Billy Kelleher (Cork North Central, Fianna Fail)
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Question 40: To ask the Minister for Jobs, Enterprise and Innovation the proportion of Ireland's loss of competitiveness in recent years that was due to currency fluctuations; and his immediate priorities in tackling the problem of cost competitiveness in the economy. [21068/11]

Richard Bruton (Dublin North Central, Fine Gael)
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Ireland experienced a significant loss in cost competitiveness as measured by the real Harmonised Competitiveness Indicator over the past decade, reflecting a combination of an appreciation of the Euro against the currencies of many of our trading partners and higher price inflation in Ireland. Between 2002 and early 2008, our cost competitiveness declined by almost a third. Adverse exchange rates accounted for about three quarters of this decline, with the rest due to higher rates of inflation in Ireland compared with our main trading partners.

Since 2008, however, we have regained some of this lost competitiveness and Irish competitiveness is now back to 2003 levels. This has been driven almost equally by favourable exchange rate movements and lower rates of inflation compared with our competitors.

Ireland's competitiveness has also been improved through a reduction in the costs of doing business. Improvements have been seen in relation to labour costs, property costs, utilities and business services, as highlighted in the recent Cost of Doing Business report published by the National Competitiveness Council.

To continue to build on this improvement in our competitiveness, however, the Government recognises that it must put in place structural reforms to our cost base, to ensure that the gains we make are permanent and will not be eroded by a resumption in growth or exchange rate movements.

In this context, I am have been in contact with my Ministerial colleagues, highlighting the issues which the National Competitiveness Council believes must be addressed to strengthen the competitiveness of our cost base, and asking them to consider those recommendations.

I am also continuing to develop proposals for substantial reform of our sectoral wage agreements and I am working with my Government colleagues, through the Cabinet Committee structure, to identify actions that can be taken to reduce costs in other areas, such as commercial rates, legal costs and administrative burdens.

The High Level Group on Business Regulation, which is chaired by the Minister of State for Small Business, John Perry T.D., works to fast-track simplifications to specific red-tape issues identified by business. In addition, an Inter Departmental group of officials from all Departments responsible for regulation affecting business, co-ordinates the measurement and reduction of administrative burdens in a systematic manner, based on the internationally recognised standard cost model.

To date, the High Level Group has processed 48 specific red-tape issues brought to its attention by business, and continues to drive progress on a further 20 items. The Group continues to work with business interests to identify new opportunities for simplification.

My Department has already reduced measured burdens by 22%, which is an annual saving of almost € 187 million for business. I expect to be in a position to announce further initiatives in this area before the end of the year.