Bernard Durkan (Kildare North, Fine Gael)
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118. To ask the Minister for Jobs, Enterprise and Innovation the extent to which the industrial cost-base here compares favourably with other European Union and non-European Union countries; and if he will make a statement on the matter. [29286/15]

Richard Bruton (Dublin North Central, Fine Gael)
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Ireland’s improving competitiveness performance since 2011 has been central to securing the recovery in economic growth and employment. Improved competitiveness has made Irish firms more cost competitive internationally and made Ireland a more attractive location for firms to base their operations in.

Addressing Ireland’s international competitiveness therefore remains a key economic priority for Government. Since 2012, the Government’s Action Plan for Jobs has set out a comprehensive set of measures to improve our competitiveness performance. The themes in this year’s Plan build on the reforms of previous years in the areas of competitiveness and sets out a range of actions to facilitate improved competitiveness.

We continue to monitor Ireland's cost competitiveness on a regular basis. This is specifically required under the Action Plan for Jobs 2015. Action 247 requires the National Competitiveness Council (NCC) to “Benchmark key business costs and publish a report highlighting areas where Irish enterprise costs are out of line with key competitors”. The NCC’s Costs of Doing Business in Ireland report published in April 2015 benchmarks key business costs across over 50 indicators and focuses on areas where Irish enterprise costs are out of line with key competitors, and on costs that are largely domestically determined.

The 2015 report concentrates on the costs that are largely domestically determined such as labour, property, energy, water, waste, communications and business services. The report finds that while relative cost competitiveness is improving (i.e. although costs are increasing, they are increasing at a slower rate than in many of our competitors), this improvement is largely being driven by external factors beyond the control of domestic policymakers. In particular, a weak euro exchange rate, low ECB interest rates, and low international fuel prices have all combined to improve Irish cost competitiveness.

The NCC report concludes that Ireland’s industrial cost base has improved but pressure points are emerging in labour, property and business service costs. We must therefore focus intensely on reducing costs that are out of line with those in competitor countries. There is a role for both the public and private sectors alike to proactively manage their cost base and drive efficiency, thus creating a virtuous circle between the costs of living, wage expectations and cost competitiveness. Measures that ensure open and competitive markets are essential. Improving productivity performance is also key.

Government will continue to progress actions that improve Ireland’s competitiveness position. The policy implications of the Costs of Doing Business and associated structural reforms required to address Ireland’s cost base, will also be included in the NCC’s annual Competitiveness Challenge report which will be published later this year.