Tom Sheahan (Kerry South, Fine Gael)
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Question 46: To ask the Tánaiste and Minister for Enterprise, Trade and Employment her plans to reduce the cost of doing business here following a recent Forfás report; and if she will make a statement on the matter. [44581/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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This Government recognises the critical importance of reducing 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. Restoring cost competitiveness is a vital part of driving export led growth.

Under the Framework for Economic Renewal we are taking a number of measures across Government to improve our competitiveness. Cost competitiveness has been a particular focus of attention and we are already seeing results.

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 6.6 per cent in the year to October 2009 - the sharpest fall in Ireland since the 1920s.

We have also seen a decline in unit labour costs, which has a direct effect on competitiveness. We continue to exert further downward pressure on costs, including progressing those recommendations of the Competition Authority that have most effect on competitiveness. We have taken action on energy costs, public sector wage costs, and we have been actively progressing recommendations to increase competition and remove anti-competitive restrictions in the sheltered sectors of the economy. These include competition in transport, pharmacy services and rent. In addition, we are working to ease costs to enterprise in administered sectors of the economy under state control such as local authority charges. We are also easing the administrative burden that regulations can create.

The ESRI recently predicted that, with our current control of costs, productivity should grow by over 3 per cent in 2010. Combined with projected wage decreases of 2.5 per cent, this represents a significant improvement in the competitiveness of the Irish economy.