Oireachtas Joint and Select Committees

Wednesday, 20 September 2017

Committee on Budgetary Oversight

Ex-ante Scrutiny of Budget 2018: Nevin Economic Research Institute, Irish Congress of Trade Unions, Irish Tax Institute and Chambers Ireland

9:00 am

Mr. Ian Talbot:

They now also operate as a County Mayo chamber group and they are also members of the Atlantic economic corridor group of chambers. As an organisation we are doing everything we can to support those businesses working together across our entire island to achieve things. If one looks back ten years, our chambers tended to work very independently. They are now working much more closely together and are seeing the value of getting together to get higher levels of investment into an area.

To address the Deputy's specific queries, on the low-pay sector there is a question mark between when the rate of unemployment was at 15% and now, when it is down to 6%. We certainly now need to be looking at the quality of jobs that are coming through. If we go back to looking at the 9% rate of tax and when it should be changed, we continue to believe that now is not the right time. I did not really mention it earlier but I specifically mentioned international competitiveness in my presentation. Approximately 10% seems to be the normal rate for tourism businesses in Europe. We feel that 9% is right in that sector at the moment. It is creating employment and with the unemployment level coming to 6% other challenges in the economy will be created. We may start to see wage pressure coming through for example. I think we are seeing that because we are reaching full employment. We believe that is positive.

On the issue of Dublin hotels being able to charge the rates they can charge at the moment, we have spoken to tour operators and and such businesses. They say that if one is trying to get a tour coming into Ireland and visiting the east and west coasts, it is still important to get people into Dublin, but it is vitally important that they come to Ireland and we get them over the far side. It is also vitally important that when cruise ships come calling to ports other than Dublin that there are attractions which can get people off the boat and spending money locally. There are a whole lot of areas in which we need to remain competitive in the tourism sector. I am not sure how the obvious shortage of supply that is facilitating hotel prices in Dublin can be dealt with.

I keep coming back to two things. First, our focus as an organisation this year is that infrastructure must be the priority. We have said that we are prepared to forgo some of our other typically standard projects, such as tax reform, small business supports and so on, to make sure that we are spending money on infrastructure around the country. I know it is a little bit further south than the Deputy's constituency, but I specifically mentioned the Cork to Limerick motorway and that then joins up all the way up to Gort, Tuam and Galway. It is really opening up the Deputy's area. We are pushing very hard for that sort of infrastructure building. I also specifically mentioned how important we believe the national planning framework is in order for us to have a proper debate about how we support regional and rural development and not just to allow Dublin to keep growing at the rate at which it has traditionally grown. We really believe that national planning framework is vitally important in starting to address some of the many issues. We do not feel that it will be too easy to address them in budget 2018.