Growth of 3% needed to sort problems, says lobby group

Thu, Jun 21, 2012, 01:00

IRELAND SHOULD be targeting growth of 3 per cent a year in order to tackle its problems, Danny McCoy, the director general of business lobby group Ibec has told delegates at a Small Firms Association (SFA) conference.

Also speaking at the event, Restoring Consumer Confidence, yesterday was SFA chairman Ian Martin, who called on the Government to reverse its decision to cut the rebate that employers receive on redundancy payouts.

Mr McCoy said Ireland should not settle for the predicted growth rate of 1 per cent this year and beyond. “We need to be a little bit more ambitious than that,” he said, adding that the targets should be 3 to 4 per cent volume growth a year.

He was not just advocating growth for growth’s sake and quoted his “favourite philosopher” Woody Allen, who said that “it’s better to be rich than poor, if only for financial reasons”.

It was necessary for Ireland to achieve a higher growth rate in order to deal with economic problems such as the lack of employment opportunities and the country’s debt burden.

“We can plead for debt forgiveness till the cows come home. The best way is to reflate the economy so that that burden is [more easily] lifted.”

A number of factors made this ambitious growth rate achievable, he said. “We have form; we have capacity.” Ireland’s “remarkable” infrastructure gave “huge potential for our growth rates” while our “malleable workforce” and the availability of capital in the form of foreign direct investment were also in Ireland’s favour.

Mr Martin said the reduction in the employer’s rebate on redundancy payments from 60 per cent to 15 per cent in last year’s budget had had a “devastating impact” on businesses trying to restructure, and had forced more companies into liquidation. He said the decision must be reversed in Budget 2013.

The SFA also released the results of a survey of its members (to which 792 business owners replied) which found that their perception of consumer confidence in the economy generally was very negative, with 60 per cent rating it as poor.