The National Competitiveness Council has warned that Ireland's position as the second most expensive country in the euro zone has undermined the ability of Irish companies to compete in international markets.
Its Annual Competitiveness Report launched today says the Government's immediate priority should be to slow the growth in prices and costs.
Among the measures it proposes are an end to the cap on large retail outlets, a reconsideration of the ban on below-cost selling, and new powers for the Competition Authority.
NCC chairman William Burgess said that despite an impressive economic performance this year, there were considerable pressures on our competitive position.
As well as prices and costs, he pointed to intense competition from new EU members and Asian countries for exports and inward investment.
On developing innovation, the NCC calls for initiatives at pre-primary education level to target areas of social disadvantage. It points out that only 77% of Irish 17-18 year olds finish secondary education, compared with 100% in Denmark. The report also calls on the Government to continue current levels of investment in research and development.
The NCC says there are growing concerns about the costs of compliance with national and EU regulations in a number o areas. It wants recent company legislation - such as the Companies' (Auditing and Accounting) Act 2003 - to be reviewed, as new rules were creating significant problems for start-up companies.
The report calls for the Government to avoid increases in VAT and excise duties in the budget. It also wants a comprehensive and independent review of Government spending.
