Oireachtas Joint and Select Committees

Wednesday, 8 February 2017

Committee on Budgetary Oversight

Macroeconomic Outlook: IBEC

2:00 pm

Photo of Tommy BroughanTommy Broughan (Dublin Bay North, Independent) | Oireachtas source

I apologise for missing the earlier discussion. One of the boards of which I am a member, the Northside Enterprise Centre, is a member of IBEC and receives a large amount of interesting information from it. I apologise if members have asked the question I am about to ask. Did IBEC submit to the Minister for Public Expenditure and Reform, Deputy Paschal Donohoe, a fully costed budget, similar to what this committee tries to do? The summary of recommendations and costs in the submission collates various proposals on tax cuts and expenditures. Is an overall figure provided elsewhere in the document?

IBEC probably makes a strong case every year on the need to attract and retain highly skilled workers. Its submission refers to the effects of taxation on highly skilled workers. The Minister repeatedly asks the Opposition to produce a menu of alternatives. What menu will IBEC offer? For example, it opposes changes to the 9% VAT rate for the tourism sector, a tax on sugar and so on. How does it propose to maintain expenditure? Social housing and health, which are major issues for the workforce, are strictly rationed and the effect of this rationing on ordinary families has been the subject of considerable media publicity this week. Does IBEC agree that we should continue to ration housing and health or should we spend the money needed in these areas? If so, how does it propose to achieve this?

IBEC refers to staying the course and the witnesses probably referred earlier to the budgetary rules, particularly in respect of the capital plan. I welcome their comments on the capital plan and I hope IBEC's viewpoint will be shared by our European colleagues in order that we are given greater wriggle room to develop infrastructure in the west, as outlined with great eloquence by the previous speaker.

On the regions, decentralisation failed because it proposed scatter-gun development across the country. Cork, Limerick, Galway, Waterford, Sligo, Castlebar, Kilkenny and a cluster of three towns in the midlands benefitted from decentralisation. We should also consider a second tier of towns such as Wexford as locations for decentralisation. Deputies who represent the Dublin region sometimes become a little depressed because Ministers invariably knock the city when announcing plans, arguing that this or that cannot be done. I understand the population of the four Dublin county council areas has reached 1.4 million and the population of Leinster is approaching 2.5 million, which is the population of Wales. I do not see much wrong with this. Munich, a world class city, is the capital of Bavaria, a German state of roughly the same size as Ireland. This country needs a world class city as its capital, which will necessitate building a metro to the airport and completing similar projects. At the same time, this should not prevent Cork, Sligo and other places becoming classy cities. It is possible to achieve both objectives. The Taoiseach and Minister for Housing, Planning, Community and Local Government, Deputy Simon Coveney, presented a false dichotomy on this issue the other day.

Dublin is the capital of the State and we want it to be world class city, rather than third or fourth rate city. If one looks back to the late 1980s before the docklands were developed and the Luas was built, it was a third rate city, with a desperately low level of resources provided for third level education and so on. We need to develop Dublin as well as the other cities.

Is IBEC being too sanguine about Brexit? Other members probably asked that question earlier. The witnesses indicated that retail is in a little trouble. Agricultural exports, especially food, are critical to the economy. Recently, we heard that as much as one fifth of companies in the city of London may move to Ireland, which would be incredible. However, one also hears that food companies may move to the United Kingdom. Does IBEC need to do more hard research on Brexit?

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