Ms Mary Rose Burke:

A number of issues have been raised. When it comes to the issue of affordable housing, we absolutely agree that expenditure on housing assistance does not increase the stock of housing. The problem is one of supply and demand. The lack of supply is causing the problems. State intervention in the private market to acquire or rent private accommodation does not help matters. We could get a much greater effect from the moneys being spent if local authorities built social and affordable housing. That must be part of the solution. Expecting the market to solve a housing issue is the reason we are in this position. Solving housing problems is not the purpose of the market.

On labour shortages, we have the results of surveys showing the number of our members who anticipate taking on new hires and the number of open jobs in small and medium enterprises and major multinationals. We have a labour shortage and there are issues surrounding recruiting abroad, particularly for skilled candidates. Sometimes these roles are filled and the employee leaves after three or six months because he or she cannot find housing. Housing is the single biggest barrier to people moving here to take up roles. It is also a barrier to Irish people being retained in jobs. Housing is, therefore, a highly topical issue.

As we indicated, the impact of affordable childcare on female labour market participation is a key issue. This is a cohort of the population whose members generate considerable costs in terms of education and development and then suddenly leave the workforce because tax or childcare issues impact on the rational decisions of the couple or family in question.

On our proposals for tax reliefs for entrepreneurs, we are mindful of the over-reliance on foreign direct investment in our industrial policy. While this policy has served us well to date, given the changes with Brexit and in the US, we need to focus on growing indigenous businesses. The proposals we have made are modest in terms of their cost but address the issues. Entrepreneurs are choosing to exit businesses too early because it is the only way for them to realise some of the value. Alternatively, they choose to move to Northern Ireland or the UK. We are, therefore, already seeing a loss to the Exchequer in terms of revenue that would be gained if these businesses were allowed to grow and develop in scale here and provide employment.

Some of the issues we have addressed concern signalling to the market. We have been very successful in our industrial policy in respect of foreign direct investment, FDI. Our success in this area has been well recognised internationally. However, we now find ourselves in a position when it comes to indigenous business that the UK is more attractive on every single measure. We are suggesting not only that we attain UK levels of competitiveness but that we exceed them when it comes to small and medium-sized enterprises.

All of the measures we propose are set out in the preliminary recommendations document. One measure, the proposal to adjust the cap on qualifying gains for entrepreneur relief from capital gains tax from €10 million to €15 million, would generate a cost of €2 million. While the cost of the relief would increase from €54 million to €56 million, the adjustment would sent out a signal that Ireland is a place that welcomes and supports entrepreneurs. Our proposal on the research and development, R&D, tax credit, would not generate any additional costs as it is a timing issue. It is a matter of whether research money is provided upfront or is reclaimed over a period. While the total cost would be roughly the same, for a cash-strapped start-up company, it is important to access research funding early as it could go out of business within the three years for which it must wait for it.

The costs of our proposals are not material. What is significant is the direction of travel and the signalling to entrepreneurs that this is a country where it is attractive to set up, grow and retain a business and one which does not incentivise entrepreneurs to exit early. All of those provisions are in the recommendations document. The recommendation on capital gains tax, CGT, is to encourage people to invest in high-risk Irish businesses rather than international blue-chip businesses. The issue for us is more the impact of the recommendations than their cost.