High insurance costs among threats to State’s competitiveness
Research warns that borrowing and legal costs are other key risks to business
The National Competitiveness Council says it is concerned about the high cost of doing business in the Republic. Photograph: Dara Mac Dónaill
High borrowing, insurance and legal costs threaten the Republic’s competitiveness, experts warn in a report published today.
The latest research from the National Competitiveness Council, which reports to the Government, focuses on three key costs to business, credit, legal services and insurance.
The council says it is concerned that these costs are higher in the Republic compared to other countries, particularly in the euro zone, adding to the expense of doing business here.
On borrowing costs, the report, Competitiveness Challenge 2019, says that affordability of credit remains a major issue for business.
The council says that the Government needs to “further analyse” why interest rates charged to small and medium-sized businesses are rising and draw up a list of actions to tackle them.
The Republic remains an “expensive and slow jurisdiction” to enforce commercial contracts, the council says.
Its report calls on the Government to ensure that the new Office of the Legal Costs Adjudicator has enough resources to improve transparency and competition in the law.
Evidence from business groups suggest that rising public liability insurance costs are hitting competitiveness, the council says.
The report urges the Government to implement the Cost of Insurance Working Group recommendations and continue to monitor their impact on the cost of liability cover to businesses.
Council chair, Dr Frances Ruane, pointed out that the Republic was vulnerable to “external shocks” as it was a small open economy.
“Consequently, we cannot afford to be complacent about our strong overall performance and must continuously strive for improvement, so that we remain a highly competitive economy,” she said.
The council is made up of senior business people and civil servants. It reports to Taoiseach Leo Varadkar and the Government through the Minister for Business, Enterprise and Innovation, Heather Humphreys.