NERI’s Quarterly Economic Observer Autumn 2015 was described at its launch as a manifesto for growth.
The economic think tank decided this year rather than doing a pre-budget submission, of which it has detailed proposals out on already, it would focus medium to longer term growth strategies and policy areas for Governments to pursue.
Section 4 discusses policies for long-run economic growth in the Republic of Ireland:
The economy’s potential to grow depends on its ability to generate productivity gains year-on-year. The Republic’s productivity growth has been falling since the 1980s.
The best way to sustain growth in productivity over the long-term is to invest in education and skills, in productivity enhancing infrastructure, and in the production and diffusion of new technologies.
We propose a set of policies designed to increase the economy’s future potential output. For example, we propose the establishment of an infrastructure bank, increased funding for research and development and early years learning, increased support to prevent child poverty, and a phasing out of most though not all government subsidies and tax breaks.
Growth in per capita output also depends on growth in employment and the number of hours worked across the economy. We propose a number of reforms to reduce barriers to labour market entry. Examples include subsidies for childcare and the gradual tapering of family supports along with income.
Budgetary projections suggest the primary government expenditure share of economic output will, by the end of the decade, be at a very low level by NERI modern historical standards. While acknowledging the need for reform of the tax system, we urge the government to reconsider its plans to cut the overall level of taxes in Budget 2016 and to take a more strategic and long-term approach to growing the economy.
The document also provides a very useful policy reforms that will increase productivity and output. This is on page 9 and 51 of the document.