Skip to main content
Normal View

Industrial Development.

Dáil Éireann Debate, Thursday - 13 May 2004

Thursday, 13 May 2004

Questions (53, 54)

Bernard J. Durkan

Question:

49 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has identified the issues contributing to price hikes and lack of competitiveness in the economy; her proposed action to deal with the situation; and if she will make a statement on the matter. [13873/04]

View answer

Bernard J. Durkan

Question:

81 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the extent to which she or her Department has monitored increasing costs to industry here; the efforts she has made to combat these issues; and if she will make a statement on the matter. [14016/04]

View answer

Written answers

I propose to take Questions Nos. 49 and 81 together.

The Government is 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 Government has made concerted efforts to achieve the goal of the partnership programme, Sustaining Progress, to create a virtuous circle of low inflation, moderate wage growth and higher productivity. This in turn provides firms with a competitive business environment from which they can successfully operate.

Examples of these efforts include 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 their recommendations, the Government has agreed new management and control arrangements designed to keep public expenditure on target. The 2004 budget avoided inflation-fuelling increases in indirect taxes thus minimising the Government's contribution to inflation. These efforts coupled with the depreciation of the dollar have resulted in the steady decline in Ireland's inflation rate. The most recent inflation figures from the consumer price index show an inflation rate of 1.3% in March 2004. This is a decrease from 1.7% in February and is the lowest level in more than four years.

Price increases in the area of insurance have been a particular concern. I have referred on many occasions to the programme of reform I have initiated to tackle the issue of high premia, which have had a detrimental effect both on consumers and on business competitiveness. I am pleased that the Personal Injuries Assessment Board will commence dealing with employer liability cases from 1 June 2004. By eliminating the need for litigation costs where legal issues are not in dispute, the Personal Injuries Assessment Board will significantly reduce the cost of delivering compensation.

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. The Competition Authority is charged with combating anti-competitive practice in the economy. It is undertaking several studies in key areas of the economy such as the banking and insurance sectors. The Government looks forward to the publication of the authority's reports into these key sectors later this year. Competition in all sectors must be encouraged to ensure goods and services are provided at an efficient and affordable price.

My Department is preparing a report into the implementation of the National Competitiveness Council recommendations for submission to the Government in June. The report will set out progress to date in implementing the recommendations set out in the National Competitiveness Council's 2003 report, Competitiveness Challenge, and will enable the Government to evaluate Ireland's competitiveness, as it intends to do twice yearly in accordance with the Government decision of the 25 November 2003.

Top
Share