Richard Bruton (Dublin Bay North, Fine Gael)
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The Costs of Doing Business Report published by the National Competitiveness on April 21st provides an assessment of Ireland's cost competitiveness performance vis-a-vis a range of competitor countries. The report concentrates on the costs that are largely domestically determined such as labour, property, transport, energy, water, waste, communications, credit/finance and business service. It finds that Ireland’s cost base has improved across a range of metrics over the last five years. This has made Irish firms more competitive internationally and made Ireland a more attractive location for firms to base their operations in. However, despite these improvements, internationally comparable data suggest that Ireland remains a relatively high cost location for a range of key business inputs and there is strong upward cost pressure evident in property and in the labour market. The Council warns that Ireland is particularly vulnerable to external shocks beyond our control – external risks at the moment include in particular the forthcoming UK Referendum on membership of the EU, oil prices and exchange rate movements. To pre-empt such threats we must create a competitive edge.

The report is a timely reminder of the risks of complacency regarding our economic performance. The improved competitiveness of Ireland’s exporting sector has been one of Ireland’s greatest strengths in recent years and has been central to economic growth and job creation. Cost competitiveness has been critical to the success of Irish based exporters, allowing them to maximise the opportunities arising from increases in global demand.

I share the Council’s view that to protect the gains achieved to date, to further embed and sustain the recovery, and to ultimately spread the benefits of economic growth to all, we must continue to enhance all aspects of our competitiveness.

The Council’s report has been noted by Government and enhancing Ireland’s international competitiveness performance will remain a key economic cornerstone of economic policy making.

The Council and my Department and its agencies are continually engaged with relevant stakeholders on the particular policy needs required to support cost competitiveness. The stakeholders include other Government Departments, regulatory bodies and public and private bodies. In this regard, 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 also essential.

The policy implications of the Costs of Doing Business in Ireland 2016 report’s analysis, and associated structural reforms required to address Ireland’s cost base, will be included in the Council’s annual Competitiveness Challenge report which will be published later this year.