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Minister, ladies and gentlemen, good morning.
Our economic well-being and our communities all across the country depend on a vibrant SME sector and a culture of entrepreneurship.
So I’m grateful to Minister Humphreys for organising a conference to discuss what we need to do now and for inviting me to speak.
I’d like to welcome everyone here, especially all those who have travelled to join us, including our speakers from the OECD, the German Government, and the European Commission.
I come with one simple message. If we are to have the economy and society we want in 2025 – low carbon, high productivity, high tech, family friendly, globally traded and competitive - we need to create the environment where that is possible.
The Government works all the time to foster relationships with multinational companies and attract FDI. But our priority is nurturing indigenous companies and entrepreneurs and you are central to us reaching our 2025 ambition.
SMEs account for 99.8% of all businesses in our State and for 70% of all employment in Ireland.
You are the backbone of our local communities, providing jobs and incomes to families around the country. You ensure balanced regional growth.
Our goal is to help you grow even stronger, enhancing your productivity and increasing resilience. We want to nurture entrepreneurship across all groups in society, encouraging the involvement of more women, more young people and more people with disabilities.
Our future economic prosperity depends on people like you taking risks and creating employment. Entrepreneurs and the self-employed are the lifeblood of our society and economy. The Government’s role is to assist you as much as we can.
So, three years ago, we introduced the new Earned Income Credit to help level the playing field between self-employed people and PAYE workers. In the last Budget we were able to increase this by a further €200.
The credit is now €1,350 and we want to equalise it with the PAYE Tax Credit in the coming years.
Since October 2017, self-employed people have also had access to the Treatment Benefits Scheme, which includes Dental and Optical Benefit.
This December, Jobseekers Benefit is being extended to self-employed people.
We are also thinking about pensions. Those who work in the public service, or in multinationals, or in big companies can generally be confident that they will have an occupational pension when they retire on top of their State pension, and that it will be adequate when they retire. For most people who work in the private sector and for SMEs, that’s not the case. Indeed two-thirds of people working in the private sector have no pension provision at all beyond the State pension and that’s something that needs to change. I want to have universal coverage for pensions in Ireland and I want everyone to be part of an occupational pension scheme and that will start in 2022.
We believe that these policies will lead to a much fairer and much simpler contributory pension system where a person’s pension reflects their social insurance contributions and where a new culture of personal retirement saving is created in Ireland.
We all know that our economy is currently performing well. We currently have:
• 2.3 million people in employment - the most ever;
• An unemployment rate of 4.4% - the lowest since 2005;
• Economic growth is increasingly well spread across the country, with the majority of new jobs being created outside the Dublin area;
• Solid wage growth, with average earnings increasing by over 3% last year, well ahead of inflation. That’s a good thing -wages should rise faster than inflation. It’s one of the ways in which we’ll raise living conditions;
• Falling poverty, child poverty and deprivation rates;
• Exchequer returns have improved year-on-year and, this year, will improve upon the surplus recorded in 2018;
• The national debt is down as a % of GDP;
• Public spending is rising but at only half the rate it did in the “Celtic Tiger” period;
• Implementation of Project Ireland 2040, projects that had been talked about for decades are finally underway because we were able to increase capital spending by 25% this year
• The Public Sector Stability Agreement on pay;
• The National Childcare Scheme and reforms to social protections like parental leave and Job Seekers Benefit for the self-employed on track; and
• Housing construction is increasing and there is some evidence of house prices levelling off.
I am determined that we should consolidate this progress and strive to do better. And I believe we must prepare for the future and for the future of work in particular.
Our strategy, Future Jobs Ireland, sets out a policy shift to increase the number of quality jobs so we will have better living standards. Sustainable jobs, that are much less vulnerable to loss. It shatters any complacency that exists and sets out an agenda to respond to future risks and to consolidate progress.
Every generation needs to shake up its enterprise and business model, otherwise it stagnates, or even falls back. We need to change the way we work.
As a country we need to see lifelong learning as the norm so we are adaptable to new technology and sectors. So we have committed to doubling our Lifelong Learning rate by 2025.
I want Ireland to be a country that works to live, not lives to work.
Today’s focus is productivity, and we want to drive productivity growth across the economy, particularly amongst SMEs. So this morning is a good place to launch the Productivity Pillar of Future Jobs Ireland which does exactly that.
Recent analysis conducted by the OECD and the Department of Finance shows Ireland performs well on productivity compared with other EU member states. However this is driven by some very productive global firms and the productivity gap between these leaders and our own domestic indigenous firms is widening.
Of most relevance to you today, we have set a target of increasing domestic productivity by 1% per year.
To tackle the productivity challenge we are:
• Strengthening the LEOs;
• Developing a new female entrepreneurship strategy;
• Launching a Future Growth Loan Scheme;
• Introducing an Operational Excellence programme to drive company transformation; and
• Applying the SME test to all new legislation.
We are also developing a plan to enhance the performance of Irish SMEs, start-ups and firms in emerging sectors based on the OECD findings that Kris and Ulrik have spoken about earlier.
Today we are also publishing the first Future Jobs Ireland Progress Report which shows we are meeting our targets. The Report was considered by Government and will be followed by the publication of progress reports every six months over the lifetime of the strategy.
It is fully aligned with our objective to ensure that future enterprise development and job creation benefits all parts of our country.
It is worth noting that Enterprise Ireland’s client companies created almost 19,000 new jobs last year. More than 60% were outside of the Dublin region. In recent years the Local Enterprise Offices and the Regional Skills Fora have become integral parts of our business ecosystem.
With Project Ireland 2040 we want to ensure there are jobs and employment opportunities for people to live and prosper in all parts of Ireland.
This aspiration is being driven by strategic and targeted investment, for example through the €500m Disruptive Technologies Innovation Fund. The second call was launched last week in Limerick and it will drive collaboration between the research, education and enterprise sectors, including SMEs and start-ups.
As Minister Humphreys has said we are preparing for Brexit and businesses in turn must ensure they are Brexit ready.
Whatever happens with Brexit, a vibrant SME sector and a culture of entrepreneurship will be crucial to our economic well-being and to communities all over Ireland.
So today’s deliberations matter. We need to ensure we are doing all we can to develop existing SMEs and encourage entrepreneurship so there is a pipeline of new SMEs for the future.
I hope you have a good discussion today and I look forward to hearing the outcomes.