Ireland’s top accountants put their views on the record on the national economy
Sixteen of the managing partners of Ireland's top 20 companies took up the invitation from Finance Dublin to offer their advice on the national economy in response to a question in the 2010 Accountancy Survey to list “business and/or economic policy initiatives that would usefully aid the Irish economic recovery at this time”. Their responses reveal an overall strategy that has yet to be tried by the Government.
A striking result of their responses is the degree of consensus that exists on core economic issues, namely competitiveness, entrepreneurship, confidence, the cost of the public service, and the importance of the tax burden. There is an overall view that getting it right in these areas lies at the core of the economic strategy that will lift the economy out of crisis, and provide the foundation for a return to social solidarity and stability. As the economy teeters on the brink of fiscal crisis, the leaders of the country's top accountancy firms have put their views on the record.

Their recommendations are listed below under eight themes that arose out of the responses, with the names of the author mentioned in brackets. The participating managing partners are: Joe Carr (Mazars); Peter Carroll (BDO); Brian Conroy (Horwath Bastow Charleton); Pat Cullen (Deloitte); Carl Dillon (Moore Stephens Nathans); Willie Fahey (IFAC Accountants); John Glennon (Baker Tilly Ryan Glennon); Neil Hughes (Hughes Blake); Patrick Lawlor (Brenson Lawlor); Mike McKerr (Ernst & Young); Jim Mulqueen (FGS); Ronan Murphy (PricewaterhouseCoopers); Terence O'Rourke (KPMG); Tadhg O'Sullivan (OSK); Paul Raleigh (Grant Thornton); Liam Rattigan (Russell Brennan Keane).

Budget Deficit & Direction of Fiscal Policy Uncertainty
I believe Irish business has largely put its house in order and has generally moved decisively to protect their financial fundamentals and their competitive position internationally. Business investment and consumer spending is highly sensitive to uncertainty surrounding fiscal policy direction. (John Glennon, Baker Tilly Ryan Glennon).

We must do everything in our power to reduce our massive public deficit which will hamper Ireland’s future economic growth and attractiveness. (Mike McKerr, Ernst & Young).

Political leadership and planning are woefully inadequate- determined consistency to restore citizen confidence to normalize life. (Liam Rattigan, Russell Brennan Keane).
Tax Rates and Cuts:
Business investment and job creation by small and medium business is also sensitive to marginal income tax rates which are now of among the highest in Europe, as well as fiscal stability we need initiatives to rekindle growth and nurture domestic recovery (Glennon)

The Irish Travel Tax, announced in Brian Lenihan’s emergency budget in 2008 and introduced the following March, is in my opinion a counterproductive tax on tourism, and while not always in agreement with Ryanair’s Michael O’Leary, I share his view that it should be abolished as a matter of priority.
(Peter Carroll, BDO)

Tax measures to encourage consumer spending need to be a priority to drive demand in the domestic economy.
(Pat Cullen, Deloitte)

Stimulus package to pump the economy a bit (Rattigan)

Government must continue to commit itself to our low corporation tax, now more than ever due to the international calls for Ireland to address this matter (McKerr)

The tax rate affecting the highly skilled, highly mobile people that we need to drive business in Ireland. This issue comes most into perspective in terms of the foreign owned, FDI/MNC companies, especially the high-tech companies, operating in Ireland. Their ability to attract their key executives, scientists, and managers to Ireland is being adversely impacted by our current personal tax regime. We believe that is it entirely possible to develop solutions which will support the attraction to Ireland of such highly skilled, highly mobile people while recognising that the tax burden across Irish tax payers has to be levied fairly.
A second key issue, (which was expounded very articulately at a recent KPMG forum on the raising of finance for innovative companies by Barry Maloney of Balderton Capital) is the need to have a sensible regime, where people who take big risks in developing start up and innovating companies can have their capital gains taxed as such and not as income. Again, there are obviously potential risks to the tax take from the introduction of more flexible capital gains rules but it should be possible to devise a structure whereby true risk takers who put their capital (both financial and intangible) at risk, can be rewarded appropriately, if and when that capital becomes more valuable as the companies succeed.

There are also a broad range of other new incentives and adjustments to the current tax and economy policy regime that we would like to see, for an example, building further on the welcome changes that have been made in the R&D tax credit regime - there is more to be done here. (Terence O’Rourke, KPMG)

Reassert our position as the location of choice for foreign direct investment (Ronan Murphy, PWC)

Delivery of changes to taxation legislation that will make Ireland competitive as a destination for IP and R&D. A lot of good work has already been done in this area but much more is needed. (Glennon)

Public sector
Tackle the public sector waste and inefficiency- who in their right minds would do a 4 year deal on anything in the economy .i.e. – the Croke Park deal without the reforms first. (Rattigan)

Competitiveness needs to be improved so that we continue to attract inward investment into Ireland. This is particularly the case for services provided by the State. A public sector reform programme needs to be kick started urgently. The time for talking is over. (Cullen)

Reduce cost of government led services and utilities- power, public transport, high personal tax rates etc (Rattigan)

The population needs to see dramatic cuts at the top in order to buy in to the cuts needed in public services. (Neil Hughes, Hughes Blake)

Full implementation of the Bord Snip Nua cuts (Carl Dillon, Moore Stephens Nathans)
Reform the dole-pay people to work, not stay at home (Rattigan)

Banking & Finance
A task force on Irish Business funding needs to be established with powers to determine and push through the measures that need to be taken to secure a robust business funding infrastructure. The withdrawal of Bank Of Scotland Ireland has led to a further obstacle to business securing funding. (Carroll)
I think a National Development Bank is an idea worthy of study. (Glennon)
Policy to encourage and promote state supported equity funding for the development of small, medium enterprises and a mechanism to facilitate the release of working capital funding to small, medium enterprises. (Jim Mulqueen, Farrell Grant Sparks)
Mechanisms to allow good businesses with significant debt to continue trading (Hughes)
The personal bankruptcy code needs to be reviewed and defined in order to bring some much needed clarity to the area. (Carroll)
A structure to deal with personal insolvency. (Paul Raleigh, Grant Thornton)
Increasing the availability of finance, particularly to small and mid tier businesses (Murphy)
Real lending by banks (Dillon)

Trade
Competitiveness needs to be improved so that we continue to attract inward investment into Ireland. This is particularly the case for services provided by the State. (Cullen)
Support for export focused businesses. (Raleigh)
Forums to inform and advise SMEs on potential international markets – need to look outside Ireland for business (Tadhg O'Sullivan)
Lower costs including wages to improve competitiveness (Willie Fahy, IFAC)
Incentives to assist construction/engineering services sector to 'sell' overseas. (Conroy)

Competitiveness & Employment
A comprehensive national jobs strategy is needed.(Cullen)
Reduce minimum wage to get people back to work or maybe remove it altogether. (Rattigan)
We must do everything possible to encourage those who are on social welfare and capable of working to re-enter the workforce – consequently, more should be done to help businesses reduce the costs to create employment (McKerr)

Extend government grant-aid
Employment Subsidy Scheme to support employment (O'Sullivan)
A national government for a period with a group to bring down costs (Fahey)

Entrepreneurship
Introduce entrepreneurship as a compulsory Leaving Cert subject. (Hughes)
I am a big fan of the report of the Innovation TaskForce, of which KPMG Partner Anna Scally was a member. The taskforce looked at how Ireland might best make its way in the world, now a changed world. It concluded, with convincing arguments, that the key to strong growth in the new economy was to make sure that we did everything possible to make the environment for entrepreneurs as conducive as we could make it. (O'Rourke)
Generate Market confidence in our economy (Carl Dillon, Moore Stephens Nathans)
Fund research into how to sustain further employment in indigenous type sole traders and companies (Fahey)

Specific sectoral ideas
Tourism (Carroll), (Conroy)

Investment in education and positioning Ireland as a centre for educational excellence so as to improve our own skills and knowledge base and to attract overseas students. (Raleigh), (Lawlor)

Renewable sector and clean technology. (McKerr),(Murphy)

ICT(Mulqueen, FGS), (Lawlor)

Drive economic jobs and growth within 5 key sectors; Agri-Food, Financial Services, ICT, Pharma, Medical Support & Devices (Joe Carr, Mazars), and appoint a business sector growth Tsar to our top 5 industry sectors

Invest in and encourage sustainable manufacturing jobs (Dillon)
This article appeared in the October 2010 edition.