Mr. Ian Talbot:

I thank the committee for inviting us. I will share my time with Mr. Aidan Doyle, chief executive of Sligo Chamber of Commerce, who will add a regional dimension to the discussion. As many of the members of the committee will know, Chambers Ireland is Ireland’s largest business network with a geographic footprint that extends across the country, with 41 chambers, of which Dublin Chamber of Commerce is our largest. We were delighted to launch a new Laois Chamber of Commerce this morning, with approximately 350 people in the room. It is a vibrant network. Every member of the committee has a chamber of commerce in his or her constituency and will no doubt be glad to see their representatives at our network's event tomorrow morning, to which they have all been invited.

We welcome the Brexit-driven approach which the Government is taking to budget 2020 as a necessity and believe it would be foolhardy to take a business as usual approach. The first order effects of Brexit will hit certain exposed sectors of the economy such as agrifood and tourism where we know issues will arise as a direct consequence. The second order effects will likely have a broader impact, potentially depressing consumer spending in regional areas significantly. We think it is wise to assume the worst, to seek to leave the national balance sheet in as robust a position as possible and to be ready to respond.

Those in the business community who are most likely to be affected by Brexit have taken actions necessary to minimise its effects on their businesses, such as rerouting logistics in a way which is unlikely to change regardless of what happens next with Brexit. This has imposed additional costs on Irish businesses, which will continue, and assuming Brexit occurs, there will be further hits to the economy. This kind of external shock is likely to have a strong, immediate impact on our economic growth at the national level, the duration of which is unclear, but we have no doubt that we will all be collaborating to address the regional impacts of Brexit for a considerable time to come.

While Brexit consumes so much of our policy discourse, we must not lose sight of the longer-term challenges that Ireland will meet.

It was with this longer-term perspective in mind that Chambers Ireland formed its pre-budget submission, which is centred on the decarbonisation of our society and the necessary mitigation and adaptation strategies which follow from that.

While there is broad acceptance in the business community of the need for carbon taxes, it is vital that the proceeds of such taxes do not flow into the general fund. Over €400 million is already collected through carbon tax each year. We welcome the early indications from the Taoiseach that ring-fencing will be the Government's chosen approach. It is crucial that the current revenues and any future increased revenues are ring-fenced and channelled into schemes and infrastructure which will allow people to access lower-carbon alternatives. Increased carbon taxes which are not complemented with investment in grid infrastructure, public transport and retrofitting will have a disproportionate impact on poorer people and the more remote parts of the country. We believe that a schedule for carbon tax increases should be set out because this would help businesses to plan and budget for such increases and would bring greater predictability to the present value of energy-efficiency measures, thereby encouraging viable investment.

At an infrastructural level, our energy networks need to transition towards meeting the challenges posed by the growth in renewable energy sources while maintaining energy security and continuity of service. If our grid is to cope with the added demands that Government policy relating to e-vehicles and the full electrification of home heating will place on our electricity network, its generation and transmission capacity will need to be expanded. This will require considerable investment and needs to be a priority. Unless we can achieve this, we will not be able to meet our emissions targets and the related fines will continue to grow. We need to ensure investments which are in line with the principles of the national development plan are continued. Such investments, particularly in public transport, are necessary for a long-term reduction in our society's carbon intensity. As these investments will act as a countercyclical ballast against the economic headwinds that are before us, they will allow our economy to maintain momentum during difficult times.