Report warns that rising cost of doing business in Ireland could damage recovery

Richard Bruton says modest pay rises are fair when businesses are doing well - but any increases must be reasonable

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Jobs Minister Richard Bruton | Image:

A new report is warning that the rising cost of doing business in Ireland could damage our recovery.

In their Cost of Doing Business in Ireland report, the National Competitiveness Council (NCC) says the economy is under threat from a hike in property and insurance prices.

According to the report, Irish businesses are paying 80% more than the eurozone average for small and medium sized commercial loans.

The NCC, which advises the Government on economic trends, also says that the return of spiralling property prices poses a risk to the economy as a whole.

The report is critical of the high cost of childcare, insurance, transport, legal costs and energy - and warns of the dangers of increasing levels of industrial unrest.

It found that consumer prices in Ireland are 20% higher than the eurozone average, and also says that wage hikes need to be examined.

Richard Bruton, the Acting Minister for Jobs, Enterprise and Innovation, says modest pay rises are fair - but they must be reasonable.

Speaking to Newstalk Breakfast, Minister Bruton explained, "I think people will expect, if they are seeing their business doing well, that they will get a share in that. And that is absolutely right - we aspire to higher living standards.

"But I think the warning is that we cannot undermine our competitive edge overseas by making either price increases or wage demands that outstrip our ability to improve what we're offering," he added.