Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

In response to the Chair's call earlier and Deputy McDonald's comment, I will finish on time. I thank Deputies for their questions on Ireland's Competitiveness Challenge 2022 report, which is the matter for discussion. As Deputies know, I meet all the time people who are investors, business people or employers. Of course housing and infrastructure are issues they raise. They also say these are the same problems they often experience where they are headquartered, whether it is in London, San Francisco, New York, Lisbon or other parts of the world that are also experiencing a housing shortage.

Housing can be a constraint on economic growth. Certainly the housing situation is making it harder to recruit and retain staff. We should put this into a factual context. There are now 2.57 million people at work in Ireland, more than ever before. Unemployment is approximately 4%. It is close to an all-time low. Youth unemployment is at an all-time low. Last year was a record year for investment and foreign direct investment job announcements in Ireland. Every year tens of thousands of people come to Ireland to take up employment, which is many more than leave. Certainly from an employment and economic growth point of view, we are doing pretty well, notwithstanding the housing crisis, which is perhaps holding us back from doing even better.

In response to Deputy Crowe's question, I know some employers provide accommodation for their staff. This is not something new. It has been very common in the hospitality sector and the agrifood sector for a long time. I do not think it is the solution to the housing crisis, but if they are willing to do so, it is certainly not unwelcome.

I was asked about the recommendations of the report and how we will implement them. The report identifies a range of recommendations that focus on immediate competitiveness issues and more medium-term challenges, aimed at enhancing our competitiveness and productivity. There are 20 tangible actionable policy recommendations under five main headings. One of these headings covers immediate issues facing the Irish economy, with the focus on our response to inflation and making sure we do not exacerbate or embed inflationary pressures. It also deals with the importance of targeting assistance and productive spending. Another heading covers the need to boost broad-based productivity growth, with a focus on ensuring the approach is as broad as possible. Productivity is the engine of economic growth in the longer term and, as such, it is crucial to improvements in living standards associated with growing and sustainable wage levels, good public services and improved well-being.

It was interesting to see the report from the Central Bank the other day that suggested we will see income grow by approximately 6% or more this year. It is not quite the rate of inflation. In fact, it will probably be higher than the rate of inflation for the year. It has not happened yet but the Central Bank is certainly predicting that we will see a return to what we saw for a long time, last year being an exception, which is incomes growing faster than inflation. It will not be true for all people but it will be true for most people. It will be good if it happens but it has not happened yet.

Another heading in the competitiveness challenge report covers enhancing labour market performance. This is achieved by fostering skills and participation while ensuring the gains from productivity growth are broadly shared with workers and that non-wage labour costs are kept down. It also covers assisting infrastructure investment for a better future, including housing and managing the costs of doing business. As I said earlier, the Department co-ordinates the response. In the vast majority of cases, substantive actions are under way to deal with the points raised by the council. Work is being undertaken by individual Departments as part of their ongoing work.

Deputy Durkan asked specifically about how we are boosting productivity in line with the recommendations. The council made several recommendations on how the Government could boost productivity, including the full implementation of the Harnessing Digital strategy and the implementation of Impact 2030, as well as focusing on the importance of ensuring the twin transitions of digital and green are adequately and appropriately reinforced.

The Harnessing Digital strategy was launched in February 2022 and sets out a pathway to drive and enable the digital transition across the economy and society. There are annual reports on progress published by the Department. Impact 2030, which is our research and innovation strategy, was launched in May. The Impact 2030 steering group and implementation forum, both chaired by the Department of Further and Higher Education, Research, Innovation and Science, are in place and will oversee the strategy. The implementation forum will report annually. The first such progress report for 2022 will be produced in this quarter. The Government agrees with the council on the importance of the digital and green transitions. These are being assisted through the green transition fund, the Harnessing Digital strategy and the digital transition fund.

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