Chambers Ireland welcomes the Summer Economic Statement, but expresses concern

Chambers Ireland welcomes the Summer Economic Statement, but expresses some concerns.

Chambers Ireland, the voice of business throughout Ireland, largely welcomes the government’s plan for Budget 2023 as outlined in today’s (4 July 2022) Summer Economic Statement, but expresses some concerns about the focus.

Speaking after the launch of the statement, Chambers Ireland Chief Executive, Ian Talbot, said “The strong emphasis on infrastructure in the Summer Economic Statement is welcome, many of the difficulties that employers and workers are experiencing have arisen as a result of insufficient and inconsistent investment across many policy areas.

“The single greatest problem that our members are experiencing is the struggle to find and retain staff. This issue arises from their employees struggling to find affordable and secure accommodation, and for most people housing is the single largest driver in the cost of living.

“Our members see housing, energy and talent as being the biggest challenges for their businesses. Skilled staff are hard to find, while uncertainties regarding energy security and energy costs are greatly affecting businesses. In regional areas uncertainties are also affecting consumer confidence, leading people to save discretionary spending.

“Government should be taking a longer view and ensure that the above profile receipts from excise duties and corporation taxes are ringfenced in a climate action fund that can be used to finance much needed infrastructure through what could be still more difficult years ahead.

“Businesses should be taking a longer view too and investing in energy saving measures which will help them reduce the operating costs of their businesses. Minister Donohoe has said that we are in a ‘shock-prone’ world, and he is right, for businesses that have traded through the last 15 years, at least 12 of them have involved significant economic shocks.

“Businesses that are going to thrive are making investments that are making their operations more resilient to shocks, and we see no reason to believe that fossil fuel energy cost will be seeing a positive shock in the coming years.”

Shane Conneely, Head of Policy at Chambers Ireland continued “Many of the drivers of inflation in the economy are a result of supply constraints within the real economy, so government should remain cautious about how and where it expands spending.

“Construction costs have increased considerably over the last six months, but the long-standing infrastructure deficit needs to be bridged. Too many of the problems we experience arise from our health, energy, and transport infrastructure lacking resilience as a result of being run at, or close to, capacity.

“Fiscal measures have a poor track record when it comes to alleviating inflation, and the impact of inflation so we continue to have concerns about policies like the indexation of tax bands as being an ineffective means of relieving the pressures on those that struggle the most.”