Friday 23 February 2018

'At a wild party even good girls get into trouble' – BofI's Boucher

Richie Boucher: banks must never be a threat again.
Richie Boucher: banks must never be a threat again.
Richie Boucher

Colm Kelpie and Donal O'Donovan

TAOISEACH Enda Kenny and Bank of Ireland boss Richie Boucher have warned that Ireland should never return to the recklessness seen in the recent past.

"At a wild party, even good girls can get into trouble," Mr Boucher told many of the country's leading chief executives and business figures .

Earlier, Mr Kenny insisted his Government had probably been the most pro-business of any in the past 50 years as he called for continued wage restraint in the private sector.

In a wide-ranging speech to the IBEC CEO conference in Dublin, the Taoiseach warned that despite recent gains in competitiveness, labour costs here remain above both the OECD and eurozone averages.

He claimed wage restraint had been a central feature of Ireland's recovery to date. "This Government, this administration, is probably one of the most open administrations for business of any of the last 50 years," Mr Kenny told business chiefs.

"It is in the country's interest that Ireland be seen to be open for business and that the impact of government be available to work with business in the interests of creating sustainable jobs and a sustainable economy."

Mr Kenny said more work needed to be done to help regain cost competitiveness.

"We have to acknowledge that labour costs in Ireland remain above both the OECD and euro-area averages. Our position as an open economy in Europe should never be forgotten and not ignored, that is why continued wage restraint is a vital element and component of job creation."

The conference in Dublin's Convention Centre included contributions from several leading business leaders, including Siobhan Talbot of Glanbia, Eamonn Sinnott of Intel I reland and UK investment minister Lord Livingston.

Mr Kenny said the Government was committed to ensuring a stable industrial relations policy in Ireland as the economy recovers: "We're not going back to a situation where you have taxpayers' money being negotiated for wage increases behind closed doors."

He also hit back at claims that multinationals here are paying just 2.2pc in corporation tax, claiming the effective tax rate is between 10.5pc and 11.9pc. "Clearly what's happened is that all of the American companies, many of them not tax resident here, have been lumped in together. The 2.2pc determination is not real and is not relevant in an Irish context," the Taoiseach said.


Bank of Ireland's Boucher said banks must never threaten the economy again. His bank had a moral as well as financial imperative to repay taxpayers for support during the crash: "There are far better uses for taxpayer euros than propping up banks."

Mr Boucher said one lesson of the bust was that when some lenders behaved irrationally others should have resisted the temptation to follow suit.

Too much competition in the market in the boom led banks into unsustainable lending.

After restructuring, BoI was focused on growth, including winning new business from the closure of IBRC and the exit of other rivals, he said.

IBEC's Danny McCoy said Ireland's tax system was not working for growth, both in terms of direct and indirect taxes. "The tax impact is too high and the negative impact on the wider economy is too great.

"Yes, business accepted the need for a major overhaul of the tax system to sort out the public finances. And yes, this necessitated a significant increase in the tax take and broadening of the tax base, but we have gone too far," he said.

Mr McCoy also said there was not enough investment by the Government and it needed to significantly ramp up its infrastructure spend.

Gerry Collins of global pharmaceutical firm Janssen said the banking crisis had affected multinationals in terms of the impact on cash systems and employee moral.

Today, Irish staff working abroad were becoming harder to bring home because our tax regime, health and education systems compared unfavour- ably to those elsewhere, he said.

Feargal O'Rourke of PwC Ireland said the defining feature of a company or country's tax strategy over the remainder of this decade would be transparency.

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