The way the International Monetary Fund deals with the countries it bails out may leave a lasting print on the Irish State’s “implementation deficit disorder” long after the folk from Washington DC have returned home.
The fund’s setting of quarterly to-do lists of reform measures for governments it lends cash to ensures that feet are kept to the fire and that pressure for change does not flag.
The reform-minded in the current administration have seen the usefulness of the quarterly target-setting tool in driving change. Brendan Howlin used it for his public service reform plan and Richard Bruton has been using it for his jobs plan.
Bruton’s second annual jobs plan was launched with fanfare yesterday. It again sets out targets on a quarterly basis with the department and/or quango responsible for implementation named.
Having Enda Kenny launch it with Bruton sends a signal across the system that those who fail to meet their targets will have to answer not only to the Department of Jobs, Enterprise and Innovation, but – and much more importantly – to the Taoiseach’s department too. That focuses minds.
Hundreds of measures
The report has, literally, hundreds of individual measures and the implementation of some of the targets will be driven by managers from outside the public sector being brought in on a pro bono basis.
Reform of company law; reform of the county enterprise board system, reform of retail licensing, a new incentive scheme to encourage employers take on the long-term jobless and a streamlining of the way work permits are given to foreigners are just some of the changes included (and time-tabled) in yesterday’s plan.
Given the limitations of what any government can do to create jobs (short of massive public sector make-work schemes) and the severe budgetary constraints of the Fine Gael-Labour Coalition, the plan has plenty to recommend it. It will certainly help boost job creation and reduce job destruction if it is implemented in full.
But, that said, it does not amount to a radical departure. Nor will its emphasis on “disruptive reform” have cossetted interest groups cowering in fear of having their lives disrupted excessively.
The limited scale of the Government’s ambition and its unwillingness to take on interest groups are illustrated by its plans for training and reskilling.
If it was really prepared to shake things up and drive radical reform, it would divert funding from Community Employment Schemes, on which hundreds of millions of euro are spent annually. The schemes may be popular, but they have been proven to do nothing to increase people’s chances of getting into real jobs. Spending the money on more effective programmes would require the taking on of the cottage industry that has grown up around these schemes. The Government continues to shy away from doing that.
There is some muddled thinking in the report too. As retail activity migrates to the web, the Government yesterday announced that it would create incentives for companies to get into ecommerce by offering them a €2,500 “online trading voucher”. The report notes only 23 per cent of small and medium-sized enterprises have an online trading component. It describes this as “market failure”.
Companies not having an online presence is not a failure of the market, but simply bad management. Offering fiscal incentives when the State is bust needs very careful consideration. Giving them to companies too slow to take up obvious opportunities is to reward poor performance. It is one part of the plan that needs urgent rethinking.
