Mr. Fergal O'Brien:

I thank the Chair and the committee for their invitation. I am joined by IBEC's economist Ms Hazel Ahern-Flynn. IBEC welcomes the Government’s investment ambition set out in the budget, in particular the establishment of the national Infrastructure, climate and nature fund. We believe that fund of up to €14 billion has the potential to significantly enhance social, economic, and environmental infrastructure over the coming decade. The fund will ensure the protection of public capital projects during cyclical downturns and reduce the need for catch-up spending, provide improved value for money and offer greater certainty to sectors downstream of infrastructure delivery.

This, in turn, will enable organisations to build capacity and retain much-needed skills in both the public and private sectors.

In addition, we welcome the introduction of the increased cost of business scheme, as set out in the Budget Statement. This support is critical to helping businesses navigate the significant labour cost increases that are coming through. We await the specific details of the support measures, however, to see how they will work in practice. The biggest challenge for business currently is these rising cost pressures. Given the broad range of businesses that will be impacted by legislation-driven increases to costs in the coming months and years, ensuring the scheme is well designed in order that it is both accessible and delivered quickly to those businesses facing squeezed margins will be essential. The current sustained high rates of inflation and labour demand suggest we are at or close to the top of the economic cycle. It is essential, therefore, that as a country we maintain a stable footing and remain as cost-competitive as possible. The €250 million business package should provide much-needed relief for firms facing substantial Government-imposed increases in labour costs, but more work needs to be done in this area. It should serve as the starting point for a broader conversation on the transition to a living wage, pensions auto-enrolment and other significant labour market changes in the coming years and their knock-on impact on cost competitiveness. Although the budget takes significant steps in providing appropriate supports, ongoing labour challenges and cost issues will continue to be significant obstacles in the years ahead.

Against the backdrop of challenged cost-competitiveness within the economy, ensuring we have a highly skilled and highly productive labour force to continue to attract investment and support growth will be essential. In this regard, IBEC was disappointed not to see the €1.5 billion surplus in the National Training Fund, NTF, put to use through measures brought out in budget 2024. This was a significant missed opportunity. In a highly competitive global environment, we cannot afford to be complacent on education, skills and innovation. Significant investment in life-long learning and upskilling of workers will also be needed to meet the twin challenges of climate and digital transitions. However, IBEC welcomes the commitment to examine measures, including legislative changes, that were set out by the Minister on budget day to help unlock the fund. Going forward, businesses will continue to work closely with the Government to find a practical and pragmatic solution to unlock the €1.5 billion surplus in the NTF to ensure education and training remain essential components of Irish competitiveness.

In summary, budget 2024 struck the correct balance between investing in urgently needed capacity within the State, providing certainty for longer-term public investment and addressing immediate needs while working to enhance social cohesion. While many of the measures announced in the budget are welcome, their success will ultimately be measured by the effectiveness of their implementation. Ms Ahern-Flynn and I are happy to take questions from members.