Mr. Tom Parlon:

Thank you very much, Chairman, and good morning.

My name is Tom Parlon, and I have been director general of the construction industry since January 2008. Before then I spent two months working with Liam in preparation for his retirement. In my previous career, I was a farmer and was heavily involved in the Irish Farmers' Association serving as deputy president from '91 to '93 and from president ... and as president from '97 to 2001. I also had a brief political career, serving as a TD for Laois-Offaly from 2002 to 2007. And during my time here in Leinster House, I was also Minister of State in ... at the Department of Finance.

Liam has already outlined the nature of the CIF and the role and the services played by the federation. Ultimately, we exist to serve our members. It is the various construction companies employees and contractors who make up the Irish construction industry and who are the backbone of the CIF. Without them, there wouldn't be any federation.

Our role is to help our members on a broad industry-wide level and to provide support to them under many different headings. These include issue like ... issues like industrial relations, contracting representation and lobbying, health and safety as well as several other areas that Liam has already referred to. The nature of our membership is what gives CIF status in the Irish construction industry and the wider economy. We are also a means for the industry to come together and to have a strong united voice. It is also this responsibility that makes the CIF leaders for the construction industry in Ireland. Our job is not just to work with the industry, but to work on their behalf through good times and through bad times.

As this inquiry is all too aware, over the last ten years the construction industry went through some very, very good times and we've also had to endure just over seven years of decline. Obviously, it is the work of this Inquiry to find out the causes of the collapse of the economy as a whole, and I would like ... I would also encourage you to take a ... a close look at the plight suffered specifically by the construction industry during the course of your deliberations. Without wanting to pre-empt the findings of the committee, I am sure that these findings will suggest that the causes of what went wrong in the economy were complex and had many different dimensions. Certainly, one element that went wrong was the scale of the industry, how big it grew. It reached unsustainable levels of activity and was responsible for far too big a percentage of the Irish economy.

As leaders of the industry, the CIF have to accept responsibility for the role we played in that growth. Everything we did and every position we adopted we did to help our sector and to help our members. Our various policy positions were driven by the views of our members as well as the prevailing economic and industry thinking at any particular moment in time. Yes we were being told by national and international experts, economists and the Government that there would be a soft landing but we have to take responsibility as well. However, time has shown that that approach was wrong and we're certainly sorry for that situation. We accept that we should have done more to encourage a more responsible level of activity, we should have taken greater heed of the warnings coming from the various sources even if they were going against the mainstream. We should have encouraged greater caution. If we knew of course back then what we know now we would do things entirely differently. There was a huge demand for houses and people needed some place to live, but looking back with perspective we can see that some of that demand was driven by speculation and the level of house building became sustainable. We're sorry that this happened, we want to learn from the lessons that the economic collapse has taught us. We are acutely conscious that tens of thousands of people in the construction sector lost their jobs and we want to ensure nothing like this happens again. If the construction industry was one of the drivers of the boom it is certainly one of the major victims of the crash.

Practically from around the time I joined the CIF, the construction industry had entered into a period of decline and difficulty. I believe if you look at the Ulster Bank purchasing managers index that there were about 75 consecutive months of decline from May 2007 until September 2013. The impact on the sector was massive, equally the pain felt in the industry had huge implications for the rest of the economy.

Throughout the course of the downturn huge numbers of construction companies went out of business, at one point practically every week was bringing news of another significant company closing its doors. At times it seemed like the industry was losing hundreds of businesses every month, it was the case. It was a depressing and distressing time for our industry, for construction workers and their families. The impact was most keenly demonstrated in the unemployment figures. In the second quarter of 2007 there were 273,900 people directly employed in the industry according to the Central Statistics Office, by the first quarter of 2013 the number had fallen to 96,300. That's a loss of 177,600 jobs over the course of almost six years so, you know, the impact that had on families around the country in every town and every village had a major impact.

The turnaround had also been clear in Exchequer returns, the people who lost their jobs and the ones who didn't emigrate or seek job opportunities abroad went from paying income tax to receiving social welfare payment. We never want to see the construction industry suffer like this again. We want to see a sustainable construction industry operating at about 12% of GNP. This is a level that Forfás recently and the Government have both stated is appropriate for a country of our size with our demographic needs. Unfortunately now and I ... acknowledge that we went to 23% of the economy at one stage back in 2006, we're now a long, long way below that particular point but thankfully we're now starting to move in the right direction. However, as part of our final deliberations I would encourage the inquiry to at least note how badly the construction sector has suffered during the downturn.

As part of my appearance here, Chairman, before the committee, I was asked to talk about the establishment, the operation and the effectiveness of NAMA. I think it is fair to say that the industry was very worried about what NAMA was going to be and what it was going to involve when it was established. It was an entirely new entity that hadn't been established anywhere else on the globe, and you will see from the various reports that we provided to the inquiry that our members were expressing massive concern about the various provisions and the powers that would be provided to NAMA. We were also anxious that the wrong approach could mean even greater suffering for an already distressed construction industry. As we say in our submission to the inquiry, and I quote, "It was clear to the CIF that its members would be subject to an entirely different banking environment and the establishment of NAMA would have a profound effect on the ability of some members to support their ongoing businesses."

I think a lot of our concerns came at that time from the scarcity of information about NAMA. There was a lot of speculation floating around and the problem was that no one fully understood just how NAMA would end up operating and how it would work with the construction industry. It is also fair to point out that the CIF wasn't alone in having concerns about NAMA prior to its establishment. I know that many Members of both Houses of the Oireachtas were particularly verbal in their opposition to NAMA. However, the extensive public debate on the establishment of this entity was a very good thing. It allowed concerns to be taken on board and, in some cases, assuaged before the enactment of legislation.

The CIF believe that NAMA are doing a good job in handling a very difficult role. On a macro level, we fully acknowledge that NAMA are fulfilling their remit and seem to be achieving results. They are also one of the few sources of development capital in recent years for the industry, as they are funding the finalisation and the development of some of their assets to realise their full value. Again, this is important and has played a part in the recovery of the construction sector. While we may have expressed strong concerns in the past, I would like to think that the CIF and NAMA have since developed a more co-operative approach. As we have seen the progress being made by NAMA, the industry has come to realise that they are part of the solution. We respect what they are doing and a signal of that respect, I think, has been the invitation we have expended to senior members, both chairman and chief executive, to speak at our CIF annual conference for the last three years. In conclusion, Chairman, I'd like to thank the committee for the opportunity to talk about the various issues surrounding the economic downturn and the construction industry and I would hope in the course of our discussion that we're able to bring some greater understanding to the committee's deliberations. And I look forward-----