Taoiseach stresses need to reduce deficit in address to business leaders

Restoring Ireland’s reputation for prudent financial management is key to getting more investment and jobs into the country, Taoiseach Enda Kenny has said.

Addressing more than 1,600 business leaders at the annual Dublin Chamber of Commerce dinner in the Convention Centre last night, Mr Kenny also said that while agreement has been reached to ensure that spending cuts and tax increases will be less than previously forecast, next week’s Budget will still be difficult for many.

Mr Kenny said the Government’s main objectives in the Budget is to continue the job of fixing the public finances in order to exit the bailout later this year and to invest in the creation of jobs.

The Taoiseach said the Government remains committed to reducing the deficit to below 5 per cent next year and below 3 per cent by 2015.

“The gap between day-to- day Government spending and tax receipts is still one of the highest in the euro zone. It is also unsustainable,” he said.

Mr Kenny used his speech to highlight the role that Dublin plays in driving the national economy. Claiming that the city’s best days are still to come, he said much work has been done in recent years to transform the capital from “an underdeveloped resource to a modern, cosmopolitan and creative city”.

“Dublin has become a true international city. And as such Dublin is now competing for investment and jobs with competitor cities all over the world,” he said. The greatest way to commemorate Dublin in 1916 will be for our capital city, 100 years on in 2016, to be a vibrant, attractive, and successful city.”

The chief executive and president of Bloomberg Dan Doctoroff said Ireland’s decision to make difficult decisions and keep investing during recessionary times will help it to recover.

Mr Doctoroff, who also served as deputy mayor for economic development and rebuilding of New York following the September 11th attacks in 2001, said constant investment, radical self-awareness and the ability to think big are key skills needed to rebuild economies.

Praising the decisions taken over the past five years to bolster the economy, he said Ireland would emerge stronger than before.

“The challenge of thinking big is that it doesn’t always show up in the next quarterly GDP report,” he said.

"In Ireland your determination to keep investing in the things that really matter has allowed you to become a place where Irish entrepreneurs are building and creating jobs and taking ideas to the world."
'Bad taste'
Director of personal, business and corporate banking at AIB Bernard Byrne told business leaders the excesses of the past, both within the banking industry and further afield, had "left us with a bad taste and a strong desire for the opposite regime to prevail." He added that the banking system was close to being back on track.

“While the work is not completed, the significant restructuring of the industry that has seen €70 billion of loans delivered across the industry and massive shrinkage of headcount are more in the past than a future prospect,” he said.

"The signs of the return to profitability are strong and 2013 will prove to have been the watershed year where the debate about credit provisions is finally laid to rest with the pillar banks seeing 2014 as the year when profits exceed provisions for the first time. We are within touching distance of the self-financing viable banks that are so badly needed."
Grounds for optimism
President of Dublin Chamber of Commerce Liam Kavanagh said there were grounds for optimism about the economy but that more needed to be done to get the country back on track.

Calling for the retention of the 9 per cent Vat rate, he also stressed the need to retain the current corporation tax rate to attract foreign investment.

Mr Kavanagh also stressed the need for a directly elected mayor for the capital. “Dublin needs its own ‘political champion’. The Chamber believes that Dublin should have a directly elected Mayor. But that office must have real executive power and authority to drive the promotion of enterprise, innovation, tourism and transport for the city,” he said.