Mary Butler (Waterford, Fianna Fail)
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Ithank the House for allowing me to stand in for Deputy Kelleher today. What actions are being taken to reduce the cost of doing business in Ireland and to reverse Irish competitiveness deficiencies?

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I thank the Deputy for raising this matter.

Ireland is a competitive economy, as reflected in a range of economic metrics such as high economic growth, the strong performance of the labour market across sectors and regions, strong trade figures and productivity figures. For example, the results from the Labour Force Survey show there was a 2.3% increase in employment in the year to quarter 4 2018, bringing total employment to 2,281,300, the highest number on record. In quarter 4 2018, there were 128,800 people unemployed, a decrease of 10.5% compared to the previous year. However, this strong competitiveness position cannot be taken for granted. There is no room for complacency. Improving Ireland’s competitiveness position is a key priority for this Government and my Department.

The National Competitiveness Council report, Cost of Doing Business in Ireland 2019, found that while Ireland is a high cost economy - the fifth most expensive in the EU - the cost base for enterprise is internationally competitive across a range of metrics, including, for example, the cost of starting a business, communications costs and average income taxes. However, the council noted that cost pressures are evident in some areas, including the labour market, credit, business services and residential property.

Future Jobs Ireland 2019, launched in March, is a whole of Government framework designed to improve our economy’s resilience in the face of emerging and future challenges. It sets out 26 ambitions to 2025 across five pillars in the areas of innovation, productivity, skills and talent, participation and transitioning to a low carbon economy. Along with Project Ireland 2040, Global Ireland 2025 and the Government’s forthcoming All of Government Climate Plan, Future Jobs Ireland 2019 represents an integrated approach to prepare for the opportunities and challenge of the future economy.

A range of specific deliverables in Future Jobs Ireland 2019 aim to enhance the business environment and improve competitiveness, as well as other factors, that contribute to specific sectoral cost challenges. For example, on credit and financial costs, the future growth loan scheme will provide long-term debt financing for strategic investments at competitive rates in a post-Brexit environment; on legal services, new business models for legal services will be introduced, including new legal partnerships and limited liability partnerships; and on construction, an implementation plan for actions to stimulate construction sector productivity will be delivered, including greater deployment of building information modelling. As a small open economy, we must never underestimate the importance of maintaining competitiveness and ensuring that the cost of doing business does not impede it.  In this regard, Future Jobs Ireland 2019 is an integral component of the Government’s overarching plan for the future of the Irish economy.

Mary Butler (Waterford, Fianna Fail)
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The cost of doing business is a major issue for Irish competitiveness. As stated by the Minister, Ireland is a small open economy and we rely on our businesses to compete internationally and at home. The latest National Competitiveness Council report is another detailed examination of serious Irish competitiveness deficiencies across the board. The Minister is correct that we cannot take anything for granted. Ireland remains an expensive location in which to do business across several cost metrics, including property, insurance, transport, energy and business services. The cost of doing business report states that the cost profile of Ireland is a high cost, at the same level as Japan, Iceland, Denmark and Sweden. I ask the Minister to set out the actionable timetable for the implementation across her Department of the recommendations of the National Competitiveness Council, if possible?

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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In the 2018 IMD World Competitiveness Yearbook Ireland was ranked 12th in the world, as compared with 24th in 2011. As such, we have made substantial progress in recent years. We continue to attract high levels of foreign direct investment, FDI. IDA Ireland had another record year for job creation in 2018 in a highly competitive global market. This shows that internationally Ireland is considered a strong place in which to do business. We have a young, well educated workforce and so there is a strong talent pool here. For companies experiencing difficulty finding skills here our employment permits system is flexible, which I demonstrated recently in terms of the changes to the system in respect of companies with genuine difficulties sourcing workers in the construction, meat processing, horticulture and dairy sectors. In any country, there will always be challenges sourcing workers. What is important is how one responds to those challenges. The new Future Jobs Ireland 2019 initiative will have a key role to play in that regard.

Mary Butler (Waterford, Fianna Fail)
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Last year, the Joint Oireachtas Committee on Business, Enterprise and Innovation held extensive hearings with stakeholders on the cost of doing business in Ireland, in respect of which it published a report. The common denominators across all sectors were, the cost of rates, insurance and banking, and labour and skills shortages. Have any of the committee's recommendations been taken on board by the Department? Leaving aside the issues of insurance and rate costs, which I know do not come under the Minister's remit, have any of the committee's recommendations around labour costs and skill shortages been implemented?

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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In terms of the skill shortages, my Department has reviewed economic migration policies to ensure they are fully supportive of Ireland's emerging labour market needs, be they skills or labour shortages. The report of the review, which was published in September 2018, confirms that the current employment system is robust and has served the country well in recent years. An action plan has been formulated to drive the recommendations of the review. I was pleased to be able to remove particular sectors from the ineligible list, including the construction sector. I have issued a number of work permits to enable the construction sector to address critical skills shortages in terms of quantity surveyors, engineers and so on, from outside of the EU, which the sector has welcomed.