Dáil Éireann Debate, Thursday - 16 October 2014
3. Deputy Stephen S. Donnelly asked the Minister for Jobs, Enterprise and Innovation in view of Ireland’s continued fall down the competitiveness rankings, the policies being developed to improve our competitiveness relative to countries with which we compete; and if he will make a statement on the matter. [39381/14]
Amharc ar fhreagraThis question regards our competitiveness, which is a mixed bag. With regard to Ireland's competitiveness index, relative to ourselves, we have done significantly better since the start of the recession, with factor input costs decreasing. Compared globally, however, we are doing worse every year. The World Economic Forum, WEF, places us 27th this year, down from 22nd in 2007. While we are getting more competitive relative to ourselves, we are rapidly becoming less competitive relative to other countries. What is being done in this regard? Are there targets? Is the Minister satisfied with our position and trajectory?
It has been well catalogued that Ireland lost a considerable amount of competitiveness between 2000 and 2010. Since 2011, Ireland's international competitiveness rankings have improved in the International Institute for Management Development's World Competitiveness Yearbook from 24th to 15th and from 29th to 25th in the WEF global competitiveness report. This is the third consecutive year that our position has improved in the WEF rankings and contrasts with a period of declining competitiveness experienced in the years up to 2011.
According to the WEF, Ireland ranks ahead of other advanced countries in categories such as institutions, labour market efficiency and the goods market. Ireland's scores are weakest in the macroeconomic environment category, which is driven by Government debt and borrowing. These weaknesses are being addressed through Government macroeconomic policies and the ongoing focus on improving the performance of financial institutions. At the report's launch, the WEF noted that Ireland's ranking was improving due to the structural reforms that were under way. Many of these messages were echoed in the recent annual EU member states competitiveness report, with Ireland named as one of only four member states with high and improving competitiveness.
Competitiveness has been a key theme in the Action Plan for Jobs since its inception. The plan has developed initiatives across the spectrum to improve competitiveness, including reforms to make wage-setting mechanisms more adaptable and measures to improve access to finance, to make it easier to establish, operate and expand a business, to deliver a supply of competitive skills to growing sectors, to reduce business costs and to enhance the ease of doing business.
The National Competitiveness Council, NCC, has been reconstituted with the addition of new industry partners. Recognising that competitiveness is a national economic priority, we have put in place a process under which the Cabinet committee on economic recovery and jobs considers a report on competitiveness on a quarterly basis. This has placed an enhanced focus on the practical changes that can be implemented to improve our national competitiveness. As in previous years, measures to enhance our competitiveness will be a core element of the Action Plan for Jobs in 2015.
I thank the Minister for his reply. The NCC's figures on our global rankings differ slightly from the Minister's. They do not show us moving at all. According to the Forfás report, for example, we were ranked 21st or so at the start of the crisis and are now 28th. I accept the Minister's point that some of the decrease has been driven by the macroeconomic instability, but examining the microeconomic drivers shows a worrying decline in the World Bank's ease of doing business rankings, which are entirely on the micro side and cover such matters as red tape, regulation and so forth. From memory, it ranked us at seventh or eighth in the world in 2007, whereas we are 15th or so now. We are sliding down the macro and micro competitiveness rankings.
I accept that the Minister has taken real actions. Is he happy with the trajectory? Could more be done? Are there large ideas or policies to which he did not refer and that have not been introduced yet that could be implemented within the next year and a half?
It is true that we have improved in the competitiveness rankings in the past three or four years. Compared with where we were prior to the crisis, much has changed, including in our public finances. There has been tangible progress in certain respects. Unit wage costs have improved relative to our competitors by approximately 20% and property costs have improved dramatically. We have improved across a spectrum, but there are always other areas in which we could improve.
The Deputy was right to draw attention to the ease of starting a business, which is a specific focus of ours. We are ranked 115th for dealing with construction permits and 100th for getting electricity connections, although we believe there may be some inaccurate reporting of the ease of getting some of these services. However, we must improve. We have put teams in place to consider some of the matters in respect of which we are at the wrong end of the spectrum. We are taking steps to address them. We are good in other areas. For example, the Revenue Commissioners come out of the process high on the list and the Companies Registration Office, CRO, has reduced by half the time it takes to establish a company. We are making progress and will focus specifically on all of the areas that affect start-ups.
I have not checked to see whether the next matter I wish to raise is covered in the budget, but the Competition Authority is under-funded. As we all know, there is cartel behaviour in some sectors, but I will not go into the allegations. The troika showed us professional fees decreasing during the recession with one divergent line increasing, namely, legal fees. There appears to be an opportunity to create a robust Competition Authority. According to previous heads of the authority who spoke freely after leaving, it was hopelessly under-resourced to do the job that needed to be done. Has more funding been provided to the Competition Authority in the budget? If not, will the Minister make a case for same in future?
I am glad to report that we received sanction last year to strengthen the Competition Authority. It is taking on new enforcement staff and ten effective resources. This year, we also strengthened the Office of the Director of Corporate Enforcement, ODCE. As such, and in sympathy with the concerns expressed by the Deputy, we have strengthened both agencies that ensure good corporate and market performance.
