Published: Wednesday, 3rd February, 2010 5:00pm

'Costs must be cut' Bruton tells Gateway Chamber

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To regain competitiveness, Ireland will have to continuing its production costs, and broaden its tax base and return to a culture in which enterprise is promoted, Fine Gael's deputy leader and finance spokesman, Richard Bruton, told the Midland Gateway Chamber of Commerce in Mullingar on Friday night.

Invited to speak to the chamber by Senator Nicky McFadden, Deputy Bruton said that the key to Ireland's economic success in the past had been enterprise, and Fine Gael wants to revive that "bedrock", which had, he said, been forgotten about.

"We believe getting back to enterprise is the core driver: it is vital," he said, and to encourage enterprise, it would be necessary to undertake measures like cutting employers' PRSI; and looking at all the cost structures, including the price of utilities, rates and other charges.

Shared services

Deputy Bruton also revealed that Fine Gael wants to create a central "shared services" agency to take over functions that are at present handled - with massive duplication of staff - by local authorities around the country, such as the handling of grant applications, means testing for such grants; inspection processes and so on.

"A lot of the waste is unintended, but virtually every unit has a unit for processing means testing," he said.

"There are huge savings to be got by having a service delivery company that would be a shared services deliverer, that would provide a grants service or an inspection service.

"We have forty units administering higher education grants," he said. "Don't tell me one authority couldn't do it."

Spatial Strategy

Asked by Dominic Doheny if Fine Gael would endorse the National Spatial Strategy Deputy. Bruton said that in Opposition, it wasn't possible to do a complete re-evaluation of the Strategy.

However, he said, Fine Gael believed it had been a mistake by Government to cut its planned capital expenditure by 30 per cent, but he pointed out that the NSS anticipated increased population growth, and the continued construction of up to 80,000 housing units a year. He said the ground rules have changed, and it would clearly be foolish to say that every project agreed at a time of very different vision should be continued, citing, as an example, the Dublin Metro project.

"You have to rethink the cost benefit, but the core, of course is you have to have a regional strategy that is built along the core of a region."

He said that a lot that had been planned is going to have to be done commercially, and Ireland was going to have to raise private money to do that. However, Fine Gael would insist that every project "washes its face", so it cannot be assumed, he said, that everything in either the National Development Plan or the National Spatial Strategy stands without question.

Costs

On a question on the costs facing businesses, Deputy Bruton said that Ireland is having to mimic a devaluation by bringing its cost structures down.

He said the mandate of the energy regulator needs to be extended to take the cost of electricity down to international benchmarks; that the ESB needed to be told to"squeeze" its productivity.

He said that the tax base will have to be broadened through the introduction of both water charges and property charges, and that a move will have to be made on the professions, and on the cost of rates. If competitiveness is to result, there had to be fairness to the process, and this would mean tackling monopolies and anti-competitive practices, he added.

Deputy Bruton regretted the end of social partnership, and said this could have had a role in this bid to return to competitiveness.

Asked about water charges, Deputy Bruton said he didn't believe water charges would be a major revenue raiser, but, "people will suddenly start to see maybe we don't need so much water; maybe we should be harvesting rainwater rather than using water of the quality of Ballygowan to flush the toilets".

Deputy Bruton promised to bring to Deputy Simon Coveney - the party's Communications, Energy and Natural Resources spokesman - points raised at the meeting by Gillian Murtagh of Shay Murtagh & Co from Raharney, on how the installation by householders and businesses of rainwater collection systems might be incentivised, and points raised by Cllr. Pat Whelan who told the meeting he had suggested in 2007 that it be made a requirement of all planning permissions that such systems be installed in new developments.

He also promised to look at suggestions raised locally on the creation of a "smart grid" into which small-scale energy producers could sell their excess electricity into the national grid.