This General Election will be one of the more consequential in recent times. Elections are always an opportunity to reframe the challenges which drive society, but the manifestos put forward by political parties in this election are likely to underpin ongoing and material change in our economic and social model particularly those that form the Programme for Government.
Political manifestos will contain significant promises. All these commitments bely one very clear global trend. Ireland’s business model, the tax producing engine which will pay for these commitments, is in an increasingly precarious place.
Over the past six decades, the Irish economic model was based on a set of consistent policy pillars – a competitive business model, political stability, openness to people and trade and growing educational attainment. Whilst those pillars have evolved over time, the same basic set of consistent policies have remained at the core of raising living standards.
In a global context, we are a small open regional economy in the European Union. Openness to flows of trade, capital and people are central to our economic model. It drives investment in our offices and factories and ensures that we have a constant flow of innovation and ideas. The income that companies go out and earn in global export markets is then recycled into the domestic economy. This largely determines how much money is available here at home for both households and the Exchequer.
The Irish business community is a key component of a healthy and vibrant society. It is well understood how businesses provide opportunities for meaningful employment in local areas. More than that they also act as a lynchpin of social life in our communities in our cities, towns and villages. Successful businesses underpin a cohesive and prosperous society.
Despite a challenging environment, Ireland also stands on the cusp of an exceptional opportunity. This election is a chance to ensure that we are not complacent about the opportunities that economic success has delivered for society and to set out an ambitious vision for the country.
Business success has delivered bountiful resources for the State. In the past five years, business through corporate tax alone has provided €100 billion to the Exchequer and much more again through wages and income tax. Without these outsized tax payments by corporates, the Government would be borrowing to run the State. We should never take this contribution for granted but neither can we ignore the opportunity that it presents for the country.
The competitiveness of our economy is driven by a wide variety of factors but at their heart is the ability to achieve high performance and productivity across our sectors, whilst remaining relatively competitive on our cost base. Factors which are core to our ability to compete – such as infrastructure and skills – are covered throughout our manifesto.
All countries will be equally challenged by the same disruptive forces, but Ireland’s recent economic success means that it is coming from a position of strength; one which can herald an unparalleled period of investment for a new economic model. If we respond effectively to the disruptive forces of decarbonisation and digitisation, we can reshape the country for a prosperous and sustainable future. Business is calling on all political parties to shake off any complacency about economic success and to plan ambitiously for the future.
We believe that our four pillar campaign of fostering a competitive economy; delivering a sustainable quality of life and regional balance; securing Ireland’s role in the world: and preparing the labour market for the needs of the future, can underpin prosperity for current and future generations.
The next Government must seize the once in a generation opportunity to reshape the country through investment. In particular, it must embrace the decarbonisation challenge by setting out an energy strategy which can sustain both our planet and our prosperity. The country needs an energy strategy which can balance the decarbonisation imperative with both competitiveness and security of supply requirements. An ambitious energy strategy which seeks to maximise Ireland’s exceptional potential for renewable electricity generation would deliver a competitive edge for the economy for years to come. It would spawn new enterprise development and crucially, as energy consumption must shift closer to the location of renewable generation, it can be a game changer for effective regional development.
Ireland has achieved spectacular success in recent decades, moving from a depopulating, underdeveloped nation to one of the world’s most prosperous economies with an effective distribution of economic success across all regions of the country. While there are many policy challenges still to be addressed, particularly in areas such as housing and public service provision, we currently face these from a position of great strength.
We cannot stand still. We must now underpin our future prosperity with sensible economic policies which protect our global competitiveness and through delivery of the most ambitious investment programme in the history of the State.
