IBEC, THE national organisation that represents businesses and employers, is calling for a new State-backed investment bank to drive growth in the economy.
The proposed bank, which forms part of a 50-point Action Plan for Recovery announced by Ibec yesterday, would provide a new source of funding for growing and high-potential businesses.
Ibec chief economist Fergal O’Brien said countries such as Canada, the US and Germany have implemented the idea. The proposed bank would not be a brand on the street but a funding system provided through existing commercial banks to improve access to capital for Irish businesses. It would be financed by the European Investment Bank and the National Pensions Reserve Fund.
The action plan calls for tax incentives to encourage additional home renovation activity, a new social welfare smart card system to ensure child benefit payments are spent in the domestic economy, and an overhaul of the work visa regime to make it easier for top talent and skilled graduates to work in Ireland
Mr O’Brien said labour market reform was slow. “We still have issues around incentive to work in the Irish economy. We have lots of skilled shortages especially in the high-tech sector. If we’re not getting the skills into the economy how are we going to be able to grow?”
“The banks were giving a lot of money to households and now it’s the reverse. Households are giving money to the banks. That’s the dysfunctionality of our banking system at the moment.”
To accelerate the pace of public sector reform Ibec is proposing more flexible work practices in the public sector, reform of public procurement procedures to give SMEs a chance to compete for contracts, and a greater use of outsourcing as a means of saving money and improving services.
Ibec chief executive Danny McCoy said the positive outcome from the recent EU summit should reduce Ireland’s sovereign debt burden and improve sustainability, but to make real progress Ireland needed economic growth to take off.
