Look up the word ‘corporatocracy’ in the dictionary and you’ll find a link to the new Programme for Government: a government heavily influenced by the interests of corporate owners.
The new Programme for Government (PfG) makes it clear that employers will be welcomed into every Government department; their demands will be acted on; and only the best china will be brought out.
All this will be done under the cover of supporting struggling SMEs (small-medium enterprises). However, the term SMEs is an artifice. SMEs make up 99.8 percent of all enterprises. So when the term SME is used, it effectively means all business, and all employers.
We can see this emergent corporatocracy in three areas: corporate welfare, deregulation and labour market-policy retrenchment.
Corporate Welfare
The biggest single corporate welfare handout is likely to be cuts in VAT, PRSI and ‘other measures’ for the retail and hospitality sectors. The PfG is silent on the actual details but negotiators have been briefing the media. Cutting VAT for hospitality alone could cost up to €700 million and that’s before we get into PRSI, other measures and the retail sector.
However, it’s the mood music of the PfG that provides the best insight:
- Cost of Business Advisory Forum will be set up to review ‘all business taxes’
- ‘Review and simplify the current Business and Enterprise Tax system’
- ‘Implement a pro-enterprise tax policy’ (as if we didn’t have the lowest corporate tax and employers’ PRSI in the EU already)
- ‘Bring forward taxation measures to help contain energy costs, including with regard to VAT’
- ‘Publish an Action Plan for Competitiveness and Productivity . . . this action plan will include tax policy . . . ‘
The above doesn’t include the sectoral-specific references in the PfG to review tax measures (e.g. agriculture, private transport, R&D tax credits, etc.). Nor does it include increased ‘resources’, or grant-aids to business sectors which are prolific throughout the PfG.
This ‘throw-money-at-businesses’ approach could prove quite costly. And without any underlying analysis of our low domestic productivity, it could prove quite wasteful. But it will boost profits and that appears to be the intention.
Deregulation
Deregulation is becoming a buzz policy, promoted by the EU Commission and the Draghi Report, and taken up by the PfG. The argument is that the business sector is over-regulated; that regulation is strangling innovation and business flexibility. Yet, in the UN’s Ease of Doing Business series, we rank 8th in the EU-27. This doesn’t suggest that regulations are a barrier to successful enterprises. Nonetheless, the PfG commits to:
- ‘Rigorously implement the SME test to scrutinise every new piece of legislation and regulation for its impact on SMEs’ (that is, all businesses)
- Simplify and modernise our regulatory framework
- Government Action Plan for Competitiveness and Productivity with a key focus on reducing the cost and regulatory burden on business
- Reduce where possible the regulatory burden, simplifying EU rules for the SME and Farming sectors
- Identify regulations that are now redundant to reduce unnecessary red tape, with each government department and regulatory agency to submit a list of such regulations.
- Attract private market investment into the economy through an enhanced regulatory framework
- Work with EU partners to eliminate unnecessary bureaucracy in EU Directives and Regulations to facilitate business operations.
No one would object to a more efficient operation of administrative requirements for businesses. If there is duplication or redundancy, then address these. However, regulations cover a range of crucial public interest activities: environment, labour rights, workplace health and safety, consumer safety, financial transparency, and so much more. What is happening has been described at the EU level as deregulatory zeal and corporate-friendly deregulation in disguise.
It will be imperative that trade unions, environmental and civil society NGOs monitor Irish deregulation closely, requiring the Government to justify any actions that puts public interests at risk.
Labour Market Policy Retrenchment
This is probably the most unnerving part of the Government’s corporatocracy agenda. It is encapsulated in the following commitment.
‘Assess all elements of labour market policy that impact on the viability of SMEs’ (i.e. all businesses)
This has the potential to subject all labour market policies to the overriding needs of corporate interests. The PfG makes a start by failing to mention the Living Wage or the last government’s policy to increase the minimum wage to 60 percent of the median wage. Instead, it substitutes the following formulation:
‘(ensure) fair wages whilst also supporting the viability of small and medium-sized enterprises.’
Further, the PfG is silent on progressing with statutory sick pay. And it is silent on the establishment of sectoral taskforces which was referred to in the PfG of the last government (though never acted on).
But there are other worrying references; in particular:
‘Publish an Action Plan for Competitiveness and Productivity within 12 months . . . This action plan will include wage policy . . . ‘
Wage policy? What could this possible mean?
There is no recognition that Irish employees suffer from chronically high levels of low pay, one of the highest levels of wage inequality in the EU, a massive gender pay gap in the private sector, or high levels of precariousness. There is no recognition that these lead to a poorly performing indigenous sector - reducing demand, increasing costly staff turnover, and suppressing productivity.
There is, to be fair, a number of proposals that will attempt to bring people with disabilities into the formal workforce – a welcome emphasis, especially as ‘Ireland has worst rate in Europe of employing people with disabilities’. And there’s a helpful commitment to extend pay-related benefits to parents benefits.
But on the crucial issue of workplace democracy, the PfG is hardly reassuring:
‘Publish an Action Plan for collective bargaining in 2025 in line with our commitments under the EU Directive.’
This can mean anything and given the overall narrative of the PfG it probably means little. The last government stated that there were no statutory interventions needed (‘commitments’) under the Directive. So don’t expect employees’ right to bargaining collectively to be introduced into law anytime soon.
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No doubt, the Government will justify these and other commitments as a ‘pro-enterprise’ policy, increasing competitiveness and productivity. But they are no such thing. Enterprise is not promoted by heaping no-strings-attached subsidies on employers, is not improved by reducing regulations that protect the public interest, is not progressed by miring the economy in low pay and poor employment quality.
We need a new business model, a re-imagining of what a productive economy is, of how economic efficiency, social equity and democracy are intertwined and mutually re-enforcing.
Whatever that might look like, it won’t look like this Programme for Government.
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