Recession can help cut costs, says head of US chamber

IRELAND NEEDS to take advantage of the opportunity provided by the current recession to significantly reduce the costs of doing business, the incoming head of the American Chamber of Commerce in Ireland said yesterday.

Dr Paul Duffy said Ireland’s economic requirement was “very simple”.

“We have to export more innovative and higher-value goods and services at more competitive prices that anyone else,” he told the chamber’s president’s lunch.

“That means we have to lower our costs. It is no secret that our costs have spiralled out of control in the past few years. We are handing our European and US counterparts a competitive advantage over us.”

Acknowledging that the current turmoil was international in character, he said: “The first and most important steps we can take towards recovery are the ones we can take here at home.”

Dr Duffy, who has spent his whole career in the pharmaceuticals industry, is a vice-president at Pfizer responsible for the group’s manufacturing operations in Ireland and Singapore.

It was necessary to move away from the State’s “unsustainable” dependence on transaction taxes, he said, but the existing corporation tax regime should be retained.

“Ireland’s tax offering, including but not restricted to our 12.5 per cent corporate tax rate, played a vital part in building up our strong base of foreign direct investment,” he said.

“This advantage must be protected for the long term and not squandered at the altar of short-term expediency.”

He told his audience that the burden of bringing the State’s finances back into balance needed to be shared fairly across the economy and would require people to make sacrifices.

However, with jobs being lost across the economy and businesses struggling to survive, a reduction in the public sector pay bill was necessary “and must be sustained”. Despite the need for cost reduction, Dr Duffy argued that investment in areas such as education were “both strategic and necessary”.

He called on the Government to publish a specific action plan within three months for the implementation of the Government’s action plan for the creation of a smart economy.

“Inaction only breeds cynicism and cynicism undermines our capacity to take the range of difficult actions we need to take,” he said.

Dr Duffy said it was essential that Ireland voted Yes to Lisbon at the next opportunity.

“Having at long last overcome our disadvantage as a peripheral island on the western edge of Europe, we cannot condemn ourselves to either internal irrelevance or external exile from the one forum where our essential interests can most effectively be advanced.”