There’s more costs than labour costs… or don’t ask the question if you don’t like the answer. July 31, 2009Posted by WorldbyStorm in Economy, Irish Politics.
Crocodile on Wednesday pointed me to an interesting snippet from the RTÉ news that morning, an interview with Denis Brosnan chair of the mid-west Task Force. The line taken by RTÉ is fascinating. The heading for the piece is “Government urged to reduce labour costs”. What’s odd though is that Brosnan doesn’t emphasise labour costs over all other costs, and is indeed at pains to articulate that this is a much broader problem of costs, despite the interviewer attempting to shepherd him down that line. Also of interest is the glaring fact that the interviewer has a somewhat vague idea – clear from the transcript – as to what the function of the Report is…
Interviewer: Well the Mid West Task Force was set up following job losses at Dell… we’re joined by it’s chairman well known business man Denis Brosnan. Can we deal first with the Reports recommendations about reducing labour costs. How important a part of this Report are those recommendations?
Brosnan: I don’t think it’s labour costs alone… basically the country itself and the mid-west region has become cost uncompetitive. It’s the total area of costs… in the mid-west there’re fewer tourists coming because we’ve priced ourselves out of a lot of markets. In the area of manufacturing we’ve priced ourselves out of markets… so it shouldn’t be labour, virtually in all areas of costs in Ireland are out of line with any competitor.
Interviewer: And what are the specific proposals in this report about reducing those costs?
Brosnan: Well the report is basically about unemployment and how to reduce it. There are 36,000 on the Live Register this year… it’s growing rapidly. It’ll peak at 50,000. So what we’re saying to government is in the short term all you can do is get people to stay in education, have community schemes, get involved in infrastructure. In the second half of the Report we’ll look at how to create jobs, but it’s impossible almost to be looking at the creation of jobs as we continue to lose them and as we do virtually nothing about cost-competitiveness.
Interviewer: We heard earlier from FG TD Kieran O’Donnell, he welcomed the job creation proposals in the report but he shied away from any suggestion that there be a reduction or review of the minimum wage or decreases in social welfare payments.
Brosnan: Well we’re not [sigh]… we said they need to be looked at. Everybody has a choice to make. Perhaps Government more than anybody else has a choice to make that we cannot get new manufacturing to come into this region or to many parts of Ireland while we’re uncompetitive in the area of labour, but let’s not think of labour alone, we’re seriously uncompetitive in the area of energy, which is electricity and gas, we’re seriously uncompetitive in many other areas, the area of professional services, everywhere we’re uncompetitive so if we don’t tackle it…then we have the choice of very high unemployment until people can emigrate again.
Interviewer: So in other words will this exercise have been pointless unless the Government doesn’t take on board the recommendations on making ourselves more competitive.
Brosnan: I don’t think they have to take on board all our recommendations but certainly it makes the task almost very difficult if not impossible for IDA, Enterprise Ireland and all the agencies to persuade foreign investment that Ireland is a good place to invest.
Interviewer: Will the final report touch on rationalisation of the agencies themselves. You saw the McCarthy Report recently suggest that Shannon Development shouldn’t have any role in the future creation of jobs and its functions should be transferred to Enterprise Ireland and the IDA.
Brosnan: Well we’ve met all the agencies. We’ve met 24 bodies in compiling this Report and part of our second stage and final report will be to get the agencies back and we want to meet them, and we think there’s a lot of duplication there. Whereas we mightn’t go as far as McCarthy which was very much get down costs get agencies under control but certainly there is duplication there and we find we have found for investors that they’re very much confused who they go to. They would like a one-stop-shop.
Interviewer: So the final Report could well recommend that there be some elimination of red tape.
Brosnan: Well I wouldn’t like to say that just yet. But we will be calling the four or five agencies back in again and asking them to present to us and they have been very good so far…
And so on… there’s a wrap up where Brosnan reiterates that people staying in education and job growth is the only way to prevent people joining the Live Register. That’s a depressing prospect, isn’t it?