Budget 2010 – Tackling Public Sector pay very welcome and was essential to stabilising the public finances

– Does very little to help regain international competitiveness and stimulating exports

The Irish Exporters Association (IEA) today (9th Dec) commented on Minister Lenihans Budget for 2010 delivered in Dail Eireann as follows:

Ø The measures to reduce Public sector pay were absolutely essential to stabilising the Public finances, and the IEA strongly welcomes the Ministers budget actions in this regard. Failure to have tackled this issue would have driven up general taxation across the private sector and further depressed the economy.

Ø The further commitment to reducing Public sector day to day spending by a further €2 billion in 2011 is also welcome and must be delivered on.

Ø The Budget however did very little to help industry regarding international competitiveness or stimulate export growth. In particular the IEA are critical of the failure to address:

· High Costs of Energy, relative to our international competitors

· High costs of Transport, in fact the Carbon Tax will increase the costs of moving goods in and out of the country.

· The rising cost of finance due to the crisis affecting the export insurance and banking markets

John Whelan, CEO of the IEA stated:

“Public Sector pay reform was essential but so was tackling key competitiveness issues and measures to stimulate the export sector. In particular it is important to point out that all exporters have stated the need to reduce by 20% the cost of energy for their factories and transport facilities. Not alone did the Budget not address this critical competitiveness issue, it added to the cost by way of the Carbon Tax.”

He further stated;

“The Budget also failed to give any meaningful support or stimulus for the food export sector which accounts for 57% of total indigenous exports in the critical areas of –credit insurance or – sterling exchange exposure. Both of these issues have been the cause of over €1 billion in lost export sales and approx. 10,000 jobs to the sector over the past 12 months.”

In conclusion the IEA stated that the Banking sector refunding and the Public sector finances have been meaningfully tackled by the Government, a serious re-evaluation of the stimulus measures for the export industry would now have to be tackled.

BUDGET UPDATES FROM PRICEWATERHOUSECOOPERS

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For further information, please contact John Whelan, Chief Executive, IEA

Mobile: 087 927 1243