The Late Late Show, New Economic Outlook and the importance of energy security
A core objective of Ibec’s campaigning is to adopt a stakeholder-led approach, so it was impactful to see An tUachataráin Michael D. Higgins reference Ibec during his Late Late Show interview last Friday and speak at length on the need for a new model of Social Dialogue. Achieving cut through during what was a seminal interview at an extraordinary time is a powerful endorsement of our credible and collective effort to Reboot & Reimagine for a better Ireland. Ibec’s virtual event with An Tánaiste Simon Coveney TD and Minister for State Helen McEntee TD drew on the complexity of global, European and all island challenges we face. For those of you who couldn’t attend, I have included a link to the recording of the event below.
As you know from last week, I wrote to An Taoiseach expressing dissatisfaction on both the reopening roadmap’s phasing lengths and the social distancing measuring. The letter had subsequently been picked up over the weekend in the print and broadcast media. This week, we continue to press this message: the length of the lockdown in Ireland, including a more conservative pace to reopening the economy than our peers, will help determine the scale of the fall in economic activity. If we plan to have a significantly longer lockdown than most developed countries then we cannot, at the same time, plan to run a deficit which is at the lower end of that same group of countries unless we are providing lower relative supports for businesses.
Tomorrow’s publication of Ibec’s Quarterly Economic Outlook Q2 underpins this message and provides a useful platform. Forecasting in 2020 a contraction in GDP of 11%, a fall of 14% in consumer spending and 40% this year in investment, the Outlook says that recovery of the economy to its 2019 level will not happen until 2022 at the earliest. In a best-case scenario unemployment will fall from a current 28% to 16% by the end of 2020 and falling to 7% by the end of 2021. Significant measures will need to be taken over the coming months to protect households and business, get people back into jobs, and bring forward maintenance and investment projects from an extended capital plan.
Ibec has also issued a statement to the media today calling on party leaders to commit to a comprehensive review of Ireland’s energy security needs, as it transitions away from fossil fuels. Four-fifths of our members who participated in our survey expressed concern about the possibility of a pre-emptive decision to rule out future investment in specific energy technologies such as natural gas, in advance of understanding the implications for energy supply security. The move to a low carbon economy is not optional. It is critical to our future wellbeing and long-term competitiveness. But the transition must also be practical and evidence based.
We observed the Exchequer Returns tonight have fallen into large deficits as expected but it reveals that income and corporation taxes show the underlining resilience of our business model. It’s a base on which we can place some confidence that, when we reopen fully, our recovery might be stronger than is the current consensus opinion.
Finally, I leave you with the following:
- a short clip of the Late Late Show interview referencing Ibec
- a copy of our Quarterly Economic Outlook and a link to register for the Outlook webinar
- a recording of the Ibec virtual event with Tánaiste Coveney and Minister McEntee