John Perry (Sligo-North Leitrim, Fine Gael) | Oireachtas source

The Cost of Doing Business 2012 report, published by Forfás in April 2013, showed that Irish cost competitiveness had improved markedly in the past few years. Between January 2000 and April 2008, Ireland recorded a 22.5% loss of competitiveness, fuelled by an unsustainable consumption and property boom. Since 2008 it has regained some of the cost competitiveness it had lost. Much of the improvement in Ireland's cost competitiveness since 2008 is accounted for by the favourable exchange rate movements. However, there have been falls in relative prices in a number of areas. Labour is the most significant cost for most businesses and the latest EUROSTAT figures show that the labour cost index in Ireland fell by 1.6% in quarter 3 of 2013, compared with quarter 3 2012. In the two year period 2011-12 there was a very significant improvement of almost 20% in our unit wage costs relative to the rest of Europe.

Construction and rental costs for both office and industrial space have fallen dramatically for new businesses since the collapse of the property bubble. Rental costs for office space, for example, declined by 45% between 2007 and 2011. Similarly, the Forfás report shows that the cost of the majority of business and professional services in Ireland has fallen since 2006. The cost of legal services is a notable exception, but the Government is continuing to press for reform in this area through the Legal Services Bill.

My Department has identified measures to simplify the administrative burden on businesses to the potential value of over €207 million per annum. Programmes such as Enterprise Ireland’s LEAN Business offering and innovation supports are helping companies to address competitiveness issues and improve productivity. Through the Action Plan for Jobs 2012 and 2013, the Government has focused on creating a supportive environment for businesses operating in Ireland. The action plans have included a range of concrete measures to address issues which impact on our competitiveness position. The implementation of these actions, combined with the Government’s exit from the troika programme and its return to international funding markets, will play a key role in improving our competitiveness further and realising our ambition of making Ireland the best small country in which to do business.

Additional information not given on the floor of the House.

The Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, is finalising the 2014 Action Plan for Jobs on behalf of the Government which will build on the progress made in recent years and will include further measures aimed at reducing costs for business.

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