Government blamed for rise of ‘rip off Ireland’

OPPOSITION parties have blamed the Government for contributing significantly to Ireland’s status as the most expensive country in the European Union for many everyday goods and services.

Fine Gael Enterprise spokesperson, Phil Hogan, said a new report by the National Competitiveness Council (NCC) confirmed the Government’s failure to control costs and prices over the past five years.

Mr Hogan said the NCC study provided final proof that the Government was the main culprit behind “Rip-off Ireland”.

The report showed consumer inflation in Ireland exceeded the eurozone and EU rate for the past seven consecutive years.

Mr Hogan said this period coincided with the same period that the current Fianna Fáil-PD coalition had been in power.

“This Government has been stoking inflation with a lethal combination of stealth taxes and increased business charges,” said the Fine Gael TD.

He called on the Government to conduct an immediate review of the terms of reference for regulators as he claimed the Irish experience of regulation had generally resulted in higher prices.

The Green Party’s finance spokesperson, Dan Boyle said the findings showed there were significant risks for the future of the economy due to Ireland’s high cost base. Mr Boyle said the economy was pricing itself out of business and this was “the real legacy of Charlie McCreevy’s tenure as Minister for Finance”.

Overall, the NCC report revealed that the price of goods and services for Irish consumers rose by 17.5% over the past five years compared to just 8.4% in the 15-country EU. Figures contained in the report also indicate prices under the control of the Government contributed to 45% of all inflation over the period.

Although the NCC welcomed the Government’s role in bringing about a fall in insurance costs in the past year, it also blamed decisions by the coalition and State agencies and regulators as contributing adversely to inflation.

Prices for goods and services either provided or regulated by the State, such as health, education and telecommunications, have added 3.4% to inflation, while increases in taxes have added a further 4.5% over the same period.

In particular, the NCC noted that the price of electricity for industry had soared by 40% over the past three years.

Although inflation fell significantly in the first part of 2004 to 1.3%, NCC chairman, William Burgess, said it had accelerated again in recent months to as much as 2.7%.

In order to control the risk of further inflation, the NCC has urged the Government to avoid any large increases in the forthcoming budget. It also recommends better regulation of key sectors such as energy, telecoms and professional services, to ensure greater competition.