Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

My assessment is that the labour market will continue to be tight. We will experience some softening over the period ahead but we remain confident in the outlook overall. We stand by the projections we made on the fiscal side and the macroeconomic side in the budget just a few short weeks ago. The next opportunity to update those projections will be in the stability programme update which will be published next April.

I will not deny that the external environment has deteriorated. As a small, open economy, that has a direct impact on Ireland. Many of our main trading partners will not experience any growth this year or perhaps next year, and that has knock-on consequences for us.

Regarding corporation tax receipts, we had a weakness for the past three months relative to the same months last year. That trend may not necessarily continue in the current month, November. That remains to be seen and we will find out in the coming week or so as the information comes through. However, we stand by the forecasts and we will update them in the coming months as part of the stability programme update. The external environment is one that is characterised by uncertainty and instability. That does have an impact and it makes it all the more important that we manage the domestic levers as well as possible, remain competitive and keep an eye on our cost base.

There are absolutely no grounds for complacency in terms of the strength of the labour market. It is not necessarily a predictor of future activity, so we need to continue to invest in that regard. There are capacity constraints. We have discussed the labour market on many occasions. We have also discussed the housing market, which is also a constraint, as I have acknowledged. We have to continue with the reform programme, including, for example, in the planning system. We need continued investment in renewable energy, ensuring energy security, and in education, skills and research.

All of these, as well as our income tax system, are competitive factors when it comes to Ireland's relative position on international investment decisions. We heard a reminder of this again today from the American Chamber of Commerce survey of multinational enterprises in Ireland. It is quite positive despite the challenging backdrop. It highlighted all of these issues as ones the Government needs to focus on.

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