Emergency Budget 2009 – What does it mean for tech?
Brian Lenihan has just delivered his Supplementary Budget and the numbers are being crunched all over. For the ding-dong buzzword laden push on the ‘Smart Economy’ that Lenihan delivered, the Budget falls far short of the mark on encouraging real innovation in the tech sector.
Call this a first cut..
To the Young Potentials, Sling your Hook
Specifically, jobseekers allowance for the under twenties will be halved to €100 a week so as to incentivise the young unemployed to participate in training programmes.
What will these cuts mean to those already living in poverty, with very little education? Cuts need to be paired with incentives. By ‘incentivising’ the young, does the Government mean that these young people are lost causes that will only seek jobs when they are being pushed further into poverty? By shrinking social welfare payments, is the Government pushing these kids further towards crime? Kids this young need to be working.
This incentivisation does not come with a matching programme to boost the skill base of young unemployed people. How can a Government commited to pushing Ireland towards a “Smart Economy” model, willfully abandons its young people?
Enterprise Stabilisation Fund, enough?
In an effort to support Irish businesses operating in Project Economic Meltdown, Lenihan is proposing the establishment of the Enterprise Stablisation Fund.(pdf link)
The Fund will have a total budget of €100 million over two years, with €50 million being provided in 2009 and a further €50 million to follow in 2010. The Fund will be administered by Enterprise Ireland and approvals will be based on business plans submitted to the agency by applicant companies. Particular attention will be paid to small and medium-sized enterprises engaged in exporting.
The ESF is a Band-Aid. A bloody plaster set to help staunch the flow of capital in SMEs. A tiny measure. Something that doesn’t go far enough to nurse real innovation that’s hurting. We’re not even waving at situation Status Quo. We’re flushing this money down the fucking toilet. €100 million is nothing in the scale of things. Nothing.
I’m interested in seeing the decision-making that EI puts in place to evaluate business plans that companies submit to the ESF. Will it differ from other schemes?
Corporation Tax Stands Still
Corporation tax is not moving. I’m not sure the Government could have pushed it down any further without serious heat from an already prickly Europe still smarting from a rejected Lisbon One.
The Smart Economy
Lenihan’s statement on Government’s commitment to the “Smart Economy”:
The Government will also implement measures to support the “Smart Economy” through investment and incentives to reach an R & D target of 2½% of GNP by 2013. We have already trebled our economy wide R&D spend over the last decade. It is now around €2.5 billion of which some two thirds comes from the enterprise sector. It is not just a matter of saving jobs where we can but of re-orienting the economy to produce the export-led growth we must achieve.
What does this actually mean? Without pointing to exact policies or schemes to support a knowledge-based economy, how can measures on boosting R&D really be evaluated? Supporting the “Smart Economy” isn’t only a cash transaction, but a commitment of capital, attention, oversight and flexibility. Just shoving target spends in silos will not yield strong and sustainable job growth in the Sciences, Engineering and Information Technology. Also, without mentioning policies upfront, if and when a further squeeze on expenditure is made, wouldn’t it quite easy to bleed financial support from target “Smart Economy” spends to other places?
What Broadband?
For all the buzzword jockeying on the “Smart Economy”, there wasn’t a mention of broadband. Broadband doesn’t exist on the roadmap of the Governments budgetary strategy to turn around the country. And they don’t stray far from the truth, Ireland’s broadband infrastructure is nonexistent. On a day when Australia is committing A$43B on a publically-owned, high-speed national broadband network, Ireland closes her eyes. The Australians project that the network will stimulate economic growth to the tune of 37,000 new jobs. Ireland still turns away.
At the same time, thousand of miles away, the US Congress is setting aside $7.2B to boost broadband in far-flung areas underserved by high-speed connectivity. What of Ireland? Again, She turns her back.
Dulling the bite of capital expenditure by fixing spending over the next couple of years without placing specific attention on rolling out national broadband as an exception means another decade of Irish Internet users pissing into the wind, speedwise. Another decade of Ireland moving in slow-motion with little inventiveness and economic imperative. Creativity plugged.
Fantastic article Alexia. Your points on broadband are spot on. The broadband situation sickens me. I had a meeting today with a Media Auditor and was told that broadband penetration is at 66% and will rise to 85% by the end of the year. I asked how and was told that the National Broadband Scheme will make broadband accessible to the whole country within 3 years.
I actually laughed.
I proceeded to explain the VERY BIG difference between dongles and broadband.
It made me sick. Then I saw the news on the Oz plans. I actually got sick a little.
How is the government so short-sighted and unaware of the necessity for a top rate broadband infrastructure. How?
In general i try and keep away from the politics as I think its generally the people in any democracy that eventually make a difference. For this to happen however the government of the day have to put in place a general framework that allows things to develop naturally.
An obvious area in the modern world is a communications infrastructure. What’s really frustrating is that IT IS SO OBVIOUS!!
So, for the next few years we’re going to have to fudget because of the bludget.
I’ll be off politics by the morning as i reckon you’d find more inspiration under a stone!
In fairness ridding the banks of the toxic assets should help funding for SMEs.
I wonder how “smart” the economy will actually be when they eventually bring back in college fees .. bye bye working class thrid level students