Rising cost of business a 'threat'

The rising cost of doing business in Ireland is becoming a threat to the economy, a leading banker has warned.

Addressing a Dublin luncheon of the Leinster Society of Chartered Accountants, National Irish Bank chief executive Andrew Healy said small- and medium-sized enterprises were under increasing pressure from inflation. Mr Healy said the Government was putting too much emphasis on the contribution of multinationals to the economy and that more needed to be done to support indigenous industry.

"The single greatest threat to Irish prosperity comes from the rising cost of doing business here," Mr Healy said. While the economy was still "sound", he said it was time to make decisions before serious damage was done.

"Many of the components of inflationary pressure are in areas that can be controlled. We may not be able to do anything about international energy costs but we can do something about Irish electricity costs, gas prices and local government charges."

He said the Government had scope to make public spending more efficient. "Any accountant or manager faced with the challenge of cutting costs will start by looking at frivolous or redundant areas of expenditure."

National Irish Bank was acquired by Danske Bank Group in April of last year.

Mr Healy said the bank was not concerned about the recent slowdown in the rate of house price increases.

"It's no harm to have a bit of reality about house prices. Had recent rates of house price increases continued I've no doubt that we would have had a very painful and hard landing eventually," he said.