Bernard Durkan (Kildare North, Fine Gael)
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Question 113: To ask the Minister for Finance if he proposes to take measures to address the issue of competitiveness in the economy and encourage continued inward investment having particular regard to global trends in the economic and financial services; and if he will make a statement on the matter. [17810/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In responding to the Deputy's question to my predecessor Mr. Cowen, I would begin by saying that the Government recognises that improving national competitiveness is essential to facilitate a re-balancing of the economy towards more sustainable, export-led growth and to maintain Ireland's attractiveness as a location for inward investment in all sectors of the economy.

While external factors such as the exchange rate have an impact on domestic costs, these are beyond our control. As such, we must seek to control those costs which we can influence. We must also take steps to improve productivity.

In support of these objectives, the Government is committed to maintaining a low burden of taxation on capital and labour, and has implemented a range of policies aimed at improving competition in product markets and flexibility in the labour market. We are also investing heavily in physical and human capital under the National Development Plan. These measures will equip the Irish economy with the skills, infrastructure and operating environment needed so that we can compete effectively for projects in sectors where global demand is growing, such as business and financial services.

Of course, restoring competitiveness will also require sensible wage developments. Therefore, it is essential that pay increases are kept at a level which does not undermine our competitive position relative to our main trading partners. The current round of pay talks has an important role to play in this respect.