INTRODUCTION
Good evening Ladies and Gentlemen.
Can I begin by thanking Patrick, Gina and the members of Dublin Chamber of Commerce for your kind invitation.
I know that this event is the biggest of its kind in Ireland and I’m delighted to be here.
I think it’s fair to say we’ve all had quite a year.
We’ve worked hard, creatively and together.
We’ve achieved vital change.
Although that change is never as fast as we would like.
We have too developed something else, something new if you like it’s the silver lining in the dark clouds...
A new consciousness that we’re in this together and working together for the good, not just of our individual business, but the good of the country.
In the face of enormous challenge your efforts have been stellar.
And for that I thank you.
When we first took office in March 2011 we began the urgent and critical task of stabilising the economy.
International Reputation
The previous three years had taken its toll on Ireland.
250,000 private sector jobs lost, zombie banks, unsustainable bond yields that led to a bailout, an international reputation in tatters.
Our progress is slow but steady.
Together with the Labour Party I believe we have made a solid start in tackling the country’s problems.
At last Ireland is moving in the right direction but it’s clear to all of us we have a long way to go.
For your sake, the sake of our businesses, I believe it’s absolutely critical that we make every effort possible to restore Ireland’s reputation as a place where business can thrive, where investment makes sense, and where employment opportunities grow.
Sometimes the work is high-profile: such as the visits by Her Majesty Queen Elizabeth II, President Obama or Vice President Xi Jinping. Such high-profile events can help restore a sense of belief at home and catapult us into world headlines for the right reasons.
More often than not it is the hard, tireless work of businesses like yours who are out there every day selling the message, being the message, that Ireland is an excellent country for enterprise and opportunity.
To deliver on my commitment to make Ireland the best small country in the world for business, I’ve made sure the government is doing all it can to help business attract new investment.
Government Ministers are engaging in an extensive programme of trade missions across the world to help open up new markets and to sell the message that Ireland is open for business.
This work is essential as we continue to rebuild a competitive, export led economy.
It involves a sometimes tricky transition from the old, failed economy based on property, banking and debt to a new, sustainable economy based on enterprise, exports and innovation.
Irish export-oriented businesses are rising to this challenge.
New figures show that our exports levels are now exceeding pre-boom levels.
Good news for you, your staff, their families.
Every week I hear of Irish firms winning new contracts and investment overseas.
It’s the best news and the way to secure long-term, sustainable growth.
One of the most dramatic changes we have witnessed over the past year has been the shift in Irish sovereign bond rates.
In July 2011 our 10 year bonds were being traded at rates over 14%.
Today they are under 5%.
The renegotiation of our Programme involving interest-rate reductions, longer loan terms and a commitment to examine our banking situation has led to renewed international confidence in our future.
Domestic Demand
Unfortunately, for many different reasons, this confidence is not shared at home.
Unemployment remains unacceptably high.
Consumer confidence and domestic demand remain low.
We are still struggling with the fallout of the property boom and bust. Businesses, employers, their families and yours, are feeling the strain.
But the economy cannot truly recover until international confidence in Ireland is matched by confidence at home.
We will not get Ireland fully back to work until domestic demand recovers to more sustainable levels.
This is a challenge for everyone, the government included.
For our part we have focused on stabilising the national situation over the past year.
We now have some stability in the unemployment rate, property prices and in our banking sector.
What we need to do now is to use this stability as a platform to start growing the economy again, to get confidence back again, to get Ireland working again.
We all have a role to play to make this happen.
This is about us, a nation, a people, a society....
Every business and all the public sector need to marshal their resources to improve our collective situation for benefit of us all.
Crisis blocks, crisis is crippling.
Confidence will only return once we move beyond the crisis mentality and start planning for the future again.
Business Leaders as Community Leaders
Business leaders, many of you here, have been instrumental in promoting new economic opportunities through cultural and sporting events.
Even during the worst years there have been shining examples of leadership and community spirit.
Dublin and Ireland is blessed by having community and business leaders who organise or support ‘signature’ cultural and sporting events.
They are vital to our recovery.
They put us firmly in the international mind and on the international map.
And for all the right reasons.
We can never overestimate the positive effect they have on our people and on local economies.
And working with you in that regard is central to the government’s thinking.
Our ambition must be matched by yours.
And I know it is.
In recent weeks alone we had the Tall Ships Festival in Dublin.....attracted over 1 million people onto the quays of Dublin.
The Celtic Classic showdown between the US Navy and Notre Dame attracted over 30,000 Americans only last month.
We showcased our offering.
They brought that vital boon to our businesses and our economy.
St. Patrick’s Festival, Cork Jazz, Wexford Opera, Galway Volvo Ocean Race are just some examples of the big signature events in Ireland supported by business.
And this is even before we even talk about the huge support for sport: GAA, soccer, rugby, cricket, athletics… are all supported by business and have such a positive influence on people’s lives.
Enterprising businesses take full advantage of these opportunities but others gain too from the lift that they give to the community.
I would encourage you all to continue to contribute back to your communities through your successful business ventures.
Government’s Role in Improving Confidence
When it comes to restoring domestic confidence the Government has the leading role.
Our strategy is progressing on a number of fronts.
We working with our European colleagues to advance our banking debt position.
We are continuing to advance and deliver long-overdue, large-scale reforms
We are continuing to improve our public finances.
Europe
In order to build on stability at home, we must have stability and growth in Europe.
And in the Eurozone in particular.
It is essential then that the clear and unequivocal decisions made by the Heads of Government in June aimed at stabilising the Eurozone are implemented as fully and as quickly as possible.
I discussed this recently with President Barroso leaving him in no doubt how critical it is for confidence and for democracy itself that Europe be seen to deal with its problems and follow through on its decisions.
I’m not alone in that thinking.
Comments in that regards by other leaders and by the President of the European Parliament just last week are very welcome.
The decisions reached at the June Council meeting are highly significant as they acknowledge the imperative to break the relationship between bank debt and sovereign debt.
This toxic link has caused confidence to collapse right across Europe.
Breaking this link will go in some way to
restore that sense of confidence and indeed induce a sense of relief, especially in Ireland considering the steps we took with the understanding of protecting the European banking sector.
Earlier this week, Minister Noonan attended a meeting with his fellow European Finance Ministers.
Next week I’ll be attending another European Council meeting where the Heads of State will consider and work on the next vital steps.
It is absolutely crucial that the right decisions be made for the future of the eurozone.
Our priority must be long-term stability.
Not a quick-fix that, though it might be popular in the end, could jeopardise Ireland’s interests.
Instead for guarantee Ireland’ interests it’s time for cool heads, strong nerves, and the longer, better, wider view.
The first six months of 2013 with the Irish Presidency of the EU Council presents a historic opportunity to showcase an Ireland at the top of its game. To facilitate decisions on important issues that will impact on the entire Union.
This is not only an opportunity for Government but also for you.
I have met some organisations that are planning international board meetings, industry conferences and company workshops all around Presidency events.
I would encourage anyone who has not considered organising similar events for their organisation not to miss this opportunity.
The Government stands ready to help facilitate and support any of these events where possible.
Debt
Patrick correctly touched on the impact of legacy debt on businesses and households.
It’s something that restrains future growth and confidence. I’m in no doubt it will be one of the toughest challenges for this Government.
On this we are delivering on an ambitious reform programme on debt.
It might be slow, but it’s steady and carefully-planned.
Every one of you here knows that Irish bankruptcy laws have been out of date and ruinously for some time.
Our Programme for Government committed us to bringing these laws and services into the 21st century.
It’s the way to protect and serve a modern, open, and entrepreneurial economy.
The landmark Bill is currently working its way through the Oireachtas and should be passed into law by the end of the year.
It provides for the comprehensive reform of personal insolvency law and will also involve the introduction of a new and welcome, non-judicial, debt-settlement process.
Right now we’re in the process of instigating new arrangements for the operation of the new Insolvency Service.
The Director Designate of the Service has been recruited and this week Government approved the hiring of specialist, insolvency staff.
We fully expect the new service to be fully operational in early 2013 shortly after the new legislation is signed into law.
These changes will give the vital light at the end of the tunnel
A second chance for those currently suffocated by debt with no realistic way of settling them.
Political Reforms
This is just one example of the Government’s reform agenda. But it is a crucial one.
Building renewed confidence in Ireland will involve tackling many residual problems.
We are 18 months into our term of office and I expect to have delivered a radical series of reforms across politics and the economy by the end of our term.
Of course, change must always start with the political system.
A system that has proved resistant to change over the years.
Our first days in Office I cut costs by reducing Ministerial pay.
By removing the entitlement to State cars we halved the cost of government transport.
We have since introduced new laws for the effective banning of corporate donations.
We’re cutting the number of TDs by 8 at the next election
We’re linking female participation in politics to State funding of political parties
We’re introducing new measures to increase Dáil sitting days.
I expect shortly that there will be a landmark Government decision on the reform of local government which will involve the first major overhaul of the system since the 19th century.
Because we know it’s simply impossible for you to do the best business possible shackled by a system that is a century and more out of date.
In the second half of next year there will be a referendum on the abolition of the Seanad.
In other areas we are seeking to boost the competitiveness of the economy by reforming and opening up sheltered sectors to competition, sectors such as legal and medical sectors.
Work Activation
Government made the decision to overhaul our welfare system through our ‘Pathways to Work’ strategy.
Building on best international practice on work activation, we have been rolling out new services to welfare offices across the country.
Active assessments of new welfare clients, group engagements, and one-to-one interviews are now part of the new model of rights and responsibilities of the welfare system.
With the minister for Social Protection, I’ll be launching this new integrated and co-ordinated service next week.
This is a new start for our social-protection system.
I want to encourage all employers to re-engage with that new service as it becomes operational across the country.
It will offer a more advanced and personalised service for employers and job-seekers alike, matching the right person with the right opportunity.
We have set an interim target of increasing the proportion of job vacancies filled by the new work activation service from the Live Register to 40% by 2015.
This is a big challenge for us. But it will also require a new level of co-operation and sense of trust between your businesses and our new work activation services.
It is vital for the country that we start filling more job vacancies with people currently on the live register.
The Government has had a number of schemes to incentive businesses to hire more people off the live register. However, take up remained low. Schemes in the past may have been too bureaucratic or too time intensive.
In response to this Government is now examining ways to streamline and simplify these schemes to encourage more businesses to hire off the live register.
As part of your future recruitment plans I would encourage you to examine the generous supports on offer and the talent available on the live register before making any final decisions.
This is just one part of our public-service reform agenda but in the circumstances it’s a critical one.
Of course, we’re downsizing the public service to a more sustainable level.
We have significant agreements already in relation to public-service sick pay, consultants’ contracts and consolidating back-office operations.
Obviously, we must do more. A lot more. And this was the agenda for my meeting this afternoon with the Croke Park Implementation Body.
Approach to Budget 2013
18 months ago, we were elected to sort out the problems with our public finances.
Our preparations for Budget 2013 are underpinned by a clear diagnosis of our situation and the strategy to follow.
It’s clear that cutting Government borrowing is essential to our economic recovery and long-term prosperity.
Even if we ignore costs related to the recession and servicing the banking debt there is still an unsustainable gap between what the Government spends and what it takes in with revenue.
You can’t run your businesses like that.
We refuse to run the country like that.
For the sake of our businesses, and the legacy we leave to our children and grandchildren.
The Government is dealing with the very painful legacy of years of double-digit public spending on services, pay and welfare entitlements.
All of it financed by a temporary tax windfall from the credit-fuelled property ‘boom’.
The mistakes of the past have to be learned and a reversed.
There is nothing to be gained by delaying the hard decisions.
There will be no sustained growth in the Irish economy until Government borrowing is put back on an evidently-affordable path.
And until the massive capital flight that caused Ireland's recession is reversed.
Yes, this is a difficult reality, but now we are moving in the right direction.
Last
year, the underlying deficit fell to 9% of GDP, ahead of target and down from almost 12% in 2009 and over 11% in 2010.
This year, we expect the deficit to once again beat the 8.6% of GDP target we set out in the Budget.
The hard sacrifices being made by you and your families are delivering results.
For the years ahead, we have set out a medium-term deficit-reduction strategy.
One that enjoys the confidence of our official creditors and, increasingly, of the financial markets.
It balances the need to accommodate economic recovery with reducing the deficit to manageable levels.
Even as we cut Government spending and raise additional revenues, our priority is and must be to improve Ireland's attractiveness as a location for investment and job creation.
That is why we cut VAT on tourism by a third;
That is why we have reduced employers' PRSI for workers on the minimum wage
That is why we are broadening the tax base through the introduction of a property tax
And that is why we will continue to defend and indeed improve the transparency and competitiveness of Ireland's business tax-regime.
Efforts to cut the deficit and support job creation are not and cannot be mutually exclusive.
More employment in Ireland will not come from Government spending.
It will come from creating an environment that fosters more exports and investment
We have to look at where we were 18 months ago. And recognise the distance we have already come.
From an unprecedented recession, our economy has returned to modest growth.
Ireland has had a 20% improvement in competitiveness in just 3 years.
Our balance of payments has returned to surplus.
Private sector employers have added 17,000 net new jobs since the first quarter of last year.
But neither can we be complacent about the challenges ahead.
There is still too much red tape and bureaucracy in dealing with the Government.
Our banking system, while stabilised, is still not strong enough to finance a robust, economic recovery.
We recognise these challenges.
And one thing I can promise this audience is that my Government will listen to employers as we set out to resolve these problems.
Because it is right, absolutely right, that Government listens to industry about how best to remove the obstacles to more investment, more jobs.
Indeed, I have asked Minister Bruton to consider how to deepen co-operation between the public and private sectors in the delivering of the Government's Action Plan for Jobs.
Conclusion
This has been an eventful year for Ireland and for Irish business.
The economy has been stabilised and we’re growing steadily once again.
As a Government we will continue to take the necessary decisions to right this ship. Step by step, decision by decision, we will get this economy moving again.
This will mean dealing with the expected and unexpected – as you do each day in your businesses.
Just as a business needs the strategy, confidence and resolve to be successful, we are putting in place the framework for Ireland to be a success… to match the ambition and achievement of our people, whether they be Olympic competitors or entrepreneurs.
Dublin Chamber of Commerce and its members can and do play an important part in this process by maintaining your focus on success… as we do… empowered by innovation, confidence, and tireless pursuit of your goals.
The Government shares your goals, wants you to be successful, and I commit that we will do what we can to help you.