Dáil debates

Tuesday, 25 October 2005

Lisbon National Reform Programme: Statements.

 

5:00 pm

Liz O'Donnell (Dublin South, Progressive Democrats)
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As the Minister of State, Deputy Treacy, is not in the House I will commence the debate, as scheduled, with the agreement of the House.

I welcome the publication of this report. It is a draft document entitled Integrated Guidelines for Growth and Jobs — the Lisbon Agenda. Its focus quite properly is on sustaining Ireland's strong economic growth and employment performance, an issue which cannot and will not be taken for granted by my party or our partners in Government. The presentation of this report to the House affords us an opportunity to reflect on the status of our economy, how we got to where we are now and how we will navigate the best way forward.

The figures included in this document are a compelling audit of the true extent of our economic and employment progress over the past decade. The figures are compelling by any measure. The unemployment rate in 1994 was 14.7% and in 2004 it was 4.4%, which is as good as full employment. The employment rate in 1994 was 52.2% and in 2004 it was 66.7%. I could continue in that context but it is all set out in the report. Rather than resting on our laurels, the question on which we need to focus is how we can preserve the gains we have made in our economy and throughout our society. The single biggest achievement in politics, perhaps accompanied by the peace process and the success in sustaining a political settlement, as it affects real lives is the 10% plus reduction in our unemployment rate during the past ten years which is down from almost 15% to 4.4%. Those who would make light of such an achievement are in denial of the reality behind the figures. This country has been turned around. It has moved from mass outward emigration to net inward migration and the despair and misery that meant for our people for many decades. On every front there have been improvements in the quality of life. We have increased employment, increased incomes, higher living standards and lower levels of poverty. That is also the reality behind the figures in the report. The report is about building on those gains and strengths. In Ireland we have to look at how we and Europe can respond to developments in the United States, the Far East, China and India. The world will not wait for us. It will continue to develop and we must look to our own response. Ireland is a small and open economy and the key to sustaining economic growth is to remain flexible. Ireland's flexibility will be based on fostering enterprise, risk taking and innovation.

Another key instrument for sustaining our position economically in the world will be maintaining the tax system that creates the environment for enterprise, competition, efficiency and growth, a credo close to the heart of the Progressive Democrats. In Government between 1989 and 1992 and again since 1997, we have worked hard to establish that system of taxation. Despite claims to the contrary, not only do we have a taxation regime that supports the flexibility we need as an economy, but one that benefits lower wage workers over higher income earners. Deputies opposite may disagree with this proposition. The report reads: "Ireland today has the most generous tax and welfare system for single income families on the average industrial wage in the world". The income tax strategy we put in place aims at maintaining full employment and strengthening the competitive position of the Irish economy through keeping taxes on labour low. It is a policy that also includes a particular focus on the low paid and on the elderly.

The taxation system we espouse benefits all in society. By reforming the tax code we have restored a position not seen since the Ireland of the 1960s, where high earners, not those on modest or lower incomes, pay the vast bulk of tax. The top 25% of income earners pay 80% of all income tax raised by the State. We want to do more. The true value of this national reform programme is its questioning of how we can maintain our economic success. We must work harder to foster enterprise and efficiency and boost spending on research and development.

In 2003, the Tánaiste established the enterprise strategy group to prepare a report that would serve as a blueprint for an enterprise strategy for growth and employment in Ireland. Its work is an important part of the national reform programme report. The group found that while Ireland's economy remains strong, action is needed to ensure potential threats do not adversely affect performance. It set out medium term enterprise opportunities for the economy. To sustain our position, Ireland requires quick and appropriate policy responses to the needs of business, to help them build competitiveness and better manage the rapid changes taking place in world trade and investment regimes. That is our focus.

The report makes clear the demands on Europe in terms of our productivity. We must pursue productivity gains. Although EU productivity levels were growing faster than those in the US for five decades, since 1996 the EU has lagged behind the US each year. Labour productivity in the US is growing twice as fast as in Europe and as a result our relative levels of wealth have also started to fall.

Ireland's role in pursuing productivity gains for the wider EU will be to tackle inefficiencies in our sheltered private sector and in the public sector. While the export-orientated private sector has propelled the growth outlined in the report, the sheltered private sector and the public sector can hold us back. Whether it is the professions, law, medicine, the health service, airport terminals, bus markets, electricity and gas, we must pursue efficiency by competition and-or appropriate regulatory change. The Progressive Democrats have been unrelenting in their pursuit of that agenda for almost 20 years, an agenda that is shown to be an imperative by this report.

Competition and reform can be messy and unpopular at times but this cannot be an excuse for freezing inefficient practices in certain sectors. We must be radical and determined in pursuing productivity gains for our economy and the Lisbon objectives. Our labour market has changed utterly in the past 20 years posing fresh challenges for us as policy makers and for employers. Two central elements in this regard are migrant workers and child care. In recent weeks the business in the House ranged from the Employment Permits Bill and other legislation dealing with the changing environment of the workforce.

Latest estimates indicate that in the year to April 2005 Ireland had net migration of more than 53,000 compared with 31,000 in 2004. In the past year alone 50,000 females entered the workforce. These two issues, female participation and inward migration, raise particular challenges for the wider society, not to mention sustaining growth.

In regard to child care, we need sensible measures to increase the supply of places for children and thus reduce costs. I am happy the Minister for Justice, Equality and Law Reform, Deputy McDowell, has significantly increased investment in child care services in recent years under the equal opportunities child care programme. Total expenditure will amount to just under €500 million for the period 2000-06 in the form of capital, staffing and quality improvement grants. Under the programme, 26,000 new child care places were in place at the end of June 2005. Programme commitments already in place should lead to the creation of a further 13,000 places.

We need to continue to develop programmes such as the equal opportunities child care programme, beef up their budgets and create more places. The programme should be nuanced to take account of different types of communities, established communities versus newer settlements in the growing commuter belt where support systems are weak. We all accept we have to help ease the increasing burden of child care costs on young families. Initiatives, however, must be sensible and thought through. Contrary to recent policy announcements from the Labour Party for example, this is not about lashing money at the issue, it is about increasing funds in a targeted way to help those bearing the greatest burden. It is about increasing supply and reducing costs. The Progressive Democrats want to see diversity in the child care sector. One size does not fit all families. Parents should have choices in this most important aspect of their lives and child care provision should reflect that choice, not be some form of homogenous State controlled monolith.

In regard to the second major development in our labour market, migrant workers, we must ensure our policies are the right ones. I spoke in this House two weeks ago on legislation to codify the existing administrative work permit arrangements. We should and will provide new and increased protections for migrant workers, who are so important for our economy, and will provide for the introduction of a green card system which would comprehend long-term or permanent residency. In my contribution I stated a modern, progressive migration system is well overdue in Ireland and must be separate in process and policy from asylum.

Ireland's changing demographics pose challenges in housing, education and health. Right across all Departments, wise people should be planning for the best outcomes in terms of integration of all the new people coming to live among us. These new members of our society must be treated fairly and the Employment Permits Bill and the related elements in the NRP report demonstrate comprehensively that although we have been playing catch-up in the area of inward migration, our policies are now beginning to take shape. However, they need constant tweaking and a constant sympathetic response to the changing needs of the newcomers to our society.

The national reform programme report is a result of commitments given by Governments at the European Council meeting in March. EU leaders agreed to refocus the Lisbon strategy on jobs and growth and prepare a programme report. This is a welcome reminder that national Governments still have a massively important role when it comes to macro and micro-economic policy and employment policy. Some parties would have us believe that Ireland has ceded its control over these matters at European level and that we are powerless in these matters. Others claim the advances we have made would have happened anyway.

The national reform programme process and report demonstrate, beyond question, the central role national Governments and their policies play in promoting and sustaining domestic and European economic development. We have not ceded all control and these matters are not settled by diktat from Brussels or anywhere else.

The policies of the two parties in Government are critical to the extent of economic development and progress and, as a result, to living standards and poverty. If the parties opposite had been in Government in recent years, there is absolutely no doubt that taxes and unemployment would higher. Thankfully for Ireland, this was not the case. The Progressive Democrats, in conjunction with our partners in Government, have ensured that we had the right policies for Ireland. We sought a mandate for them and got it. These are policies to foster enterprise and initiative, to drive competition and efficiency, and to provide the most generous tax and welfare system for single income families in the world. As this Lisbon NRP report demonstrates, it is in Ireland's national interest, and Europe's, that the economic strategy espoused by the Government remains at the centre of our policy-making.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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Is cúis áthais dom an deis seo a bheith agam labhairt i nDáil Éireann faoi chlár athchóirithe na hEorpa chun slí eacnamaíoch na hEorpa a fheabhsú faoi Chlár Lisbon. I am pleased to have the opportunity this evening to speak about Ireland's national reform programme under the relaunched Lisbon agenda.

In 2000, the then 15 member states set the ambitious objective of making the European Union by 2010 "the most dynamic and competitive knowledge-based economy in the world, with more and better jobs and greater social inclusion". This goal was to be achieved by an extensive reform programme, including the establishment of an effective internal market, boosting research and development, and improving education.

While much of the work involved in implementing the Lisbon agenda appears complex, it is really about people's lives. It is about the bread and butter issues which are important for every citizen and every community, both here in Ireland and right across the EU. They are bringing about tangible benefits in the daily lives of our citizens — supporting workers in their employment, assisting the business community in managing the transition to a knowledge-based economy, protecting our environment and promoting greater social cohesion. This is certainly a challenging agenda. It is unique in that, while it sets common goals and targets across member states, they can only be achieved by acting in partnership. European institutions, national governments and all stakeholders must therefore work together, towards the common goals.

Under the Irish Presidency of the EU in 2004, a mid-term review of progress across the EU was initiated. This found that the overall results were disappointing. The outcome of the mid-term review acknowledged the scale of the challenge facing Europe, in particular the widening growth gap with other major world economies. Failure to address this gap would see Europe experience further economic decline with inevitable pressure on its social and environmental policies.

In this context, the European Council earlier this year agreed that the Lisbon agenda would be relaunched as a partnership for growth and employment. It would focus particularly on two urgent priorities, growth and jobs. The overall process would be simplified and streamlined. Each member state would produce a three-year national reform programme setting out its national priorities and commitments to improve economic growth and create further employment. For its part, the European Commission would focus on measures to be taken at EU level to reinforce the programmes being undertaken by member states.

While the European Council agreed to focus on two urgent priorities of growth and employment, it also endorsed action in two complementary areas — promoting social cohesion and sustainable development. In terms of social cohesion, the Commission's communication on the social agenda addresses vital issues of tackling poverty and disadvantage. This social agenda will help achieve the Lisbon objectives of full employment and social cohesion. Likewise, the new focus on growth and employment expressly acknowledges the overarching role of sustainable development. The declaration on guiding principles for sustainable development, which was adopted in June last, is a basis for achieving sustainable growth.

The member states and the Commission agreed on an integrated set of 24 broad guidelines to be considered during the preparation of the various national reform programmes. These guidelines, covering macro-economic policy, micro-economic policy and employment policy, replace the broad economic policy and employment guidelines which were previously reported on in two separate processes.

Ireland is fortunate in that, owing to the broad range of policies being pursued in recent years, we are performing well according to many of the key economic indicators. Over the past ten years, GNP has increased at an annual average rate of 6.3%, and is forecast to continue to grow at close to 5% over the term of the national reform programme. Expressed per capita, our GNP has almost trebled since 1994. Government debt is down from close to 90% of GDP in 1994 to less than 30% in 2004. Unemployment has fallen from 14.7% in 1994 to 4.4% last year. The employment rate rose from 52.2% to 66.7% over the same period. Overall, we are making solid progress towards the Lisbon goals and starting from a relatively strong base with our new three-year reform programme.

Many factors have contributed to this strong performance. The programme for Government, agreed in 2002, provided the framework for action across the entire policy spectrum and is entirely consistent with the Lisbon agenda. Two of the central pillars of the programme for Government are sustaining economic growth and maintaining full employment in the economy. To achieve this, the Government committed in its programme to maintain the public finances in a healthy condition and to keep down personal and business taxes in order to strengthen and maintain the competitive position of the Irish economy. Within these constraints, the Government reaffirmed its determination to concentrate the available resources on improving the quality of public services and delivering further real improvements to pensioners and people on low incomes.

Underpinning these aims, we have a strong track record under our social partnership model of forging consensus with and among the social partners on the right measures to take. Over the past 18 years social partnership has provided us with a much needed framework to take corrective measures to address the problems of the mid-1980s and, since then, to build up and improve overall economic and social progress. Bringing together the various key sectors — employers and trade unions, the farming sector and the community and voluntary organisations — to work in partnership with Government has served this country well. It has helped to create the necessary conditions and consensus to give rise to growth, jobs and better social provision instead of rising taxation and spiralling debt. It has contributed to providing stability and certainty over a multi-annual timeframe and has unquestionably yielded significant benefits in terms of industrial peace. Not surprisingly, successive Governments have reaffirmed the centrality of social partnership to economic and social development.

In the broader context, it is clear that the Lisbon Agenda is consistent with our own national goals and priorities. It is hardly surprising, therefore, that when the member states committed last year under Ireland's successful EU Presidency to create national reform programmes to engage more closely with the social partners, it was decided that our existing social partnership model would serve as Ireland's reform programme.

The current partnership agreement, Sustaining Progress, runs to the end of 2005 and nobody underestimates the challenge of securing a new agreement. However, drawing on the experience of the past, we know we stand a better chance of tackling problems by working together. In some respects it might suit us better if the national reform programme did not have to be prepared for another few months. That said, we will certainly update our Lisbon programme in the light of the outcome of future engagement with the social partners.

This Government is acutely aware of the need to maintain competitiveness and improve productivity, despite our recent impressive performance. No matter how successful we have been in recent years, we cannot simply rest on our laurels. It is fitting, therefore, that the national reform programme gives us an opportunity to put together, in an integrated way, the policies and initiatives that are being implemented to ensure continued success.

I will outline the content of the programme in the areas of macroeconomics, microeconomics and employment guidelines and in line with the priorities which we have set. The range ofstructural reforms envisaged under the Lisbon reform programme must take place in a stable macroeconomic environment with a particular commitment to sustainable public finances. As I have already outlined, our public finances remain in a good position. Nonetheless, we must remain alert to the risks to our economy, particularly the high level of oil prices. Our levels of competitiveness must be closely monitored and, in particular, the ongoing reliance on the construction sector for our current level of output. We must be sensitive to the potential impact of an eventual reduction in construction output levels.

It is vital that Europe becomes more competitive, in its actions as well as its words. We must accept that the global picture is important given that the EU now competes directly with other regions of the world for mobile investment in knowledge and research. Europe, therefore, must remain an attractive location for future global investment.

Improving our competitiveness within the domestic economy and internationally is critical to Ireland's continuing success. By 2004, Irish income per capita had overtaken the EU 15 average, driven largely by increases in employment. In future, further improvements in living standards will depend less on increasing employment and more on increasing productivity. Ireland's economic development strategy is now aimed at developing a more dynamic, enterprising and innovation-based economy. Our competitiveness will be enhanced over the period of this programme by the creation of an environment where enterprise can flourish and consumers are protected.

Research and development is an area which can have a major impact but is one where we are still under-performing relative to international benchmarks. Consequently, continuing to increase research and development investment, capacity and output is a particular priority under this programme. Ireland's gross expenditure on research and development is approximately two thirds of the EU average, at 1.62% of gross national product for 2005. However, that is not to say that we have been ignoring research and development up to now. Government investment in research and development increased fivefold, from €500 million between 1994 and 1999, to €2.5 billion under the National Development Plan 2000-2006. A number of key steps have been taken to build further on this positive start. Earlier this year, the Government adopted a new national action plan for research and development and an interdepartmental committee is finalising a proposed implementation strategy.

Strong foreign investment, exports and domestic demand have led to sustained reductions in unemployment over the past decade. We must place a greater emphasis on productivity by encouraging greater levels of innovation and entrepreneurship across the enterprise sector. A range of key initiatives is under way to drive this development, drawing on the work of expert bodies such as the enterprise strategy group and the small business forum.

Ireland's level of public investment, at close to 5% of GNP, is among the highest in the EU and is approximately twice the Union average. Public investment under our national development plan is targeted at addressing the infrastructural deficit to improve the potential growth of the economy in the longer term. The Government is now in the process of setting out a new blueprint for investment for the seven-year period after the expiry of the current plan. The new national development plan will focus on priorities for investment in public economic and social infrastructure in areas such as transport, environmental services, housing, education, health, child care and research and development. In particular, we will continue to build on the major investment that has been made in our transport infrastructure through the ten-year capital envelope for transport.

We must ensue that where it is necessary to regulate, we do so in the best way and with proper consultation. The 2004 White Paper, Regulating Better, sets out the Government's approach to better regulation. Guidelines on consultation for public sector bodies were published in June of this year. The Government has established a group on better regulation to oversee the implementation of the commitments and action plan arising from the White Paper. In addition, the Government has introduced a policy of systematic regulatory impact analysis across all Departments and offices. In the business sector, a new business regulation forum has been set up to report to the Minister for Enterprise, Trade and Employment on burdens imposed on business by outdated, inefficient or disproportionate regulation and to advise on business regulatory issues.

Ireland's strategic approach to social inclusion is set out in the Government's national anti-poverty strategy and the national action plan against poverty and social exclusion 2002 to 2005. Increasing access to employment has been a key part of Ireland's strategy to combat social exclusion and significant reductions in unemployment have contributed greatly to rising living standards. We must continue to facilitate participation in employment as a major strategy for tackling poverty and social exclusion.

Under the national reform programme, we will work to encourage the sustainable use of resources and strengthen the synergies between environmental protection and growth. Ireland is already well on track to meet the target under the EU renewable electricity directive for 13.2% of electricity to be generated from renewable sources. In addition, the decoupling of energy and emissions growth from economic growth began in 2002, with economic growth at 3.7% in 2003 and energy consumption remaining flat at 0.2%.

Ireland has continued to achieve high levels of employment. Employment growth continued in the second quarter of 2005, with the number of jobs up by 93,000. This represents the largest annual rise in employment since 2000, with the number of persons in employment now at 1.929 million. The long-term unemployment rate remains extremely low, both by historical and international standards, at 1.4% or, in figures, 27,600.

Under the national reform programme, we will ensure that labour market policy contributes to making the economy more knowledge-based and innovation driven. A wide range of initiatives are in operation, designed to prevent and counteract long-term unemployment. FÁS assists those who are longer than six months on the live register to gain employment, training or to enter active labour market programmes. Other initiatives are ongoing and are aimed at expanding the workforce and include lone parents and redundant workers. An independent review of the prevention and activation process is under way as well as an expenditure review of State supports for the long-term unemployed.

In addition to these measures, we are committed to increasing investment in human capital through better education, skills and lifelong learning. Our national education policy aims to ensure that all young people leave the education system with a high quality education and with qualifications. A total of 85.3% of those aged between 20 and 24 have completed upper secondary education and a majority of these go on to third level education.

To reach those at a disadvantage in society, the Department of Education and Science published a five-year action plan for educational inclusion, Delivering Equality of Opportunity in Schools, in May 2005. This plan will be implemented on a phased basis and will tackle literacy and numeracy as well as attendance issues, progression, retention and attainment. Early school leaving policies have been shown to have a positive impact, with a rate of only 12.9% early school leavers in 2004. This is clear progress towards the EU average rate of 10%.

Higher education in this country has seen major expansion over the last two decades in terms of numbers and investment. This is reflected in an increased participation rate for school leavers of 55% in 2003 compared to 20% in 1980. A particular challenge is to upgrade the competencies and qualifications of the workforce, particularly those with low skill levels and in low level occupations. This challenge will be addressed through a range of initiatives, including implementation of the national framework for the development of lifelong learning, continued priorities in the implementation of this framework, including addressing skills needs and widening access to lifelong learning, tackling disadvantage and addressing access barriers.

Increased labour supply will be met from the underlying population increase, increased participation by the unemployed, access for those outside of the labour force and migration. On the latter point of migration, we are experiencing a significant influx of workers from the new EU member states. The net inward migration figure for Ireland in the year to April 2005 was 53,400 people, of which over one third were nationals of the ten new member states. Legislation is being introduced by the Minister for Enterprise, Trade and Employment to codify work permit arrangements, improve protections for migrant workers and allow for a new green card system.

Overall, therefore, I am satisfied that Ireland is unquestionably playing its part in helping the European Union as a whole to realise the goals of the Lisbon Agenda. It is appropriate that the re-launched agenda places greater emphasis on member states, pursuing policies that are appropriate to national priorities and circumstances. That said, we must all work together to bring our Lisbon goals back into sight. Member states cannot just look over their shoulders at each other, but must look outwards. Globalisation is a fact of life and we must deal with it. The threat to Ireland, and Europe, is increasingly global, whether from the Americas, India, China or from other new tiger economies. Standing still is not an option, regardless of how well or badly we are doing.

The Government, as this new national reform programme demonstrates, is fully committed to working in partnership with other member states and the EU Commission, to ensure Europe's economic and social future, in the challenging and exciting years ahead.

Photo of Dan NevilleDan Neville (Limerick West, Fine Gael)
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I welcome the opportunity to speak on the Lisbon national reform programme for Ireland. At the spring European Council meeting last March, EU Heads of Government agreed to refocus the Lisbon strategy on jobs and growth. A central part of the new approach to achieving the Lisbon goals is the preparation of a national reform programme by each member state.

The reality today for the Irish economy is that, having emerged from the Celtic tiger period, the economy has lost cost-competitiveness. The infrastructure, both physical and information technology-related, is clearly inadequate for a modern, developed economy. The whole globalisation process is breathing down our necks as never before. Ireland has gone from fourth in 2000 to 30th in the World Economic Forum global competitiveness report, due mainly to the Government's failure to control prices. The National Competitiveness Council said Irish prices increased 22% more than those in other EU countries in 1999-2003. Economic consultants, Compecon, state that the lack of competition in the banking sector is costing small businesses €500 million per annum. The National Competitiveness Council said in its 2004 annual report that the need to recover cost-competitiveness was crucial to the country's medium-term economic future.

Clearly, the challenge facing the economy in the medium term includes this loss of competitiveness, suffered over the past five years, increased competition from China, India and the EU accession states on both product markets and mobile investments, exchange rate uncertainty due to our unique dependence on the level of sterling and the dollar and the pressures on margins and growth potential in the indigenous components of the economy. These challenges are immense. How we cope with them will determine the country's ability to achieve the economic potential GDP growth rates of 5%. To achieve such growth rates, maintain high levels of employment and continue to generate wealth and prosperity, policy must ensure that Ireland remains a significant recipient of the FDI clause and that a sustainable indigenous economy is fostered alongside the multinational economy. For the indigenous components of the economy, particularly those of the SME sector, the problem is that while they are good at what they do, they lack the skills and resources to find new markets and innovate products. This is the only way they will be able to grow in an environment where their margins are typically under pressure from rising input costs and limited pricing policies. Hence, the emphasis on the marketing capability is to be welcomed, even though one might dread a country where marketing types gain even more influence.

This is where thinking big really comes into its own. Rather then seeing the State as some big player that should try desperately to get out of the way, we should look at the State as a facilitator of business, a tool at the disposal of Irish entrepreneurs and risk-takers. Thinking big means addressing the situation where only 4% of the State's funding for research and development is allocated to the food industry, yet more than 50% of our exports are food and drink. A plus for this State always was its expertise and development of the food industry, its image abroad and the marketing carried out over the years by brands such as Kerrygold, Bord Bainne and Bord Bia. Marvellous work was done in this area, but the failure to invest in research and development, and the consequential failure of higher value products, is a lost opportunity. As someone who worked in the food industry for 23 years, and who was keenly aware of the opportunities in product development, the bulk sale of much of our food products on the export market rather than developing new added-value products is an incalculable loss to the country. I was involved in taking these opportunities. However, there appears to be a rolling back to commodity-type exporting of the food business. Just 4% of State funding for research and development is one of the consequences of this because private industry has a specific role to play in this area. I question whether some of the bigger players in the food industry are taking the easy buck and exporting in bulk rather investing in added-value products which could be sold on the shelves of international food markets.

Thinking big means actively assisting Irish businesses in getting into new markets. The Taoiseach's recent trade mission to China was a breath of fresh air. Something should be done to continue with this in the future. I have no hesitation in saying so, because it was a progressive approach in examining new markets in the Far East. This is the type of investment in which we should be involved.

The recent review of the Lisbon strategy progress, which culminated in the Kok report, was timely. There has been growing concern at the slow rate of progress in moving towards the Lisbon targets. For example, a Centre for European Reform report published in March 2004 concluded that four years into the Lisbon reform agenda, it had become clear the EU stood little chance of achieving its overall goals and went on to warn that rather than catching the US, the EU economy was slipping further behind on indicators such as GDP per head.

The IMD World Competitiveness Yearbook 2005 highlights that Ireland has fallen from seventh in 2001 to 12th this year. Ireland was ranked 54th for Internet costs, 53rd for mobile telephone costs and 52nd for cost of living. That exposes a serious competitiveness problem in the economy, which, if not addressed, will result in a downturn in the number of opportunities for everybody. It must be ensured our competitiveness is restored.

Ireland came 14th out of 15 countries in a broadband survey by the European Competitive Telecommunications Association. Ireland has only 63,610 broadband telephone lines, while Denmark, a smaller state, has 839,170 lines. If Ireland is to remain competitive, keep its markets open and ensure communications are at the forefront of technology, broadband must be available throughout the State. A programme should be introduced to ensure broadband is available at a cost that permits business to compete with our European partners and third countries. It is a disgrace that Ireland should finish second last in a survey of 15 countries.

Broadband is not available in the town where my office is based and its roll-out in County Limerick only began recently. My area is no different from many other rural and semi-rural areas. Broadband is vital to communications systems so that businesses can access markets and keep in touch with customers. The frustration experienced by business people is often expressed to public representatives and we are usually asked what can be done about it. The Government should accelerate its broadband programme and increase incentives to ensure it is expanded in line with its competitors. It should look to Denmark as an example of how to do so. However, if broadband availability does not increase, our competitiveness will slip resulting in a loss of jobs, growth and wealth.

The EPP document, Growth, Prosperity and Jobs in Europe, adopted on 4 March, highlights a number of broad challenges facing EU member states, including the ageing of European societies, unemployment and the need to create a more family friendly environment. However, the document also clearly warns that reform is necessary to ensure the Lisbon strategy is progressed and that Europe will only be fit for the future through bold reforms.

Ireland must recognise the importance of higher education and training. Our recent successes have in no small part been driven by a skilled and educated workforce. I have witnessed the effect of the University of Limerick in creating opportunities not only for people in the mid-west but throughout the State through the ICT programmes it has provided. The university is an example of how education creates the higher value skills and dynamic Ireland must have to maintain its competitiveness. Other member states and third countries will undercut Ireland in sectors where lesser skills are required and it must be ensured everybody has an opportunity to access education in Ireland so that positions created in the future can be filled.

However, our school completion rate at 82% is of considerable concern as it is not improving. In addition, the recent OECD report on higher education policy in Ireland indicated research and development spending and support lags behind international norms, which must be of concern for future economic development. The EPP document stressed the need to improve education and training along with the priority given to research and development.

Deputy McManus referred to our tax regime, which has improved competitiveness. The Government continues to favour a low tax regime to ensure Ireland is competitive because we are losing jobs to low wage economies. When Deputy Bruton was Minister for Enterprise and Employment, 1,000 jobs were created every week.

Debate adjourned.