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Monday 20 November 2017

OECD warns Government to cut the red tape to help startups

Colm Kelpie

Colm Kelpie

The Government must reduce barriers to entrepreneurship by making the bureaucracy around starting a business easier, the OECD has said.

The global economic think-tank has warned that the regulation of licences and permits required to open and run a business is too restrictive here, and that enforcing contracts and registering property is also difficult.

Better incentives must also be introduced to encourage women into employment, such as lower taxes for lone parents and more affordable childcare, the Organisation for Economic Co-operation and Development (OECD) said. And it said competition in non-manufacturing sectors must also be strengthened.

In its Going for Growth 2015 report, which assesses and compares reform progress across OECD countries, the Paris-based think tank gives Ireland a largely positive report card, but flags up issues that require greater attention.

It urged the Government to do more to get the long-term unemployed back to a job by allowing for a smoother phasing-out of benefits and supplementary payments, such as housing and medical benefits, as they return to work.

In the business sphere, the OECD called for fees and waiting times for licences and permits required to start and operate a business to be reduced.

"Continue to shift away from high fees charged to obtain planning permission, towards recurrent property taxation," the OECD report said.

It also warned that R&D spending here remains low, with most done by multinationals.

While noting the launch of a pilot national health innovation hub and a small business innovation research programme, the OECD said resources for promoting co-operation between industry and researchers must be concentrated in a smaller numbers of centres of excellence.

The report reiterated a theme touched on before; that incentives for women trying to get into the workforce are not good enough here.

"Female participation rates and hours worked are relatively low, especially for mothers, which is partly due to the relatively high costs of childcare," the report said.

"This contributes to Ireland having one of the highest proportions of people living in households with low work intensity in the EU, increasing the risk of social exclusion and child poverty."

It called for tax rates to be cut for lone parents returning to work and second earners, and access and affordability for childcare to be increased.

More broadly, the OECD said he world's 20 biggest economies must focus on higher labour productivity and become more competitive and innovative if they want to deliver on a pledge to boost economic growth.

The OECD said governments should ensure that women, young people as well as low-skilled and older workers get jobs and earn decent salaries.

Irish Independent

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