Shane Ross

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The Ostriches Gabble Glibly; But The Risks Ahead Remain

Posted on: October 23rd, 2007

On Thursday, the Seanad debated the IDA and its record of attracting investment into the country. Minister Michael Ahern and Senator Ivor Callely spoke for the government. Their speeches reflected an enormous confidence in the future. I do not know whether or not that is misplaced, but there is a danger about being too smug over the future of the IDA, just because it has been so successful in the past.

Unfortunately, the ostriches on the government benches seem to be blind to the dangers ahead. The formula for growth which worked in the past, based on low taxes and foreign investment, is being successfully emulated by numerous others today. In order to compete, the country’s infrastructural problems – problems like broadband – must be tackled. Here is an edited version of my speech in the Seanad chamber:

Senator Shane Ross: I read the annual report and the Minister of State’s speech. The annual report contains this kind of mantra which we are used to about the IDA and the knowledge economy. I am not certain it knows what the knowledge economy is or whether it is saying that we do not have the tax cuts and the competitiveness but have clever people who are well educated and who have huge skills which do not exist elsewhere.

That may be true and may last for a little while but what it is saying is that it is positioning itself up-market and that if one comes here, one will have to pay for premium goods. It is a dangerous game. We must, however, accept that the old game is over. The IDA realises that the day when tax cuts, low wages and cost competitiveness were the real carrot for bringing people in is over.

I welcome the fact the Minister of State quoted the mission statement of the IDA. I am afraid it fills me with even more fear about the future. It really is a pretty contorted meaningless mission statement which lacks any direction. It states: “We will win for Ireland, its people and its regions, the best in international innovation and investment so as to contribute to the continued transformation of Ireland to a world-leading society [What in the name of God is a world leading society?] which is rich in creativity, learning and personal and social well-being.” That could be the mission statement for any charity, state agency or state body in the world. It is utterly meaningless.

One of the great strengths of the IDA is that it has been a kind of independent republic within State agencies, within that great sphere in which these rather padded State agencies exist. The Minister of State referred to it as “autonomous”. That is a good word because it has been autonomous in the past, has been allowed to do its own thing and, on many occasions, has been counter to the general financial consensus in the country.

The IDA has been enterprising and has brought Americans and multinationals to this country when politicians concentrated all their efforts on and love-bombed native industry. As a people, we do not like to acknowledge that the reason for the boom is multinationals. We do not like to acknowledge that because it somehow implies we did not do it ourselves. It was not native industry or normal financial measures but it was welcoming multinationals, to some extent rather quietly.

I agree with all those who said we should keep the 12.5% tax rate. Why do we not cut it to rival Latvia, the Czech Republic, Poland and Macedonia? Why do we not bring it down rather than put it up to attract more industry and compete with those countries? I hope I have not been too critical because what the IDA has done in the past has been wonderful. However, for all its great work, has the IDA any clout? Is it allowed to get on with its work and does the Government ever listen to it? Everything in this particular sector is not rosy.

I do not know whether anybody in this House read the report of the US Chamber of Commerce last year. For a group which tends to pull its punches on the Irish economy, it was deeply critical of some of the inadequacies in the economy. It said the infrastructure was appalling. According to the US Chamber of Commerce, that is a deterrent to people coming to this country. If we do not spend the money quickly, they will not come.

Much more important, however, is the issue of broadband. Northern Ireland, which has a kind of antediluvian economy compared with ours, provides broadband to every house and business. We cannot do that. It has been promised time and again, yet there is no progress on broadband.

How in the name of God does the IDA explain that to Google or to other such organisations? How does it say to them that we cannot do it and we cannot provide the money or the infrastructure? If the message goes out that our infrastructure is inadequate, and I am not just talking about roads –

Senator Ivor Callely: That is not fair.

Senator Shane Ross: – but about broadband as well –

Senator Ivor Callely: Senator Ross should not send out that message.

Senator Shane Ross: – people will not invest in this country.

Senator Ivor Callely: That message is incorrect.

Senator Shane Ross: I am saying that and I will not take any lessons from Senator Callely on what I should or should not say in this House. Broadband is inadequate and its lack is bad for the people, big business and small business in particular. Senator Callely, who referred to small businesses, should know the lack of broadband is a terrible problem for them in Ireland.

The IDA deserves great applause in respect of the International Financial Services Centre. Let us distinguish between the past, in which the IDA did a wonderful job that should be acknowledged, and the future, which presents dangers that the Government and IDA should consider a little more seriously and about which they should be a little less smug.

To read the full text of the debate click here.