Bernard Durkan (Kildare North, Fine Gael)
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Question 120: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the action she will take to address the issue of rising costs in both manufacturing and service industries; and if she will make a statement on the matter. [24223/08]

Mary Coughlan (Donegal South West, Fianna Fail)
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As a small open economy many of the factors which determine inflation are beyond our control. We have no control over issues such as rising oil prices and the decline in the value of the dollar against the euro. However, it is important to ensure that our domestic cost base does not undermine competitiveness. The Government is actively seeking to restrain inflationary pressures, promote competition, pursuit of sensible incomes policy, and we are keeping public spending growth at sustainable levels. Doing this will allow us to keep the burden of taxation low, thus helping to maintain competitiveness and to maximise our economic potential. These are all part of our strategy to improve the cost environment and to enhance competitiveness.

In relation to public expenditure, we are committed to moderate the growth in current spending in line with the growth in available resources, notwithstanding our key priority to fully implementing the National Development Plan. This will improve competitiveness through eliminating infrastructural bottlenecks and by raising the skills set of the population. This Government has always been focussed on addressing competitiveness issues as they emerge. Through our enterprise policies we are committed to making the economy one of the best locations in which to build businesses in high technology and internationally traded services. The Government has introduced a number of non-inflationary budgets in recent years and responds to the regular advice on the competitiveness agenda provided by the National Competitiveness Council. In addition, the recent Report of the High Level Group on Manufacturing outlines both global and domestic trends driving change in the sector and the implications for manufacturing companies operating in Ireland. The Group acknowledged the relevant policies that have been put in place and the substantial number of supports available to the manufacturing sector. Ireland's existing expertise provides a base for continued wealth creation over the next decade and the Group envisage that Ireland's manufacturing base will continue to move up the value chain. The Group's recommendations seek to substantially enhance existing manufacturing by delivering the environment and skill set necessary for sustainable success in the contemporary competitive environment. The Group has outlined a vision for manufacturing based on innovation (both technological and non-technological) and advanced manufacturing.

There are undoubtedly challenges to be addressed. I am satisfied that through our prudent management of the economy, through our social partnership structure, and through the provision of competition and other structural reforms in the economy that we will be able to meet those challenges.