Paul Kehoe (Wexford, Fine Gael)
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Question 157: To ask the Minister for Enterprise, Trade and Employment if he has developed a policy to reduce Ireland's cost base, thus encouraging investment and job creation; and if he will make a statement on the matter. [25042/05]

Micheál Martin (Cork South Central, Fianna Fail)
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The National Competitiveness Council's, NCC, annual report gives an opportunity to benchmark our competitiveness against 15 important trading partners and competitors for mobile investment. The NCC's latest annual report was published last month and shows that earlier increases in prices and costs have stabilised and are no longer increasing at a rate faster than elsewhere in the EU. The council states that the ultimate objective of competitiveness is to achieve sustainable improvements in living standards and quality of life. The report acknowledges that by this measure, Ireland's competitiveness performance remains very impressive.

Last year we had the highest real growth rate in the OECD in terms of GDP and over the past ten years the growth in national income has been more than double that of the US and close to triple the average growth rate of the euro zone economy. This does not suggest an economy held back by low investment and shackled by low growth and employment prospects.

The climate for enterprise investment remains one of the most attractive in Europe and we continue to be one of the most successful of the NCC benchmark countries for attracting foreign investment. US companies, for example, earn the highest rate of return on their investments in Ireland as compared with other investment locations and in 2003 accounted for about 6% of all US foreign direct investment coming into Europe. Hard nosed investment decisions are not made in favour of uncompetitive and lowly rated economies.

The economy is also generating a relatively high rate of indigenous entrepreneurial activity. The NCC's analysis shows that Ireland is ranked second in the EU and seventh among the OECD countries on this measure. Furthermore the 2004 global entrepreneurship monitor shows there is a growing, positive cultural disposition towards entrepreneurship and this is one of the factors contributing to the high total entrepreneurial activity rate picked up in by the NCC's analysis. Pro-enterprise policies and the obvious success and reward from business activity are changing the climate for indigenous investment and entrepreneurship.

Meanwhile there is a real transformation taking place in how we earn our living in the global economy. Since 1997, our share of the world's services trade has grown from under .5% to over 2%. This is quite an achievement for a small nation in a global economy dominated by countries that have deep rooted and long established services sectors.

These achievements underpin continued job creation right across the economy. The latest quarterly national household survey shows the number of persons in employment grew by 93,000 in the year to reach almost 1.93 million in the second quarter of 2005. This is the highest annual growth rate, plus 5.1%, recorded since the second quarter of 2000.

Over the past decade, extensive, sustained and real improvement in our economic performance shows we have broadly implemented the right mix of policies. Indeed, the president of the European Central Bank last week positively cited Ireland and its policies as an example to other economies attempting structural reform to stimulate growth.