Dáil debates

Wednesday, 15 June 2016

Priority Questions

Economic Competitiveness

2:55 pm

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

35. To ask the Minister for Jobs, Enterprise and Innovation how she will tackle the severe competitiveness challenges facing Irish business, as identified by the National Competitiveness Council report entitled Costs of Doing Business in Ireland 2016; and if she will make a statement on the matter. [16124/16]

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We all agree that one of the upsides of the recession, if we could describe it as an upside, was an end to the rip-off culture - and rip-off Ireland - that was so dominant during the era of the Celtic tiger. However, there is without doubt a concern among consumers and business that we are seeing the approach of a lack of competitiveness, tending towards a culture in which people are beginning to get ripped off again. I imagine the Minister is hearing this too. I tabled the question against that background.

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am pleased Deputy Collins has raised this issue.

Overall, the National Competitiveness Council has concluded that Ireland's cost base has improved over the past five years. We are now ranked seventh in the IMD World Competitiveness Centre report. However, we cannot be complacent. Ireland remains a relatively high-cost location for several key business inputs. Significant cost pressures remain for many Irish-based companies, especially property and business services.

The Government is committed to the costs elements within our control. However, some significant cost pressures are outside our control, including oil prices, exchange rates and Brexit. Our focus must be on those costs over which we have some influence within Ireland. The Action Plan for Jobs has a number of actions across Government to support cost competitiveness. These include, for example, the cost of credit and insurance costs. The Government has also placed a priority on addressing property and housing costs. I assure the Deputy that I will continue to work with other Ministers on cost issues. I am keen to ensure the council's recommendations are considered by the relevant Cabinet committees. My objective is to foster a competitive business environment for all businesses.

Deputy Collins referred to the rip-off culture. As Minister, I do not want to see that re-surface in Ireland. I will be keeping a close eye on this, as will my Department and the Cabinet committees investigating and dealing with this matter.

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I acknowledge the IMD World Competitiveness Center ranking. Equally, however, I am keen to point out that Ireland has continued to plunge in the World Bank ratings. We have dropped four places to 17th out of 189 economies. We are dis-improving by that parameter.

According to the National Competitiveness Council cost of doing business in Ireland 2016 report, new businesses in Ireland are paying 80% more in interest rates for loans than our European counterparts. Moreover, Irish consumer prices are 20% higher than the euro area average, SME prices have increased by over 20% and, despite the legislation passed during the last Dáil, legal services have increased by approximately 6% since 2010. We debated the cost of insurance last week in the Oireachtas but insurance costs have increased by 60% in two years - almost 30% per year. Let us put this into context. The ESRI has stated that industrial output would increase by 2% for every 1% improvement in our competitiveness. In other words, it would represent a 2:1 gain if we could tackle our competitiveness. What plans does the Minister have to create a regulatory environment that would improve our competitiveness and lower the cost of doing business and attract new business into the country?

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I assure Deputy Collins that my Department is working hard on this. We have the Action Plan for Jobs and the regional action plans to ensure that jobs come into the country. Competitiveness is on the top of our agenda as well as bringing in jobs.

We are looking at wages. Wages are mainly set in the private sector. I mindful of the issues Deputy Collins has raised, including, the cost of borrowing and insurance and so on. As I said, I will ensure there is a focus on these matters throughout the Departments. We must continue to use our taxation policies to promote a business-friendly environment. That is what we are about in the Department for Jobs, Enterprise and Innovation. I will ensure these issues are raised for business with the Minister for Finance.

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I wish to touch on the issue of our infrastructural deficit, a matter of major concern. There are many examples throughout this city and the rest of the country, including my region. These include the Limerick to Cork motorway and the Limerick to Waterford motorway. The road from Gort to Galway has to be finished. There are many parts to it. Broadband is chaotic throughout the country and this is inhibiting business and the consumers who want to transact with business over the Internet on a real-time basis. It is seriously problematic, as the Minister is aware. What are we going to do about it?

Has the Minister given any consideration to the establishment of a national infrastructure commission to plan for the horizon of 20, 25 or 30 years and properly address our infrastructural deficit? The deficit is feeding in to our employment issues, imbalance in the regions and competitiveness.

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We have identified the issues relating to broadband in the programme for Government. I will be working with the Minister for Arts, Heritage and the Gaeltacht, Deputy Humphreys, on this issue. I am aware of it. I am from County Galway and I know there is little broadband in Milltown, County Galway. This is on my priority list.

Deputy Collins referred to road infrastructure. I was in Limerick promoting jobs and meeting various stakeholders there. This issue was brought up and the point was made strongly to me. Again, I am afraid neither I nor my Department can take responsibility for the roads but I will ensure the Department of Transport, Tourism and Sport knows exactly how important this is. We know that we need proper infrastructure to bring in multinational firms and for our indigenous companies to work well.