Chambers Ireland has today called for basic increases under the national pay agreement to be fixed at 2 per cent below GNP growth with any further pay rises linked to productivity.
Speaking ahead of the National Business Forum 2006 taking place in Dublin today, Chambers Ireland chief executive John Dunne said although current economic growth appears healthy, it is fuelled by unsustainable increases in credit while exports and productivity are both declining.
"At this point we are facing a challenge rather than a crisis but there is a real risk to Ireland's success if the sheltered economy, which dominates the trade union movement, is allowed to set the terms of a new national pay agreement," Mr Dunne said.
"Irish business is quite capable of meeting the challenge of globalisation but only if it is allowed to do so without crippling wage or regulatory handicaps," he added. "A central component of this strategy must be to secure cheaper inputs for the goods and services that we produce here in Ireland. This will require a proactive import as well as an export strategy," he said.
Mr Dunne said the second priority must be to capture a growing share of key markets overseas.
"Those who have been successful to date are entrepreneurs who understand the practical, psychological and financial issues of entering and winning market share beyond the comfort zone of an ostensibly thriving Irish domestic economy," he said.