The National Competitiveness Council

The National Competitiveness Council just released a report: ‘Getting Fit Again; The Short Priorities to Restore Competitiveness’. It is a short term ‘action plan’ but quite vague on detail, and the precise policy measures to tackle the key objective are conspicuous by their absence. It reads more like a Human Resource Managment strategic report (i.e. the reference to Ireland inc as an athlete ‘getting fit again), than a policy analysis document. The NCC emerged from the Social Partnership process in 1997, and provides advise to the Taoiseach on national competitiveness. It issues two annual reports. One focuses upon a comparative statistical analysis of Ireland’s competitive performance relative to the 17 OECD economies. A second report issues policy recommendations based upon this information. Its impact upon actual policy decisions is debatable, and what exactly is meant by ‘competition’ (both conceptually and operationally) is hard to determine.

The core evaluation and recommendations from the June 2009 reports are as follows;

Restoring the sustainability of the public finances

Raising revenue through a valuation based property tax, and broadening tax base.

Cutting current expenditure (no mention of where, how or when).

Reforming the public sector; improving integration and flexibility.

Prioritising capital expenditure; physical infrastructure, education and research & development.

Refreshed national spatial strategy.

Ensuring banks are channelling credit to viable businesses

Support viable business; state should influence lending.

Protect the public finances; minimising exposure of state/taxpayer to bank risk.

Ensure NAMA does not block the necessary correction in property market.

Restoring cost competitiveness and sustaining jobs

A quick adjustment in price levels ( how?).

Adjust incomes (does not indicate where, when or how) but highlights problem of wage inflation between 2004-2007. But lowered relative to other EU countries in 2008.

Lowering property costs further; land & property prices remain high relative to other countries for business.

Lowering energy costs (through increased international competition?).

Tackling administration costs; issue directive to agencies and regulators to stop further inflation in public service costs.

Supporting competition law (no mention of whether the government should introduce new legislation or enact existing ones).

Tackling labour market challenges

Labour market programmes are facing two challenges;

  1. Introduce immediate measures to sustain employmentt

Maintain investment aimed at training for those in low skill/productivity employment.

Prioritise supports for demand led skills; but allow necessary adjustments in labour market.

Support productivity growth by improving firm’s skill base.

2. Enhancing education and training opportunities for the unemployed

Monitoring existing labour market interventions; ensuring activation measures are effective.

A greater focus upon formal accredited qualifications; enable Higher Education Authority Labour Market Activation Response Group.

Target use of limited resources to those most at risk from detaching from labour market.

Prevent early school leaving.

Restoring Ireland’s Reputation

Deliver key commitments contained in the ‘Smart Economy’ and the April supplementary budget.

Enhance the effectiveness and transparency of the regulatory environment.

Maintain strong engagement with the EU through Lisbon treaty.

Continue marketing Ireland inc as an attractive location for investment.

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