Bernard Durkan (Kildare North, Fine Gael)
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Question 116: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the extent to which she has identified the most salient issues creating a barrier to job creation; her proposals to address these issues; and if she will make a statement on the matter. [41260/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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Restoring Ireland's competitiveness and, in particular, cost competitiveness is a key priority for this Government and essential for sustaining and creating employment. Growing our exports is the only sustainable path to reduce unemployment and secure long term prosperity. In order to enable Irish exporters to compete successfully in global markets, we need to increase productive investment in the economy, reduce the costs of doing business, and improve productivity in the internationally trading enterprise base. There are a wide range of competitive strengths which we retain, including a young and comparatively well educated work force, growing levels of research and development activity, a modern internationally-traded enterprise base as well as a long track record as an attractive location for overseas investment.

It is particularly important to reduce business costs at this time when all sources of efficiency are in focus and when jobs are at stake in all sectors of the economy. Energy and labour costs are the foremost concerns of the enterprise sector, together with the issue of credit availability particularly for the small and medium enterprise sector. This Government is committed to addressing these concerns. Where Government charges are an issue, we have maintained downward pressure. We are committed to maintain low business taxes and a favourable regulatory environment, and will ensure that our policies keep pace with the way business is changing.

Restoring cost competitiveness in Ireland is made more difficult by the current weaknesses in the dollar and sterling — the currencies of two of our more important trading partners. However, in spite of these difficulties, we have made good progress in controlling costs and we are restoring competitiveness. All categories of businesses have benefited from significant energy price reductions during 2009.

With regard to labour costs, it is the view of this Government that controlling pay costs, both in the public and private sector, is a key element in restoring competitiveness. Both the NCB Manufacturing and Services Purchasing Managers' Indices have shown a sustained and deep period of declining input costs for businesses in Ireland, driven, in part, by lower wage costs. This is matched by a decline in Irish inflation that reached minus 6.5 per cent in the year to September 2009 — the sharpest fall in Ireland since the 1920s.

A stable macroeconomic environment is a pre-requisite to enabling export driven growth. It is essential that we implement a credible and widely supported programme to restore the sustainability of the public finances and ensure the banks are channelling credit to viable businesses. The ongoing availability of credit to business is a critical issue for our small and medium sized enterprises as they trade through the current economic downturn and work to protect jobs in our economy. The actions already taken by this Government to stabilise the banking sector and to ensure that the banks meet their commitments under the recapitalisation package are all focused on getting banks once again to support our broader enterprise economy by extending appropriate credit to viable projects. The Credit Supply Clearing Group will continue to play a key role in this process by addressing the legitimate concerns of both businesses and the lending banks.

Notwithstanding current economic difficulties, we must continue to upskill our workforce to ensure that the necessary skills are in place to meet current and future enterprise needs and as a way of driving the economic upswing when it comes. In keeping with the objectives of "Building Ireland's Smart Economy — A Framework for Sustainable Economic Renewal" and the "National Skills Strategy", Ireland must continue to build upon its strength of a skilled labour force, in order to attract inward investment and ensure sustainable employment.