Mary Coughlan (Donegal South West, Fianna Fail)

I wish to share time with the Deputy Brendan Smith.

Without doubt, the key consideration in addressing the challenges in the environment we now face is to maintain and enhance our competitiveness in the fullest sense; competitiveness that will enable our economy to develop on a path of sustainable export-led growth; competitiveness in terms of enabling us to remain an attractive location for foreign direct investment and to provide the right conditions for building a strong indigenous industrial base; and competitiveness that will underpin our development as a knowledge-based, innovative economy capable of sustaining high quality employment. Such an ability underpinned the impressive growth of the recent decade and this Government is committed to creating the same conditions to allow us to be competitive when the current challenges abate.

Against that background, I am happy to provide clarification to the House of the savings to be achieved by my Department during the remainder of 2008, following the recent Government decision on the need to curtail Exchequer spending in the current year. Minimum savings amounting to €24.551 million on a total budgeted spend of almost €2 billion will be achieved across all areas of my Department's Vote as required by the Government decision. However, a number of key principles arise. First, I am determined that the key agencies of the Department will remain sufficiently resourced to ensure strong delivery in terms of inward investment, growth of the indigenous sector, research and development and upskilling the workforce. These are all areas of productive investment that will ensure that Ireland is well placed to capitalise on the economic upturn that will inevitably arise.

Second, the savings have been designed to ensure that the most vulnerable in our society are protected. Thus, there will be no reduction in places on community employment or jobs initiative schemes and no savings are being sought on programmes for people with disabilities.

A sum of €19.15 million of the 2008 savings will be from the FÁS allocation which is the largest single spending area within the Department's Vote. In general, the savings include areas where spending requirements will be less than budgeted due to lower apprenticeship entrants, lower dependant allowance costs and savings already yielded by lower than expected activity in the first half of the year. A small saving of €440,000 arises as a result of reduced training provision by Skillnets. Combined savings in the order of €2 million have been identified across the Competition Authority, the National Consumer Agency, the Irish Auditing and Accounting Supervisory Authority, the Companies Registration Office, the Office of the Director of Corporate Enforcement and the Health and Safety Authority, while administrative savings will also be delivered by the development agencies operating under the aegis of my Department, including IDA Ireland, Enterprise Ireland, Shannon Development and Science Foundation Ireland. A saving of €1 million will arise on my Department's administrative budget and remaining savings required will be spread across other smaller areas of the Department's budget.

It would be wrong to suggest that delivering these savings will be painless. They will require stringent measures and tight controls. However, they will be managed in a manner designed to minimise the impact on programme delivery by exploiting natural savings arising from reduced activity and delays in filling staff vacancies. As required by the Government decision, savings will include a reduced spend on areas such as consultancy, advertising and public relations. The measures identified are prudent and targeted to have minimum impact on frontline services and reflect the Government's commitment to take determined action on matter within our control.

Of course, some of the factors impacting negatively on the economy and on our competitiveness are beyond our control. Therefore, it is all the more vital that in areas where actions can influence our cost environment, we act responsibly and work together to ensure that we safeguard and enhance our competitiveness. This is our best route to job creation and increasing living standards in the medium term.

The Government is committed, through the national development plan, to investing in competitiveness, through funding for training and upskilling, science and research and the attraction of new industry, as well as the growth and development of our existing industry. This agenda goes hand in hand with maintaining and enhancing standards in the workplace and employment rights through the partnership process. We do not and cannot seek to advance one at the expense of the other.

At the outset, we should not forget where we are. On overall competitiveness, Ireland stands out in a number of important categories. The world competitiveness scoreboard as recently as May this year ranked Ireland at 12, up from 14 last year. The Centre for European Reform ranks Ireland 6th among the 27 EU member states for overall competitiveness in 2008. WTO data show that Ireland is now the 12th largest exporter of commercial services in the world. The Lisbon Council's European jobs and growth monitor ranks Ireland as the second most competitive economy in Europe in 2008. Our GDP expanded at an annual average rate of 6.5% over the period 1997 to 2007, which has facilitated a substantial improvement in living standards.

As Minister for Enterprise, Trade and Employment, the central thrust of my Department's policy will be to continue to strengthen and build on our competitiveness through the provisions of the national development plan. The ability to create and exploit knowledge is an essential feature of an advanced economy and therefore Ireland has placed research and development at the heart of its economic development effort. The Government, through the strategy for science, technology and innovation, recognises the importance of moving our economy to a knowledge-driven one. The objective of the strategy is to provide the opportunity to achieve convergence, coherence and synergy in our national innovation system. The current national development plan provides for a very significant increase in the investment in technology, innovation and scientific research, amounting to a commitment of €8.2 billion over the period 2007 to 2013. The aim is to build the skills needed for a modern knowledge-based economy and to strengthen Ireland's research base.

As a result of significant Government investment, multinational and indigenous companies now see Ireland as a location for world-class innovation activity.

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