Dáil Éireann Debate, Wednesday - 15 November 2006
118 Ms Enright asked the Minister for Enterprise, Trade and Employment the changes he believes need to be made to the regulatory regime here in order to foster competition and reduce the cost base for Irish businesses; and if he will make a statement on the matter. [37946/06]
View answerOpen and fair competition is one of the central keys to a successful economy. A visible effect of competition is that companies that compete to win business and to increase market share will reduce prices, provide enhanced service and variety, and generally become more responsive to the needs of consumers. Another benefit of competition, and the one that is less visible, is the fact that competition drives companies to cut their costs and find more efficient and productive ways of doing business.
The promotion of competition in the economy requires an effective legal framework. Strong competition legislation contributes to our competitiveness by penalising anti-competitive and anti-consumer behaviour, and by protecting the competitive process in all sectors of the economy. The 2002 Competition Act consolidated, reformed and modernised previous legislation relating to competition policy and merger control and the Irish Competition Authority is one of the most empowered, pro-active and successful enforcement agencies of competition law in Europe.
The Government also recognises that restrictions on competition arising from regulation can impose substantial costs on the economy and have adverse effects on the international competitiveness of Irish business. In this regard the Government is committed to addressing sectors where barriers to entry or restrictive practices exist. Our commitment to better regulation stems from the recognition that if State regulation is excessive in quantity, or is of poor quality, then it will be an unnecessary burden on economic and social activity. By minimizing regulatory barriers, we can make it easier for entrepreneurs to avail of business opportunities and to enter markets, and we can achieve greater efficiency and choice for consumers.
Strong competition legislation is only one regime within which businesses operate. The Government has stepped in as needed in order to develop effective regulatory structures and practices in areas of regulatory failure. In the Company Law area the government has taken several initiatives to improve the regulatory infrastructure, by, for example, setting up the Office of the Director of Corporate Enforcement and the Irish Auditing and Accounting Supervisory Authority. In both cases, existing regulatory structures were not working or not working well enough. Reform was necessary. And reform has been accomplished. Business regulation in the field of company law feeds into improvements to our national competitiveness, through high standards of corporate governance and brings about a stable and predictable environment in which entrepreneurs can establish businesses, investors can invest, creditors can lend and the interests of the employees, consumers and other stakeholders are protected. Low standards of corporate governance cause serious damage, not just to the immediate victims of the misconduct — the investors, creditors, employees and pensioners of scandal hit companies, but to confidence in the operation of markets and with follow-on damage to whole economies.
Commercial regulatory regimes are just one part of the picture. The Government is very conscious of the need to control costs in order to maintain competitiveness. As part of the new Social Partnership agreement, Towards 2016, the Anti-Inflation Group has been re-activated to help exert downward pressure on inflation. Forfás, under the aegis of my Department, have published research such as the Statement on Prices and Costs, and are due to publish further work in this area over the coming weeks. Many other factors influence the cost of doing business in Ireland, for example the cost of energy. Energy costs are predominantly a global issue, as they are driven primarily by oil prices. The development agencies under my Department are monitoring the issue of energy costs and the impact of such costs on the overall competitiveness of companies.
To the extent that a regulatory change is identified as being necessary to foster competition, to improve competitiveness and reduce cost bases, such change will be considered and effected if warranted.
