Ireland 'still lagging' behind on education and productivity
THE National Competitivness Council (NCC) still believes Ireland is suffering from poor quality education, a high cost of doing business and productivity levels below OECD averages and plans to publish a range of reforms later this year to address these problems.
Despite recent gains the economy can improve competitiveness further, NCC chairman Don Thornhill said at the launch of a report on the present state of the country.
"Ireland has much further to go if we are to deliver long-lasting competitiveness and sustainable growth," Mr Thornhill said ahead of the launch of the NCC's annual report on competitiveness today. "Ireland cannot aim for just being good enough, we must strive to be world beating."
The report notes that Irish incomes are now below the 28-nation OECD average when measured by gross national product -- but incomes are among the highest in Europe when measured by gross domestic product, which is distorted by contributions from multinationals. Productivity is also below the OECD average when measured by GNP.
Poverty among single working people (measured by their ability to meet modest clothing needs such as coats and shoes) is much higher than the EU average, while poverty within families is below the average thanks to generous child benefit. The NCC's report highlights the poor performance of Irish 15-year-olds in international tests of mathematical and scientific ability.
These poor results come despite, or perhaps because of, the very long hours spent by students in school. "We need shorter school days and longer terms," said Thornhill.
The Irish academic calendar, which gives Irish school children some of the longest summer holidays in the world, was designed for a different era when children helped with the harvests and is no longer appropriate today.
The NCC highlighted seven areas where the country has to improve: the high cost of doing business thanks to high property prices, expensive landlines and high legal fees; below-average productivity; poor access to credit; better training courses to return people to work; ensuring high income tax does not deter work; better maths and science teaching; and better infrastructure such as broadband access.
Wages remain high in Ireland and the country has the fourth highest net wage level in the OECD, with salaries being 40pc more than average.
While income tax and PRSI have risen since the bust, Ireland remains competitive. An Irish couple with two children on a combined income of 167pc of the average industrial wage pays less tax than 24 out of the 28 OECD countries surveyed. A single person on the same income is the 11th lowest.
A single worker earning €40,000 a year now pays 24.2pc of his income in taxes compared to 18.6pc just three years ago.