Exclusive Interview: Taoiseach Micheál Martin
The Role of Taoiseach
“As Taoiseach, you have to pull it all together; you've got to maintain cohesion”
Following nearly a decade as leader of the opposition, in June 2020 Martin assumed his current role as Taoiseach and head of the Irish Government. An historic coalition with Fine Gael and The Green Party has brought with it the challenge of accommodating a wide number of viewpoints amid the backdrop of an unprecedented COVID-induced lockdown and the exigent demands of a housing crisis, among other things.
As someone who has held several ministerial portfolios, Martin is acutely aware of the inner workings of Government. In comparing his ministerial positions to that of Head of Government, he asserts that the roles are "fundamentally different." "When you're a minister you have a particular narrow focus in terms of the individual ministry, but of course, in our system of collective Cabinet responsibility you do have a role at Cabinet, although you tend not to meddle or interfere - you make a contribution but one doesn't overly interfere in another person's domain. As Taoiseach, you have to pull it all together, you've got to maintain cohesion - particularly in a three-party coalition. It's about parity of esteem, it's about working with everybody in a very deliberate way making sure there are no surprises. And also, working towards achieving the objectives that are in the Programme for Government (PFG) - which is really the template that we all have to honour and work towards. That [the PFG] anchors the Government because that's what we've agreed to implement. Obviously, issues come that aren't in the PFG that we have to react to and make decisions on. So, it's [the roles of Minister and Taoiseach] much different and you have to have an overseeing view in terms of all the Government departments and all of the issues that arise. But I find it very interesting. I don't have an issue with making decisions. My only issue is that we can deliver in a timely manner- that things aren't delayed too long," he says.
Having 3 parties -and hence 3 different viewpoints in Government - undoubtedly makes achieving cohesion more difficult. However, Martin points out that the difficulty lies as much in the "operational delivery through agencies, through local authorities, through the system more generally. The Government has constraints,” he adds. “There are limitations to power and that's fair in a democracy, there should be. We have the constitutional framework, but that's not what I'm talking about here - I'm talking about planning, making sure we can get houses built fast [for example]. But it takes a long time now to get a project done in Ireland," the Taoiseach says.
Climate Change/COP26
“People look at the climate too much through the prism of agriculture. It is very important, but so is transport.”
The Government’s Climate Action Plan 2021 published earlier this month reflects the Government’s ambition to meet a 51% reduction in greenhouse gas emissions by 2030 and to achieve net-zero emissions no later than 2050. The plan is unprecedented in terms of scale, reflecting the urgency of the unfolding climate emergency. Indeed, sectors like electricity are earmarked to reduce their emissions somewhere between 62% and 81%. Agriculture, meanwhile, must reduce emissions somewhere between 22% and 30. With such ambitious targets in place, the Taoiseach views public buy-in as being central to the plan's ultimate success.
"I think it's going to be very challenging. We're going to have to work to engage with the public - it has to be a collective effort on all of our behalf. But it's absolutely necessary; we're talking about ourselves - it's an existential issue for us all and particularly for younger people. And the children of today, we have to try to ensure that they have a quality of life into the future that's worthwhile. The challenges coming from climate change are enormous. We've seen the storms, we've seen a preview of what can happen. When I was in COP 26, the small island states - for them it's [the effects of climate change] happening now. It's not something in the distance future and I think that sense is there now amongst us all, " says Martin.
He continues: "The Belgian prime minister spoke at COP 26 about 41 people dying in the floods in Belgium...look at what happened in Germany. And I've said it before, I think the election of President Biden has given a much-needed impetus globally. President Trump's administration didn't believe necessarily in the need to move on in climate change and were promoting fossil fuels and so on. So, the very fact that the American administration has re-joined Paris, are in partnership with Europe - now we learn about the [US] partnership with China, it's all very positive. That said, it still is very challenging and targets are important, pledges are important but the doing of it is the most challenging of all.
The Taoiseach added that he believes agriculture should not be the one and only focus in trying to reduce Ireland's emissions. "People look at the climate too much through the prism of agriculture. It is very important, but so is transport - transport is actually a bigger challenge. I think new technologies are going to be very important. I was out at Nova UCD recently and looking at the companies that are start-ups there - a lot of them are focused on climate."
Martin also believes there is a need to develop alternative income streams for farmers and to reward farmers who embrace biodiversity. Indeed, the ability to create new opportunities from perceived obstacles has been a theme throughout this Government's term. Martin highlights the Government's Recovery & Resilience Programme as featuring strongly on the green economy. "Retrofitting will create jobs. An expanded public transport will create jobs: in terms of everything it takes to electrify the rail line; in terms of more rail, Luas, Metrolink - all that's going to happen. I can see smaller companies developing in rural Ireland around food production, around organics - all of that will happen as result of the green economy. Plus the circular economy, there will be legislation to provide for that...The importance of the climate plan is that it sets a roadmap for investment - it tells people 'it's worth your while to invest in alternatives'," the Taoiseach adds.
Data Centres
“Quite a number of data centres purchase wind farms and compensate for the pressure they're putting on the grid”
The Climate Action Plan also highlights the creation of a multi-billion euro Just Transition fund, created from carbon tax receipts, which will help people with the costs of going green. As mentioned, the plan seeks a cut in electricity emissions of between 62%-81%. Among the measures to achieve this, the plan calls for a review of Ireland's data centre strategy, to ensure that it supports renewables and emissions targets. Eirgrid estimates that data centres will account for 25% of electricity usage by 2030 and opposition parties have called for the growth of such centres to be curbed. There are now 70 operational data centres in Ireland and Dublin has become the largest data centre hub in Europe. "Data centres aren't huge employers in themselves, but they're very important for the digital transition that is happening globally and happening here" says Martin. "So part of the digitalisation of society and the economy is the need for data centres. But that said we can't have a moratorium on data centres, but we do have to watch the pressure they put on our energy system," he adds. The Taoiseach further points to the forthcoming review by the Commission for Regulation of Utilities on this area which will highlight issues such as future capacity for data centres, the ability to create back-up energy supply and data centres' contribution to the national grid. "Quite a number of data centres purchase wind farms and compensate for the pressure they're putting on the grid," adds Martin.
COVID-19
“Early indications from Israel are that the third dose is dramatically more impactful than the second dose”
Amid the backdrop of a steady rise in COVID-19 cases in recent weeks, there have been suggestions in some quarters that a return to restrictions of some sort could be on the cards. Martin highlights the high level of vaccination as being the key differentiating factor between the current wave and the spike which hit Ireland this time last year. "As a country it's been very challenging as it has been for all countries across the world. I think we have had public health at the centre in terms of advice which is important in dealing with a pandemic - and I think we've come relatively well through it so far, but it [the virus] has different iterations and the different variants are a big factor - each variant has become more transmissible; so the Alpha variant was very transmissible last Christmas and we didn't have the vaccines. The big change now is that we've had a fantastic vaccination programme, very efficiently organised and that gives us strength in terms of preventing severe illness and ICU admission, hospitalisation and mortality,” he says.
“There's a very robust test and tracing with very high capacity - 130,000 tests this week -which is very strong, and now we're running our antigen testing in addition to that. And then thirdly: behaviour and the boosters. I think the booster programme is going to be very important. We see from early data that there's a significant reduction in severe illness and hospitalisation amongst the over 80's because they've had the booster. We're now rolling out the booster to the over 60's and to healthcare workers. I anticipate that will be expanded. And early indications from Israel are that the third dose is dramatically more impactful than the second dose in terms of the generation of antibodies giving us protection - that's going to be a significant part of how we deal with this wave. Now we are very concerned with the numbers, they are very high. We've reopened society and that reopening, the increased socialisation - you mentioned you were in Coppers- all of that leads to the increased case numbers. The key will be the conversion of case numbers to hospitals. At the moment we're managing that although the health service is under enormous pressure, not just from COVID but from a range of respiratory illnesses and so it's going to be a very tough and challenging winter for the health service,” Martin says.
He continues: “On the other hand we've reopened the economy and we've brought back employment for thousands and thousands of people which is important in terms of mental wellbeing, in terms of people's quality of life and their security - and that can't be dismissed. There's been a dramatic turnaround in the fiscal situation because of the reopening of society and in the employment situation because of the reopening of society: so that's the balance we have to get right.” Martin believes that personal responsibility will play a crucial role during this wave of the virus: "if everybody would watch and reduced their level of contacts, the cumulative impact of that is that you reduce the overall rate [of reproduction of the virus] in society," he adds.
Brexit/Article 16
“Rhetoric is easy, sloganeering is easy - I'm past that; I don't believe in that”
The difficulties surrounding the implementation of the Northern Ireland Protocol has led to threats in recent weeks of the UK triggering the much-feared Article 16. The exact consequences of this are unknown, however it is an outcome that will almost certainly lead to further disruptions to trade and beyond. Having spent a great deal of time in Northern Ireland in his younger years, the Taoiseach is acutely aware of the need for understanding and co-operation. "I grew up during the Troubles and for thirty years it was the daily diet of our lives - bombings, mayhem, people being murdered. We never thought we'd see the end of it. It became almost endemic in our lives. So for us, and for my generation, the Good Friday Agreement was a massive sea change that we never thought we'd see - and great credit to the British and Irish governments [for that]. And that's why I'm very anxious to say to the British government that we need to act in sync because that's what gave rise to the peace process," he says. "When I look at the North, I see the progress, but equally I see the potential that's there. It's easy to go backwards, it's easy to go back into the trenches. Rhetoric is easy, sloganeering is easy - I'm past that; I don't believe in that anymore in terms of having a go for the sake of having a go. We've got to see beyond the next move and we've got to see what's the overarching objective - reconciliation. You need to work with people. Unity is about people, it's not about territory. I think we need to work with people on the ground; there's a new centre ground emerging in the North as well that wants to engage on a practical basis," he adds.
He continues: "I think Brexit has created a challenge for the island, and it's challenging for the relationship between Britain and Ireland. And so, we have to really be very careful as we move forward in making sure that we can maintain the stability and the peace and the edifice of the Good Friday Agreement. I believe passionately in what the Good Friday Agreement has achieved, but it's potential has never been fully realised. And that's why I'm developing the Shared Island initiative to really grow the North-South dimension in a practical and pragmatic way: fun projects that make a difference to people living on the island and we're doing that through the Ulster Canal, greenways, investment in research (there's a €40m allocation to research for North-South institutions coming together. Likewise, industrial collaboration as well on the border and then there's a lot of dialogue going on," the Taoiseach says.
In terms of the ongoing Brexit process Martin asserts that the Irish Government is “working with the British government, but the British government has to work with the European Union; we're also working with the European Union,” he adds. “We believe that people in business, jobs depend on stability in the relationships. Nobody should do anything that would put that stability at risk. That would be disruptive to trade. We have our channels to the British government -they know our position. No decisions have been made yet in respect of the Article 16 issue and I think for the moment what we are saying is that talks should continue and the indications are that they're going to give another few weeks between the UK and the European Union. Maroš Šefčovič [Vice-President of the European Commission] came up with a very generous package of measures, further than anyone anticipated the EU would go up to now. They deal with all the bread-and-butter issues. He went to the North, he met with all the stakeholders and on behalf of the European Commission he devised his proposals. Some Member States thought he went too far, but he got that package through. David Frost brought in the ECJ which is almost trying to torpedo Šefčovič's package before it was even announced. But I think the Commission's package has landed well with people in Northern Ireland. They want to maintain access to the Single Market and that means there has to be compromise, " the Taoiseach says. He adds that it is incumbent now on the UK government to respond to what the Commission has produced.
Budget 2022/EU Fiscal Stimulus
“Fiscal parameters always matter and fiscal responsibility always matters”
Compared with Budget 2021, the size and scale of this year's budget was far smaller - a €4.7bn package compared to €17.75bn in 2021 to be precise. The Irish Fiscal Advisory Council (IFAC) were praiseworthy of the measures, saying that the Government has put the economy on a more "prudent path that will reduce borrowing and the debt ratio in the years ahead." Davy Stockbrokers, in addition said that the Budget showed that political pressures to spend the unexpected strong performance of tax revenues in 2021 had been resisted, with the limited amount of measures being focused on addressing the rising cost of living. That said, the State's national debt is currently hovering around 105% of GNI* (GNI* being an indicator designed specifically to measure the size of the Irish economy by excluding globalisation effects).
Despite the EU's unprecedented quantitative easing programmes and relaxation of debt rules, the Taoiseach maintains that fiscal prudence matters as much as ever. "Fiscal parameters always matter and fiscal responsibility always matters," he says. I ask whether EU fiscal rules matter less now in the current climate and amid the backdrop of a steady adoption of what is defacto a Modern Monetary Theory (MMT) school of economic thought in the US and EU. Martin says much will depend on how Europe reframes the fiscal strategy post-COVID but that "the ECB have been very clear that the bazooka type approach that has been adopted in the past two years is correct in terms of strong underpinning of economies during a global pandemic, keeping businesses intact through furlough programmes. And I think the impact of that is such that when we reopened society many businesses came back quickly. And so, we've had a good rebound in the economy. Now the issue will be how long we can sustain that. The global situation is going to have an impact on that, so inflation is there, the supply chain problems are there. Do they act as constraints on our growth? - that will be something we have to watch over the next number of months. So far, so good. Our FDI sector has been very robust, has added jobs. Our exporting side of the economy has been very strong. Our own indigenous companies are doing well. I see as a result of the CETA (EU-Canada Comprehensive Economic and Trade Agreement) we've gone up 30% in exports to Canada which underpins the value of free trade and free trade agreements. Sinn Féín and the far left opposed CETA. It's just beyond belief that you would say to small companies in Ireland 'we want to restrict your exports to Canada and therefore you won't be able to add jobs.' That's what Sinn Féin and the far left are saying to companies in Ireland and I don't think they have a coherent enterprise policy," the Taoiseach concludes.
SMEs
“In the last 20 years we've transformed the relationship between SMEs, the indigenous sector and our research infrastructure”
The Taoiseach also highlights the need to "transform" the indigenous sector. "We've done well on small to medium sized companies in Ireland and they're growing all of the time. Enterprise Ireland has done a lot. But if you were to look at it over a 50-year cycle, we did an awful lot on foreign direct investment and that, by the way, spawns its own SMEs as well because many people in SMEs today were in the multinationals - particularly in life sciences and technology. And so, what we have to do is something similar to what we did in 50 years in FDI in SMEs," he adds.
During the Election 2020 campaign Martin was forceful in this desire to reboot the SME sector - what he refers to as the engine of the economy. "Enterprise Ireland is the key agency, first of all, in helping and nurturing start-up companies. That's very important and that's going to continue. But also, investment in research and development is key to our own indigenous base and that's why in the last 20 years we've transformed the relationship between SMEs, the indigenous sector and our research infrastructure," he says. Martin further highlights third-level institutions and their associated incubation centres as being key in terms of situating new companies on campuses which can subsequently spawn new companies that can grow.
Corporation Tax/OECD Tax Deal
“It's not just about tax anymore; investment in education over 50 years has made a huge difference to Ireland”
In October, after a long period of speculation Ireland finally agreed to sign up to the OECD tax deal. The agreement will mean an end to Ireland's world-famous 12.5% corporate tax rate - at least for those companies earning over the €750m turnover threshold. However, Ireland has received assurances that we can operate two rates of corporate tax, with those below the threshold paying tax at the extant 12.5%. rate. Despite much international opposition, Minister for Finance Paschal Donohoe was steadfast in his refusal to commit Ireland to any deal during the summer, until more certainty could be obtained regarding the details - specifically, the removal of the words "at least" from the draft text with respect to the 15% global minimum rate. In a similar vein, PwC Managing Partner Feargal O'Rourke argued in an Irish Times opinion piece that it was sensible for Ireland bide its time and see if the US Congress approved President Biden's plan for a 15% minimum rate.
"All negotiations, you don't sign up immediately," the Taoiseach says- adding that he believes some of the labelling ascribed to Ireland throughout the deal process was unfair. "You have to separate ideology from national interest. Every country has its national interest. We have a very strong FDI sector in Ireland. It's not just about tax anymore; investment in education over 50 years has made a huge difference to Ireland: investment in third-level, research. We need to more in research, by the way. The bottom line is that having it at 15% and moving from a 'at least 15%' to a precise figure of 15% -and I'm getting assurance that this issue won't be revisited every second year- is very important because investment needs certainty and continuity. And if you add in the fact that we're the only English speaking member of the European Union; we have a very strong education ecosystem in Ireland; good human capital - all that helps with a competitive tax rate to continue to attract inward investment," says Martin.
Housing
“We've had lots of legislation passed in the first 12 months which gives us the underpinning to do a lot of work on affordable housing.”
As mentioned earlier, Martin believes that it takes a long time to get a project done in Ireland. Nowhere is this more evident than in housing, which is a key focus of the Taoiseach and his Government. "I think the crisis is so bad in housing. It's very serious. Since we've come into office we've had two lockdowns which have hit construction which we had to lock down twice because of COVID. There's a good bounce back now from up to September - we're looking at a year-on-year figure of 30,000 commencements. We have to get to 33,000 a year," he says.
Martin highlights the hypocrisy of Sinn Féin who object to countless planning permissions at local level, yet simultaneously grumble in the Dáil about Government inertia. "We've counted about 6,000 houses that Sinn Féín have opposed through different schemes and different projects across Dublin and across the country. I would say that all politicians need to think twice now given the crisis we are in. But there's no point into me coming to Dáil Eireann saying it's a crisis and then when you're out on the City Council in Dublin saying you can't allow 750 houses be built because you don't like the mix between private, public and affordable," he adds.
The Taoiseach is firmly of the belief that the word 'crisis' implies a sense of urgency and, as such, the luxury of being pernickety to the nth degree simply isn't there. He continues: "We wrote to the younger generation, one of the first generations that can't avail of affordable housing and look forward to being able to buy a house. I think Darragh O'Brien has put in a suite of measures from affordable, to cost rental, to social housing and a range of other initiatives that he has taken with the Land Development Agency. We've had lots of legislation passed in the first 12 months which gives us the underpinning to do a lot of work on affordable housing and also to unleash the Land Development Agency with statutory powers to get projects off the ground," he says. Martin adds that he thinks by the end of the Government's term in 2025 they will have "gotten housing on a level that will be sustainable and that will be impactful in terms of over thirty odd thousand houses a year being built - that's key. We need to be at that level. The last two years, it's been at twenty thousand because of COVID - that's nowhere near enough. And, in fact, I'd like to go beyond 33,000 obviously in the next year or two to compensate [for the last two years]," the Taoiseach says.
Education
“We're not going to go down the route of student loans for fees or anything like that”
The funding of higher education and research will be one of the themes of the rest of this Government’s term, according to the Taoiseach. An update on the Cassells report, which identified the need for an extra €600m a year by 2021 whether from the Exchequer, student fees, or a mix of both was received from the European Commission during the summer. Martin says that he expects Minister for Higher Education Simon Harris to publish a report on the Commission’s by the end of this year. "Well, I think in third level there is without question the need to improve the core funding of third-level education - both the technological universities, institutes of technology and universities. And from that perspective that Cassells report was looked at by the European Commission - that's come back. Already we changed the contribution from Employers' PRSI on foot of the report - that happened some years ago, that's continuing," says Martin.
On the issue of fees, the Taoiseach says they are continuing at the current rate. He continues: "We've expanded student grants for the first time in terms of increasing the grants, but also increasing the threshold at which we can qualify. And also this year, in the autumn, we are giving substantial funding to the universities as a once-off in terms of helping their overall financial position heading into 2022. So, the key issue will be then over time to implement Cassells and increase the core funding to third-level," he says.
A primary goal of Martin's in opposition was to create a separate department for Higher Education and Skills. This has now happened under his watch and the Taoiseach is optimistic about it's potential to be a potent force for good. "I think it's a very significant change. It creates a Cabinet level focus on further and third-level education which in my view given where the economy is, we have to go into higher-value activities, high-end activities in the economy - we have to compete; and the competition is in the area of research and higher education...And the Minister [Harris] will implement over time the key part of the Cassells report in terms of core funding," the Taoiseach adds. Martin - as Simon Harris has previously said - categorically rules out the potential for student loans to become part of the funding solution: "That's not going to happen. We're not going to go down the route of student loans for fees or anything like that. We think that would put a debt on students and we've learned from the experience of other countries it hasn't been the most efficient of systems. But I think the most important issue is that we don't want barriers created and it does create a debt for students as they leave college which we are not comfortable with," asserts Martin.
Comments
Post a Comment