Tom Morrissey (Progressive Democrats)

I thank the Independent group for tabling this motion and the Minister of State for attending. The issue of competitiveness is paramount to this economy and is of crucial national importance. Continuing to compete not only in selling our goods and services but also in attracting foreign direct investment and creating high quality jobs are the key to our future growth. Economic competitiveness is central to the prosperity and well-being of our society. Despite the tenor of the motion, the prospects for the economy remain positive. Let us not lose sight of that during this debate.

There are two essential elements at which we must look. One, which is outside our control, is the nature of international events and the other is whether we can do the right things at home in terms of our economic policy. I am adamant that the right decisions are taken for Ireland into the future. The policies to date have delivered unparalleled growth and prosperity for the people. We must work to ensure this continues during the lifetime of the Government. The context of our policies is of course the international climate. Movement in international exchange rates, interest rate policy and oil prices can and do play a significant part in our economic fortunes. The Government has been obliged to steer through some significant obstacles on the international economic front. However, to date, the sound basis for our prosperity has been maintained, especially over the last seven years. The Independent group's motion rightly remarks on the current state of competitiveness in the Irish economy and what a remarkable state we are in.

The Irish economy has achieved remarkable rates of economic growth and has recorded one of the best economic performances in the world over the past decade. It grew by an average of more than 7.5% from 1997 to 2004, while in the EU, the average growth was just over 2%. I am reminded of the speech of the chairman of the National Competitiveness Council when he warned that the competitiveness of the economy is seriously impaired by the lack of competition in many sectors. He reports that markets in which competition is weak or absent are characterised by high prices, lower output, less innovation and lower levels of buyer satisfaction. The Independent group's motion mirrors some of these concerns.

We have a duty to protect Ireland's economy and a duty to promote its competitiveness. Therefore, we must examine all markets that have restricted competition. The Competition Authority believes that in many markets in Ireland, competition has been severely restricted and in some cases, totally prevented. Restrictions are said to be widespread in existing retailing, transport, banking, communications, energy and many other private and public service sectors.

I share the concerns of the Independent group and the Competition Authority also concurs. The erosion of national competitiveness can also damage our attractiveness as a destination for visitors and investment. Where market restrictions lead to high prices, action must be taken by the Government. In markets which the Competition Authority has studied in detail, it has found that restrictions imposed high prices and are disproportionate to any clear public policy objective. It is worth restating that notwithstanding the economic progress I outlined earlier, the Government is not complacent about Ireland's future economic well-being. It is in the business of promoting economic growth, not as an end in itself, but as a mechanism to provide social progress. National competitiveness and social progress go hand in hand.

It may seem untimely to focus on emerging threats to our future prosperity. However, the 2004 competitiveness report shows that considerable pressures remain on our competitive position. The motion from the Independent group echoes the specific areas of concern highlighted by the National Competitiveness Council's annual report. These include the continued growth in domestic prices and wages. However, we cannot have it both ways. This country now has a minimum wage which thankfully has been increased recently. It is turning into a high-value economy. When we go abroad on business or on holidays and pay what we call lower prices, those lower prices are a reflection of the fact that we are unlikely to work for the wages on offer. We do not want to work for such wages in this country any longer. This is the situation we must address.

The tourism industry is fortunate that people are willing to come to this country so that prices can remain low. We are fortunate in having such a sizeable immigrant workforce in this country to take up those jobs which Irish people no longer want. As I stated earlier, the minimum wage might have increased our prices, but we do not have to apologise for that.

In the tourism sector, the issue of travel is vital. If we want to create jobs, we must ensure that we have a competitive travel industry. Only last year, we successfully unbundled Aer Rianta. We can now see the benefits that will flow to Cork and Shannon and the regions to which people will be able to fly on new routes. Had this measure not been taken, I suspect that those regions would be less well-off than they are today. I thank the Independent group for the motion it has tabled but I remain secure in the knowledge that the Government is committed to ensuring we remain competitive in the years to come.