Monday 11 December 2017

Growing belief among business elite that we can't afford another austerity Budget

Five of Ireland's top executives tell Roisin Burke what they think should be the priorities in the next Budget

EU big shots like Jose Manuel Barroso and Olli Rehn are hinting that sentiment has gone seriously cold on austerity and an IMF Irish mission chief has recanted. At home, discussion is rife about whether another belt-tightening austerity Budget in October is the right way to go or if it would be better to look at some economy-strengthening spending policies.

We quizzed business leaders across several sectors of the economy for their thoughts.

Here's what they told us.

Larry Brennan, Chairman, Savills

The continued austerity policies adopted by the Government have meant that recovery in the Irish economy remains dependent on the external environment, where challenges remain in the performance of US, UK and other international trading partners.

Of particular concern has been the impact on the retail economy, where continued weak consumer sentiment has led to disproportionate savings ratios and ongoing poor retail sales.

This area of the economy certainly needs appropriate support, whether through income tax or VAT cuts or other stimuli. Sensible changes such as moving the Budget away from the crucial Christmas trading period will help – but more must be done.

Brian O'Cathain, Chief Executive, Petroceltic

It depends what is meant by austerity. As regards taxation, the American Chamber is right on this – any punishing taxation or change to corporation tax would kill off inward investment.

But in terms of public sector reform, we have a long way to go. The Government could have done more in this respect.

Alan Foy Blueface CEO

I think we do need to relax austerity. History has taught us that you have to invest in order to grow.

We still have relatively high unemployment and it's time to invest in growth and jobs. A key thing is to have the right measures in place to do that.

There need to be more stimuli for employers to bring people into the work place, a real injection of liquidity into the system and employment subsidies and so on.

We need to look overall at the Budget for job creation and job support.

A huge amount of very talented people in their 20s still need to travel outside of Ireland to find work. It's not as bad as the Eighties, but it's still a brain drain. We need to do more to encourage employers to bring recent graduates into the workforce.

We have doubled our workforce and will add more people this year and Enterprise Ireland has supported us in recruitment. We have an amazingly talented workforce and we need to keep that talent here.

Mark Bourke CEO, IFG

The original path of austerity was necessary, as all of the country's finances were completely out of whack and we were spending way more than we had and couldn't borrow on the international markets at sustainable rates.

Now, however, we've spent three years regaining our reputation and it looks like we have rebuilt our credibility to borrow.

What has to happen now is a slow opening-up and there is a necessity to get growth going. Otherwise, it's a vicious circle of an ever-decreasing economy.

The trick is to retain the confidence of the markets and invest as much as you can in building growth. It's an endless tightrope.

There has to be continued effort to support FDI (foreign direct investment), maintain an effective tax regime, cultivate the tech sector and make it easier for small business to employ people.

We've just about retained credibility, but we've got to protect that. Any sense of losing the desire to be credible is a risk.

Ray Coyle Founder, Largo Foods

From a retail point of view and people having money in their pocket to spend on things to boost the economy, I think enough is enough. There shouldn't be another slasher Budget.

People are really suffering in a bad way and there's been enough pain. There are other ways of raising money to get the economy back on track.

Irish Independent

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