Written Answers. - Competitiveness in Industry.
Mary Harney
Ceist:
26
Miss Harney
asked the
Minister for Enterprise and Employment
the steps, if any, he intends to take to make labour intensive industries such as Packard Electric more competitive; and if he will make a statement on the matter.
[10987/95]
The cost of operation is a crucial competitive factor for industry in Ireland and in particular for industries like Packard Electric. The need to improve the environment for business and to improve competitiveness was highlighted by the Industrial Policy Review Group, chaired by Mr. Jim Culliton on "Industrial Policy for the 1990's".
Against this background, in its last two budgets the Government has brought about reductions in PRSI for the lower paid. The Government has also recognised the need to lower the cost to the employer of recruiting and employing staff. By applying a lower rate of employers PRSI rates to higher earnings levels and further reducing the tax wedge i.e. the difference between the value of take home pay and gross labour costs, this Government is endeavouring to make labour-intensive industries more competitive.
In addition, a priority of this year's Finance Act has been to focus on the plight of the lower paid and to further reduce PRSI on their earnings. All of these changes have a significant impact on the cost competitiveness of labour-intensive industries.
I have also established a new Task Force for Industry Adjustment to identify areas of business at risk from competitive forces and to propose competitive strategies. This task force has commenced a process aimed at bringing about changes — particularly in its traditional manufacturing sectors — to encourage firms to prevent job losses and secure existing employment. The Task Force, which includes ICTU and IBEC as well as the State agencies, is developing a targeted initiative aimed at areas where avoidance of job losses requires major change and adjustment. I hope that they will have completed their process in the coming months.
In addition, IDA Ireland and Forbairt already work closely with their existing clients to identify at an early stage Irish or Irish based companies which are in danger of becoming uncompetitive.
There are a number of ways in which IDA Ireland and Forbairt can help companies improve their competitiveness including: working with companies to achieve ISO accreditation; introducing World Class Manufacturing standards; establishing R & D functions; working with companies to keep overheads down to ensure that the cost of manufacturing can compete internationally; close intervention with companies who wish to become sub-suppliers to major multi-national enterprises. Forbairt also provides significant support to indigenous companies under the Management Development Programme.
I would urge all labour intensive companies which are experiencing competitive pressures to review these IDA and Forbairt measures and to contact these agencies with a view to using them to increase their cost competitiveness.
