Bernard Durkan (Kildare North, Fine Gael)
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Question 178: To ask the Tánaiste and Minister for Finance the steps he proposes to take to improve the competitiveness of the Irish economy; and if he will make a statement on the matter. [17633/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The last two Governments have developed policies which are designed to help Ireland's competitiveness and this Government intends to continue these policies. Important policy issues in the medium-term include: developing our innovation potential, improving the regulatory environment, enhancing the human capital of our country and developing our economic and technological infrastructure. By bolstering Ireland's competitiveness these, in turn, should raise living standards, improve the quality of life and lay the foundations for future growth.In this context, the National Development Plan for the period 2007-2013 will further enhance our economic and social infrastructure, notably in the key areas of Transport, Environmental Services, Social and Affordable Housing, Health, Education, Broadband and Energy. In addition, investment in support of the Strategy for Science, Technology and Innovation and investment in Education at all levels with a particular emphasis on the third and fourth — that is PhD — levels in tandem with continued investment in labour force training and lifelong learning will ensure that we are well prepared to face the challenges ahead. The new Government is also keen to enhance our competitiveness as a location for new internationally-mobile research-related investment. Recognising that Research and Development (R&D) is the key to a more knowledge-intensive economy aimed at providing a sustainable long-term basis for growth in employment and incomes, the last Government introduced a tax credit for R&D in 2004. Improvements to the tax credit scheme were announced in this year's Budget.

The aim of the tax credit scheme is to encourage existing overseas and indigenous firms to add research functions to their operations in Ireland or to increase their level of research activity. This, combined with our single 12.5 per cent corporation tax rate on trading profits in all sectors, will continue to support the necessary stable enterprise environment which Ireland has so carefully nurtured through the years, and help to underpin our economic and social development going forward.