IRISH banks are “pillaging” the economy while the government fails to learn the lessons of the last financial crash, according to Fianna Fáil enterprise spokesperson and Cork North Central Fianna Fáil TD Billy Kelleher.
Those are lessons that Mr Kelleher knows well, having held the posts of Labour Affairs Minister and Trade and Commerce Minister as the crash happened.
After seven years as opposition health spokesperson, he moved back to a business brief last year, taking over as Fianna Fáil’s spokesperson on business, enterprise, and innovation, marking Minister Heather Humphreys of Fine Gael.
Health was a “reactionary” brief, he said, as the ongoing emergence of different crises dictated the agenda.
His work in that portfolio culminated with the controversial Oireachtas committee that reviewed the Eighth Amendment and recommended the terms of the referendum last May and the principles of the new law that came into effect this week.
Once the bulk of that work was done, Mr Kelleher moved on to enterprise, which he believes has a lot more space for strategy than health.
With the economy growing following the crash, he believes that plans need to be made now so that Ireland is ready for the next downturn.
If the government doesn’t act now, Ireland could go back to the position he found himself in when he entered his first business portfolio just over a decade ago as the financial crash unfolded.
“The country was haemorrhaging at that stage,” he said.
“We were facing the point where unemployment was rising dramatically, and the state was unable to fund itself and we arrived at a scenario where we actually had to get a bailout from the IMF, the EU, and some of our near neighbours.
“That was the backdrop. But from my point of view it was the human misery and suffering that an economic collapse causes — the impact that can have on an individual, and a family, and a community,” he said.
He said that all he could focus on at the time was fighting fires and trying to keep businesses open and people employed.
“Back then, it was fire brigade action. The economy was after imploding, so there were massive problems economically that were spiralling out to societal problems. So you had no time for strategic planning. Strategic planning would have been a luxury.
“We dealt with it every day, and it was hard work. There were long hours, but you felt it was your public duty to see what you could do to help.
“It was all hands to the pump. People may not appreciate that or even see that, but we put in a lot of hours seeing if we could find ways to help the situation,” he said.
The situation is different now. While some threats loom on the horizon — Brexit in particularly — the Irish economy looks set to grow in the short term.
Unemployment is just over 5% — effectively full employment — and the working population is growing as people migrate for work.
With businesses expanding, Mr Kelleher believes that now is the time for strategic planning, both to meet the needs of the market, but also to insulate against another downturn.
“I have no doubt there will be a downturn in the economy again. We are probably one of the most open global economies in the world.
“There aren’t too many more countries in the world as dependent on the international markets for exports. There are always going to be swings and roundabouts, and periods of growth and decline. We have to get to a point where we are investing in the right stage of the economic cycle, so that we can have a safety net when you have a downturn,” he said.
He warned against increasing current spending too much right now, as things like corporation tax are not stable.
“I would be worried that we would be inflating government spending now, in an already expanding economy — that we would start spending a lot, and that would increase current expenditure. When you have a downturn, you have to carry that expenditure or cut it.
“Politics being what it is, you can see this government ramping up spending rapidly. The key issue here is whether it’s sustainable.
“I just believe that after all that we’ve been through as a generation, why would we burden another generation with the policies that are pro-cyclical?”
He said that the government needs to invest in the Rainy Day Fund — one of Fianna Fáil’s key concessions in the confidence and supply agreement, which would allow the exchequer to save during good years and spend during bad ones.
The government also needs to focus on infrastructure like roads and broadband, allowing different regions around the country to live up to their potential.
Investing in human capital, helping people to retrain and upskill and to increase migration so that people can fill the labour shortages that many businesses are now facing, he said.
The government also needs to spend more time on small and medium enterprises (SMEs) instead of putting all its focus on multinationals, he believes.
“Very often, we roll out the red carpets for multi-nationals, and rightly so, they’re very important to the economy.
“We probably don’t do as much as a state in terms of incentivising and encouraging small enterprises,” he said.
“There are big challenges there at the moment. Companies want to expand, but there are shortages of capital and access to credit. On top of that, there are labour shortages, both in construction, but running into all sectors and running right across the economy,” he added.
He said that the cost of regulations is a big issue for many SMEs, and the government needs to get smarter about how regulations work.
“Government is not good in general at unshackling and taking the burden off small and medium enterprises. It has the habit of interfering in a way that undermines them.
“Regulation is good, because it keeps uniformity of practices. When it becomes intrusive and burdensome and a drain on small and medium enterprises, well then you have to start looking at regulating businesses without stifling it with bureaucracy.”
A regulatory impact assessment needed to take place alongside any new measure the government puts in place.
“If a department is bringing forward a new regulation, they would have to sit down and analyse n advance of it coming to being the impact that would have on SMEs.
“Employment law, health and safety - critically important, but when you are bringing it in, can it be brought in in a way that doesn’t have a profound impact on the ability of a business to actually continue,” he asked.