriers to innovation and enterprise, by more competition, for example.
It also means not over-loading the engine of private sector activity; not over-taxing today’s workforce; and not over-burdening future generations with excessive deferred taxes in the form of borrowing.
Public spending growth
We all know that there have to be limits, every year, on public spending growth. What those limits should be is ultimately a matter for government decision in the prevailing circumstances. Sustaining Progress very sensibly recognized that current spending should grow no faster than GNP growth, as a foundation of sustainable public finances. It effectively recognized that not every desirable policy can be financed at once and pointed towards prioritisation.
We know also that one of the reasons for a limit to spending growth is that the economy, in many areas, cannot absorb higher spending without driving up inflation. We saw this happen in the recent past. There is no social or economic gain in it.
No responsible Government and no partnership agreement would ignore these realities. Shopping lists of policy proposals that take no account of capacity and available finance will do no-one any good.
As taxpayers and members of the public, we all have a vital interest in both the effectiveness and the composition of public spending.
The partnership agreements have allowed us to balance moderation in pay increases with reductions in taxation and increases in services. It was recognized we would all benefit from the economic and social gain that would follow.
Health policy and spending
In microcosm, the same balance can be struck in health spending.
Everyone wants increased health spending. I think it’s fair to say also that everyone wants increased health spending to deliver more and better health services.
Health is very people-intensive. 70 per cent of the health budget is made up of salaries and pensions. Within a limited budget, there is a balance to be struck between legitimate pay increases for existing staff and the funding of new services provided by new staff. This trade-off is not new or unique to Ireland. Every government in every country faces the same challenge when trying to develop new health services. A sustainable level of growth in pay is important for a steady build-up of these services.
The partnership has also taken up the challenge of public sector reform. Clearly this should make a visible difference for health service reform and health service outcomes too.
I have said before that we should not look at the health service as an impersonal system that we are all condemned to obey. The system is a collection of all the rules and roles, procedures and work practices that have grown up over years. They can be changed and reformed for the better, one by one. The Government has made an important start.
But no one person and no one group can do it alone, neither the Minister, nor a hospital manager, nor the consultants nor the nurses. Reform involves us all.
It is clearly an area where a strategic view can be taken in partnership. We are all users of health services. We all have an interest in better health outcomes. Very many of us are involved in delivering health services. And we all know that financial and other realities cannot be wished away.
We can achieve a lot more reform, and a lot better services for ourselves as a society, if we work together. This is our health service and it affects all of us. It makes far more sense for us to seek out and welcome change, rather than resist reform and seek to be compensated for every change.
In summary, I see three ways where the traditional partnership approach can work for better health services.
•first, it will unlock the full potential of our health spending to lift our eyes above the horizon of legitimate, but necessarily limited, sectional interests;
•second, the public and private sectors can complement each other and work together in a way which can benefit all patients, public and private;
•third, resolving differences without industrial action is obviously in patients’ best interests and in all our best interests.
Each of us comes to the partnership process with our respective responsibilities and mandates. We are here to work together to find ways to meet those responsibilities and mandates.
The political responsibility and mandate of the Government is unique and will continue to be the bedrock for our engagement in the process.
The partnership process, although not part of our constitutional governance, is of considerable benefit in the successful running of our modern state. Our task is to ensure it continues to be so.
Partnership will be judged by the public on its results, as it ought to be.
So let us make sure it addresses realities and works to produce effective, reforming, visible results for the country.