Thursday, 11 March 2004

Questions (80, 81, 82)

Bernard J. Durkan

Question:

79 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the position in terms of our competitiveness on European or other export markets; and if she will make a statement on the matter. [8202/04]

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Bernard J. Durkan

Question:

85 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the price increases that have contributed most to a lack of competitiveness in the economy; the action or actions she has taken or intends to take to address the issue; and if she will make a statement on the matter. [8209/04]

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Bernard J. Durkan

Question:

86 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps she has taken to combat the ever increasing problem of costs to industry which is causing a lack of competitiveness in the economy; and if she will make a statement on the matter. [8210/04]

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Written answers (Question to Minister for Enterprise)

I propose to take Questions Nos. 79, 85 and 86 together.

The International Institute for Management Development, IMD, in its World Competitiveness Yearbook for 2003 ranks Ireland as the eleventh most competitive country in the world with a population of fewer than 20 million. Ireland performs particularly well in regard to our exports of commercial services, our real GDP growth and our level of high tech exports. With respect to our positionvis-à-vis our European partners, the EU Commission’s spring report, Delivering Lisbon — Reforms for the enlarged Union, includes a comparative study on the performance of EU member states in the various areas of the Lisbon agenda. The report echoes the findings of the IMD competitiveness yearbook and notes that Ireland scores well on productivity levels, on productivity levels per person employed and on educational attainments. The EU Commission’s report also notes the significant decrease in long-term unemployment in Ireland and the introduction of more competition in telecoms and new competition rules for both the electricity and the gas markets.

The Government recognises the importance of ensuring that Ireland remains competitive, as a guarantee of our future economic success. We are committed to providing a pro-business environment, which will enhance the competitiveness of the Irish economy. A pro-business environment with low inflation will stabilise firms' costs and provide them with a solid competitive business environment from which they can successfully compete on both domestic and international markets. The most recent inflation figures from the consumer price index, CPI, show an inflation rate of 1.8% in January 2004. This is the lowest level in more than four years.

The present partnership programme, Sustaining Progress, has at its core the need to underpin Ireland's competitiveness. The goal of Sustaining Progress is to create a virtuous circle of low inflation, moderate wage growth and higher productivity, thereby providing a firm competitive business environment for Irish industry. A key element of Sustaining Progress was the establishment of an anti-inflation initiative. As part of this initiative, a group was created to examine ways of addressing domestic inflationary pressures. The group published its first progress report in November 2003 and in response to its recommendations, the Government has, among other things, agreed new management and control arrangements designed to keep public expenditure on target.

Arising from the work of the National Competitiveness Council, NCC, in its Annual Competitiveness Challenge 2003 report and the Competitiveness Challenge 2003, the Government has decided that it will assess Ireland's competitive status every six months. My Department is currently examining the recommendations and issues set out in both NCC reports, with a view to making a report to Government in June of this year.

I have stated on several occasions that the principal method for reducing costs and maintaining them at an acceptable level is to increase competition in all sectors of the economy. We cannot afford to have sheltered sectors of the Irish economy immune from price competition. It should be noted in this context, that the resources of the Competition Authority have been substantially increased to combat anti-competitive practice in the economy. Competition in all sectors must be encouraged to ensure goods and services are provided at an efficient and affordable price.