Dáil Éireann Debate, Tuesday - 17 February 2004
203 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the reason Ireland has become uncompetitive despite having an apparently low inflation rate; and if she will make a statement on the matter. [5075/04]
Amharc ar fhreagraThe most recent inflation figures from the consumer price index show an inflation rate of 1.8% in January 2004. This is significantly lower than the 5.1% rate of increase recorded in February 2003. The reduction in the rate of inflation, is encouraging and is in keeping with the objective set in the partnership programme, Sustaining Progress. The goal of Sustaining Progress is to create a virtuous circle of low inflation, moderate wage growth and higher productivity, thereby providing a firm competitive business environment for Irish industry.
The Government recognises the importance of ensuring that Ireland remains competitive as a guarantee to future economic success and to correctly position ourselves to take advantage of improvements in the global economy. The annual competitiveness report, 2003, produced by the National Competitiveness Council, while confirming many of Ireland's strengths, highlighted the many challenges we face and the difficult choices we have to make in the present uncertain global economic environment. Strengthening competitiveness requires a number of actions and both the Government and I are fully committed to taking the appropriate measures as I have stated on previous occasions.
The Government is continuing to take steps to strengthen competitiveness across the economy and to implement specific measures to tackle cost pressures in key areas for Irish industry. One such area is insurance. As the Deputy will be aware I am in the process of implementing a programme to fundamentally reform the insurance market to tackle the issue of high premiums, which have had a detrimental effect both on consumers and on business competitiveness. I am committed to continuing with the reform programme and bringing about improvements in the functioning of the insurance market. A key aspect of this is the establishment of the Personal Injuries Assessment Board, PIAB, under the Personal Injuries Assessment Board Act 2003. The PIAB is expected to be up and running in the near future. It will reduce the litigation costs associated with delivering compensation.
I have stated on several occasions that the principal and most sustainable method for reducing costs and maintaining them at an acceptable level is to increase competition in all sectors of the economy. We cannot afford to have sheltered sectors of the Irish economy immune from price competition. Competition in all sectors must be encouraged to ensure goods and services are provided at an efficient and affordable price. The powers and resources of the Competition Authority have been increased substantially to enable them to effectively tackle cartels and abuses of dominant position and to recommend regulatory reforms to improve competition in key markets.
