Michael Ahern (Cork East, Fianna Fail)

I thank Senators Terry, Cox and Hanafin for their contributions this evening. I also thank the other Senators who spoke earlier in this debate. I am glad the Seanad has given time to and focused attention on important subjects like competitiveness and consumer protection. We need to increase our understanding of the various factors which contribute to competitiveness, which is a broad subject. This discussion has helped to improve our comprehension of this complex topic.

I would like to begin by citing some macro-statistics, which tell their own story. Ireland returned to strong economic growth last year, when GNP increased by 5.5%, total employment increased by an average of 3% and domestic demand increased by a substantial 4.4%. There has been a significant decrease in consumer price inflation over the past 12 months. Ireland's rate of inflation is close to the euro zone average and it looks likely that the economy will continue its robust performance. Rates of growth of between 5% and 6% have been forecast for 2005 and 2006. Labour market conditions are expected to remain buoyant during the rest of this year and in 2006. It is likely that the positive environment for investment and employment will keep unemployment hovering around the historically low rates of approximately 4% in 2005 and 2006. Such statistics are hallmarks of a successful economy.

Despite the positive outlook I have outlined, we cannot afford to be complacent. Competitiveness is the lifeblood of a modern open economy. Given that foreign direct investment is increasingly mobile and depends on changing global economic circumstances, Ireland's future prosperity will be determined by its competitiveness. Ireland's competitive success continues to be built on key competitive strengths such as its taxation regime, which is one of the lowest in Europe, its well-educated and skilled workforce and its history of pursuing policies which are pro-business and proactively support enterprise. Globalisation means it is easier for our competitors to copy the competitive strengths which led to our remarkable economic success over the past decade. If we are to retain our competitive edge, we need to protect our strengths and develop new bases for competitive advantage, at national level and in every company.

The Government recognised, when it established the enterprise strategy group, that Ireland faces the direct and demanding challenge of moving from an economy driven by investment to one driven by innovation and knowledge. The recommendations contained in the group's report, Ahead of the Curve, will be pivotal in mapping the direction of Ireland's enterprise policy, ensuring its long-term competitiveness and increasing its corporate profitability. The recommendations aim to give the economy the capacity to move quickly to counteract emerging threats to business and to exploit the opportunities being presented by technological developments and the internationalisation of business. The Government is committed to the implementation of the recommendations. If we are to remain competitive, we must address our increasing cost base. That will continue to be a high priority for the Government, which has enacted several provisions to tackle increasing costs in a wide variety of sectors of the economy.

The Government has vigorously pursued a policy of introducing regulatory reform in the insurance sector. The establishment of the Motor Insurance Advisory Board and the Personal Injuries Assessment Board has led to a significant reduction in the cost of motor insurance. Statistics issued by the Central Statistics Office indicate that the average cost of motor insurance has decreased by 15% over the past 12 months.

Any discussion on competitiveness must be concerned with the level of competition in the marketplace and the protection afforded to consumers operating there. A marketplace is said to be effective if traders can compete robustly to sell their goods and services and consumers can readily avail of the choices offered by such competition. Markets which restrict competition or choice are ultimately self-defeating. For that reason, the policy of successive Governments has been to promote competition and consumer choice. Some of the measures which have been taken in support of that policy include a wide range of laws aimed at bolstering competition and providing certain protections to consumers when buying goods and services. Dedicated bodies, such as the Competition Authority and the Office of the Director of Consumer Affairs, have been established to enforce such laws.

One of the Government's primary responsibilities is to ensure that its policies and statutes remain effective and robust. Competition policy has been reviewed and developed in recent years for that reason. Senators will be aware of recent changes to strengthen competition law. Significant additional resources have been allocated to the Competition Authority to assist it in enforcing the law and carrying out its wider remit. The Government's initiatives in this area demonstrate its determination to ensure that those operating in the marketplace can do so on a level playing field and that traders who seek to abuse the marketplace are brought to book.

Competition and consumer protection are closely entwined and interdependent. Consumers can exercise choice only if the market offers a choice. Having strengthened competition policy to enable traders to compete and offer choice, it is incumbent on the Government to examine its policies which protect consumers when they are purchasing goods and services in the market. Some people claim that price control should be the cornerstone of consumer protection policy, but I do not accept that price control has a part to play in a modern economy. It is a failed policy of the past that should remain in the past.

The Government's view is that the interests of consumers are best served if they use the power of their pockets. I do not claim that standards should not be in place to protect consumers from unscrupulous traders who use unfair practices or false statements to mislead consumers into making ill informed choices. As I have said, a large body of consumer protection legislation has grown up in this area over time. Unfortunately, the evolution of consumer protection law has meant that the current legal framework is somewhat fragmented and dated in some instances.

The Department of Enterprise, Trade and Employment is undertaking a critical review of existing consumer protection statutes to ensure that consumer protection laws are attuned to modern markets and consumers. The review is intended to create a more comprehensive, effective and modern framework of consumer law. While work on the review is ongoing, the Department is anxious to update consumer law wherever possible, particularly to deter rogue traders who seek to mislead or abuse consumers. I am pleased to include specific provisions in the Investment Funds, Companies and Miscellaneous Provisions Bill, which was discussed earlier this afternoon in the House, increasing the fines for breaches of a range of consumer protection legislation to more realistic levels.

In addition to the aforementioned legislative initiatives, my Department also established a consumer strategy group in March 2004 to advise and make recommendations on developing national consumer policy and strategy. The group presented its final report to the Minister for Enterprise, Trade and Employment, Deputy Micheál Martin in early March 2005. The report is currently being considered by Government and I understand it may be published shortly. I am certain it will greatly assist in the development and modernisation of current consumer policy.

Competitiveness and consumer protection are key to our future growth and success. A vital element of economic growth is consumer confidence. Competitive economies, where traders actively compete for business, invariably maintain the confidence of consumers. To ensure our economy remains dynamic, innovative and competitive this Government is determined that its policies in these areas are robust and effective.

Senator Terry raised the question of infrastructure and I can confirm that the Government is committed to spending 5% of GNP on infrastructure over the next ten years. That covers roads, public transport, regional airports and all necessities for an economy that is growing at such a rate as ours is today.

I accept Senator Terry's point that Ireland's broadband service does not rank highly compared to other countries. In the recent past progress has been made. It is very important that broadband be available throughout the country. I understand it is now more widely available at a competitive price than it was six months ago. We need to have the necessary equipment and resources available to us if we are to maintain our competitiveness. The 2004 budget was deliberately non-inflationary and the inflation rate has been falling steadily since then. We are now on a par with the average in the euro zone and we will maintain our place in that league table.

Notwithstanding the recent reduction in inflation the Government appreciates that consumers are concerned about prices. The consumer strategy group met to advise and make recommendations to the Government. The report contains over 30 recommendations involving all sectors of the economy impacting on the consumer. I hope that the Government will be in a position to publish that report in the near future. A recent report on better regulation required the Government to conduct analysis of existing and future laws according to a number of criteria including whether the proposal is necessary and the effects it will have on employment. The Government fully supports that legislation should be subject to regulatory impact analysis.

As Senator Cox points out, it is important to protect workers' rights. Labour protection laws in Ireland are mirrored by laws in every developed country in the Organisation for Economic Co-operation and Development, OECD. This is the case in the United States, where there are minimum wage regulations and equality laws. The Organisation of Working Time Act 1997 was implemented in a practical, pragmatic manner. I am not aware of problems with the Act. If Senator Cox has any examples or cases where there is a problem I would be happy to investigate.

I wish to thank the Leas-Chathaoirleach for the opportunity to address the Seanad on these important issues and I look forward to discussing them with Senators in the years ahead.