A NEW report from the National Economic Social Council, a strategic advisory group to the Government, has recommended a number of measures to stimulate domestic demand, improve the flow of credit to businesses and strengthen business development.
In an effort to stimulate domestic demand, the council recommends extending current incentives for energy-efficient home improvements.
It also calls for consultation with pension funds as a potential source of investment; more research on saving behaviour, particularly among under-35s; and examining housing trends, particularly moves towards higher levels of renting.
The council found there was evidence of a problem with the supply of credit to SMEs.
It said a greater examination of this matter was required to “inform” policy on the establishment of a State investment bank.
“The proposal to establish a State investment bank is a key step to support business,” the report added.
The report highlights how small companies are not able to benefit from public contracts because of their size.
“For example, a new ICT company will not have the track record or the resources to compete against a larger or longer-established firm.”
It found that the use of pre-competitive tendering processes is a standard practice in many European countries.
“It creates a process of engagement, usually a funded competition, in which firms are invited to work on aspects of particular problems facing a public-sector body. The results of this process are used to design the final tender.”
The result in many European countries is much more success for smaller local enterprises in tendering for public-sector contracts, it added.
In a bid to stimulate employment growth, the council said new forms of public works projects should be considered.
“Programmes are needed which provide people with employment opportunities and have value to local communities,” it stated.
The council called for local involvement to identify and assess ideas for projects.
“A board or entity, in which local and regional authorities would have a strong role, is urgently required,” the report stated. It also found that “more supportive frameworks” might need to be developed to facilitate a long-term increase in employment opportunities in care services and environmental activities.
The council’s report supports moves by the Government to broaden the tax base, as this is likely to have the least impact on economic growth.
The council said the report, Promoting Economic Recovery and Employment in Ireland,was an "initial exploration of policy actions" that might help to boost jobs and strengthen recovery.
