Enda Kenny
Question:89 Mr. Kenny asked the Minister for Finance if he plans to play a leadership role in addressing the emerging problems of competitiveness of Ireland’s exporting sectors. [13266/05]
View answerWednesday, 27 April 2005
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Written answers
Restoring and enhancing national competitiveness is a key priority for this Government. The Government is keenly aware of the importance of Ireland's exporting sectors to investment and jobs and, in turn, of the importance of competitiveness for these sectors. It must be remembered that we cannot control our exchange rate. In this context, we must seek to control those key determinants of our competitiveness which we can.
The maintenance of competitiveness requires that wage increases remain in line with that justified by productivity. Sensible income policies and a greater role for competition in the economy are vital to delivering this. Wage increases must be limited to those negotiated under Sustaining Progress. The downward trend in the rate of CPI inflation last year, to the lowest rate since 1999, is a welcome development and one which is supportive of the maintenance of competitiveness. We cannot control the rate of inflation; external factors have much to do with that outcome. We can, however, seek to ensure that our domestic cost base does not add to it. My decision not to increase excise rates in the budget will help inflation in 2005.
It is also important to maintain public spending growth at levels that are sustainable in the medium term, thus keeping the burden of taxation low to protect competitiveness and maximise our economic potential. We are maintaining capital expenditure at the current high levels relative to GNP in order to reduce the existing infrastructural deficit. This will support future competitiveness and ensure that Ireland creates the right environment for foreign investment and continued export growth.