I would like to thank you for the invitation to be here this morning to speak to you about how I see the future for our country and our capital’s role within it.
The Dublin Chamber is widely respected for the fact that it is an active and constructive voice for the development of Dublin. Its close cooperation with the local authorities is a model for others to follow. I regularly meet with our councillors to specifically discuss Dublin-related issues and an update on issues of concern to Dublin business is a constant item on our agendas.
Senator Darragh O ‘Brien our party’s Finance spokesperson in the Seanad and Councillor Paul McAuliffe, who serves as the Economic Committee of Dublin City Council have spoken to me about how the Chamber’s input has been important in framing the new City Economic and Community Plan.
There is a very constructive and inclusive dialogue in Dublin about its needs. However this can only go so far without the direct engagement at the national level. I believe that the recent swift towards a greater centralisation of power and marginalisation of local government is a retrograde step. It is one of the reasons why it is increasingly difficult for local and regional strategies to win support.
This is a particularly appropriate time to have this discussion as we will soon have a General Election. The time to put vital long-term issues on the agenda is limited. In fact, much of the evidence of the last two weeks is that there is a concerted effort to define the election purely in terms of short-term politics.
That is the only way you can describe the push on one extreme to claim that any change of government means chaos and ruin and on the other extreme that we can get rid of everything unpopular and spend without concern.
What’s missing in these narratives is any serious engagement in the long-term policies which can shape and sustain a successful economy and strong society. This is a concern for every part of the country where the lack of support for strategic programmes is already causing problems – but it is particularly acute here in Dublin.
Our country’s capital is a diverse, complex and international city which is the essential foundation for a successful Ireland. Yet there is little engagement with the range of issues which must be addressed if Dublin is to sustain its many great strengths and overcome its many real challenges.
This is a very important moment for Ireland. After an unprecedented shock we are faced with profound questions about the future direction of our economy and our society. We need to take the time to consider the long-term challenges we face and to show a real commitment to addressing them. We have to move beyond a discussion focused on the headlines of the day to one about shaping the sort of country we want. And no part of the country needs this discussion more than Dublin does.
Before we look forward it’s important to start by looking at the roots of the recovery which is underway today. This recovery has not emerged from any short-term policy – it was not driven by any initiative launched with glossy brochures. Ireland today is growing and creating employment because of long-term investments, planned in detail and sustained over many years.
It is the Irish people who are responsible for the recovery due to the skills they developed, the infrastructure they funded and the spirit of innovation which they embraced over a period of decades.
Recent growth would have been impossible without past support for education and research, a pro-enterprise tax system, improved transport and targeted redevelopment. These didn’t happen by chance, they happened because of the choice made to implement long-term strategies.
For example the incredible international position we have in areas like software and medical devices is something which was developed over many years. Specific investments in research, training and technical infrastructure were made years in advance of specific companies being approached.
Unless we once again embrace this spirit we will find ourselves drifting and constantly behind in dealing with fundamental challenges.
For obvious reasons fiscal policy has been a dominant concern over recent years, but a fiscal policy should be only one part of a much wider economic strategy – and unfortunately this does not exist. Basic planning has not been undertaken and the bulk of policies have not changed to reflect the challenges of a changed Ireland and a changed Dublin.
Housing is just one of the areas where a failure to thing beyond the immediate has led to a deep crisis which is already causing real social and economic damage. Fewer than half of the required housing units have been even planned for yet alone delivered.
With the shortfall in private housing and the collapse of support for social housing of course prices and rents are rising and leading to unsustainable pressures. We should not need an emergency plan when housing demand today is exactly as was predicted five years ago.
This has happened because there is no engagement with the complex range of issues which are essential to sustaining economic and social strength.
Our success in attracting inward investment is something we should celebrate. But if we do not have the housing, transport, training and cultural infrastructure to sustain these businesses and those who work in them the long-term picture will not be bright.
I don’t believe we need slogans about being the best small country to do various things in – what we need is a clear set of objectives about what sort of a country we want to have.
What I would like to do this morning is to focus on some of the core principles and policies I think we need if we are to sustain a strong and successful economy over the short, medium and long term. Within this I want to talk specifically about the role of Dublin and its particular needs.
In comparison to similar countries our capital city has an outsized importance in terms of both its population and its economy. Ireland cannot succeed if Dublin does not succeed.
It is a city of real standing internationally which plays an essential role on behalf of our country in helping us to compete and be influential in sectors which would otherwise be out of touch for us.
What people often miss is that Dublin is becoming ever-more interlinked with the rest of the country. There was a time when there was a much sharper provincial/metropolitan divide. With the development of the motorway network and rail services, as well as modern communications, much of this divide is gone. The era of ‘The Lilac Bus’ bridging the gap between separate worlds is well over.
Major firms are rarely based in one place and you only have to spend a short time on the streets of Dublin to see how many firms based elsewhere do business here.
I am very proud of the community I represent and its unique contribution to Irish life. I will continue to campaign to address the needs of my own city,but where I depart from the traditional debate is that I reject the idea that local and regional development should be presented as a zero-sum game – one where we battle to get one over on each other.
We all need to support balanced regional development and, where possible, to take opportunities to avoid overly-concentrating activities, however a clear vision for Dublin’s future is a national priority.
I believe that Dublin can be a European leader in supporting innovation and entrepreneurship. It can add to its traditional cultural image and the impact of larger companies to one where Dublin is known as a place where people go to start, grow and invigorate businesses. This applies to businesses of all sizes and to those which are founded here or come from inward investment.
A diverse economic base is essential for long-term success. In order to achieve this we have to provide a guarantee that this is a place which will support and reward those who create and build businesses. The evidence is overwhelming that you have to recognise the unique needs of entrepreneurs. Tax is a central part of this.
Ireland’s pro-enterprise corporation tax is one which we must continue to defend at every opportunity. This is a battle which is unfortunately far from over. For the first time there are significant voices in the Dáil and representing Ireland in the European Parliament who question the low rate. Equally there remain many in Europe who falsely claim that it represents unfair competition.
In the coming years there will be new discussion about enhanced cooperation within the Eurozone and other economic changes. I and my party are fully in favour of a deeper reform of the Eurozone and, in some cases, the use of enhanced cooperation.
However, we remain resolutely opposed to the idea of a common tax rate. There is no economic justification for it and it should not be allowed waste everyone’s time when there are much more important reforms which are desperately needed.
I believe we should explore whether there are domestic legislative ways of securing the current corporation tax regime over the medium and long-term.
I strongly support the initiative of the City Council, DCU and the Chamber in creating the post of Commissioner for Start-Ups and committing to this area as a long-term strategy for Dublin. I can assure you of our support in your work.
We also need to start addressing the issue of how we tax individual entrepreneurs. I believe that the vital role they play in our society should be recognised through a series of tax changes which reflect the risks they undertake and the returns they deliver for us all.
A practical way the state can support entrepreneurs is to reduce the rate of capital gains tax that applies when a successful business is sold .We are proposing a reduction from 33% to 15% for businesses sold up to a maximum of €10 million .This would help create jobs in the SME sector and encourage people to create new businesses .
We would expand the credit guarantee scheme and we are committed to reducing the 2% premium charged on loans guaranteed under this scheme. The unfair treatment of the self-employed needs to end by immediately increasing the PRSI benefits for the self-employed. They should be allowed to opt in to the Class A Structure which will allow them to receive job seekers and illness benefits if there business does not work out.
Our policy is that over the next three years there would be an earned income tax credit introduced for the self-employed to the PAYE tax credit value of €1,650 and this would cost €450 million when fully implemented. We also believe that the 3% surcharge on the high income self-employed should be phased out so as to equalise the application of the USC to PAYE to this group.
We also believe that a fully-fledged Enterprise Bank would be a permanent solution to the lending gap that exists in Irish banking sector. This Bank would lend would lend to any company regardless of sector or size provided it can demonstrate its credit worthiness.
The lack of start-up or expansion capital remains a big barrier for a lot of businesses. Over the years there have been efforts to kick-start the venture capital sector but they have been disjointed and not especially successful. Britain has shown progress in this area and it is one which should be a priority in Ireland’s business policies.
We also need to explore ways of supporting the patterns of long-term ownership and development which have been the foundation of much of Germany’s long-term success.
In addition to their base of heavy industry their ‘Mittelstand’ sector has been crucial to securing skilled employment and enabling the flexibility of larger enterprise. The Mittelstand sector is noteworthy for how often there are patterns of the inter-generational transfer of the business and support for maintaining employment levels.
I think we need to explore this more to see if we can incentivise such practices here and we should certainly remove unreasonable barriers to passing on family businesses.
Without the sustained increase in education attainment which began in the 1960’s the growth of our country would have been impossible. In the years ahead education will be even more important.
Dublin could not compete in the modern economy without its network of higher education and training institutions. They represent a unique resource for Dublin and they must become even more integrated in the future plans of the city.
The concentrated expansion in research funding which began in 1997 has had a dramatic impact on Dublin’s universities. In a range of areas they now host researchers who are world leading in vital areas. For example, immunology is at the frontiers of some of the most exciting medical possibilities and Trinity hosts the Immunology Research Centre which is rated number one in the world in its areas of work.
These institutions also employ thousands, bring millions into the local economy and are an international beacon.
The drift towards narrowing the terms of research funding and the areas which can be covered is already having a negative impact in all of our universities and Dublin, because of the size of its colleges, is especially badly hit. We cannot afford to keep losing scientific talent, and equally we cannot afford to have the state constrain innovative research.
The growing cooperation between the universities in advanced research must be encouraged. It may be time for Dublin as a whole to form a collective research strategy which would help maximise its impact both in terms of quality and outreach. As part of this, I believe that Dublin would benefit from a coordinated approach to opening up research facilities to businesses.
Any city which wants to be a long-term success must address the issue of liveability. Efforts to support business cannot succeed without the infrastructure which makes the city a good place to live.
Having discussed this matter in depth with our councillors I want to say that I strongly support the efforts to bring this concept to the core of Dublin’s strategy for the future.
The disproportionate cuts to Dublin’s infrastructure projects are already having an impact with much pressure being built up. The fact that even basic planning work was ordered to a halt was foolish in the extreme.
The recent Dublin Economic Monitor has shown that the unaddressed infrastructure deficit is already having a negative impact. At a minimum we urgently need a plan agreed at all levels of government as to what the core infrastructural needs of Dublin are for the next decade.
By defining an agreed set of needs in terms of housing, office space, transport and recreational facilities we can at least have a benchmark for performance and a shared agenda.
Last week we published details of a proposal to develop Dublin’s network of villages. This is the sort of approach which really could make a long-term difference in establishing Dublin as a European beacon.
I believe that we must support Dublin in a race to the top, not to the bottom: A city defined by good jobs and a high quality of life. This can be a unique advantage for Dublin and, by extension, for Ireland.
A starting point should be a return to the concept of community policing. Three years ago a policy move made to de-emphasise local Garda stations and a continuous presence and to move to a strategy which stressed mobility. This has been a spectacular failure throughout the country. In the justifiable concern with the rural crime situation the needs of Dublin have been missed.
Where community policing has been maintained, and where the direct connection between Gardaí and those they serve is strongest people feel the safest. Implementing this as a core policy throughout Dublin should be a priority.
In the same spirit I believe we have to return to the community development model for tackling concentrated disadvantage. It has worked extremely well in the past and it empowered the local authority and community to take the lead.
Too often Dublin has been defined by divisions between different parts of the city. Overcoming those divisions should be a core objective.
A liveable city also needs available and affordable childcare. Childcare costs in Ireland are 40% higher than the rest of the EU. Our spokesperson Robert Troy has published a very detailed policy document that address how Ireland can change this .We would introduce a child tax credit of €2000 to assist working parents and we would also introduce a second preschool year while ensuring that quality in the childcare sector is a priority.
Long-term economic and social strength requires a commitment to inclusive planning and secure support. It can’t be driven by a search for headlines or short-term gain.
In the past, Ireland and Dublin have made enormous progress through a commitment to a long-term vision of investing in people, in critical infrastructure and in allowing people the space to innovate.
We must return to this spirit and we must make it a central part of our vision for the future. There is tremendous potential for Dublin to become a leader internationally as great city to live in, to create and grow.
Finally I would like to thank Dublin Chamber for inviting me to address you here this morning and of course I cannot leave without saying I hope the best team wins on Sunday next!