Spend now or we'll lose our competitive edge - McGann
Ireland is "desperately in danger" of damaging its educational fabric and losing competitiveness unless the Government boosts capital spending, one of the country's most prominent veteran business leaders, Gary McGann, has warned.
Mr McGann, who's resigning this month as chief executive of one of the world's largest packaging groups, Smurfit Kappa, told the Irish Independent that capital spending needs to be prioritised.
"We have not invested in the capital side for quite some time. We have the highest growing population in Europe and the third lowest investment in Europe after Greece and Portugal," said Mr McGann, who is also the newly-appointed chairman of Paddy Power, and sits on the board of Green REIT.
He's also remaining as a non-executive director of Smurfit Kappa, which generated sales last year of €8bn and profits of €661m.
"For a country that is recovering well and has a good balance of payments, we've got to start investing in the future in areas such as education and infrastructure," he said.
"We are desperately in danger of damaging our whole educational fabric, which has been the backbone of inward investment," he warned.
The chief executive said it wasn't just tax breaks or grants that have encouraged inward investment, but the workforce too.
"One of the clear advantages Ireland has is that it's an English-speaking country on the periphery of Europe with a very business-orientated mentality," he said.
"What is critically important for Ireland is consistency of policy and certainty of the business environment."
Mr McGann - who is also a former Aer Lingus chief executive - said that he also understands that the Government wants to restore spending power to people, but said it needs to be done on the tax side, rather than "increasing unit costs of operations".
The Low Pay Commission has just recommended to the Government that the minimum wage should be raised by 50 cent an hour to €9.15.
The Commission has argued that competitiveness has improved and that the increase would not lead to significant job losses.
"You have to find a way to stimulate the economy. But we're far from home and dry," said Mr McGann.
He added: "But we have a business structure and environment that a lot of people would be gagging for, quite frankly, so I think it's important that we understand what has made it good today and more importantly, what's going to sustain it."
He said he understood that there has to be fair pay and proper distribution of gains.
"But we have got to stay competitive. We have to restore it where it's been lost."
The globally-regarded IMD World Competitiveness Yearbook last month ranked Ireland number 16 for competitiveness, down one place from last year.