Dáil debates

Thursday, 26 November 2015

Other Questions

Economic Competitiveness

10:30 am

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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10. To ask the Minister for Jobs, Enterprise and Innovation his plans to improve the competitiveness of the economy. [41753/15]

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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Many local enterprise offices are shockingly understaffed at the moment and FÁS is also gobbling up most of their resources with regard to start-your-own-business courses and so on.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Maybe the Deputy would stick to his own question for a minute.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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The World Economic Forum global competitiveness report has stated that economies that are more competitive do better with regard to growth and are more resilient in terms of downturns. We have a shockingly low base of indigenous enterprise firms that export and those firms are still suffering due to costs on which the Government has major influence, namely, energy costs, legal costs, etc. What is the Government doing to resolve that?

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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We have allocated extra staff to the LEOs, including new graduates, so we are attending to that and will review staffing levels.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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JobBridge.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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I agree with the Deputy that competitiveness is crucial to our economic progress and the Deputy should acknowledge that exports from Irish-owned firms have been the star performers in our recovery. Last year, Irish-owned exporters created more jobs than the IDA. Most of the debate focuses on the IDA, but Irish-owned exporting companies created more jobs in 2014 than foreign-owned companies, and it is important to remember that.

We have focused very much on competitiveness which has been a key feature of the Action Plan for Jobs. We lost a great deal of competitiveness during the crash. That saw a declining export market share in the economy, which undermined our competitiveness. Since then, we have undertaken a range of measures to improve competitiveness, including many structural reforms. We have sought to make work pay, to improve access to finance for business, to streamline regulatory processes and to reduce the administrative burdens by establishing new rules on incorporation. We have improved our domestic cost base. Unit wage cost is estimated to have improved by 20% relative to our competitors. The exporting sectors of our economy are creating jobs at record levels and we have doubled trade missions to support that. We have improved our competitive tax regime, particularly in respect of innovation and start-ups. We have invested significantly in skill areas where there have been gaps, especially in ICT.

As a result of these efforts, we have seen significant improvement in our international ranking for competitiveness, but as I said to Deputy Calleary, we certainly are not complacent about this. We always need to be attentive to that. We have the National Competitiveness Council, which now reports to the Cabinet sub-committee on a number of occasions per year to underline the areas where we can make improvements. We seek to act on those reports and incorporate their recommendations, where we can, into our action plan.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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The number of Irish exporting firms is dwarfed by the number of Danish or Austrian exporting firms. We have a very low base with regard to this sector of the economy. The problem I have with competitiveness is that every time I mention it in this Chamber, the Government talks labour costs and taxation. They are not the areas in which to look for competitiveness. Even the chief executive of ISME, Mark Fielding, has commented that energy, insurance, local charges and legal fees are all higher in this State than in our European counterparts. This is the major difficulty local businesses will say they have with regard to staying in business. There is a range of talent cost in this State on which the Government is not focusing. We are talking about these particular costs for five years. The export plans of this State will never come to fruition until the Government deals with them properly.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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The export plan set by the previous Government for 2014 was exceeded dramatically by Irish-owned enterprise. It is not true that Irish businesses are underperforming in the markets; they are exceeding expectations. We have enjoyed double-digit export growth from our Irish-owned companies in the past three years. That is exceptional performance. It is driven by some very innovative sectors, including food and software development, FinTech and so on. We can stand and compete side by side with any companies, from Denmark or anywhere else in the world. I know that from the trade missions. We are winning in sectors where we have a competitive edge. The Deputy is right that there are costs and they cover all ranges, including labour, transport, property and so on. The public utilities have undergone cost restructuring and have sought to reduce the cost in the utilities. The Minister took measures in the budget to reduce transport costs, particularly in respect of freight.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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I mentioned talent. The IMD World Talent Report 2015 shows that Ireland has dropped ten places in its ranking since 2014, the largest drop of any developed country. It states that there are problems with infrastructural development and investment, worthwhile apprenticeships and internships, and that the labour force is contracting in certain sectors. In this sector, we are 50th out of 61 participating countries. The quarterly national household survey states that about 300 people in the age group of 20 to 34 are leaving the country every week, which is quite shocking. If one adds the problems we have with utility costs and not developing our talent properly to the problems with upward-only rent reviews, the commercial price for property and the housing catastrophe, one sees these elements reducing competitiveness and the opportunity for indigenous businesses to export and grow.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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The Government adopted a national talent drive last year. The consequence of this is that the Minister of State, Deputy English, has introduced 25 new apprenticeships which will have 1,500 people enrolled each year in entirely new areas of apprenticeship as well as significant growth in the traditional apprenticeship areas. We have doubled the output in ICT. When we started, we were supplying only about 45% of the ICT needed domestically, but we are now pushing that up to 75%. We have undertaken the regional skills evaluation, and as Deputy Naughten acknowledges, if we can get the skill mix right in our regions and get a magnet there for skill attraction, we can do much better there. We are good for skill availability. The IDA has many rankings that show that skill availability in many of these critical sectors is better in Ireland than in many other locations. These are tight areas and there are difficulties.

I certainly will look at the talent issue. A lot of that is around costs and investment, and everyone knows that in recent years there has been curtailment of the capacity to invest. In terms of the competitiveness which concerns the Deputy, we have boxed clever and sought to ensure that we have invested in skills that are close to those enterprises that the Deputy is concerned about.

Question No.11 replied to with Written Answers.