Dara Calleary (Mayo, Fianna Fail)
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216. To ask the Minister for Jobs, Enterprise and Innovation how she will tackle the severe competitiveness challenges identified by the National Competitiveness Council report, Costs of Doing Business in Ireland 2016, and Ireland’s position as a high cost location for business; and if she will make a statement on the matter. [11148/16]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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Improving Ireland’s competitiveness position is a key economic priority for Government. As set out in 'A Programme for a Partnership Government', our objective is to protect our national competitiveness from unsustainable cost growth and to deliver a job-fit business environment which ranks in the top tier globally.

The Costs of Doing Business Report published by the National Competitiveness Council on 21 April provides an assessment of Ireland's cost competitiveness performance vis-a-vis a range of competitor countries. The report, which has been noted by Government, concentrates on the costs that are largely domestically determined such as labour, property, transport, energy, water, waste, communications, credit /financial, 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, Ireland remains a relatively high cost location for a range of key business inputs and there is upward cost pressure evident in property, business services and 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 Brexit, oil prices and exchange rate movements.

The report is a timely reminder of the risks of complacency regarding our cost competitiveness 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. It has been critical to the success of Irish based exporters, allowing them to maximise the opportunities arising from increases in global demand. Even with improvements in competitiveness, threats to continued economic success abound. While the Irish economy is experiencing rapid growth, the global economic outlook is less certain, with growth prospects in emerging and advanced economics far from certain.

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.

Addressing Ireland’s international cost competitiveness is a key economic policy priority for Government and as set out in the Action Plan for Jobs, a range of initiatives are in train across Government Departments to support cost competitiveness. To date, the National Competitiveness Council has reported regularly to the Cabinet Committee on Economic Recovery and Jobs where its recommendations are progressed by relevant line Departments. This facilitates timely attention to areas of opportunity for improvement.

In addition, the Council and my Department and its agencies are continually engaged with relevant stakeholders on the particular policy needs required to support cost competitiveness. These 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 brought to Government published later this year.