Tuesday, 10 February 2004

Ceisteanna (81)

Bernard J. Durkan


152 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has undertaken an investigation into the lack of competitiveness in the Irish economy which seems to originate with goods or services not contained in the CPI and consequently not reflected in inflation rates; if a scientific evaluation can or will be undertaken on these issues; and if she will make a statement on the matter. [3807/04]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Enterprise)

Both the National Competitiveness Council and the Competition Authority undertake on a continuous basis investigations into the competitiveness of the Irish economy and the level of competition within in it. These investigations highlight the key areas that require attention to enhance Ireland's competitiveness and economic performance.

The National Competitiveness Council in its annual competitiveness report 2003, benchmarked Ireland's performance for 128 key competitiveness indicators against 15 other advanced countries. Though it does not rank countries as a whole or assign a single competitiveness position in regard to competitiveness, it does undertake a comprehensive examination of Ireland's competitiveness under these 128 key indicators. The competitiveness challenge 2003 brought forward the findings from the benchmarking report and offered recommendations to Government to improve national competitiveness. Examples of these recommendations included encouraging the Competition Authority to prioritise and expedite its studies, the need to roll-out national broadband infrastructure and the need to strengthen the research capacity of the third and fourth level system.

The Competition Act 2002 sets out basic competition rules and gives the Competition Authority the power to investigate breaches of the law and where necessary to bring civil and criminal prosecutions. The authority uses its enforcement powers to act promptly and rigorously to tackle anti-competitive behaviour such as collusion between firms on prices, output and market share as well as abuse of market power by firms. By taking action against these anti-competitive practices, the authority is protecting the interests of consumers and enhancing the competitiveness of the Irish economy.

The authority is currently involved in investigative work in the insurance, banking and professional services sectors. In regard to professional services, comprehensive studies are being undertaken of eight individual professions, namely medical practitioners, veterinarians, dentists, optometrists, barristers, solicitors, engineers and architects.

The consumer price index, CPI, is designed to measure the change in the average level of prices, inclusive of all indirect taxes, paid for consumer goods and services by all private households in the country and by foreign tourists holidaying in Ireland. Over 55,000 prices are collected for a representative basket consisting of 613 headings, which cover over 1,000 different items in a fixed panel of retail and service outlets throughout the country. Expenditure on capital assets, such as property and investments, gambling and certain other activities are, however, excluded. To ensure that the selection of goods and services reflects the average spending patterns of consumers, every five years the Central Statistics Office undertakes the household budget survey, which is a comprehensive study of consumer spending patterns and makes changes to the CPI accordingly. The last household budget survey was carried out in 2001. The CPI gives a comprehensive overview of trend and price changes in Ireland. The most recent inflation figures from the CPI show an inflation rate of 1.9% in December 2003. This is significantly lower than the 5.1% rate of increase recorded in February 2003.

My Department and the agencies under its aegis will continue to be proactive in promoting greater competition through policy measures at EU and national levels and through the powers given to agencies such as the Competition Authority. Competition is essential as it stimulates innovation and efficiency among business. This enables consumers to buy goods and services at the best possible price thereby enhancing the economy's overall national competitiveness.