Oireachtas Joint and Select Committees

Wednesday, 24 September 2025

Joint Oireachtas Committee on Enterprise, Tourism and Employment

Competitiveness and the Cost of Doing Business in Ireland: Discussion (Resumed)

2:00 am

Dr. Tom McDonnell:

There are a lot of questions there. On the issue of the grid and inertia generally, it is not acceptable how fast things are happening. It is not just about the green transition; it is about housing as well. We need to get the resources aligned and then we need to do it. We have the fiscal resources - that is one thing we do have. We have problems in the private sector with lack of scale for house building, issues to do with planning and so forth, although that is true of other countries as well. We do not have construction workers. That leads on to the Deputy's point about migration; the type of work permits we should prioritise and for what sectors; identifying the weaknesses in our labour supply; and using that as a tool to deal with the housing crisis.

In terms of infrastructure, it is a case of just doing it. We have to allocate the resources and, again, find the construction workers who are not there. We can only ramp it up at a certain level year on year. It is not possible to go any faster. It could be argued there is a case for using tax disincentives to push construction workers out of building hotels, commercial real estate and things like that and into infrastructure. That is another debate. There is perhaps some scope there.

On this idea of inertia, it is about the Civil Service but it also has to be about the private sector and workers. We need sectoral task forces, perhaps through the Labour Employer Economic Forum - making that a substantive body rather than just a talking shop. We need to have working groups which are actively trying to work through these problems and a national consensus on doing that. What are the needs of the economy? Where are the weaknesses? What type of infrastructure do we need? Then we must deploy the fiscal resources to do it, including by using work permits to bring in construction workers from abroad, if needs be. It is about identifying where the resource constraints are and then deploying resources.

There is a general consensus and acceptance throughout the country that our infrastructure is not where it needs to be, dramatically so. Resolving infrastructure problems will resolve the green transition problems as well because much of it is about energy and will be about building a renewable energy grid involving different types of renewable.

Almost everyone seems to agree on this but it does not happen. The question is why it does not happen. That is ultimately a political question, rather than one an economist can answer. That is what the problem is. It requires the political will to identity that this is a national mission. We can only have so many priorities. We cannot have 50 priorities. We have to identity three to five things every five years and say, "We're just going to do that."

There is not much more I can say on that. It is about deploying the resources. We have the fiscal resources but not the labour resources. We need to bring them in, to deal with issues such as planning, to have a more aggressive approach to getting infrastructure built and to just do it. We have done it in the past and other countries have done it too. Ireland is not unique in having these problems. The United States has enormous problems in these areas as well, as do many European countries.

In terms of costs, however, children's hospital fiascos do not happen in every country. Can we bring in the experts to identity how the contracts were set for that and how the project management was done? We can get productivity and efficiency gains by bringing in people from other countries. In research and development, we should target Harvard, MIT and Caltech and use the anti-science movement in the United States to bring those people to Ireland. Similarly, we should bring in people who have successfully produced infrastructure projects on time and in budget from around Europe and the rest of the world to find out how they did it and ask them to do it for us. Maybe that is how we get around it: we bring in the expertise from people who have successfully done it in other countries.

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