Dr. Peter Rigney:

Go raibh maith agat, a Chathaoirligh. I have given members a submission and I intend to go through its highlights. The Irish Congress of Trade Unions is an advocacy group for workers with 800,000 members on both sides of the Border, so some of the things I say will not surprise members in being diametrically opposed to what they heard before. In some areas, however, I will identify areas of agreement between us and the previous speakers.

When examining the cost of doing business, the cost of labour is defined by EURSTAT as the total expenditure borne by employers for the purpose of employing staff. It includes employee compensation, wages, salaries in cash and in kind, employers' social security and other expenditure such as recruitment costs, minus any subsidies received. While some will argue that workers in Ireland enjoy relatively high hourly earnings, in reality the cost associated with employing staff in Ireland is about average by EU standards, and relatively low compared to small open-economy competitors such as Belgium and Austria. This is because employer social contributions, as a component of total labour costs, are significantly lower in Ireland. A recent research paper by the Nevin Economic Research Institute, NERI, identifies the total average hourly labours costs in Ireland in 2015 as €28.70 in the business economy. This compares with a cost of €29 in the UK and €29.50 in the eurozone. International comparisons of statutory minimum wage levels that do not take into account differences in employer social insurance are misleading.

A further consideration in any analysis of labour costs is productivity. Productivity is what the employer gets for his or her €28.70 an hour. The National Competitiveness Council's scorecard for 2017 notes that Irish labour productivity performance is strong in an international context. Irish labour productivity growth has been above that in competitor countries since 2013, and was 2.3% in 2016. The productivity of Irish workers allows Irish companies to be competitive. In the short term, the cost of employing labour is more than offset by the productivity of the labour involved.

Previous speakers raised the issue of executive pay. We raised this issue last year in a report called Because We're Worth It.We pointed out what we know in terms of executive pay for chief executives of public limited companies, plcs. We also made the point in the report that this is only the tip of the iceberg because there is a large number of private companies whose executive remuneration is a secret. The disquiet about the inequality levels of executive pay is developing quite significantly in the UK at the moment, and will trickle through to Ireland through the application of most of the UK Code of Corporate Governance. The Financial Timeshas a city panel and in yesterday's newspaper, one of the contributors, who was described as a city grandee, made a point that was reflected by previous speakers in another way. He said that the premium that is attached to entrepreneurship risks is being paid to managers, who are mere employees. That is the point that is being made in our work on executive pay.

Another issue is the cost of housing people. Escalating rents must feed through into wage demands. Both the Irish Congress of Trade Unions and NERI have produced comprehensive proposals aimed at tackling the cost and supply of housing and the cost of rent. The Irish Congress of Trade Unions will continue to make the case for greater state investment in public housing. A couple of weeks ago, Members of this House and the other House paid tribute to the late Taoiseach, Liam Cosgrave. One of the leitmotifsthat came up was that he was a conservative and cautious man. This was quite correct. What is often forgotten is that in his term as Taoiseach 100,000 local authority houses were built. That is under a Taoiseach who is described as conservative, and under a Minister for Finance, Richie Ryan, who was a fiscal hawk. There are learning points from that.

The exceptionally high cost, by international standards, of renting office accommodation Dublin, noted by the NCC, does not reflect higher than average costs of labour and materials in the construction industry, but rather the acute shortage of suitable sites and the escalating cost of development land.

It is vital that such costs are controlled. In order to control these costs, more investment is required to provide for balanced regional development, along with improved transport and communication links. Last week I attended a public meeting addressed by the European Commissioner for Transport - her name eludes me. She is a very impressive lady and she said that the Commission has a problem at the moment, that it is not getting sufficient quality projects from Ireland. In other words, for public transport projects such as a heavy rail link to the airport which is required by 2030 under an EU Directive, or the DART underground in its slimmed-down format, there is very cheap European Investment Bank, EIB, money available. Evidently, however, for whatever reason we are not putting forward the proposals.

I noted that Mr. Ian Talbot mentioned child care. We produced a report last year called, Who Cares: Report on Childcare Costs & Practices. This does two things. It takes money out of people's pockets after they count their earnings at the end of the month, and it also pushes second earners, mainly women, out of the labour market. There is a body of research done by EUROMOD, a European institute on tax and benefits, where graph number one shows support to second earners across member states. Ireland comes first, top of the pack, in terms of supports. Graph number two is support for second earners, taking account of child care costs, and Ireland moves from number one to number 28. We could hear that echoed in Chambers Ireland's statement, the need to tackle child care costs.

There is a number of other aspects to doing business. Energy costs were mentioned. We are into a great era of uncertainty there for a number of reasons. In the context of Brexit, about 82% of our natural gas comes down a pipe from western Scotland, so that is a huge area of uncertainty. Second, we are going to have to decrease our reliance on fossil fuels or face enormous fines, so investment in alternative energy will be needed.

There is also the cost of getting credit for SMEs. The re-establishment of the Industrial Credit Corporation is basically what we would be suggesting.

Business representative groups frequently complain about the variation in commercial rates among various local authorities. We believe that commercial rates are an important and essential source of funding for local public services, however we would welcome a more predictable and more transparent system.

Another area where costs are outlined is legal costs. We strongly endorse a more comprehensive and transparent information database on legal service prices. The provisions of the Legal Services Regulation Act 2015 should be speedily implemented and the resources of the Legal Services Regulatory Authority increased as recommended by the National Competitiveness Council, NCC. It seems strange to us, who represent people who got the full brunt of the troika in many areas, that the legal services profession seems to have gotten off very lightly from implementation of troika representations, for whatever reasons, on which we will not speculate.

We are strongly of the view that public capital investment levels should be substantially increased. Infrastructure improvements, for example improved public transport systems and road networks, will reduce the cost of doing business and the cost of commuting. It is not often that I quote an employer, but Mr. Ian Talbot rightly makes the case about what use to an employer are workers coming in wrecked after a commute of an hour and a half. That is a very valid point and that is within the resolution of the Government. In most international competitiveness indices, Ireland tends to perform poorly in infrastructure, notably in broadband. If we are to get some sort of regional balance and correct the regional imbalances, which would in turn make life more tolerable for those of us who live in Dublin, we need to up our game in terms of broadband.

Finally, enterprise policy should focus not just on labour costs per se, but on unit labour costs. To this end we must consider how productivity and quality of work can be raised in private or public enterprises. The Nordic model, which originates in Norway, Denmark and Sweden, has succeeded in generating high levels of employment, high wages and high levels of life satisfaction. These countries also measure extremely well in international competitiveness outcomes. How do they achieve these outcomes?

The Nordic model is based on a high-quality social wage in the form of health, education, lifelong training and upskilling, social housing and child care, all of which are hugely important to national competitiveness and sustainable job creation. It is the view of congress that the Nordic model is one that Irish economic and social policy should be seeking to emulate. Go raibh maith agaibh.