Good morning everyone,
I am delighted to be with you here this morning for the IMI National Management Conference. We hold the IMI in high esteem as I have heard of the experience of key Government Departments and Agencies working with the Institute to develop and implement programmes for future leaders.
I congratulate the IMI on these accomplishments and wish them every success in their continued development.
The IMI has chosen a very relevant theme for today’s conference - ‘Managing Disruption, Seizing Opportunity’. We are meeting this morning at a time of great international uncertainty and disruption.
I refer not only to the decision of the UK to leave the EU but also of the fragile economic and political situation across Europe and the world, the migration crisis, and the continued threat of international terrorism.
In the face of such uncertainty it underlines the need for stability and leadership at home.
For our part the Irish Government is doing everything it can to prepare for a future without the UK in the EU while continuing with our plan to protect our economy, create jobs and make our people’s lives better.
A big stepping stone in that plan will be the Budget in two week’s time and I will return to that topic shortly.
The current international climate creates many difficulties for business leaders. Adapting to the big changes coming down the line will require careful planning and bold execution.
One big positive is that we are all facing into the next period in a far better position than we collectively were a few short years ago.
Ireland is now at a key moment in its recovery. We have faced many difficult years involving tough decisions by business and sacrifices by the Irish people. We are now clearly on the road to recovery. Businesses are starting to invest and expand again, jobs are being created, economic growth is strong, jobs are being created, earnings are rising, consumer confidence is returning and the national finances are almost back in the black.
With over 2 million people in employment for the first time since early 2009, we are pushing on with our target of supporting 200,000 more jobs by 2020.
Enterprise Ireland’s client companies recorded an all-time high in exports amounting to €20.6 billion in 2015, almost double what it was in 2005.
And we are also continuing to attract into Ireland new Foreign Direct Investment at record levels.
International Risks and Brexit
But we are far from complacent.
Internationally this has been a year of uncertainty.
The upcoming negotiation on the UK’s exit from the EU is a top priority for every single Government Minister, Department and Agency.
We are about to embark upon a process of negotiation that will involve a restructuring of the relationships that make us what we are today.
When it is complete, there will be 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.
Ireland must now look to new global opportunities for trade and investment, building on our considerable success to date.
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 negotiations ahead will not be easy. 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. 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 key priorities: to protect Ireland against the impact of Brexit, to fund new initiatives on housing to provide homes for our people, and to use the fruits of a growing economy to invest in vital public services and to ease the pressure on hard pressed working families.
There will be a set of measures included in the Budget to defend Ireland’s best interests in the face of Brexit. Firstly we have to make sure that we use what limited resources we have to continue to make Ireland a competitive location for new business, investment and start ups.
I anticipate we’ll see extra steps to encourage more start up and micro businesses to locate in Ireland and to become more attractive to entrepreneurs and the self employed.
This will involve taking another step to increase the Earned Income Tax Credit to match the PAYE credit as outlined in our Programme for Government.
Thanks to a recovering economy the Government was in a position to lower the tax burden on workers in the two previous Budgets to bring the marginal tax rate to below 50% this year, the first time since the crisis escalated in 2009.
The Government will take another step to lower that tax burden by cutting the Universal Social Charge further. This is in line with our Programme for Government commitment to continue to phase out the USC entirely.
To improve the lives of our people and to provide accommodation options to new workers moving to Ireland there will be a big focus on housing in the Budget.
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.
€200 million will be provided to fund a ‘Local Infrastructure Housing Fund’ to support the delivery of critical infrastructure to accelerate the supply of social and private housing. This initiative has the potential to release the delivery of at least 15,000 to 20,000 new homes, which would otherwise not be delivered.
I understand that demand from Local Authorities is incredibly strong and new projects will be ready to break ground on January 1st.
To help alleviate some of the pressure in the rental market there will also be a focus on other immediate measures to maintain and boost supply.
Keeping Ireland competitive also means making our country a better place to live and raise a family.
This month we were in the fortunate position to introduce a second free pre-school year meaning a child can now start early education and care from aged three until they move into primary school. We also introduced two weeks paternity leave that will help fathers take some time at home on the birth of their child.
These are just some examples of the types of new initiatives we can to continue with as we use the fruits of a growing economy to improve the lives of our people.
It has also meant that we are in a position to target new additional recruits for vital public services – 800 new Gardai and 650 new teachers next year alone.
This progress is only possible due to the recovery in the national finances and we won’t be deviating from our long standing policy of protecting that recovery.
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 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.
Before I finish I also want to reiterate that Ireland will continue to strongly defend its statute based 12.5% corporation tax rate, which remains a cornerstone of Irish industrial policy and will not change. Having said that we are fully committed to tax justice and we will continue to be at the forefront in the OECD Base Erosion and Profit Shifting process.
Just as important as our competitive tax regime is our reputation for policy stability, a business friendly environment and a highly skilled workforce. Indeed, skills are top of the agenda for business, and we must ensure that Ireland continues to excel in this area.
We recognise that the ‘war for talent’ is now one of the most important factors for job creation. This is why we recently launched the Action Plan for Education, which provides ambitious targets for improving all levels of our education system. It is a plan that I’m sure the IMI approve of as we strive for increased levels of education and performance.
Conclusion
I want to thank the IMI for the invitation here this morning and for organising this conference that will challenge everyone to seize the opportunity in the face of disruption.
The IMI are to be commended for being Ireland’s flag bearer in the prestigious Financial Times Executive Education Rankings.
We have a great opportunity now to re-build our country and maximise the benefits of all the hard work and sacrifice that all our citizens – in the business community and across all walks of life – have made over recent years.
I hope the conference today will assist you in this task, and I wish you all a productive day.
Thank you.