Mr. Ian Talbot:

I thank members for their questions. They made some great points. With regard to Deputy Calleary's question about the impact on incomes, the difficulty we have had over the past five years is that it was necessary to get the country's borrowings back to a sustainable level and to do that without destroying the country. We see the budget debate taking place at present and the impact of the debate about the €2 billion adjustment that might be necessary this year. It is our view that taxation is too high and must reduce. Equally, however, we are desperately trying to ensure we do not set people's expectations too high that difficult times are over. There is a middle ground of trying to find the balance that conveys to people that things are improving, but that we are still a long way from where we were when we started into this severe recession.

Things are improving but we are still a long way from where we were before this severe recession. Overlapping with the impact of property charges and water charges it has an impact on retail spending.

We also noticed, prior to the past 18 months, that any shocks anywhere in Europe, such as the talk three years ago of Italy going to the wall, had an impact on shops in Ireland the following weekend. Irish consumers are very aware of the potential impact of international developments on Ireland. It is important to end the shocks, for example, not to introduce new taxes. People need to understand that there is stability and that in future tax will move downwards, and salaries and wages upwards. People have suffered flat or reduced pay and their confidence will, I hope, improve if they see an upward trend in pay, a downward trend in tax and no new taxes. The good weather in the past few days has been enough to get people out spending. There is money in the economy but people’s mindset has been to pay down debt, and prepare themselves for future shocks. The sooner we can kill off the last of the shocks, the better. Confidence is an element of this as well as lack of money in people's pay packets.

In response to Deputy Calleary, IT and the Internet have a big impact and the Department of Jobs, Enterprise and Innovation is actively rolling out its vouchers to get businesses on line and we are happy to work with it on that. Improvement is needed in this area. Quite a few businesses are computer illiterate. We would like to see that improving. We need an improved strategy to make more businesses computer literate and get them on line. It will be quite hard for local retailers to compete with some of the big line operators. In the era when tourists will come with a carry-on bag of the size allowed by Ryanair or Aer Lingus they cannot bring much stuff home. There is an opportunity for a retailer who interests somebody in an Aran jersey in Galway to direct the customer to a website. Tourists typically do not take as much home as they used to do when luggage was kept in the hold. There are certainly opportunities in that area.

In response to Deputy Tóibín, we think the increase of 4.25% to 8.5% in the PRSI rate is particularly detrimental to the wage sector of many retail jobs. That needs to be reviewed, to see whether it should be brought back to where it was. Chambers Ireland has traditionally supported the national minimum wage and continues to do so. We think it is very important to maintain a certain minimum standard but we must make sure the economy is competitive. There are always challenges and trade-offs.

Credit costs and debt continue to be a problem. Many companies have a good core company but at the peak of the boom unfortunately decided to buy a building and piled debt onto their balance sheet for a premises they could now be renting for significantly less. That is a challenge. We are working on several committees, such as those run by the Department of Finance, on credit availability and equity financing for small business and so on, to find some solutions to that problem. One or two of the banks that are exiting the market are starting to drive solutions into the market by being prepared to do deals so that they can exit. That does not solve all the problems. We are seven years into this recession. Many companies and their bankers have learnt to deal with their position.

Chambers Ireland fought hard over the years, and sometimes it is difficult for a business organisation to call for a property tax, which we knew would affect the money in people’s pockets but the core for us was to rebalance the way local authorities are funded. We wanted local authorities to have a diverse set of funding sources in the long term and not to be exclusively dependent on business and or Government. We see the local property tax as part of a medium to long-term evolution of the local authority environment. The recent changes in local authorities and town councils are very positive but they raise issues that we need to manage. We never expected local property tax to lead to a direct reduction in business rates, we simply thought it would add a much more diverse set of funding arrangements for local authorities.