July 30th Morning: The Recession Diaries

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a0_patmcdonagh.JPGIt was only a matter of time before the business sector opened up another front in the recession wars. Hamburger king Pat McDonagh of Supermac has accused the Government of ‘strangling entrepreneurship’ and ‘criminalising business’. And just how is the vile Government doing this?

‘Bureaucracy, legislation and regulation’.

But Mr. McDonagh is just getting started.

McDonagh said that entrepreneurs were being denied the time to run and expand their companies because of the volume of ‘‘nonsense paperwork and bizarre red tape”. . .‘The country is going into a recession and the government has businesspeople spending needless time and energy filling out forms just so the civil service can justify their jobs.”

This is Number 37 in the facile-argument-file. The idea that regulation is strangling, garroting or otherwise asphyxiating business in this country is so laughable I’m having trouble keeping my fingers on the keyboard. Mr. McDonagh goes on to say that

‘ . . . the level of bureaucracy did not seem to be the same in other jurisdictions such as the US, France or even the North.’

Oh, is that right, Mr. McDonagh? Then why does Forfas – a very pro-business agency – state that:

‘ . . . the overall level of regulation in Ireland is among the lowest in the OECD’.

We have one of the most liberalised environments when it comes to product regulation, and lower levels of labour regulation than most other EU-15 countries. When it comes to the financial cost and number of procedures it take to start up a business – we are one of the least inhibitive.

In the World Economic Foundation’s Global Competitiveness Report, Ireland ranks low on the scale of regulatory ‘burdens’ – only Denmark and Finland in the EU-15 rank lower. With specific regard to product market regulation, Ireland ranks 2nd least restrictive, behind the UK, while measured under labour market regulations Ireland ranks well below the EU-15 average.

Have you read the World Bank’s Doing Business Report, Mr. McDonagh? Ireland ranks 3rd for the overall ease of doing business among the EU-15 (for you types who can’t get enough of rankings – Ireland stands 10th out of 175 nations in the world and 8th in the OECD rankings).

Davy Stockbrokers, the Central Bank and just about any comparative analysis of regulation regimes in the EU all conclude the same thing: Ireland has a ‘light regulatory regime’.

Given that there are 3,000 people employed in Supermacs, you’d think that Mr. McDonagh must have to employ a huge percentage of his workforce, a whole department, merely to fill out forms. So how many? 100? 200? Mr. McDonagh tells us:

‘I have two people employed full-time filling out forms.’

Two people! Two people out of 3,000? Is Mr. McDonagh really telling us that the difference between liberating business and enslaving it is a mere few hours a day out of a 3,000 staff business?

If I were Mr. McDonagh, I’d be more concerned with an economy where there is less money and less people employed. Because that means fewer people spending less money on his wholesome and nutritional products.

And if he thinks Ireland is over-regulated, he really should get out more.

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