Call to end public sector inflation

THE Government must commit to obtaining zero inflation in the public sector for the next three years.

This is according to the Irish Exporters Association (IEA) which said it would be key to ensuring Ireland’s exporting sector will continue to grow and become more competitive in international markets.

The point was made in a submission by the IEA to Taoiseach Brian Cowen.

Chief executive of the IEA, John Whelan said such a commitment by the Government to changes in areas such as energy, waste management, local government, public transport, health and education would “go a long way towards underpinning a target of 2% maximum inflation nationally and a resultant similar national increase in the pay talks phase of Towards 2016.”

He said all exporters, in manufacturing and services, agree there has been a loss of competitiveness over the past 18 months brought about by turbulence in financial markets and the weakening of the dollar and sterling against the euro.

The currency changes are impacting most heavily on indigenous Irish exporters, say the IEA.

It said Irish exporters must compete against US-based companies, both in the US and elsewhere, who have in the past 18 months developed a 20% currency advantage.

Mr Whelan said that the Government can make a difference in the short term by introducing toll-free access on a rebate basis to export goods.