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Social dialogue must include everyone

The troika made a major mistake in deciding the terms of Ireland’s bailout programme when they failed to factor in its social impact according to Minister for Finance Michael Noonan.

Speaking at the IMF conference in Dublin Castle last Monday, he said the same mistake had also been made in other countries when they failed to consider the effects that austerity policies would have on people.

One of the major lessons to be learned from Ireland’s experience, according to the Minister, was that all future multiannual programmes should, from the very beginning, address the social consequences of the policies being proposed and ensure that these impacts were addressed.

This is a very important insight. If the social impacts of policies had been addressed from the very beginning there would be far less anger and alienation among people today.

The failure to take an integrated approach meant that while the fiscal situation has improved dramatically and the debt/GDP ratio is falling, poverty has also increased.

Though the poverty line has fallen in the period since 2008, the number of people experiencing poverty has increased substantially.

The social services and infrastructure on which people depend, such as health and housing, are not meeting the basic requirements people need if they are to live life with dignity.

Now that the economy is beginning to improve and some additional resources are likely to be available, Government is proposing to begin a process of social dialogue as it prepares a multiannual plan for Ireland’s development.

Such a process is very welcome as long as it is fair in both its approach and its outcomes. Social dialogue in various forms is common across Europe’s most successful economies and can play a key role in building a sustainable recovery here in Ireland.

Some reports suggest this social dialogue will deal with pay and taxation issues and map out the road ahead for some years. These are critically important issues as they determine the disposable income that people with jobs will have.

Four issues
There are four key issues that need to be recognised, however, before Government decides on the shape of such a process:

  • People with jobs will be very aware of the importance, not just of pay and tax, but also of what is known as “the social wage” ie the services and infrastructure to which they have a right.
  • Many people do not have jobs; these include older people, many of those who are ill or have a disability as well as those who are unemployed. These are among the most vulnerable in Irish society today.
  • There are many issues beyond wages and taxes that must be addressed. Increasing investment, ensuring access to credit for SMEs and enhancement of capabilities in the economy and society are just a few of these issues.
  • If a social dialogue process deals with the issues of pay and taxation before social services and infrastructure are addressed then the concerns of only a part of the population will be given priority. Ensuring this is avoided requires explicitly factoring in the needs of all at the beginning of the process.

These issues should be approached in an integrated manner. Government will make the final decisions on all policy issues. That has always been the case. But it is important that any new approach adopted by Government is integrated and inclusive.

A social dialogue process would be a very positive development for Ireland at this point in our recovery. Government needs to engage all sectors of society. Otherwise it is likely to produce lopsided outcomes that will benefit those who are engaged in the social dialogue process while excluding others, most notably the vulnerable.

If Government wishes the whole society to take responsibility for producing a more viable future then it must involve all of us. Responsibility for shaping the future should be shared among all stakeholders.

There are many reasons for involving all sectors in this process: to ensure priority is given to wellbeing and the common good; to address the challenges of markets and their failures; to link rights and responsibilities.

Shared responsibility
When groups have been involved in shaping decisions they are far more likely to take responsibility for implementing these decisions, difficult and demanding as they may be.

A process of social dialogue involving all and not just some of the sectors in Irish society would be a key mechanism in maximising the resources for moving forward and in ensuring the best possible outcomes for Ireland.

Ireland urgently needs to set a course for the future that will secure macroeconomic stability, a just tax system, strengthened social services and infrastructure, good governance and a real commitment to sustainability.

A social dialogue process that includes all the stakeholders in Irish society would go a long way towards achieving such a future.

There are lessons to be learned from the old social partnership process. It is important that this learning is based on evidence and not on the caricature of social partnership that is often presented by commentators.

One way to begin the process would be for the National Economic and Social Council ( NESC) – an existing instrument of social dialogue involving broad sectors of Irish society, independent experts and Government Departments that has continued to produce clear analysis and sensible recommendations – to produce a balanced assessment of the strategic priorities to be pursued under the leadership of the Government in the period ahead.

This article by Dr Seán Healy, director of Social Justice Ireland, was published in the Irish Times on 23 January, 2015. It may be accessed on the Irish Times website here