Dara Calleary (Mayo, Fianna Fail)
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98. To ask the Minister for Jobs, Enterprise and Innovation the measures he will take to implement the recent report of the National Competitiveness Council; and if he will make a statement on the matter. [17569/14]

Dara Calleary (Mayo, Fianna Fail)
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I apologise in advance for myself and Deputy Tóibín as we are attending a committee meeting at which the CEOs of the banks are appearing, so we will be running over and back. Hopefully it will work out. The National Competitiveness Council report issued serious warnings about the increase in business costs. I know that the Minister acknowledged the report and welcomed it, but I want to know what he will do about it.

Richard Bruton (Dublin North Central, Fine Gael)
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The National Competitiveness Council published the Costs of Doing Business in Ireland 2014report on 1 April 2014. The report compares Ireland’s cost competitiveness to a number of other regions across a range of key business inputs. It also contains some key messages on Ireland’s cost competitiveness.

The report finds that Ireland’s costs base has improved across a range of metrics over the last number of years, making Irish firms more competitive internationally and making Ireland a more attractive location for firms to base their operations. However, the report also indicates that despite these improvements, Ireland is still a high cost location for a number of key business inputs. The council points to upward pressures emerging in a number of areas, including labour costs, industrial electricity prices, transport costs and a range of business services.

The NCC emphasises the importance of Ireland’s international cost competitiveness remaining a key priority for the Government and cautions that further structural change is required to ensure that costs do not escalate and erode the competitiveness gains which we have made in the last few years. The report also emphasises the importance of improving productivity performance.

The Action Plan for Jobs in 2014 introduced a new arrangement under which the Cabinet committee on economic recovery and jobs will review the competitiveness agenda on a quarterly basis and identify follow up actions to be taken in respect of both the ease of doing business and the wider competitiveness challenges. In this context, the Costs of Doing Business report was submitted to the Cabinet committee on economic recovery and jobs for its March meeting. A number of specific opportunities for improvement have been targeted for attention.

Dara Calleary (Mayo, Fianna Fail)
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The Minister mentioned that a number of areas have been targeted for attention. Can I suggest that he might take a look around the Cabinet table? The report suggests that health insurance has been one of the big drivers of cost increases in recent times. I suggest that is completely down to the inability of the Minister, Deputy Reilly, to manage that problem. The report also focuses on the cost of utilities. Irish small and medium sized enterprises have to pay the fifth highest electricity costs in the eurozone. Large users of electricity in this country have to pay the sixth highest costs. The Minister, Deputy Rabbitte, has been quiet on that. Reference should also be made to water costs in the context of the juggernaut that is Irish Water. The costs that are really affecting businesses are being primarily driven by the Government and its policies. The report identifies the impact that the potential shortage of office accommodation, particularly in Dublin city centre, will have on property costs and on job creation. That has been highlighted for two and a half or three years but very little has been done about it.

The Government has completely abandoned the commitment in the programme for Government to look at upward-only rent reviews. Many businesses are still paying Celtic tiger rents. That is another major cost. I remind the Minister that in response to the 2005 budget, he claimed that "the utilities, stealth taxes, rates and all the other burdens the State puts on ... companies have increased". He continued: "There is no tightening of belts when it comes to those delivering those services but the companies which have to compete ... are feeling the squeeze. Companies are leaving these shores to go to cheaper environments". The same thing is happening in 2014 on the Minister's watch. It is being driven by the Minister's colleagues.

Richard Bruton (Dublin North Central, Fine Gael)
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I do not think that is a fair assessment. It is clear to those who have read the report that it mentions a number of areas in which we have improved our cost competitiveness. Indeed, we have improved our cost competitiveness in labour and property costs. We have reduced the rates burden. Most counties are reducing rates. As the Deputy said, the report alerts us to the need to make sure these gains are sustained and points to the fear that there will be an upward trend in costs when the recovery takes hold. That is why we will look carefully at specific areas in which we can make improvements. I have discussed this with my colleagues. I have asked the National Competitiveness Council to report each quarter on specific areas in which we could make changes with policy initiatives. Deputies are familiar with many of the areas in question, such as the question of access to credit, because we have discussed them here. The report provides us with a timely warning that companies should not push up their prices at the first sign of returning consumers.

Dara Calleary (Mayo, Fianna Fail)
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Companies have no option other than to push up their prices in light of the health insurance increases that are being driven by the Minister, Deputy Reilly, and by the tax increase imposed by the Minister, Deputy Noonan. They have to increase prices when they are being faced with water charges. The Minister suggested that the rates burden has been reduced in many counties. The burden on small businesses has not been reduced. Businesses in Waterford that are going through the rates revaluation process are being absolutely hammered. Most companies do not have an inability-to-pay mechanism for rates. They get nothing for rates. They do not get any local services for the rates they pay. Companies throughout the country feel it is a little rich that they are being told not to pass on increases that are coming from the Minister and his Government colleagues.

Richard Bruton (Dublin North Central, Fine Gael)
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The report shows that consumer prices here have improved relative to Europe. That refers not solely to health insurance, but to the whole range of the package that workers have to pay. We are making improvements. The report recognises that we can make further changes in certain areas. As the Deputy knows, the Minister for Health has published a health reform document. There will be a widespread debate on how we can better configure our health services to get better efficiency and delivery. I think that is what the Minister is about. All the local authorities have taken out costs. They are passing on some of that in reduced rates. That is clear across the country. I do not have the data here. Virtually all of them have reduced their rate burdens. I recognise that we need to look at these different areas, identify areas that are within our control and make any possible changes that would improve efficiency. That is what the Cabinet committee will work on over the coming year.