Wednesday 13 December 2017

'It's a downturn, not war and we can get out of it'

Competitiveness is key to economic recovery, Martin Naughton tells Ronald Quinlan

'WE are not going through a famine or a civil war, or a world war. We're going through an economic downturn. We have to get out of it, and we can get out of it."

That's the view -- plain and simple -- of one of Ireland's most successful and internationally respected businessmen, Martin Naughton, on the country's economic plight.

With the December Budget looming, the billionaire founder and chairman of Glen Dimplex has given the Sunday Independent his thoughts on what needs and doesn't need to be done to get Ireland back on the right track.

Asked about the Government's current target of €15bn in cuts to be achieved between now and 2014, Naughton expressed the simple hope that the Department of Finance had finally got its numbers right.

"I have my views, the same as a lot of other people. A lot of people are surprised at the way the numbers kept changing, and that we just hope the projections which have been abysmal to date . . . hopefully people have a handle on it now, because if you don't have a handle on it, you can't do anything. You have to start off knowing where you want to get to," he said.

"The management team, the Government is there to do the job. I think the last thing we need is an election. There's a fair degree of consensus that it [the deficit] has to be tackled, and over a short period. If we in the private sector were in trouble like this, we'd be working seven days a week to come up with quick solutions, and we'd be taking action and taking it very fast."

While the Glen Dimplex chief is optimistic that the Irish economy can be fixed, and fixed quickly, he said we were compounding the battering our international reputation has taken by endlessly "flogging ourselves" with negative stories and views.

Asked what he made of the Government's near three-year delay in responding to our massive deficit, Naughton contrasted it with the rapid and decisive reaction of the recently elected Conservative/Liberal Democrat coalition in the UK.

"I was in London at a meeting with a Secretary of State -- I won't say who it was. We were with a British cabinet minister for dinner after the Treasury review which happened the day before with about 20 people from the City [of London]. It was Chatham House rules and we were having a conversation," he said.

"There was a little drinks party beforehand and everybody was in a very buoyant mood. It was a case of "good, we just got £81.5bn". It's a little less pro rata than we're going to cut [in Ireland], but it's a big number. There was a lot of glee about it. The reaction was very positive.

"Over dinner, we thought the minister was going to be getting attacked over the cuts, but not at all. It was hardly even mentioned. There was a great feeling of: 'This is good. This is positive.' And the markets responded accordingly."

Applying the British government's example to what he believes should be done here, the Glen Dimplex boss said: "It's a good opportunity for us. The cost of government is far too high. The UK decided to get rid of a half a million civil servants. That's the equivalent of 50,000 here. A decision like that will have to be addressed here sooner or later by somebody."

Commenting on the prospects for Glen Dimplex here and abroad in the current climate, Naughton was quietly confident.

"We are a global business. We're very international. The big thing we need is for the global economy to start moving. I can tell you that it's not getting any worse anywhere. It's on the positive side of the line. It's not dramatic, but it is getting better and it's getting no worse. There's no sign of double dips.

"So, all our people globally are in somewhat of a positive mood without drinking champagne or going bananas.

"This year, we as an international group will meet or beat our budgets. Like many other Irish companies, we are standing. We're not in any difficulty and we're looking forward to having a good year this year and we have a positive view of the future."

Of Ireland's prospects, he said: "We are an international, open market economy, and as the world economy lifts, the real economy will lift with it and create new jobs.

"The essential thing for the economy is to become competitive. We'll never compete against China or India. We don't have to and we don't want to. We don't have to do that. We've got to be able to compete against our nearest neighbours, against the UK and against continental Europe. It's as simple as that.

"It's a small economy. We can make a very good living if we're an economical place to do business in within Europe."

Sunday Independent

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