Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

Question 149: To ask the Minister for Jobs, Enterprise and Innovation if he is concerned at the ongoing deterioration of Irish competitiveness as revealed in the Harmonised Competitiveness Indicators; the steps he and others are taking to improve competition; and if he will make a statement on the matter. [21762/11]

Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context

National competitiveness is a broad concept that encompasses a diverse range of factors, including costs to business, and also policy inputs such as education and training, economic and technological infrastructure, and the taxation and regulatory framework. The Harmonised Competitiveness Indicators provide one measure of our competitiveness trends.

The recent report published by the National Competitiveness Council on Costs of Doing Business in Ireland states that Ireland experienced a significant loss in cost competitiveness as measured by the real Harmonised Competitiveness Indicator between 2002 and early 2008. Since 2008, however, we have regained some of this lost competitiveness and Irish competitiveness is now back to 2003 levels. This has been driven by favourable exchange rate movements and lower rates of inflation compared with our competitors.

Our 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 by the National Competitiveness Council in their recent report.

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 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.

As the Deputy will be aware, on 10th May the Government announced the introduction of a range of measures under the Jobs Initiative to improve the competitiveness of the economy, to support the maintenance of existing jobs and the creation of new ones, and to assist those who are currently unemployed to return to work.

Many of these measures have already been brought into effect, including the reduction of VAT on services primarily in the hospitality sector; the halving of the lower rate of employer's PRSI on earnings up to €356 per week; the launch of the National Internship scheme; and the focusing of the State's capital expenditure towards more employment-intensive projects in the areas of education, local and regional roads and sustainable transport projects. My Department is also currently working on developing a Loan Guarantee scheme and a Microfinance Start up Fund, to improve access to finance for businesses.

I am also continuing to develop proposals for substantial reform of our Sectoral Wage Agreements, as well as working to develop job opportunities in a number of emerging sectors, including Cloud Computing, Digital Gaming, Life Sciences, Medical Devices, Information and Communications Technology, Financial Services, Content Industry, Consumer and Business Services.

I will continue working with my Government colleagues, through the Cabinet Committee structure, to identify actions that can be taken to improve cost competitiveness in other areas, such as commercial rates, legal costs and administrative burdens. The Government will also in the near future legislate to address the commitment in the Programme for Government to abolish upwards only rent reviews in existing business leases.