Social partnership is not confined to pay moderation, although some politicians, employers and economists might choose to see it in that light. The European template that has been used so successfully here for the past 12 years involves broad-ranging co-operation between government, employers and trade unions and is a significant departure from the traditional, British-style, free-for-all bargaining. But change is slow and difficult and there are those - on both sides of the negotiating table - who would revert to what they know best. In general, such groups are motivated by selfish interests and short-term gains. At this stage, the benefits secured through social partnership should be evident to all in terms of increased profitability, greater productivity, vastly higher employment and rising standards of living. Government finances have been transformed and there is a real prospect of generating full employment.
But that is not the full story. Some employers and businesses have made very large profits indeed arising from Government taxation changes and the restraint of workers. And certain categories of employees, in the private and public sectors, have fallen behind because of productivity deals and militant actions by other groups. In addition, low-level dissatisfaction within the PAYE sector has been exacerbated by disclosures of large-scale DIRT and income-tax evasion by self-employed people in the 1980s and 1990s. In such a climate, sectional militancy is to be expected.
The secretary-general of the Irish Congress of Trade Unions, Mr Peter Cassells, has recognised that this State and its experiment in social partnership are at a crossroads. The ICTU was committed to finding solutions to the present problems, he said, and to keeping our prosperity going. But, he continued, that prosperity must be shared more fairly and the budget surplus used to improve livings standards and invest in services for vulnerable groups such as the elderly, people with disabilities and the homeless.
Last Tuesday the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney, stated that new ways must be devised to ensure that all sections of society were able to share in our economic success. There would have to be much greater emphasis on profit-sharing and employee share ownership in any new partnership agreement involving the private sector. As for the public sector, new and imaginative mechanisms of pay determination would have to be devised to allow for the management of change and the introduction of new technology, she said.
The Government is expected to publish radical proposals on public service pay within the next few weeks, in which it will propose abolishing traditional pay relativities in favour of productivity and other considerations. Such an approach, if agreed with the trade unions, would bring the public service into line with the private sector. But changes in the mechanisms for managing public service pay - no matter how welcome - are unlikely to defuse the existing militancy of nurses and other workers. A strike by nurses now seems likely in October. And paramedics, teachers and others are waiting in the wings with related demands. Transport and building workers are also pursuing wage claims that could fuel inflation and undermine economic growth. It is in everybody's interests that fair and equitable settlements should be reached with workers. But lessons from the past teach that tax cuts are a more effective means of raising average living standards.
In all of this, the main beneficiaries of wealth creation must also be encouraged by the Government to contribute to social equality through a fairer and more transparent tax system.