Speech by the Taoiseach, Mr. Enda Kenny T.D. At a Business Dinner hosted by Sherry Fitzgerald

Thank you Mark for the invitation to address everyone here this evening.

While Ireland today is being battered by strong Atlantic storms, it was only three short years ago that we were also being pilloried by the international markets in the face of an economic whirlwind.

Back then we faced a shrinking economy, skyrocketing unemployment, and an exploding deficit.

Ireland needed an EU/IMF bailout to keep the country afloat and it cost us our international reputation.

Like the sovereign, Irish businesses found it harder to access capital… investment dried up… jobs were lost.

Given how far we have travelled since those dark days I’m delighted to pay tribute to the Irish people for their sacrifice and determination. They have allowed Ireland to successfully exit the bailout and put the country back on the path to recovery.
No-one should take that sacrifice for granted. We have to deliver on our commitment to the people to get Ireland working again and to make Ireland a better place to live, work and grow old.

This is not just the responsibility of Government alone but for everyone who is a stakeholder in our society.

We have reason to be positive again.

Today the economy is growing, we have seen over 58,000 new jobs created in the past year, and we have hit our deficit reduction targets without fail as we put the country back on a solid footing.

As the first country inside the Euro area to successfully emerge from an EU/IMF bailout, it is a significant vote of international confidence in Ireland and an important milestone.

We have also exited the bail-out in a strong position.

At year end of 2013 the NTMA maintained Exchequer cash and deposits of €18.5 billion, leaving the country fully funded into the first quarter of 2015.

In early January we raised €3.75 billion on the financial markets at a competitive rate – a significant vote of confidence in our recovery.

The recent announcement by Moody’s to upgrade Ireland’s credit rating and to change the outlook to positive will have benefits for the whole economy by putting downward pressure on the price of credit for companies and organisations in Ireland.

We’re now a highly competitive and stable location for investment and jobs.

As a Government we plan to safeguard this progress by ensuring we put the country back on self financing basis.

We will reduce the deficit to under 3% of GDP by 2015 and plan to eliminate it altogether by 2018.

This is a major part of our plan to make Ireland the best small country in the world for business.

We remain a location of choice to establish, grow, and invest in enterprise. Recent jobs announcements in Cork, Galway and the West have reinforced Ireland’s attractiveness for investment.

The priority for 2014 will remain firmly on jobs.

At 12.4% the unemployment rate remains far too high.

In response we will shortly publish our third annual Action Plan for Jobs.

It will set out a detailed set of actions and new initiatives to help our enterprise sector create new jobs.

Construction/Property Sectors
As the country starts to recover from the economic crisis it is not back to business as usual. Things will not be like before.

In relation to the construction and property sector I have said that they do have a key role in supporting economic development and job creation in Ireland.

We are beginning to see signs of stabilisation in the sector.

The Government will support this recovery but only if it is based on the highest international standards in quality, excellence and trust.

Nobody wants to go back to the bad old days of the construction and property boom where scare capital chased ever increasing house prices. That won’t benefit the country, young families or the sector itself.

The spectacular crash in the sector has caused widespread hardship and ruin for many.

The creation of a boom bust property market has left hundreds of thousands of families in negative equity, the consequences of which will be with us for many years to come.

But a sustainable construction and property sector supports development across the economy, whether it’s providing high quality commercial office space for major FDI companies or building vital economic infrastructure like telecommunications, water and energy networks.

And just as important… a healthy construction sector is required to maintain the output of quality housing options for young families as Ireland’s population continues to grow and the effects of urbanisation become more acute.

The Government is also acutely aware that insufficient public infrastructure might once again become an impediment to housing provision and commercial development in the right places.

To address many of these shortcomings we have committed to publishing a new medium-term capital plan this year to remove bottlenecks from sustainable development.

In rebuilding a construction sector based on excellence and quality we have to stand up and confront the major deficiencies in the sector that tolerated poor standards through a weak regulatory and enforcement regime.

We will not tolerate any more Priory Hall’s or pyrite housing estates.

Since coming into Government we have worked hard to undo many of the mistakes of the past and to increase building control standards.

New Building Regulations introduced last year by the Government will come into effect from 1 March 2014 which set out the minimum requirements that must be achieved in bringing a building to completion.

These new regulations will in future ensure compliance with all planning requirements.

This new regime of design, inspection and construction by registered professionals and competent builders will guarantee that Irish consumers are delivered the high quality homes and buildings that they expect and deserve.

In addition, the cornerstone of quality construction in Ireland will be the registration of builders, contractors and tradespersons.
This will enable consumers to ensure they hire competent persons, while simultaneously ensuring that all statutory, regulatory and legal requirements are complied with in a verifiable and transparent manner.

The Construction Industry Register Ireland will be up and running by 1 March on a voluntary basis, and will be placed on a statutory footing by 2015.

The register will play a vital role in the continuing clampdown on activity in the shadow economy and I expect industry to work together with Government in driving out reckless and non-compliant contractors from the industry.

We are also reforming how we support sustainable economic development.

A cost-effective and robust planning system is critical to economic development.

A range of measures are underway to ensure the planning process is aligned to current needs and to current economic realities.

A Policy Statement on Planning is currently under development in conjunction with the establishment of a new Office for Planning Regulation.

Government Actions to Support the Sector
To help underpin recovery in the sector we extended in Budget 2014 the capital gains tax relief by one year to include properties bought to the end of 2014.

Where property purchased in this period is held for seven years the gains accrued in that period will not attract Capital Gains.

We also introduced a Home Renovation Incentive which will provide an income tax credit to homeowners who carry out renovation and improvement works on their principal private residences in 2014 and 2015.

NAMA has approved close to €1 billion in development funding for the completion of construction projects currently in progress in Ireland and to develop new projects to meet prospective supply shortages in certain sectors.

NAMA is prepared to invest an additional €1.5 billion in funding for Irish projects over the next three years. This will include the construction of 4,500 new houses and apartments in Dublin, in addition to office accommodation in the city centre and investment in commercially viable retail projects.

Minister Noonan has provided for a tax framework for REITs in Ireland and we have seen significant interest in this type of investment vehicle.

Despite the constraints we face, the Government continues to invest significant funds in much needed public infrastructure projects.

We are also developing options to help secure further investment, such as mechanisms for increased private financing and the greater use of PPPs.

You will be aware that last Summer Forf??s published a comprehensive report on the Construction sector.

In response Government set out a policy statement outlining a range of commitments to support the sector and we are committed to bringing forward a construction sector strategy early this year.

In this we will consider issues including:
· an overall strategic approach to housing supply, an important and growing concern especially in Dublin;
· whether there are improvements that can be made to planning processes to facilitate appropriate development; and
· whether there are ways to improve financing options for development and mortgage provision.

The previously announced consultation and coordination group will then be established and have a role in helping with delivery of the strategy.

Mortgage Arrears
There is one area which will delay economic recovery unless there is a determined effort by both homeowners and financial institutions to work out sustainable solutions to mortgage arrears problems.

A comprehensive strategy to tackle the problem has been put in place and the implementation of this strategy is now of prime importance.

It will no longer be acceptable for banks to apply short term solutions to cases where there has been a fundamental and long term change in the position of the borrower.

Durable long term restructures will have to be applied having regard to the circumstances of individual cases.

The data published by the Department of Finance and the Central Bank would appear to demonstrate some success by the lenders in addressing the accounts in early arrears and putting in place appropriate measures to prevent borrowers from going into arrears.

However, it will now be necessary for banks to significantly build on this in 2014.

Conclusion
As we all deliver on our commitments I believe that 2014 will be a critical year in Ireland’s recovery.

This year we will continue to overhaul our public services and financial sectors… we will continue to put jobs first and centre in the national agenda… and we will rebuild our economy as one based on enterprise, exports and innovation.

We are not content with current estimates for economic growth and unemployment.

As a Government we will continue to work with Ireland’s business sector to accelerate recovery, growth, and job creation.

Just like the weather we may not be able to avoid international economic storms but we can prepare for them by building a robust and sustainable economy.

This is one of the Government’s ultimate objectives for our term in office.

I’ve no doubt that this is a goal shared by everyone in this room and Government looks forward to working with you all to deliver on this vision for our country.