Mary White (Fianna Fail)

I welcome the Minister of State, Deputy Killeen, to the House and I wish him luck. He has a tremendous reputation in Leinster House and in County Clare. I am aware that everybody in Clare is crazy about him. Even Senator Ryan stated that it is about time he was awarded an elevated position.

I may be accused of exaggeration but the Minister's speech is probably the best I have heard delivered in the House in respect of enterprise and employment. I have read Ahead of the Curve, the Annual Competitiveness Report 2004 and the Competitiveness Challenge 2004 and in my view the answers to the points raised therein are to be found in the Minister's contribution. The Minister showed vision while in the Department of Health and Children in driving through the smoking ban. It was a difficult Ministry for him but he will go down in history for what he has achieved. The points raised in the documents to which I refer and in the Minister's contribution provide an outline of what he must do. He has a tremendous opportunity to make progress.

Despite all the positive figures — the fact that unemployment has fallen to 4.5%, that GNP will grow by 4.25% this year and that business confidence, industrial output and FDI are all on the increase — I am concerned that the Government might become complacent and that people will believe the Celtic tiger economy, which is not, perhaps, as strong as it was previously, will remain in place. That is a dangerous assumption. There are threats abroad of which people are not aware.

The documents to which I referred earlier indicate how stands our cost base relative to those of our trading partners. According to the Annual Competitiveness Report 2004, the average cost of Irish goods and services, relative to that of our major trading partners, has increased by over 20% since 2000. There is no doubt that the rise in the value of the euro against the US dollar and sterling — about which we cannot do much — has been the biggest cause of deterioration in our competitiveness. However, fast growth in domestic prices and wages have also contributed. The Government further contributed to inflation but I believe it has learned its lesson. I am afraid to refer to stealth taxes but these were real and they added to inflationary costs.

The loss of competitiveness is already undermining the ability of many Irish-based manufacturing companies to compete in international markets. An article in the Irish Examiner last week stated that the Small Firms Association said that continuing job losses in the manufacturing sector are a major cause for concern. It is also stated in the article that more than 900 manufacturing jobs were lost during October — bringing the total number this year to over 7,000 and an overall total for the economy of over 20,000 — and that the Small Firms Association blamed deteriorating cost competitiveness for the 30,000 job losses in manufacturing and production during the past three years. The total number of people in employed in manufacturing has, therefore, dropped from 330,000 to 300,000.

If the decline in cost competitiveness persists, there will be a continued loss of employment. The growth in employment during the past four years has occurred mainly in the public and building sectors. A decline in our competitiveness has resulted in manufacturing jobs being lost.