Monday 20 November 2017

Ten smart ways to stimulate the economy

Nick Webb, Business Editor

Cutting through the euphoria that came with the modest cut in our bailout interest rate, it has become clear that we still need something to kick-start the economy. You can't grow by cutting. And we can't get out of the debt crisis without growing the economy. We need our own Marshall Plan, part- funded by the €800m savings in the bailout interest rate, to stimulate growth again unless we want to face a "lost decade" of joblessness and zero opportunities.

The roads have improved beyond belief but the NRA has had to stall a number of projects because of the lack of international finance for public-private partnerships (PPP). A pan-European system to guarantee major road, water, school and hospital building projects could help reactivate the sector. The PPP system would appear to provide the best value for money for the construction of vast schemes. Construction projects equal jobs. Major projects such as the Luas spur, Western corridor or a massive overhaul of the water and waste network could be addressed as the €184bn National Development Plan is brought back on line.

The car scrappage scheme has worked worked well with 30,000 cars sold under the trade support scheme. It can be extended to other goods and services. What about office equipment or household goods or even clothes or shoes?

New companies pay no tax for the first three years. Not a cent. There's also no employee tax on staff earning a certain amount of money for the first couple of years. ESB and Bord Gais also provide cut-price power to new companies in return for long contracts. Cutting corporate tax from 12.5 per cent down to 9.9 per cent would annoy the crap out of our European partners but would help boost Irish business.

The move to cut Vat was a step in the right direction but anecdotal evidence suggests that it hasn't been enough to kick-start the restaurant, pub and entertainment sector. Taking another 5 per cent off the tax rate might help.

The retail sector is dying before our eyes. Last week's move to appoint receivers to Superquinn shows just how tough trading remains. Michael Noonan has called for people to start spending again. That's a big ask especially if we don't know if we'll have a job next week or if there'll be enough money to pay the mortgage after new taxes. The Croke Park agreement doesn't allow for job cuts or pay cuts in the public sector. How about issuing a portion of their pay in the form of vouchers that must be spent in Irish shops? Vouchers off a chunk of a washing machine, car, sofa or even an Irish hotel.

The wildly ambitious Spirit of Ireland project, which would involve bricking up valleys in the West of Ireland to create massive hydroelectricity stations, is utterly bonkers -- but it might just work. Or what about a truly massive wind farm or wave energy project? Companies such as Eddie O'Connor's Mainstream Renewable or Brendan Gilmore's Openhydro have the skill sets; all we need is the money and some real ambition.

Remember Farmleigh? Yep, there was an awful lot of hot air but also some pretty damn good ideas. None of which has gained traction. The idea to create a humongous cultural university -- as proposed by billionaire Dermot Desmond -- should be reheated, reviewed and ultimately funded. U2, Samuel Beckett, WB Yeats, right, and Oscar Wilde. It's one heck of a good start.

Rolling out next generation broadband would be a good start, but Ireland has a chance to become the world's first digital state. Starting in the schools, axe text books and replace them with iPads and e-learning. Some online projects such as the Revenue's PAYE online or ROS have been outstanding successes. They should be rolled out everywhere. Every piece of interaction with the State should be online. This would lead to vast projects to digitise health records, social welfare, education and other sectors. Every single company in the country should be given grant aid to get online. Google, Microsoft, HP, Intel, Facebook and all the other big names are already here, let's use their skills more.

Outside the IDA, Bord Bia should be one of the most important agencies in the country. It should be robustly assessed and any shortcomings addressed. Then throw money at it. Irish meat, dairy and other foods are a massive strength and should be built on. Vast swathes of the country should be ring-fenced as completely organic and marketed to within an inch of their lives. Food and drink exports grew 11 per cent to €7.9bn last year; they could and should be much bigger.

Tourism is one of the biggest industries in the country and crucially one that employs an awful lot of people. Let's be honest though, some of what we offer tourists still sucks. Paying €20 for a main course in a pub in west Cork doesn't help. Why don't we have a Disneyland-type attraction here? Our biggest two draws are the Zoo and the Guinness Hopstore. There is a lack of a wow factor. Richard Quirke's casino in Two-Mile-Borris is a barmy idea -- but it's a big idea and we need those.

Sunday Independent

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