President, Ibec Council Members, Ministers, distinguished guests, ladies and gentlemen, good evening.
Thank you, Imelda, for the introduction and thank you, Danny, for the invitation to speak this evening. It’s great to be here.
I would like to start by offering my sincere congratulations to Frank Gleeson on his Presidential term. I know Ibec and its members really valued Frank’s leadership as businesses emerged from Covid.
Imelda, I wish the very best to you as you start your term as President. The year ahead for businesses will be unpredictable, and will require fresh thinking and ingenuity, which I know you will bring to the role.
President, this time last year, I spoke about the collective spirit in our response to Covid and the crucial role that Ibec played. The pandemic is not over but perhaps the finish line is in sight.
12 months on, we are dealing with new challenges – a war in Europe and soaring inflation.
That collective spirit must be invoked again.
We need to work together once again.
We need Ibec and others around the table to help us make the big decisions and get them right.
Friends, tonight I can say to you that the Irish economy is in good health.
Despite all the upheaval of the last two and a half years, Ireland has never had more people at work and female labour market participation has never been as high. Incomes, notwithstanding inflation, have never been higher.
Employment is growing strongly in every part of the country. The border counties of Donegal, Leitrim, Sligo, Monaghan and Cavan have been the best performing region over the past two years, with employment growing by 29%. The South East and Western Seaboard aren’t far behind.
More and more Irish citizens are returning home to live and work here – almost 30,000 people in the past year and a similar number again from the UK and Europe.
We are benefitting from a massive ‘brain gain’ and flow of talent and skills in to the country.
We are running budget surpluses at a time when our peers are running deficits.
The quality, strength and ingenuity of Irish workers and Irish businesses are generating those revenues, allowing Government to respond assertively to crises and invest in our future.
So thank you to everyone in Ibec and your members for your role in making that happen. We do not take it for granted.
President, we are recognising the contribution of workers by introducing reforms to strengthen workers’ terms and conditions. These include statutory sick pay, flexible working and the move to a living wage. And I thank Ibec for its broad support for these changes.
As a Government, we are working to ensure the pandemic leaves a legacy of a more inclusive and secure society.
Full employment. Good jobs. Secure jobs.
Collective Bargaining
As you know, I tasked a High-Level Working Group under the auspices of the LEEF to review collective bargaining and the industrial relations landscape in Ireland. This was done in the context of a draft EU Directive requiring each Member State to facilitate much greater collective bargaining.
I’d like to thank Maeve McElwee and Danny McCoy for their work on behalf of Ibec and also the trade union representative bodies. Ibec has shown courage and forward thinking by participating and it seems we now have an agreed way forward. I look forward to hearing people’s views when I publish the report next month.
Budgetary approach
Tonight, I know businesses are worried heading into the winter. Energy and other input costs are rising. Interest rates are rising. Consumer confidence is waning.
The Government’s multi-billion euro financial response to the pandemic was unprecedented, whether it was help with wage bills to keep staff on, the commercial rates waiver, lower VAT, government backed loans or the introduction of a less expensive, simpler way to restructure and survive than examinership.
I can assure you we didn't do all that to allow viable businesses and jobs to go to the wall now.
We understand the scale of this energy crisis and we will respond with appropriate scale.
There is little reason to run very large surpluses when a counter-cyclical response is required – but we will not empty the tank now. We will keep resources in reserve so that we can respond as the situation develops and intervene again if we need to, if this crisis persists.
The main objective of next week’s Budget will be putting more money in people’s pockets and reducing the bills that people have to pay.
For any household budget, there are three elements:
- There’s what you get paid
- There’s how much you get to keep after taxes, and
- How far the money goes.
We want to help on all three fronts.
We will ensure that incomes rise where we have influence: the national minimum wage, the public sector pay deal, increases for pensioners and for people on welfare payments like carers and people with disabilities.
We will reduce income tax, so you get to keep more of what you earn. That’s really important for middle-income workers who often lose half of any pay increases they get in taxes, USC and PRSI, which is unfair. It also makes us less competitive when this is not the case in the UK, US or most of Europe.
And we will try to make your money go further by helping with some of the costs like reducing the costs of childcare, the cost of putting a child through school or college, or healthcare.
Some of these costs were too high in Ireland and out of kilter with European norms long before this crisis.
Now is an opportunity to change that.
Reducing the cost of childcare and extending early education will have wider benefits beyond improving household budgets. It will improve the labour market, advance equality for women, be pro-family and improve educational outcomes for children.
President, Government will act in the short-term to help businesses survive and we will back that up with a broader, medium to long-term agenda to improve the business environment in Ireland.
- Helping businesses pay your bills
In next week’s budget, we will take action to help businesses with energy bills. It will be broad based and tens of thousands of businesses will qualify.
There will be a particular focus on SMEs in retail, hospitality, manufacturing and other high energy users.
It will be a response of scale.
Secondly, we will open a new Ukraine Enterprise Crisis Scheme before the end of the year. It will be targeted at viable but vulnerable firms in manufacturing and internationally traded services. A similar scheme during Covid granted over €180 million in funding to 740 companies, protecting 30,000 jobs.
Thirdly, we will provide low-cost loans, similar to the Covid Credit Guarantee Scheme which helped more than 10,000 SMEs access credit.
We will also ensure the Department of Enterprise, Trade & Employment receives an increase in staffing so that our enterprise agencies like Enterprise Ireland, IDA Ireland, Intertrade Ireland and the Department can continue to invest in companies, secure investment and provide good services to businesses, like quick turnaround times on employment permits.
- Energy efficiency and moving away from fossil fuels
In the medium to long term, we will help businesses invest in energy efficiency and reduce our reliance on fossil fuels.
There are about 20 energy efficiency schemes already available but take-up isn’t what it should be. That’s because people don’t know about them or maybe don’t see the return on investment.
We will ensure the right incentives and information are in place to improve take-up.
While weaning ourselves off coal, oil and gas is a global challenge, it also presents incredible opportunities for Ireland, specifically electricity generated by offshore wind, backed up by battery storage and interconnection, and of course, green hydrogen.
President, I believe we can go from being an energy importer to being an energy exporter within a generation, with all the benefits that come with it – greater energy security and price stability, employment and regional development.
I believe the green and digital transitions should be viewed as opportunities. We should embrace them.
- Investing in skills and education
We will help companies plan for that twin transition with better reskilling and upskilling opportunities.
I agree with Ibec that we need to use the National Training Fund super surplus to help plug the skills gap and hopefully we can announce something in that regard in the coming months.
We will also retain what’s good about the education system and nurture the talent that continues to attract foreign direct investment to Ireland.
- Investing in Infrastructure
President, with a rapidly rising population, Ireland needs to invest big in infrastructure. I know Ibec has called for this consistently over the years. We have a population of 5.2 million people and it’s rising rapidly. We need to keep up.
The revised National Development Plan brings spending on new public infrastructure to a level well above the EU average and our peers like the Netherlands and Denmark. Execution in the current economic climate will be the challenge.
I can assure you, we will not pull back on vital capital investment when we need it most.
- Increasing the availability of Housing
I know housing is a deep concern for us all as citizens, but also as employers. We have not yet turned the corner, so we need to do more and be open to new ideas.
We need to do all we can to increase supply of new housing of all forms. We have built 25,000 new homes in the past year. That’s more than any year since 2011.
But it’s not enough. We need to get close to 35,000 a year.
President, many politicians are sceptical of free trade and even oppose existing or new free trade agreements. I think that’s very worrying. We owe our prosperity to trade above all else.
As part of our new Trade Strategy, we are going to launch a communications campaign to highlight the benefits of international trade and investment to a broader Irish domestic audience and foster a deeper understanding of the important role that trade and investment plays in providing jobs.
- Refreshing our enterprise policy
Just as some politicians are critics of free trade, others want to change our economic and enterprise policy. They would increase taxes on businesses, talent and employment, veto trade deals and end support for further European integration.
President, let me be blunt, if there is a fundamental change in our economic policy, things will change fundamentally – and probably not for the better. We need to be live to that danger.
We cannot take our good economic performance for granted.
This is no time to rest on our laurels in a rapidly changing world. We will not stay successful by standing still and we have to get ahead of the next wave and catch it.
With this in mind, I have commissioned a White Paper on Enterprise Policy to be published before the end of the year. It will set out how we will grow employment, investment and trade in the decades ahead.
Fiscal sustainability
Minister Paschal Donohoe is here tonight. Paschal, thank you for your leadership on global tax reform. When I spoke at the Presidential Dinner this time last year, the outcome of the OECD International Tax agreement wasn’t at all certain. You ensured our interests were protected.
I know that we must plan for the possibility of corporation tax revenues declining in future years. We can do so by investing some of those revenues in better infrastructure. Once a school, or metro or waste water plant is built, it does not have to be built twice, just maintained.
We can also do so by holding some of those revenues in reserve and by reducing debt.
That’s what we plan to do.
I know many people take the view that Ireland needs to increase our total tax take to improve the sustainability of our taxation and welfare systems – that we need to do this not to improve services but just to stand still in the context of a bigger population, the automation of jobs and the move away from fossil fuels.
That might turn out to be the case but it could also turn out to be a pessimistic view. The same view could have been formed 20 years ago. Who then would have predicted the population, employment and income growth we have experienced, or that technological developments would have brought such wealth to Ireland?
We should go for growth and be optimistic about the future of our country.
My vision for Ireland for the next twenty years is a positive one – a growing population, 6.5 million people and more than 3 million jobs, more investment, more trade – a society and economy that embrace new technologies of the digital and green transitions and opportunities to create new wealth.
We should not fear the future, we should own it.
Conclusion
President, a great man once said:
“an obstacle on the road helps us on this road”
We have many obstacles ahead but Ireland has proven time and time again that we can overcome them, together.
It can bring out the best in us.