Chairman of the Small Firms Association, AJ Noonan and SFA Director, Patricia Callan, nominees, Ladies and Gentlemen,
It is a great pleasure to be here this evening at the 10th year of the Small Firms Association National Business Awards to present the awards to the winning companies and to the overall winner.
The Small and Medium Enterprise (SME) sector is, of course, a very significant part of our economy. Ireland is immensely proud of its SME sector. Despite the significant challenges that we have faced in recent years, our indigenous producers and SMEs have faced these economic conditions with great resolve and determination.
I think that our recent experience of economic crisis and recovery has demonstrated quite clearly the importance of the SME sector and its role in Ireland’s recovery.
And Ireland is recovering.
Earlier this week saw the publication of this Government’s Third Report on the Programme for Government. In it, we are able to take stock of just how far we have moved on to emerge from the deep economic crisis that we inherited in 2011. While many challenges remain, in 2014 we are overall in a far better and more optimistic place:
In 2013 we successfully dealt with the promissory note, and the negotiation of a new public service pay deal.
As you are all aware, we have left the EU/IMF programme, without a precautionary credit line. We have recently been upgraded by Moody’s.
Our budget position is improving, and we are on course to hit our core target of a 3% deficit by 2015. Most importantly, we are seeing a sustainable and broadly-based recovery in the economy, and major improvement in the numbers employed with 5,000 jobs now being created every month (compared to 7,000 per month being lost when we came into Government).
This is starting to translate into reduced unemployment levels with the latest standardised unemployment rate at 11.9%. Although this is still too high, it is moving in the right direction. We can afford at this stage to be far more confident about our prospects than at any time since the crisis began.
It is important to acknowledge the vital role of the private sector in driving our economic recovery and in creating employment, in particular Ireland’s small and medium enterprises, which create two thirds of all new jobs.
I think there are three components to what we now have to do.
Firstly, we must continue with our work to address legacy issues such as:
• the problem of mortgage arrears;
• reforming the welfare system, to provide more opportunities for those who have no jobs;
• the need to tackle the outstanding deficit in our public finances and meet the 3% target for 2015;
• the availability of credit to business - The Government has introduced a range of schemes to support the provision of funding to SME's. In 2014 we will:
- take action to increase participation in Government sponsored access to finance schemes for SMEs such as the Microenterprise Loan Fund and the Credit Guarantee Scheme.
- ensure that banks also do more to support the domestic economy through more lending to small businesses – at more competitive rates - to allow them to grow and create jobs.
- underpin these aims with a new plan for the future of the Irish banking system in the Spring.
- publish legislation in coming weeks to establish the €6 billion Irish Strategic Investment Fund to make commercial investments in Irish enterprise and infrastructure. The same legislation will also establish NewERA on a statutory footing to support higher investment levels through, and better returns from, our commercial semistates.
Secondly, we have to manage the recovery.
We must assist the many people and households who had nothing to do with the creation of the crisis, but had to carry the burden of dealing with it.
We will do that by creating the right environment for employment through strategies such as the Action Plan for Jobs and Pathways to Work. The biggest problem still facing households continues to be work – either not having a job, or not having enough work.
As part of managing recovery, we have to manage expectations especially in the areas of public expenditure and wages. There can be no relaxation in control of the public purse – something which everyone in society will have to appreciate, including the business community. Retaining our competitiveness is key. It is also the case that rising living standards are, ultimately, an important economic objective, and are part of maintaining a healthy domestic economy.
The third set of issues that we have to confront is about the future.
As we move out of the bailout, we need to articulate a longer term vision of the future. Before Christmas, the Government published the Medium-term economic Strategy, which set out the objective of full employment by 2020.
The clear focus across the whole of Government that enabled us to exit the bailout must now be brought to bear on the next target – replacing the jobs we have lost, and achieving full and sustainable employment.
We have to develop and maintain our existing trading links, but we have to build new ones and diversify the sources of our income. We must never again expose ourselves to a scenario where we are exclusively reliant on any one sector or market.
That is why we are expanding our networks of Embassies and Consulates overseas, opening eight new missions, to cover new and emerging markets such as Indonesia, as well as deepening our relationships in the US by opening a consulate in Austin, Texas. The Review of the Tourism, Trade and Investment Strategy which I launched last week will help to ensure that the resources of the State – both the embassy network and State agencies – are positioned to deliver maximum overall benefit for the economy, meaning good jobs for our people at home.
We also have to take action to get back to a sustainable level of activity in construction, as part of both a short and medium term growth agenda. It is my view that recovery will not feel like recovery, until the construction sector is restored to something like a normal level of activity. The commercial property sector in Dublin is moving, but we have cause to be concerned about residential construction. It may seem odd to say it, but we need more houses, especially in Dublin – and we need the jobs and the activity that goes with construction activity.
There is potential to create some 12000 extra jobs in construction by tackling this deficit. That is why we are working to finalise a strategy in the coming weeks to address the needs of the construction industry. We must take steps to create jobs in construction and ensure that we develop a right-sized sector that has long term sustainability. Action is needed now to prevent problems building up which will cause future difficulties.
The tourism sector also offers the potential of tens of thousands of extra jobs across the country. Building on the success of The Gathering, the lower VAT rate and new airline routes established as a result of the abolition of the travel tax, we will publish a new tourism strategy before the summer.
As Minister for Foreign Affairs and Trade, I have been deeply involved in the task of restoring Ireland’s international reputation and repairing relationships. As part of this Government’s continuing efforts, over the St Patrick’s Day season, 27 Ministers will take part in over 100 business events and 80 high-level political meetings in 35 cities across 23 countries. In addition, this year we will be undertaking twice the number of Ministerial-led trade missions that were undertaken in 2011.
Many of you here will be familiar with the vital role Embassies play, in close collaboration with the relevant State agencies, in opening doors for Irish businesses and supporting their expansion into new export markets. I would like to encourage each of you, when overseas, to engage with our Embassy network and with the State agencies. Our strength on the international stage is based on the connections and networks which we enjoy - I encourage you all to be part of that network.
At home, we have thankfully created the right circumstances for a return to sustainable economic health. We now have a solid base upon which we can further build our recovery which must be experienced throughout society and by all of our people.
As part of that, we will continue to benefit from the continued and focused work of the Small Firms Association in helping and advising over 8,000 member companies to grow and develop their businesses.
My thanks to the SFA for inviting me here this evening and my congratulations to all of the finalists for these awards.
Thank you for your attention.