National Competitiveness Council warns political short-termism could scupper recovery

As Fine Gael and Fianna Fáil struggle to agree to a cap on rent hikes...

National Competitiveness Council warns political short-termism could scupper recovery

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The National Competitiveness Council has warned that the Government risks scuppering Ireland's economic recovery if it continues to prioritise temporary political gains over sustainable policies.

In its latest report, published today, it examines the challenges posed to Ireland's economic ambitions on an international scale.

It is critical of plans to scrap the Universal Social Charge and the failure to decide on a sustainable funding model for third level education.

Ireland's Competitiveness Challenge 2016 states:

"Following years of fiscal retrenchment, and a general reduction in living standards, it is understandable that people wish to see a degree of payback from all of the sacrifices made. Embedding a sustainable recovery requires us to look beyond the short-term, and towards a more medium-term horizon.

"It is about determining the sort of economy and society we want, not tomorrow or next year, but in 5 or 10 years’ time, and taking the action today necessary to deliver on this. This will require some difficult decisions - in some cases forgoing immediate but temporary gains so that we can provide for the future. Taking a longer-term view is often politically unpalatable; if we are to avoid the Irish cycle of boom and bust, however, a medium-term approach is essential."

The report suggests investing in infrastructure and skills and talent to maintain a level of competitiveness, pointing out that broadband deficits and the emerging widespread industrial unrest present more immediate challenges. 

Peter Clinch of the council says our competitiveness in the future will be determined by decisions taken today:

"What we're saying today in our report is that the economy is in it's strongest place since the onset of the recession, but we are facing very significant threats externally which are beyond our control.

"Brexit, potential shift in economic policy in the US and the uncertain nature of what's happening in the EU. And so what we're saying is that this makes it essential that we guard and improve our competitiveness; those factors which are within our control."