Health Strategy - INO Conference

9 May 2002

INO Conference 2002 City West Hotel, Dublin Thursday 9 May, 2002
Address by David Begg, General Secretary, Irish Congress of Trade Unions

 

As you may be aware the Employers' organisation IBEC and Congress have been exchanging fraternal messages over the last few weeks about the future of social partnership.

The employers have alleged that unions have not abided by the terms of the agreement and instead have pressed unreasonable pay claims. I think this position is disingenuous for a number of reasons:

  • The income tax exchequer returns for 2001 revealed a shortfall of €1.2 billion against expectations. If pay settlements were running substantially ahead of those provided for in PPF it would show up as a positive movement in income tax receipts. The trend continued into the first three months of this year when income tax receipts were 2.8% down on the same period last year;
  • The disputes resolution machinery - Labour Court and LRC is working effectively;
  • The NIB is the body created by the PPF amendment to ensure compliance with the terms of the agreement. In the past year four major issues have been referred to NIB - The Euro Conversion, Aer Lingus, the Carers' Dispute and the 1% lump sum interpretation - and all have been satisfactory resolved;
  • Recently published CSO statistics indicate the lowest level of strike activity since 1917.

It is a fact that the PPF was a good agreement and that pay increases in Ireland are running ahead of the general trend in Europe. But if you consider that we are in eleventh place in the EU wages league it becomes clear that this recent improvement is only making up lost ground. If you also consider that over the 15 years of partnership the share of national wealth going to profits had gone up from 31% to 50% then employers have little to complain about.

By any standards the conditions for competitiveness in Ireland are very favourable. Business has had the advantage of:

  • A 25% devaluation of the Euro which allows us to sell goods into Britain and the US at a great advantage;
  • Very low interest rates;
  • Capital Gains Tax which was reduced from 40% to 20%;
  • The lowest corporation tax regime in Europe;
  • The lowest social insurance costs in Europe.

It is a good and necessary thing to have a competitive economy - even though I think some of the taxes on business are too low - but we have to ask what is it for? A country is more than an economy. There is no merit, in my opinion, in creating economic conditions that simply make the rich better off. We must surely strive to distribute the fruits of prosperity so that they benefit everyone.

I have said many times over the past few weeks that I am in favour of social partnership. It is not because I think it is necessary for pay determination. Public service unions will have to negotiate with Government as an employer whether or not there is a successor to PPF. But it is because the process embraces a whole range of issues that influence the economy and the quality of life that it is of value.

It is unfortunate that during the course of the General Election campaign there has been a lot of obfuscation of the choices available to us in the area of economic and social policy. Everywhere there are demands for improved public services but the political parties are afraid of the consequences of stating plainly that it is the taxpayer who will have to pay for the required improvements. I think that society has to be mature enough to acknowledge this fact. It is legitimate to expect public services to be effective and efficient but we cannot expect to be able to provide them much cheaper than our European fellow citizens who pay 45.7% of their GDP for these services against our 33% of GDP.

Congress has stated publicly our broad support for the recently published health strategy. I set out our view, which was informed by the INO and other health sector unions, at some length in one of the series of lectures organised by the Office of Health Management. In the course of that lecture I introduced two serious qualifications - the willingness to commit financial resources to deliver the strategy and the management competence to make it happen in reality.

Let us consider for a minute the hill that has to be climbed to bring the health services up to an acceptable level:

The cutbacks implemented from the late Eighties onwards have left us with a legacy of erosion which I think the public is not fully aware of;

  • A 21 per cent reduction in hospital beds in 1987 plunged the health service into a state of decline which got worse as the years went on;
  • As the economy took off from 1994 onwards the population began to increase as people returned from abroad to take up jobs here. This population increase of 14 per cent overall has been concentrated particularly in Dublin although it has affected other parts of the country as well;
  • Paradoxically, advances in high tech medicine have saved lives but have increased the numbers of people with a high dependency on quality medical care;
  • An increasing elderly population by definition places extra demands on a health care system.

Overcoming this legacy of under-investment and demographic changes requires political will. I do not think that will has been demonstrated to date. There is nothing wrong with any Government stating that they want to achieve discernible improvements in service quality for increased financial outlay. But it rings a bit hallow if they do not, at the same time, provide convincing evidence that they will provide the financial resources.

It is interesting to note that the British Government, which faces similar problems with the NHS, has begun to face up to the funding issue. In the recent budget they increased the equivalent of employers' PRSI specifically to fund the NHS. By contrast our Government cut employers' PRSI to the tune of 387 million Euro per annum even though we have the lowest social insurance taxes in Europe. This was a very serious error of judgement that should be immediately reversed by the new Government. It was the result of pressure by the employers' organisation IBEC which we know, thanks to the freedom of information act which revealed details of the meetings involved into the public domain.

Having raided the public purse it is extraordinary that IBEC sees no contradiction in warning the Government against implementing the outcome of the Benchmarking Review Body. All parties to the PPF - Government, unions and employers - freely entered an agreement to set up an independent Benchmarking Body to scientifically compare jobs of equal value in the public and private sectors. There was no compulsion on anybody to enter the agreement but, having done so, they must leave the Benchmarking Body to conclude its task without trying so crudely to influence it by public statements.

I have to admit that I find it profoundly frustrating that our economic system has such a distorted view of the value of different professions. Take for example the banking sector. The Irish Times yesterday carried an article about the reward packages for AIB executives. The Chief Executive Mr Buckley had a salary of €502,000 in 2001 together with a range of bonuses; profit shares and share options that brought his total package up to €685,000. Yet failures at AIB's American subsidary, AllFirst, nearly wrecked the bank. How is it that astronomical salaries, beyond what anyone could possibly need, are considered acceptable and even necessary for some jobs? How is it that these jobs are considered to be so much more valuable than the work of sustaining life and caring for the sick? Why is it that granting the means of providing a decent livelihood for people who have such a vital role exercises the minds of our top economists and business leaders to such a degree? While not wishing it on them, one wonders that if any of these commentators were to contract a serious illness would they still feel the same way about the relative merits of a nurse or a banker. I suspect it might change their perspective somewhat.

The Benchmarking Body is scheduled to report in June. I have no idea what they will recommend but I hope it will be satisfactory. You may expect, however, that between now and then every liberal market economist will be out in the media explaining how the deteriorating state of the public finances will not permit payment. I warn you to expect this and I warn you that our task of delivering a satisfactory outcome on benchmarking will not be easy because the public finances are not as good as they were and a new Government will play hardball on the strength of a fresh electoral mandate.

But, at the end of the day, this comes down to the value society places on having a decent health service. There are 15,000 registered but non-practising nurses in Ireland. The health strategy calls for the employment of 10,000 new nurses over the period of its implementation. Without those nurses the plan will fail and they will not be motivated to work in the health service unless salaries and conditions of employment are as good as they can get in the private sector. If we as citizens of Ireland want a health service as good as the best in Europe then we have to pay for it - and that means paying nurses and other staff in the health service what they are independently judged to be worth. The same principle applies right across the public sector.

Healthcare was the major casualty of the tax-cutting formula for recovery adopted 15 years ago. Hospital beds were cut wholesale. Patients fleeing the public system made private providers rich. Two-tier medicine became entrenched.

This was not without consequences for the common good. We do not live as long as other Europeans, and the gap has widened - that is the bottom line for our health. At age 65 we have the lowest life expectancy in the EU. Thirty years ago Irish men lived longer than the average European.

What shortens our lives? Heart disease, cancer, suicide - our death rate from each exceeds the EU average. Growing inequality also denies people years. Inequality has grown in Ireland during the boom, exacerbated by fiscal policy.

It is possible to correct this state of affairs, just as it is possible for us to have good schools, good housing, good childcare and good public transport. We are a comparatively well off country and we have choices about how we share out that wealth. We will be told, of course, that we do not have choices because we cannot do anything that might affect competitiveness. Competitiveness is important to the overall wellbeing of the economy but what is the point of being competitive if the population at large sees little benefit from it? We are in danger, as a nation, of allowing ourselves to be talked into a situation where everything is subordinated to the needs of the economy, where the rich get richer, where inequality in society increases and where the quality of life deteriorates. We could convince ourselves that increasing crime, increasing suicide amongst the young and social disintegration is inevitable. We would be wrong to reach such a conclusion. We do have choices if we chose to exercise them.

That is what trade unionism is all about. It offers the possibility that working people will be given the economic strength, through acting together, that gives meaning to choices in a free society. The movement is the repository of the hope that society can be organised in a way that ensures the greatest sum of freedom, the highest amount of real choice and, in consequence, the most human happiness. As I said earlier on, if pay determination was the only issue involved, there would be no particular value in social partnership. It is because social partnership gives us the vehicle to influence social policy and the quality of life that makes it worthwhile.

The challenges we face in society today are not unique either to our time or our country. Shortly before he was assassinated Robert Kennedy spoke about these things in a speech at the University of Kansas in a way that I think still finds a resonance 34 years on. This is what he said:

"Even if we act to erase material poverty, there is another great task. It is to confront the poverty of satisfaction - a lack of purpose and dignity - that inflicts us all. Too much and for too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things.... The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile".

As you meet here at Annual Conference I think you can take some satisfaction in the achievements of your union. Nurses have become a strong force in industrial relations that any Government will ignore at its peril. You have had to take direct action to achieve improvements in areas of the health service and in pay and conditions. But you did it in such a measured and wise way that you never lost the support of the public. Public support is a pearl of great price. When it is lost it cannot easily be recaptured. I hope that the authorities now appreciate the strength of your resolve and that it will not be necessary to have to resort to industrial action as a means of solving problems in the future. The consequences of industrial action in the caring professions are such that all of us would want to avoid it.

I wish you well in your deliberations and I hope the Irish Nurses' Organisation goes from strength to strength in the future and that we do eventually get a health service we can be proud of.