Ivor Callely
Ceist:79 Mr. Callely asked the Minister for Finance his views on the measures required to sustain the economy here to ensure continued competitiveness; and if he will make a statement on the matter. [24829/01]
Written Answers. - Fiscal Policy.
As a small open economy with a high degree of integration into the global economy, economic conditions and living standards in Ireland are essentially determined by our ability to trade in international markets and to capture an adequate share of mobile investment with its associated high productivity jobs. The current downturn in the domestic and global economies will require everyone to adjust to the new economic conditions to sustain Ireland's competitiveness.
In this context, responsible cost developments must be a first priority. The terms of the Programme for Prosperity and Fairness must be adhered to and business must contribute to lowering inflation by avoiding margin-building. Social partnership provides the best foundation for economic stability and social progress during the current uncertain economic environment and into the future. Since the first of the current agreements came into effect, total employment has risen by 600,000, or 55%, and disposable incomes have also risen very significantly in real terms.
Tackling the existing infrastructural deficit will also improve competitiveness over the medium term. Transport and other infrastructure-related deficiencies impose significant additional costs on the economy. In this regard, it is important that these key elements of the programme of capital expenditure set out in the National Development Plan 2000-2006 be kept on course. This must be achieved, however, within a sustainable fiscal framework, a crucial factor in maintaining confidence of investors and consumers.
At a micro level, measures aimed at increasing productivity can also boost competitiveness, by reducing the unit cost of producing goods and services in Ireland. We must continue to implement measures which boost productivity at the firm level, and more generally, for example, by continuing to improve the skills of the population through education and training.
Regulatory reform must also remain a priority. Promoting competition, eliminating barriers to market entry and reducing red tape can all boost competitiveness by reducing inflation, enhancing efficiency, increasing innovation and reducing costs faced by firms.