Minister McGrath's opening speech at the IIEA webinar- 21 September 2021

"Fostering a Fair Recovery and Building Resilience: The Path Forward for Ireland and the EU". Michael McGrath TD, Minister for Public Expenditure & Reform, Institute of International & European Affairs 21 September 2021

I am very pleased to be able to take part in this event this afternoon and to welcome you all – virtually at least – to the Whitaker Room here in Merrion Street.

I am particularly pleased to welcome Commissioner Paolo Gentiloni to Dublin, and here to the Department of Public Expenditure & Reform, to discuss Ireland’s National Recovery and Resilience Plan.

TK Whitaker was a pioneer of economic development at a time of great economic challenge for Ireland and we are still inspired by him. The last eighteen months have seen Ireland, Europe, and the world face an extraordinary challenge, namely the COVID-19 pandamic, requiring an extraordinary response, at a national as well as international level.

At a national level, the 2020 Programme for Government set out the ambition and the actions required to meet this challenge and to repair the damage that has been inflicted by the pandemic.

And in many ways, the pandemic has acted as a catalyst for enabling future change and allowing Ireland to build back society and the economy in a manner that is sustainable.

As our successful vaccination programme allows us progressively to reopen the economy, the Government’s Economy Recovery Plan has set out how we will support the full resumption of economic activity and get people back to work.

Allied with the National Development Plan, and building on the extensive supports the Government has put in place since the start of the pandemic, the Economic Recovery Plan sets out a new phase of supports, investment and policies for a new stage of economic recovery and renewal.

In recognition of the extraordinary impact of the pandemic, the full range of tools at the Government’s disposal have been used, and continue to be used, including income supports, grants, reliefs, taxation measures, and loan guarantees, so as to protect workers and their incomes, and support businesses through the pandemic and beyond.

Meanwhile, at a European level, the €800 billion NextGenerationEU recovery package represents an unprecedented response by the European Union to the global pandemic. It represents Europe’s shared response to the public health and economic and social crisis caused by COVID-19.

NextGenerationEU is an ambitious and common recovery package that will complement and support each Member State’s own national response to the crisis.

At the heart of the NextGenerationEU lies the Recovery and Resilience Facility. The aim of the Facility is to address the economic and social impact of the pandemic and make European economies and societies more sustainable, more resilient and better prepared for the challenges and opportunities of the green and digital transitions.

Ireland will receive approximately €915 million in grants from the Recovery and Resilience Facility. These grants will be used to support investments between now and mid-2026.

A further set of grants will be allocated to each Member State in 2023, taking into account economic developments between now and then.

Ireland’s Plan has been developed by the Government in close cooperation with the Commission, taking into account the RRF prioritisation of green and digital transition and the challenges identified as part of the European Semester process.

I would like to thank the Commissioner and the Commission services for their excellent cooperation in developing our Plan.

I was very pleased to meet Commission President Ursula von der Leyen when she travelled to Dublin in July to present the Commission’s positive assessment of Ireland’s Plan to the Taoiseach.

I was also pleased to join my colleague, Paschal Donohoe – who I know the Commissioner knows well – at the recent meeting of ECOFIN when Ireland’s Plan was discussed, and I was delighted that the Plan was approved by the Council.

The overall objective of Ireland’s National Recovery and Resilience Plan is to contribute to a sustainable, equitable, green and digital recovery, in a manner that complements and supports the Government’s broader recovery effort.

The Plan is aligned with domestic policies such as the Economic Recovery Plan and the National Development Plan which will see Ireland investing €116 billion in capital spend over the period from 2018 to 2027. Consistent with the NRRP, the priorities for the NDP include reform, sustainability, regional development, innovation and skills, and climate action.

Ireland’s Plan is based on twenty five investment projects and reform measures spanning three priority areas addressing green and digital transition, along with social and economic recovery and job creation.

Each priority contains a set of impactful and reinforcing investments and reforms.

Let me first turn to Advancing the Green Transition

The next number of years are critical if Ireland is to address the climate and biodiversity crisis that threatens the safe future of the planet.

Ireland’s ambition is to more than halve carbon emissions over the course of the decade. This will be challenging and will require fundamental changes in so many aspects of Irish life, but the measures contained in this Plan and other key domestic plans, like the National Development Plan and the Climate Action Plan, will help us rise to the challenge.

Reflecting our strong national commitment to addressing the climate and biodiversity crisis, the National Recovery and Resilience Plan sees a significant allocation being made to supporting investments addressing the green transition.

As detailed in the 2020 Programme for Government, Ireland is committed to a 51% reduction in overall greenhouse gas emissions from 2021 to 2030 compared to 2018 levels, and to carbon neutrality by 2050 at the latest. Ireland recognises the importance of frontloading these required investments as many of the changes started in the 2021-2025 period will only lead to reductions later in the decade.

Ireland is lagging behind, however, compared to other EU Member States in tackling decarbonisation. In fact, Ireland is expected to miss its target for cumulative emissions for the period 2013 to 2020 by approximately 5%. This means that proposals and funding are required to substantially reverse recent trends and improve efforts to decarbonise. Out plans will also be crucial for achieving progress towards environmental objectives in line with the European Green Deal.

As part of the Government’s commitments in the Programme for Government, Ireland will support the European Green Deal, which provides a roadmap for Europe to take advantage of the opportunities presented by moving to a low-carbon future.

The National Recovery and Resilience Plan represents a first step to significantly reform and direct relevant funding towards decarbonising projects such as retrofitting, ecosystem resilience and regeneration, climate mitigation and adaptation, and green data systems.

The measures contained in the National Recovery and Resilience Plan and in other key domestic plans will help this country rise to the challenge.

Reflecting the importance of the digital transition for Ireland and Europe in the coming decade, support for Irish businesses and our citizens to adapt to, and reap the benefits from, digitalisation will be central to our National Recovery and Resilience Plan.

That is why Accelerating and Expanding Digital Reforms and Transformation is one of the three priorities of our National Recovery and Resilience Plan.

Ireland’s ambition is to provide a better experience for citizens and businesses interacting with Government and, as important, to continue and accelerate the reform agenda through improvements in the way Government systems operate.

Achieving this requires digital transformation of Government: redesigning and rebuilding Government processes and services, if necessary across organisations, and using digitalisation and data to provide an integrated experience for our citizens, businesses and policy makers.

Having a user-centred focus on the design and delivery of public services, underpinned by exemplary identity and data infrastructures, will be a key driver of reforms.

The benefits of the digital transformation of public services to both individuals and businesses are well established. These range from efficiency, transparency, trust, and accessibility, through to funds being released for expenditure on improving existing and future services.

Realising the potential of digital also requires promoting awareness of the possibilities of digital and strengthening digital skills within organisations and across sectors. Through this approach we will scale innovation to enable system-side transformation and reform.

Policies and interventions that advance the digital transformation can also be catalysts for wider recovery, growth and increased competitiveness. Having invested in underlying infrastructure, such as the National Broadband Plan, we need to drive adoption and maximise return on that investment, while also driving the reform agenda.

For the past number of years, Ireland has striven to improve digital connectivity across urban and rural settings, to integrate digital services as part of the reform and transformation of the Public Service, and to promote the benefits of digital transformation among Irish enterprise.

The digitalisation of the Public Service is particularly key given the challenges presented by COVID-19, with the need for remote working, remote transferral of confidential information and a reduction in gatherings and face-to-face consultations.

Digital interactions are also less time consuming for people and reduce the administrative burden on both the public sector and companies, which can help support business as economies recover from the effects of COVID-19.

Moreover, given the scale of case management that occurs across public facing parts of the Government sector, automating these components will significantly boosts productivity, reducing backlogs and freeing up resources for other priorities.

Our digital transition will be one of the key enabler for our reform agenda. It will allow greater interoperability of public services within and between organisations, nationally as well as across the EU as appropriate. It will improve quality of service, enable the sharing of information in an efficient manner within the public sector and with citizens and business, thus enhancing our public administration.

Ireland’s National Recovery and Resilience Plan has a strong focus on supporting people’s return to work and preparing for the challenges of the future. This is reflected in our third priority: Social and Economic Recovery and Job Creation.

Further Education and Training in Ireland has long played a critical role in labour market activation and in upskilling and reskilling people.

The requirements on the FET sector are particularly acute given the significant impact of COVID-19 on the social and economic fabric of Ireland. In particular, certain sectors and occupations have been impacted greatly, such as hospitality, services and retail. Additional skills challenges that relate to climate, Brexit and automation also exist.

Recognising these challenges, Ireland has strengthened the mandate and governance of this sector through the establishment of the Department of Further and Higher Education, Research, Innovation and Science. This Department will drive the reforms required to ensure Ireland is equipped to upskill and reskill the workforce and to provide skills for growing sectors such as green and digital.

Ireland has introduced investments in FET aimed at upskilling, reskilling, retraining and providing experience to individuals to enable them to avail of employment opportunities.

Additional Government investment in vocational and further education was first announced in the July 2020 stimulus package to help people reskill and, if necessary, change career.

This was further supported with additional further education and training places announced in Budget 2021.

This priority area in Ireland’s Plan will focus on new work placements in response to the COVID-19 pandemic, in order to keep those who are unemployed close to the labour market.

It will also focus on equipping the Irish workforce with the necessary future skills that will be required to boost the innovation and productivity of the SME sector, as well as the provision of skills in support of climate action.

This commitment to reforming the focus of FET to meet the future employment that Ireland strives to advance, in climate action and digitisation, will ensure there is alignment between the development of physical capital and human capital.

Ireland recognises the critical role that NextGenerationEU and the Recovery and Resilience Facility will play in helping to repair the immediate economic and social damage brought about by the pandemic. But more than that, they will enable us to move beyond the pandemic and rebuild the European economy.

For Ireland, as a successful open and global economy at the heart of the European Union, that is key.

I would again like to thank the Commissioner and his team for their excellent cooperation in developing our Plan. But we now move to the next phase: implementation.

This phase will be led by me and my Department, in close cooperation with Minister Donohoe and his Department. I look forward to continuing good cooperation with the Commissioner and his team during this critical phase.

Thank you

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