It is a great pleasure to be here this morning at the opening of the Investec Investment conference.
The theme of your conference: “a time to look back – the time to move forward” is well chosen, because it neatly captures where we stand today as a country. Yes, we have come a long way in the past three years in returning our economy to stability and growth. We have done that as a result of the hard work and sacrifice of the Irish people. And we must always be careful not to repeat the mistakes of the past. But this is also a moment when we have to think and act for the future; when we have to build on the progress we have made to ensure a full and sustainable recovery for all of our people.
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, and tomorrow the NTMA will return to scheduled bond auctions, building on the phased re-entry to the capital markets achieved over the past two years. This is an important watershed and marks the full normalisation of Ireland's presence in the markets.
Our budget position is improving, and we are on course to hit our core target of a 3% percent 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 being lost every month when we came into Government).
This is starting to translate into reduced unemployment levels with the latest standardised unemployment rate at 11.9 percent. Although this is still too high, it is has been moving the right direction for more than 20 months. We can afford, at this stage, to be far more confident about our prospects than at any time since the crisis began.
As we look to the future, I think there are three components to what we now have to do.
Firstly, we have to continue working on legacy issues. Secondly, we have to manage the recovery. And, thirdly, we have to make plans for the future.
In terms of legacy issues, we still have work to do in dealing with the aftermath of the crisis.
We will continue to work, for example, on dealing with the problem of mortgage arrears and personal debt.
We will drive ahead with our programme of reforming the welfare system, to provide more opportunities for those who have no jobs.
And we will work to ensure the availability of credit to business. To that end, the Government has introduced a range of schemes to support the provision of funding to SME's, which create two thirds of all new jobs.
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.
We must also work to ensure a balanced recovery, doing more to promote the domestic economy. We have made it clear that the construction sector is a major priority. We cannot – and will not – go back to the days of the bubble, but the construction sector is now operating at well below normal output. The sector has the potential, over the next five years, to create some 60,000 jobs, and, in doing so, to provide the houses, offices, factories, and infrastructure that our country needs. In the coming weeks, the Government will finalise our Construction Strategy and we will make implementation of it a core priority for the year ahead.
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 part of managing recovery, we also have to manage expectations, especially in the areas of public expenditure and wages. There can be no relaxation in control of the public purse. And that is 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.
Thirdly, we have to plan for 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.
Despite the crisis, we live in a fast-changing global economy. Technology is creating new products and new economic sectors at a rapid pace. Today, thousands of Irish people work in sectors that didn’t exist ten years ago. The centre of economic gravity is shifting to the East, and billions of new workers and consumers are coming into the global trading system. You can either see those trends as threatening, or as opportunities. The Government is determined that, in the year ahead, we will do more to lay the foundations for the future prosperity of our country.
As the world changes, so must our mindset and our footprint. We have to develop and maintain our existing trading and investment links, but we have to build new ones and diversify our export markets.
That is why we are expanding our network 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 month, will help to ensure that the resources of the State – both our embassy network and State agencies – are positioned to deliver maximum overall benefit for the economy, meaning good jobs for our people at home.
If we are to develop new technologies, new firms and new sectors then we need finance to do so. In the coming weeks we will publish legislation 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 semi-states.
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, I will travel to France later today for a comprehensive programme of trade, tourism and investment-focused events as well as high-level political meetings. Over the St Patrick’s Day period, 27 ministers will take part in over 100 business events and 80 high-level political meetings in 35 cities around the world. In addition, this year we will be undertaking twice the number of ministerial-led trade missions that were undertaken in 2011.
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.
Thank you for your attention.
ENDS