Joan Burton
Similarly, it should be remembered that it was during the dark days in the immediate aftermath of World War II that the UK developed its National Health Service, and Germany established KfW, a state-owned strategic development bank to support reconstruction. Finland recovered from its 1990s recession by investing in education and innovation to become one of the most dynamic, competitive economies in the world with one of the highest standards of living.
These innovations serve as a reminder of what can be achieved when people pull together when times are tough, and as a direct inspiration for Labour’s proposals for Universal Health Insurance, prioritising basic numeracy & literacy, and a Strategic Investment Bank, Ireland is a great country whose best days lie ahead.
In government, Ruairi Quinn as Labour’s Minister for Finance introduced Ireland’s now totemic corporation tax rate of 12.5%, in part to defend the tax competitiveness of the IFSC. Labour is committed to maintaining Ireland’s competitive tax regime and our sovereign right to design it as we see fit.
Recovering cost competitiveness has been painful in recent years, but mercifully quick. The economic flexibility for which Ireland is renowned has allowed us to recover lost ground and re-position ourselves as a high-end destination for inward investment that can again begin to compete on price.
There are several selling points that are unique to our IFSC, and one of these is the ample availability of highly educated, highly motivated workers. Unfortunately, recent evidence suggests that standards are slipping, from basic literacy and numeracy right through to supposedly work-ready graduates. Labour in government is committed to stopping the rot. We will invest in improving outcomes from early education through life-long learning.
As Ireland moves on from the unsustainable construction economy of the past decade to develop a truly dynamic, export focused economy for the 21st century, it is important the IFSC remains the key driver of jobs, growth and tax revenue that it is today.
Where it has blazed a trail in the past in niche sectors, the IFSC can again benefit from an early-mover advantage by pushing forward with efforts to grab market share in the burgeoning niches of Islamic and eco-finance. Labour in government will support and sustain the future development of the IFSC, including welcome innovations like the ‘Green IFSC’.
Ireland’s global reputation for financial and regulatory rectitude has suffered a hammer blow in recent years, as anyone working to attract new business to the IFSC can attest. Restoring this reputation is a key challenge facing the next government.
Light-touch, laissez-faire regulation is a discredited concept whose time has passed. The critical question we face is how to replace a regime that failed with a regime that works for business, protects consumers and minimizes risks of financial contagion.
Ireland needs to learn lessons from its past mistakes and from solutions applied successfully in other countries. Canada and Australia, for instance, have learned their lessons to become among the ‘best in class’ regulatory regimes in the world.
Rather than applying a broad brush, however, we need to target specific reputational risks rather than impose burdensome catch-all rules that impose unintended consequences.
We urgently need to fix our broken banks to get credit flowing to business and families around the country. Once the banks are back on their feet, we need to accelerate efforts to meet new Basle III criteria so that Ireland becomes a beacon for compliance.
Rather than being simply a burden for business, better, smarter regulation can be a source of comparative advantage for Ireland. Together, we can make the IFSC a global hub for regulatory excellence. Dublin can be the Singapore of Europe.