Ladies and Gentlemen,
It is my great pleasure to be here this evening. Before I begin I’d like to take a moment to thank the organisation’s outgoing President, Gerry Collins, and his associates for all their hard work during the last year and to commend Gerry on a very successful term of office.
I believe I can speak for everybody here when I say to the organisation’s new president, Anne Heraty, that we wish you the best for your tenure as President and know that you will continue the high standards of your predecessors.
Reflecting on the Year
This evening I wish to talk to you about how our new Partnership Government intends to protect the economy and use it to make our people’s lives better; and how we intend to face the many rising international risks, including Brexit, that will challenge all of us.
Last year, I stood here and said that the recovery we have achieved together must be nurtured, so that it can take root, thrive and grow. That the sacrifices by the Irish people and the tough decisions by business could not be squandered.
That is as true today as it was a year ago.
Undoubtedly, we are in a better position.
There are now over 2 million people in employment for the first time since early 2009. These new jobs are spread across the country and across most industries. Every new job created is a life and a family transformed and it is why our Action Plan for Jobs remains so important.
It is also very encouraging to see the Government enterprise agencies continue to break new record levels of investment, exports and job creation.
The latest economic growth figures published yesterday reveal a stable economy that is growing sustainably.
Since we last met we also had the formation of the new Partnership Government.
As head of that Government I speak on behalf of the whole ministerial team when I say that we are absolutely committed to delivering on the goals and aspirations of our agreed Programme for Government.
First and foremost that means protecting our economy and using it to make people’s lives better.
As we face into new challenges we will protect the progress we have made as a country. With Brexit and rising international economic and political uncertainty now is not the time for risks.
I will later return to the upcoming Budget in October and outline how it is another stepping stone in our plan to safeguard the economy.
International Risks and Brexit
In framing that Budget we have to have regard to the increasingly volatile international climate. Not only Brexit, but also the political uncertainty in the United States; the ongoing impact of the migration crisis; the continuing threat of international terrorism; and the weak economic performance in several EU member states underline the need for stability in our own country.
The event that will have the most profound impact on Ireland is undoubtedly the result of the Brexit referendum.
Of course, while we in Ireland were disappointed with the referendum outcome, the democratic decision of the UK to leave the European Union is one that we accept.
But we cannot deny the range and extent of the challenges it presents to everyone on these islands, in Europe, and beyond.
The process of negotiation that will soon be embarked upon will involve a recalibration of all of the mosaic of relationships that make us what we are today.
When it is complete, we will have a new set of relationships within the UK, between Britain and Ireland, between North and South on the island of Ireland, and between Britain and a 27-member EU which includes Ireland.
It will mean that Ireland must look to new global opportunities for trade and investment, building on our considerable success to date.
And we will, of course, work tirelessly to maintain and develop our existing trading relationship with the UK.
However, we will also have to adapt to an Ireland working within the European Union on developing new policies without the UK with whom we had so many shared interests.
The challenges involved are as complicated as they are unprecedented.
The Irish Government has clearly set out its priorities in the context of the upcoming negotiations.
First and foremost, Ireland remains completely committed to our membership of the European Union and the eurozone.
Our priorities for the negotiations relate to the economy and trade, to Northern Ireland and the peace process, to the common travel area and to the future of the EU itself.
The Government put a comprehensive contingency framework in place to map the key issues of most importance to us.
All of our Government Departments are deepening their analysis of the likely impacts of the UK’s decision and continue to develop risk analysis and contingency plans.
We are making adjustments to our administrative structures to ensure that we can address them fully, under the oversight of a new Cabinet Committee which I am chairing.
We have also embarked on an intensive diplomatic campaign.
I have held bilateral meetings with Chancellor Merkel, President Hollande, Prime Minister May, and the President of the European Council, Donald Tusk.
The Minister for Foreign Affairs and Trade has spoken to every one of his 27 EU counterparts, while other Ministers and officials have been stating Ireland’s case in all of our contacts at EU level and further afield.
I am satisfied from all of my engagements with international leaders that Ireland’s priorities, including those arising from the unique nature of the relationship between Ireland and Britain, are understood.
In particular the importance of protecting the peace process, and of Europe’s contribution to peace in Ireland, resonates strongly with every leader I have met.
Immediately after speaking with you this evening I will travel to Bratislava for tomorrow’s first ever Summit of 27 EU leaders.
What I pointed out as a possibility in Belfast in the run-up to the referendum has now come to pass – I will be the only leader from these islands at the table.
In Bratislava and in future discussions, I will be setting out Ireland’s contribution to the vision for the future of the European Union.
That vision must be based on the enduring principles of the European Union – of partnership, of peace and of prosperity.
That is the wider context in which Brexit will be considered at European level.
That is why no one should underestimate the commitment of the 27 EU member states to maintaining the European Union.
The EU is the answer to so many historic questions for Europe.
That is why nobody should think that the negotiations ahead will be easy, or that they can be viewed through a purely economic lens. For the remaining EU members, there are matters of historic and fundamental importance at stake. It will be a hard bargain to strike.
Preparations for Budget 2017
For these and many other reasons now is not the time for taking risks, especially given the journey this country has been on for the past decade.
While Ireland faces into the coming years on a far better footing than when the previous Government entered office in 2011 we need to make the right decisions to continue to rebuild the Irish economy, help people back to work, and invest in vital public services.
Next month’s Budget will reflect our goal to protect economic progress while delivering on new measures to help make people’s lives better.
Only a strong economy supporting people at work can pay for the services needed to create a fair society.
Thanks to the careful economic management of recent years we now have the resources to target investments in key public services that will make a real difference to people.
This is only possible following the difficult job of getting our public finances under control after years of reckless spending decisions.
The deficit is now set to be under 1% in 2016 and our plan will be to eliminate it altogether by 2018. As a result Ireland has once again an A grade rating from all major credit rating agencies.
What this means for our people and our business community is stability and confidence. No more boom and bust which upends families and small businesses.
In the weeks ahead there will be intense political and parliamentary debate about the best use of the limited resources. Not all good suggestions will be affordable in the next 12 months but with continued economic recovery we will, in turn, be able to continue to deliver for hard pressed families.
At a time when resources at our disposal are limited, it is especially important that we ensure that the choices we make target areas of greatest need.
As reflected in the Programme for Partnership Government, policy focuses will be upon housing, health, making work pay and ensuring Ireland is ‘Brexit-ready’. The National Economic Dialogue offered an important contribution and I’d like to acknowledge IBEC’s positive involvement in that.
This year the State will spend almost €56 billion on public services, new infrastructure and welfare supports. Thanks to our growing economy we estimate that there will be approximately €1 billion in additional uncommitted resources to be distributed next year in at least a 2:1 share between additional expenditure increases and taxation reductions.
All these investments will continue to see the ongoing recruitment of new front line public servants such as additional teachers, special needs assistants and Garda recruits to meet the needs of a growing population.
The Action Plan on Housing launched by Minister Simon Coveney in July sets out a comprehensive set of actions to help bring greater stability to our housing market, particularly through measures to build more homes.
The importance of infrastructure investment, for example, is recognised in the Programme for Government.
This is reflected in the inclusion of €5 billion of additional capital expenditure in the period to 2021 which is over and above the €27 billion Exchequer capital investment provided for in the Capital Plan published last year.
As you are all aware, major infrastructural investment projects currently underway or in the planning process in Dublin include Grangegorman DIT Campus, the Luas Cross City, the National Children’s Hospital, and the New Metro North. The opening of the Phoenix Park tunnel to rail services will greatly benefit commuters and increase the numbers of services at peak time.
The National Broadband Plans to deliver high speed internet into every premises in Ireland also remains a top priority.
Additional funding will be allocated into priority areas such as housing, transport, health, education and flood defences, informed by the outcome of the mid-term review of the Capital Plan to be undertaken in the first half of 2017.
It is vital that the Government will continue to prioritise measures to deliver on our target of 200,000 new jobs by 2020, including 135,000 outside Dublin.
New tax related measures are under consideration to support entrepreneurs and innovation.
Existing measures have been highly successful such as the impact of the reduced 9% VAT on the tourism related services industry.
However, it is important to state that the taxpayer is supporting these policies in good faith and industry itself needs to reflect this by not repeating the mistakes of the past by setting prices at uncompetitive levels. The Programme for Government will continue to support the reduced 9% rate providing prices remain competitive.
Before I finish I also want to provide a message of reassurance regarding our corporation tax regime of which there has been much debate about in recent weeks.
I cannot be more categorical in stating that our statute based 12.5% corporation tax rate remains a cornerstone of Irish industrial policy and will not change. Our right to set our own tax rate is enshrined in European Treaties.
As a small nation on the edge of Europe we have realised some time ago that economic security – and thus true national independence – could be secured only by opening up to the world, by attracting foreign investment and by building up our trading relationships.
Ireland fights vigorously for mobile foreign direct investment, but we fight fair.
Governments over the years have made clear, as this Government has, that Ireland did not and does not do deals with corporates, large or small.
It is not how we do business.
Ireland will continue to be at the forefront in efforts to improve and reform the international tax system. That’s the work we have been involved in at the OECD and international level for some time. That’s why we have changed legislation to demonstrate our bone fides in this regard.
Conclusion
Ladies and gentlemen, before I leave you to your dinner I just want to offer a final word of gratitude to Ireland’s business leaders who have worked with Government throughout the recent economic crisis.
Today Ireland is in a much better position. Our job in Government is to ensure that the benefits of recovery are seen across the country and are invested in public services that assist everyone to fulfil their potential.
The times ahead will pose new and difficult challenges for us all.
But I am confident that a stable, confident and ambitious Irish nation will overcome these challenges.
I look forward to a future where our people, your children and grandchildren will lead prosperous, fulfilling and healthy lives at home in Ireland.
Where Irish businesses continue to expand into new territories across the world and lead the next wave of industrial development.
I would like to thank IBEC for the contributions it has made and I know that you will continue to play your part in advancing Ireland’s competitive position into the future.
Thank you all for your attention and enjoy the rest of your evening.