Bernard J. Durkan
Question:163 Mr. Durkan asked the Minister for Finance if he expects Ireland to compete with low wage economies successfully; and if he will make a statement on the matter. [2863/05]
View answerTuesday, 1 February 2005
Questions (163)
Written answers
Ireland will face significant competition from other economies, some of them low wage economies, for jobs and investment. To ensure that we are best placed to retain existing jobs and to attract new investment Government policies remain focused on restoring and enhancing national competitiveness.
The Government is committed to ensuring that prices and wages evolve in a manner that maintains our competitiveness. My decision not to increase indirect taxes in the budget will further help inflation in 2005. In addition, sensible incomes policies and a greater role for competition are also critical to keeping domestic costs competitive.
However, Ireland, like other high income economies, cannot seek to compete with low wage economies on the basis of wages alone, and we must be cognisant of other factors which enhance our attractiveness as a business location. These include skills, the quality of our infrastructure, regulatory structures and the stability of the business environment.
Ireland must seek to continue moving up the value chain attracting investment increasingly from high value added sectors such as information technology, business services and pharmaceuticals, for example, where the skills of the available workforce and the quality of the business environment and the available infrastructure are critical. This is why the Government remains so committed to maintaining capital expenditure at the current high levels relative to GNP in order to reduce the existing infrastructural deficit.
As outlined in the budget, over the 2005-09 period we will maintain our high level of investment in infrastructure at nearly twice the European average. Investment in education is also important to ensure that the Irish workforce possesses the skills to compete successfully in the future. By taking the correct actions today on the factors which affect our competitiveness we will be able to continue competing successfully in the global economy.