Mr. Ger Gibbons:

On behalf of the Irish Congress of Trade Unions, ICTU, I thank the joint committee for the invitation to discuss competitiveness, the cost of doing business and related matters. This follows on from the invitation we received from the committee and the submission we made to it in August.

ICTU is the representative body for 46 affiliated unions and seven associated bodies on the island of Ireland. These unions and bodies have a total membership of 550,000 in the Republic and 200,000 in Northern Ireland, making ICTU the largest civil society organisation on the island.

We seek to represent and advance the interests of all workers through collective bargaining and social dialogue. We particularly welcomed the invitation to focus on factual information from which the committee might be able to draw conclusions or which could be put to others for comment.

In these opening remarks, I will focus on a number of key points from the submission. First, as NERI says in its submission, competitiveness is a relative concept and is a function of an economy's underlying productivity and its cost base and, crucially, how economy and firm productivity and cost bases compare with competitor countries and firms. Any discussion of these issues must therefore start by comparing Ireland's competitive performance, in particular with other high-income western European countries - the Benelux and Nordic countries, France, Germany, Austria and the UK.

While we do not necessarily endorse its criteria, methodologies or recommendations, we note that the International Institute for Management Development's World Competitiveness Report 2025 ranks Ireland as the world's seventh most competitive economy. This is down from fourth place in 2024 and second in 2023, but is above Ireland's 16th place ten years ago. Furthermore, Ireland was again ranked as the most competitive economy in the euro area.

I mention in passing that the National Competitiveness and Productivity Council attributes Ireland's fall in the past year largely to a deterioration under business efficiency, where we fell from fourth to 11th place, and in management practices, where we fell from third to seventh place.

The European Commission's 2025 country report for Ireland also considers Ireland to have a competition-friendly regulatory environment. It says that Ireland presents "a strong competitiveness profile overall" and that we meet the "fundamental conditions for competitiveness". Equally, the OECD's economic survey of Ireland also highlights Ireland's "competitive starting position" and says that Ireland's regulatory framework is "among the OECD's most competition-friendly".

Despite all the talk of business failures, Ireland's insolvency rate has been stable over recent years, at 27 per 10,000 firms in 2023, and 29 per 10,000 in 2024, and so far in 2025. This is below the rate of 36 per 10,000 in 2019 and well below Ireland's 20-year average of 50 per 10,000.

Second, any discussion of these issues must also acknowledge the facts, not myths, about wages. The European Commission pointed out in June that wage growth in Ireland in the decade to 2024 was "below what could have been expected...given macroeconomic [developments]". It stated Ireland's labour costs are generally in line with peer countries and eighth highest in the EU in 2024 and in 2023. It also stated that Ireland has the highest level, one in five, of low-wage earners among peer countries. Eurofound estimates the national minimum wage at 48% of gross median wages, which is the same as in 2023, in 2020 and even in the year 2000, 25 years ago. It is well below the 60% reference value used internationally to assess adequacy and now enshrined into Irish law since last November by the only legislation the Government has adopted so far to comply with its obligations under the adequate minimum wages directive. The national minimum wage is still €1.25 below the real living wage.

I highlight these facts about Ireland's comparative performance and wages in Ireland not to suggest that there are no issues around competitiveness and the cost of doing business - we acknowledge that there are - but to make the broader point that the current dominant, business-led narrative, with its sole focus on driving down wages, not only distorts reality but diverts attention from Ireland's real competitiveness challenge, how to improve productivity in domestic-owned firms.

It is of course the case that international assessments of Ireland's competitiveness performance have to be treated with caution, as our rankings are skewed upwards by highly productive multinationals, especially US multinationals. The European Commission also pointed out in June that productivity in domestic-owned enterprises lags behind foreign-owned firms and their euro-area counterparts and warns that this will hinder the prosperity and resilience of the economy and overall living standards.

In preparing for today's meeting, we looked back at the joint committee's first exchange with some of the business groups last July. Unfortunately, we did not even find an acknowledgement from them of the challenge of low productivity in domestic-owned firms, never mind any suggestions on how to improve it. While Ireland's seventh place ranking in the world competitiveness report 2025 is thus inflated by a small number of multinationals, it is worth pointing out that all the other European countries in the top 15 - Denmark in fourth place, Sweden in eighth, the Netherlands in tenth, Norway in 12th place, Finland in 14th and Iceland in 15th place - are all countries with much higher levels of collective bargaining coverage and trade union membership. Thus, there is a high-road inclusive strategy for improving productivity and competitiveness through collective bargaining and social dialogue.

Indeed, the potential of collective bargaining and social dialogue to improve productivity and competitiveness is increasingly acknowledged and advocated at European level: in the June 2023 EU Council recommendation on strengthening social dialogue, which the Government supported; in the 2024 Draghi report on the future of European competitiveness; in the European Commission's January 2025 Competitiveness Compass; and even in the March 2025 European Pact for Social Dialogue, agreed by the European Commission with the European-level social partners, including us but also with IBEC and ISME.

ICTU's new economic model policy paper, developed with NERI and discussed at our biennial conference in Belfast in July, assesses Ireland's current economic situation and challenges, North and South, and sets out a framework for achieving a more productive economy, more and better jobs, greater economic security and greater economic resilience, with collective bargaining and social dialogue being central to the entire framework.

ICTU considers that the most effective way of addressing the real issues around competitiveness and the cost of doing business is by promoting collective bargaining, in line with Ireland's obligations, which we still have to implement, under the adequate minimum wages directive. I am happy to take any questions about our submission and these opening remarks. I look forward to the discussion.