Sutherland warns against talking State into recession

SENIOR IRISH businessman Peter Sutherland warned economists against talking the State into a recession.

Addressing the Irish Management Institute national conference in Powerscourt, Co Wicklow, the chairman of BP and Goldman Sachs International said: "We have an unparalleled capacity to overreact to events, and this is often exacerbated by uninformed commentary from across the Irish Sea about the true nature of our condition."

He added: "Commentators and economists generally should restrain the tendency to make things appear worse than they are.

"The fact is that the achievements made in the Irish economy are real.

"They are not a bubble and, given proper policies, we can confidently look forward to continuing growth above the EU average for the next five years and beyond."

Mr Sutherland highlighted Ireland's high household savings ratio, which stands at 11 per cent, the same as in Germany.

"This high level of precautionary saving has taken place and it will stand us in good stead during a downturn."

He said the Government needed to reform the public service and called for a greater focus on higher education, including the reintroduction of third-level fees.

He also called for major reform of the health service.

"We spend more on healthcare than most European economies and yet we are in a mess.

"Society as a whole should support robust attempts to bring about the necessary changes even when this annoys the vested interests that resist them.

"One big issue for our future is the improvement and greater efficiency in our public services.

"The value for money expended for public services is often very poor."

While recognising that Ireland is one of the best performers in the Organisation for Economic Co-operation and Development in terms of graduate output, Mr Sutherland said, "numbers are not everything".

"We have increased the numbers in third level dramatically, but the problem is that our system does not produce superior graduates," he said.

Mr Sutherland added that the Government should consider reintroducing third-level fees.

"We have to address the issue of fees," he said.

"At the moment we have a situation whereby those who can [ afford to] pay don't, with the result that our universities don't have enough money. This is one acid test of whether we are up to the challenge of our time."