Bernard Durkan (Kildare North, Fine Gael)
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Question 166: To ask the Tánaiste and Minister for Finance the steps he proposes to take to address the increasingly serious issue of the negative impact of hidden inflation affecting the manufacturing and services sectors; and if he will make a statement on the matter. [29928/07]

Bernard Durkan (Kildare North, Fine Gael)
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Question 168: To ask the Tánaiste and Minister for Finance the steps he has taken to identify inflationary trends not reflected in the CPI with particular reference to the need to sharpen the competitiveness of the economy; and if he will make a statement on the matter. [29930/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 166 and 168 together.

The Director General of the Central Statistics Office has sole responsibility for, and is independent in, deciding the statistical methodology and professional standards to be used in compiling the Consumer Price Index. The index is designed to measure the change in the average level of the prices paid by consumers for goods and services. It measures in index form the monthly changes in the cost of purchasing a representative basket of consumer goods and services. Maintaining a moderate rate of inflation remains a key priority of economic policy because of its importance in restoring competitiveness. We have no control over some of the factors influencing competitiveness, such as the exchange rate. However, we must always seek to ensure that our domestic cost base does not undermine competitiveness. In this context, it is important to maintain low inflation, pursue a sensible incomes policy and keep public spending growth at sustainable levels in the medium term. This will allow us to keep the burden of taxation low, thus helping to maintain competitiveness and to maximise our economic potential. Regarding wage costs, the Government remains focused, through the partnership process, on securing a responsible approach to earnings growth in the economy.