Competitiveness Council calls for investment in infrastructure

To keep pace with competing jurisdictions Ireland must increase its capital spending Council says

Dr. Don Thornhill, chairman National Competitivenes Council, said on Tuesday that Ireland must increase its capital expenditure to a level that at least matches the level in competitor countries. (Photograph: Dara Mac Dónaill/The Irish Times)

Dr. Don Thornhill, chairman National Competitivenes Council, said on Tuesday that Ireland must increase its capital expenditure to a level that at least matches the level in competitor countries. (Photograph: Dara Mac Dónaill/The Irish Times)


Reducing higher than international average energy prices, investing in infrastructure and restoring trust are the key messages in the National Competitiveness Council’s submission to the Action Plan for Jobs 2015.

Published on Tuesday, the council, which reports to Government on key competitiveness issues , has identified a range of short term actions to support competitiveness and improve the environment for job creation in its submission. Membership of the council includes Liam Casey, chief executive of PCH; Professor Peter Clinch of UCD; Shay Cody, General Secretary, IMPACT Trade Union; John Herlihy, vice president, Google Ireland; and Siobhán Talbot, group managing director, Glanbia.

Despite the recent decline in oil prices, higher than international average electricity prices remain an issue for Irish exporters the NCC said, due to the additional charges imposed under to the public services obligation (PSO). This is a subsidy paid by electricity users in order to fund electricity generation from peat and renewables.

“Paradoxically, falling oil prices have the effect of increasing the proportionate impact of the anti–competitiveness cost wedge imposed by the PSO,”Dr Don Thornhill, chair of the NCC, said, calling for action to address this challenge.

Another issue raised by the NCC is the decrease in public capital expenditure.

“If we are to keep pace with our competitors, we must invest, and the council are calling for an increase in capital expenditure to a level that at least matches the level in competitor countries at a similar level of infrastructural development,” Mr Thornhill said.

Thirdly, the NCC said that Ireland’s reputation as a secure and responsible location in which to do business is central to competitiveness. In this respect, expanding the resources available to the Data Protection Commissioner is welcome.

“Given Ireland’s drive to be at the forefront of the big data revolution, it is absolutely essential that we maintain a best-in-class data protection regime. I welcome the recent commitment to expand the resources of the Data Protection Commissioner and the announcement of the opening of a Dublin office,” Mr Thornhill said.

“Trust really matters for competitiveness - countries with high levels of trust are better placed to manage economic and social change and to achieve societal goals without excessive regulation. They also tend to experience higher levels of wellbeing. It is essential that we, as a society respond to these failures of the past and rebuild the trust of citizens in the ability and willingness of public and private bodies in Ireland to adhere to the highest international standards”.

Specific measures recommended by the council include:

  • lSubject to a successful pilot, the Housing Assistance Payment scheme (HAP) should be rolled out nationally in 2015.
  • lReview social welfare supports to ensure that (a) part time workers have a financial incentive to avail of full time employment opportunities; and (b) receipt of secondary benefits does not impede employment take-up.
  • lActions are required to reduce energy use and lower peak demand.
  • lIn the interests of transparency, the Government should consider publishing the most recent advice from the Attorney General on the issue of upward only rent reviews, as well as any other relevant inputs received on the potential impact of their abolition.
  • lThe forthcoming capital review should strive to ensure that capital expenditure (as a percentage of GDP) mirrors that in competitor countries that are at a similar stage of infrastructural development.
  • lAll labour market programmes should be evaluated on a regular basis with resources focused on those programmes proven to deliver on their objectives, and with direct relevance to the labour market.
  • lThe development of new apprenticeships in key sectors such as modern manufacturing, engineering, transport and logistics, wholesale and retail, and hospitality (i.e. sectors which demonstrate active employer engagement, are large employers and/or experiencing high replacement demand) should be prioritised.
  • lA continuing focus on developing greater linkages between indigenous and foreign owned firms should be progressed in the 2015 plan.
  • lThe enactment of the Legal Services Bill should be expedited.
  • lGovernment should re-commit to the EU’s Europe 2020 research intensity target of investing 2.5 per cent of GDP (2 per cent of GNP).
  • lIreland should maximise drawdown from available funding sources such as the European Framework Programme for Research and Innovation 2014 – 2020.
  • lThe implementation of the National Entrepreneurship Policy Statement should be prioritised.
  • lIn order to enhance SME access and participation in procurement, public procurement policy should aim to ensure that as many firms as possible are provided with an opportunity to compete for public contracts.
  • lThere is a need to continue to monitor bank lending carefully, particularly as the economy returns to growth and demand for funding increases.
  • lThere is strong potential for the State to provide a supporting environment (e.g. seed funding, regulation, etc.) to alternative sources of finance such as peer-to-peer lending.
  • lThe office of the Data Protection Commissioner needs to be resourced in a manner that ensures effective and efficient enforcement of data protection regulations, and at a level that supports Ireland’s ambition to become a leading European data analytics centre.