BaileNuachtCartlann Aitheasc agus Preaseisiúintí

Speech by the Taoiseach, Mr Enda Kenny T.D. Institute of Directors' Autumn Lunch, Four Seasons Hotel, Friday, 23rd September 2011 at 12.30 pm

 

Friday, 23rd September 2011

Introduction
Thank you Tom for your kind introduction. I am delighted to join you all here today. I would like to thank Maura Quinn for inviting me to be your Guest of Honour.

This afternoon I see before me a broad range of successful businesses operating in Ireland.

The one thing we all have in common is our collective desire to return Ireland to a strong, sustainable economy. It is Government, business, citizens, working together side by side that will get Ireland back on track.

It is your companies that will create the growth and jobs.

But it is my Government that will have to build a supportive, flexible and competitive environment where businesses can flourish and start-ups thrive.

And I believe we have every reason to be optimistic about our prospects for success.

Economic outlook
When my Government came to office six short months ago we faced unprecedented challenges:
A shrinking economy;
A broken banking system
Unbalanced public finances, and
A shattered international reputation.

This afternoon I can report to you that I believe we have made significant progress in all these areas.

The latest economic growth figures are encouraging. While there are great challenges ahead it proves that the policies are working. We need to stay the course and see this through.

We have stabilised the banking sector. We are beginning to see some small net inflow of deposit funds - both retail and corporate - for the first time, which plays a critical part in the Irish banks achieving their targets.

The restructuring of the banks took place ahead of schedule and the recapitalisation of the banks to satisfy the stress tests were achieved on time at the end of July 2011.

The Government has successfully renegotiated our support programme interest rates which will give rise to significant savings for the state. Some €900 million in 2012 and over €10 billion over the lifetime of the extended programme.

A Trojan collective effort by Government, business and the people has helped restore Ireland's international reputation. The Government continues to receive acknowledgement for hitting our economic targets, business leaders continue to market and promote Ireland as a land of business abroad and our people did us proud through the classic Irish welcome extended to Queen Elizabeth and President Obama.

When recovery comes about, it will be the people's recovery. When people abroad look at Ireland, they see our difficulties. But are amazed by how we, as a people, deal with these challenges together. Ireland is an example of success through collective hard work and determination.

But least anybody here needs reminding there is still a big job of work to be done.

The difficult process of banking reform continues. The domestic economy continues to lag behind our exports. Job creation is still a necessary top priority. And the structural reforms of the Irish economy and public service continue apace.

The ongoing market turbulence remains a great concern to Ireland. It has the potential to derail economic recovery. This is why we are working with our European partners to work on solutions that will improve the way the Eurozone works as a whole. The challenge must be to deploy overwhelming financial firepower to support those Eurozone countries that are pursuing and implementing sustainable economic policies.

While the international situation remains unpredictable, there are significant reasons to be optimistic about Ireland's prospects.

Our exports continue to perform strongly with a 7% increase recorded in the first quarter of this year.

Crucially, our balance of payments is now in surplus, proving the strength of our economic sustainability.

Our competitiveness has improved significantly. Business costs have fallen across the economy and labour costs are expected to reduce further this year.

Productivity grew last year at the highest rate since 2002.

The Government will take this opportunity - and see through the next round of adjustments.

Step by step. Decision by decision. We will put Ireland on the path to long term recovery.

Contribution of FDI
FDI in Ireland increased significantly in 2010. IDA clients account for over 70% of total Irish exports.

Ireland's 12.5% rate of corporation tax remains sacrosanct and is a cornerstone of our economic policy and will remain so.

This view is shared across the political spectrum and public opinion in Ireland.

Our corporation tax scheme is simple and transparent while other countries choose to apply more complex systems.

But our arrangements are appropriate for our small and flexible export-oriented economy. And will help us along the road to recovery.

Almost 11,000 new FDI jobs were created in 2010. The outlook for 2011 looks positive with investments to midyear up on the same period of 2010.

However, if Ireland is to have a real opportunity of early-mover advantage in key sectors we must be willing to make choices in our investment.

We must clear obstacles to growth and back the innovators.

That means supporting new industries like cloud computing, lifesciences, cleantech, digital content, the digital gaming industry and others.

We have shown our commitment to date in some of these sectors and we are determined to champion the cause of the others through policy and creating a competitive business environment.

Indigenous sector
While we have a very strong FDI community we must build stronger Irish businesses.

Enterprise Ireland is working to drive growth in our indigenous companies through a broad range of programmes and supports.

Small business face challenging times but actions must be taken to ensure survival.

These include further reductions in business costs, access to credit and driving productivity and innovation.

As I have said, I want to make Ireland the best small country in the world in which to do business.

Small business
The Government wants to support small business in anyway we can. SMEs can provide the badly needed jobs in every town and townland across the country.
We do not underestimate the ambition, creativity and perseverance of the entrepreneurs running these companies. They are crucial to the success of Ireland Inc.

It is vital that the voice of small business is heard and reflected in our policies to grow jobs and rebuild the economy. That is why I appointed Minister of State John Perry with specific responsibility for small business, to free up many of the obstacles that obstruct employers creating jobs and growth.

My vision is to make Ireland synonymous with entrepreneurship and successful business activity. I believe that the Irish people have it within them to be even more successful on the global business stage. My job is to help release that potential for the good of the country.

Credit
One of the key priority areas that we are working to address is the difficulty of accessing credit.

As part of the jobs initiative and in accordance with the commitment given in the Programme for Government, work is advanced on the design of a Temporary Partial Credit Guarantee Scheme.

The Government is also committed to developing a suitable micro-finance fund for the micro-enterprise sector.

With the introduction of these Schemes over the coming months we will have made a big step towards a more sophisticated and accessible financing environment for SMEs in Ireland.

The Innovation Fund Ireland continues to attract venture capital to support high potential businesses in Ireland.

Role of business
So the Government is taking action on a number of fronts to support enterprise.

We are in ongoing dialogue with business in relation to identifying further obstacles or blockages that we need to address.

But you also have a key role to play in facilitating economic recovery.

Despite the success of a number of Irish firms in global markets, we can do a lot more to increase the footprint of Irish firms in overseas markets.

Firms need to increase their investment in innovation, further enhance productivity, continue to develop management capability and invest in staff.

Your leadership, ambition and vision will be fundamental in identifying and anticipating changing market and customer needs.

The vast majority of exports and export-led employment by Irish owned firms is accounted for by companies which have invested in innovation and continuously adapt.

In particular, I very much welcome the increasing collaboration and partnerships you are forging with other companies, across a range of sectors and with higher education and the research community.

I would urge you to continue and increase this collaboration.

Corporate Responsibility
I would also urge you to consider carefully the role and responsibilities of the director in modern business.

We must all learn the lessons from the catastrophic failures of governance, in Ireland and abroad, which have caused this economic crisis.

People in senior business positions need to fulfil their responsibilities to their companies and to wider society so that we prevent similar failures again.

For our part the Government is fundamentally reforming our system of financial regulation.

Conclusion

At the outset of this Government I said that this was going to be the hardest working Government in the history of the State.

Six months later we can look back at a time of frenetic activity. The country is in a better place.

I can assure that there will be no slowing down. Only a growing determination to put this country and economy right.

It will be a massive collective effort of the Irish people, whether in business, the public service or those who volunteer.

But the effort will be worth it in the end. We will regain our economic sovereignty. We will restore the good name of Ireland among the nations of the world.

This is my mission. This is the Government's mission. This is our mission. And there will be no rest until we succeed.

Ends

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