Business Irish

Tuesday 24 October 2017

IBEC criticises Noonan for lack of ambition in Budget plans


Thomas Molloy and Peter Flanagan

IBEC's conference on the economy opened yesterday with strong disagreement between the business lobby group and Finance Minister Michael Noonan over next month's Budget.

IBEC chairwoman Julie O'Neill introduced Mr Noonan to the conference attendees by complaining about the hike in VAT rates, calling for a more "ambitious property tax" and criticising a "perceived lack of ambition" over public/private partnerships.

Her unusually forthright criticism drew a sharp response from Mr Noonan, who dismissed the idea that there was "some sort of magic formula" and noted that he had little room to manoeuvre because of his decision not to raise corporation tax and income tax.

"We have to face the music. The idea that there is a set of soft options is not a runner," Mr Noonan said.

A full-scale property tax is not possible at this stage because there is no valuation base, he added. The Government's €100 property tax, to be introduced next year, was later ridiculed by IBEC boss Danny McCoy for being just €2 a week.

The conference, the second to be organised by IBEC in the wake of the downturn, was dominated by two themes: the eurozone crisis, and the belief that Ireland cannot return to the past.

Business model

"I have lived through four major recessions and a couple of wobbles. This one is different," Mr Noonan said. "We don't want to go back to where we were. We need a new business model for Ireland."

Other delegates spoke of the difficulty of doing business in Ireland at the moment. Dana Strong, chief executive of UPC, said customers were sensitive to tiny variations in price, while Ulster Bank chief executive Jim Brown called on the Government to introduce a loan guarantee scheme for small business.

Dennis Nally, chairman of PricewaterhouseCoopers International, said Ireland was still "very vulnerable" and picked up on Mr Noonan's theme about not just returning to the old ways of doing things.

"Ireland needs to look even harder at emerging markets. We should become a bridge between Europe and the powerful countries such as China, India, Korea and Brazil. Half of the world's economic growth will depend on six emerging economies by 2025," he said.

Instability, volatility driven by technology and new markets would be the new normal," he added.

That sentiment was echoed by CRH chief executive Myles Lee, Glanbia boss John Moloney and Paddy Power's Patrick Kennedy, who warned that while Ireland's recovery had been considerable, the country was still vulnerable to shifts in the world economy.

"When your exports are greater than your GDP, you are far more susceptible to international shifts than most countries," said Mr Kennedy.

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