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Economic Policy

Dáil Éireann Debate, Tuesday - 14 December 2021

Tuesday, 14 December 2021

Questions (10, 11, 12, 13, 14)

Richard Boyd Barrett


10. Deputy Richard Boyd Barrett asked the Taoiseach if he will report on the newly published response to Ireland’s Competitiveness Challenge 2021. [60208/21]

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Paul Murphy


11. Deputy Paul Murphy asked the Taoiseach if he will report on the newly published response to Ireland’s Competitiveness Challenge 2021. [60211/21]

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Mick Barry


12. Deputy Mick Barry asked the Taoiseach if he will report on the newly published response to Ireland’s Competitiveness Challenge 2021. [61472/21]

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Alan Kelly


13. Deputy Alan Kelly asked the Taoiseach if he will report on the newly published response to Ireland’s Competitiveness Challenge 2021. [61499/21]

View answer

Mary Lou McDonald


14. Deputy Mary Lou McDonald asked the Taoiseach if he will report on the Government's response to Ireland’s Competitiveness Challenge 2021. [61495/21]

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Oral answers (23 contributions) (Question to Taoiseach)

I do not agree with the language-----

We will allow the Taoiseach reply to the questions first.

I do not know what language he does not like because I have not answered yet. Was his comment anticipatory?

I propose to take Questions Nos. 10 to 14, inclusive, together.

The National Competitiveness and Productivity Council published its annual Competitiveness Challenge report in September. This makes recommendations to the Government across a range of policy areas. On 30 November, the Government published a formal response to the council's recommendations. This response was co-ordinated by my Department, drawing together material from relevant Departments. This is the second year in which a formal response was issued by the Government to the Competitiveness Challenge report.

The council outlined a set of 20 priority actions or recommendations across a broad set of areas for Government consideration. This areas include business, environment, boosting productivity and infrastructure, with issues such as insurance, climate action, childcare, housing, skills and the changing world of work highlighted. The Government welcomed the focus of the council on the priority areas outlined and agreed both on their importance and relevance to Ireland's continued competitiveness. The Government's response demonstrates that the council's recommendations are aligned with the Government's own ambitious agenda for economic recovery and sustainable development.

What I was about to say was that I do not like the language of competition in terms of a sustainable economy but nonetheless some of the matters discussed in the document are important. This relates to my previous point about musicians. If we do not support key sectors such as music and culture, we will really pay for it. I ask the Taoiseach to look at that because although some venues are getting some supports, individual jobbing musicians are not getting the support they need. Many of them will go out of business and they will not be musicians and entertainers on the other side of this pandemic. That will be a great loss to our society and economy, including our competitiveness, much as I dislike that term.

This is also true when it comes to low pay and the cost of living challenges that large numbers of working people are facing now. Another of my hobby horses is the plight of taxi drivers. If we are to be competitive, we will need taxi drivers at the airport for tourism and all the rest of it but not many will be left in business if they do not get the support they are being denied now? More generally, there are many low-paid workers in critical sectors and we cannot get people into those areas. The Government is complaining that everybody is on the PUP and that is why we cannot get people. It is not the reason; it is because the pay is too low for large numbers of workers in many areas.

Recommendation 3.4 of the report is:

To increase certainty for individuals and businesses, publish a timetable that shows how the national broadband plan roll-out is being brought back on track

This was clearly conceived before the latest and emerging very significant scandal relating to National Broadband Ireland. I found the Taoiseach's answers earlier wanting in him seeking to kick the matter to the Minister's regular questions later today. To be blunt, we know from very good work of The Currency, in summary form, about what looks like a massive swindle perpetuated on the public, facilitated by a lack of transparency from the Government and all to the benefit of a shadowy hedge fund. In essence, the requirements for providing equity have apparently been satisfied not by providing equity but instead by providing loans at extortionately high rates. All this is done while very substantial fees are collected, paid for by the public.

There is a list of 14 very appropriate questions on but I will not get a chance to ask all of them. I will ask some and encourage the Taoiseach to look at them and provide answers. Why has the contract not been published in full as promised to the Oireachtas by the then Minister, Deputy Bruton? Why are the sections of the published contract governing how investors contribute capital to National Broadband Ireland redacted? Why was this deemed commercially sensitive after the contract was signed and the parties were no longer exposed to competition? There is a series of other relevant questions.

The Sunday Independent reported last weekend that the Cabinet was secretly briefed about massive job losses and warned that tens of thousands of jobs could be lost when the EWSS ends next April. Can the Taoiseach confirm this is the case? Is the Government carrying out an analysis of companies that have been getting this support and what supports will be put in place to save jobs?

The rising cost of living has been mentioned and it is having a major impact on workers and businesses. Private sector unions are to seek pay claims of up to 4.5% next year to reflect the surge in inflation that is eroding what people can afford and standards of living. As the Taoiseach knows, issues around energy bills have been well ventilated in this House.

Will the Taoiseach reflect on the fact that going back to normal is not what many people in this economy need? A total of 23% of Irish workers pre-pandemic were in statistical low pay, according to the OECD, and 40% of young people under the age of 30 were in insecure work. That is not an economic model we want to return to and that is not the type of competitiveness that does young people or vulnerable workers any good at all.

I too would like to raise the reports of over the weekend that the Cabinet received a memorandum earlier this month warning that thousands of businesses may fail and tens of thousands of jobs may be lost when the EWSS ends next April. We are told the memorandum highlights that many of these jobs are in the hospitality and entertainment sectors. Did the Cabinet receive this memorandum before the latest round of restrictions was announced by the Taoiseach? Will he provide us with more detail on the projections given to the Cabinet? It seems astonishing the Government ploughed ahead with closing the schemes, knowing they needed to be extended at current rates so that workers and businesses would not face a cliff-edge scenario.

Speaking at an Oireachtas committee last month, representatives from the National Competitiveness and Productivity Council underlined the need to create a more robust economy that is less vulnerable to economic shocks. What is the scale of job losses and business closures that are expected next year and are they to be concentrated in a limited number of sectors? Data provided to the Government need to be analysed but it also needs to be shared with those most affected. Has this happened? If not, is it the intention of the Government to share this information and data?

The Sunday Independent reported that 300,000 jobs are being supported and approximately 25,000 businesses are under pressure as a result of Covid and the restrictions that have been implemented. IBEC has stated that in hospitality, there will be 40,000 fewer jobs in 2022 than in 2019, an incredible figure. The majority of these jobs will be lost by women and the second greatest proportion of these jobs will be lost by young people aged between 16 and 25.

We have recently seen the emergence of zombie businesses, that is, businesses that are surviving only because of the supports the Government is providing. They are racking up massive debts monthly. I know of one café with four staff that had no debt in 2019 but, because of debts to the landlord, suppliers and Revenue, it now owes €100,000. Some of those businesses are saying they will lash out for Christmas period, in order that they can earn as much as they can, but close once January comes along.

Many of these businesses are not going to survive. As a State, we have to look at dealing with the debt they are experiencing and support it in some way. The Taoiseach did it for the banks a number of years ago; now, a large cohort of SMEs are in a similar debt situation and need the Government's support. The livelihoods of tens of thousands of workers hang in the balance as a result.

The questions related to the competitiveness challenge report. Deputy Boyd Barrett, to be fair to him, spoke to the report and the question that was asked. I acknowledge his aversion or discomfort with the word "competition" but we need a competitive economy. Competition at a certain level can bring standards, although it can have the opposite impact in different contexts. We need a competitive economy and that needs good infrastructure, which needs to develop. Housing for workers, for example, is a big challenge for us in order to continue to create economic opportunities in cities and towns across the country. People need places to live in comfort and there needs to be a good public realm to facilitate the attraction of companies, whether foreign direct investment, FDI, or indigenous companies, to various towns and cities. "Competitiveness" is a broad term but it is an important aspect of national policy. It is important we have the annual competitiveness challenge report and that the Government benchmarks its performance against emerging issues.

On the issue relating to EWSS, PUP and CRSS, the intervention by the Government has been unprecedented in supporting incomes and in supporting companies and businesses to keep workers on their payroll in order that we will be in a position to bounce back when we come out of Covid. We have done well this year since March and the emergence of the Alpha variant crisis. We have reopened society and the economy and our exports have done very well since then. Manufacturing has increased, construction is going well in terms of activity levels and house construction, and retail has had a bounceback. Revenues are strong. The Exchequer deficit will be much smaller than originally envisaged. We were facing a deficit of €18 billion to €19 billion but that could be closer to €10 billion at the end of the year.

The economy has been managed well and competently by the Government so far. Of course, there are challenges in respect of how we evolve from a pandemic era back to normality. Because the EWSS and CRSS supports are so unprecedented, there has to be a judgment call at some stage as to how to amend them or evolve out of those schemes, which are economy wide, with a view to, perhaps, having more bespoke supports for different sectors. We need a bespoke support-----

Will the Taoiseach ask the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media to meet musicians in that regard?

There is no issue there. I recently met more than 30 organisations with the Tánaiste and the Minister, Deputy Catherine Martin. Separately, I also met individual musicians with Senator Murphy to discuss issues they had. What comes to mind in the context of music, performance, entertainment and hospitality is the wide diversity of interests and sub-sectors within the sector, so we do-----

There are a number of other questions and we are out of time. I do not mean to interrupt the Taoiseach but we will have to address the questions.

This is the final set of questions.

Is it? I beg your pardon.

The ideal way forward is more bespoke models.

I am not responsible for headlines. The only briefings we get relate to the numbers on EWSS. We certainly did not get a headline saying hundreds of thousands of people could be laid off. In fact, what seems to be emerging - this is not a fact but rather it is suggested by trends - is there has been less scarring of the economy than we might have thought at the commencement of the pandemic that there would be, but many people are still dependent on EWSS. We have brought in the rates waiver for the first quarter of 2022 and restored the PUP in limited circumstances. We are working very hard to support people.

There was no memorandum at the meeting, as reported.

I did not say that. I have answered the questions. Come on, now. The Deputy is trying to put words in my mouth, as she has done previously.

Was there a memorandum?

I said the memorandum was got did not relate to the headlines. I am not responsible for headlines. There was no memorandum predicting that 300,000 jobs would be lost.