I move:
That Dáil Éireann is of the opinion that the tourist industry is failing to make an adequate contribution to the national economy, due to the failure of the Government with regard to prices, its introduction of penal taxation and its failure to give guidance and adequate support to the industry.
The end of the tourist season is the appropriate time to discuss the tourist industry. We will have an opportunity to examine our successes or failures and prepare ourselves for the next season. After last year's budget we on this side of the House feared the effects that the increases in the price of petrol, drink, tobacco and tea imposed by the budget would have on the tourist industry. Our fears were justified and following the budget we tabled a Private Members' motion at that time, that the House deplored the actions of the Government which had reduced the competitiveness of the tourist industry and we recommended that subventions necessary to restore competitiveness be provided.
On that occasion some speakers claimed that there was an upsurge in the tourist market and predicted an increase in tourist numbers for 1976. It was stated then, also, that bookings in April, 1976, were at a much higher level than was the case for the same period in the previous year. However, an examination of the Bord Fáilte monthly tourist statistics for August, 1976, discloses that the number of tourists from Britain was 47,000 fewer than in the previous year or 88,000 fewer than the target of 858,000. The actual number was 817,000. An increase of this nature in itself should be sufficient to cause a good deal of concern to those involved in the promotion of tourism. The same statistics show that there was a marginal increase in the number of tourists coming from North America. The increase was from 256,000 to 269,000 or, approximately, 5 per cent. So far as Continental tourists were concerned there was an increase this year of about 11 per cent—from 188,000 last year to 207,000 this year. There was no change in the numbers coming from Northern Ireland or the number of day trippers to this country. But we must take a very serious view of the fall-off in actual numbers and of the failure to reach targets or, indeed, to be anywhere near the targets set.
I notice from the Order Paper that the Government have tabled a motion counter to the one I have put down. In this they claim to have put tourism on a better footing than was the case before they assumed power almost four years ago. It is difficult to imagine anyone involved in the tourist industry being prepared to accept the Government's claim in this regard. On the contrary, those in the industry consider themselves to have been abandoned by the Government. There is no foundation for the Government's claim to have improved this industry. Rather, their performance in this sphere can be likened to the case of a man, having had too much to drink and setting off for home in his horse-drawn cart. The reins fall on the road but everything will be all right provided the horse knows the way home.
There is no control by the Government in regard to the direction in which the tourist industry is going. They are to be blamed for not influencing in any way the rate of progress in the industry. The fact that the industry is not in even more serious difficulties is a tribute to the imagination, the dedication and the ability of those involved both in the public and the private sectors of the industry. However, the morale of those people is low now. They have not been receiving any guidance.
In regard to improving the situation the Government should consider it a priority to designate the tourist industry as a service industry. Tourism is an export industry. It contains all the benefits for the economy that any other export industry contains but has the advantage of not requiring the importation of vast quantities of costly raw materials. By any reasonable test, tourism is an export industry but it is not credited as such in regard to matters of taxation. It is only fair and just that it be given this classification which would go a long way towards off-setting the ill-effects of the Government's tax measures which are proving so detrimental to the industry and to all those employed in it. There is no valid reason for refusing to comply with the request for this classification of the industry apart from the consideration that the Minister for Finance might not be able to hive off as much from the industry during the next few years as has been the case up to now. However, I am of the opinion that the expansion that would result from a designation on the lines I have suggested would prove of real benefit to the Exchequer in the long term.
One can only come to the conclusion that the Government's actions in relation to tourism are based on the policy of expediency. The Minister for Finance is making desperate efforts to grab money from any source even if his policies will prove in the long term to have ill effects for all of us, to grab some more money in taxes to help them out of a situation which, to a great extent, was created by themselves. As far as tourism is concerned it is a case of the Government killing the goose that lays the golden eggs.
I should be very interested to hear in the Minister's reply what are his proposals for the industry following the year that has passed. He should certainly look at the employment potential of the industry because earnings from tourism filter through our economy in a dramatic way. They have a multiplier effect and have widespread benefits. It has been said on good authority that 10 per cent of banking and insurance business here results from tourism and about 20,000 jobs in the wholesale and retail trade; that it gives about 4,000 jobs in the entertainment field; 7,000 jobs in the textile industry and about 2,000 jobs in the drink and tobacco industry. Viewed from the agricultural side—and at the present time it would be well if we could use more of our agricultural production—I have seen figures given in respect of usage of agricultural produce by the tourist industry and it was estimated that it absorbs about 2.5 million gallons of milk per year, 36 million eggs, 2,000 tons of butter, 6,000 tons of meat and 15,000 tons of vegetables.
When one examines those figures, especially those for meat and milk, in the light of our present situation and in the light of the earnings of tourism and the form of revenue it brings in, one realises that support for the tourist industry means, first and foremost, jobs, not only jobs available on a large scale in the tourist industry and related industries, but also filtering down through the whole economy. The fact that up to the present 112 hotels have been sold since 1973 has resulted in a loss of about 3,500 bedrooms, about 15 per cent of the total available. It is estimated that there is a direct loss of about 2,500 jobs. This is only in one section of the tourist industry. Pronouncements made last week at a seminar are worth repeating: it was stated that for every 15 extra American or 37 extra British tourists persuaded to visit Ireland, one new full-time job is created.
If the tourist industry achieves the target set for 1977, it was claimed that approximately 3,500 additional jobs would be created. This is why we must make every effort to hit the target. If we had fulfilled the projection for 1976, the industry would not be in its present situation. These reasons alone, ignoring the help to our balance of payments given by such earnings, make it vital that some positive action be taken to help tourism. No other sector of the economy I think is as capable of creating jobs in such numbers and with such speed. It has been said that at present tourism generates about 110,000 jobs. I think, if given Government backing to meet the target and accelerated growth, it could generate as many more jobs in the next 10 years. That is why I think it is so important to assist the industry at present.
A number of positive proposals have been repeatedly submitted by members of the tourist industry to alleviate their present problems. Of these one was duty-free facilities between Britain and Ireland; another was a proposal which we have continuously urged since the last budget and it is the granting of petrol concessions for tourists by way of voucher at the point of entry. Had this been introduced when first suggested, certainly we would not have had the fall-off in British tourists that we had in the past year. It was also proposed that there should be export tax relief for certain sections of the tourist industry and it was suggested that a tourist credit corporation be set up to aid the industry to raise capital at favourable rates at a time of vanishing profits. It was suggested that special attention be given to transportation and that a national selling agency should be formed. Those suggestions merit careful attention.
I think there should be careful definition of the national interest, the tourist interest and the airline interest in regard to scheduled and chartered flights. The current constraint on Aer Lingus to show a profit might not be in the national interest. In their efforts to minimise losses they may be forced by the Minister into a situation where they come dangerously close to inhibiting rather than aiding the influx of tourists. At present their aim seems to be to create profits while I think it should be geared to generating the maximum number of tourists for this country.
Another matter which has been much discussed and which requires urgent and serious consideration is the concept of a national tourism selling agency. Such an agency would involve not only the public sector but also the private sector and it probably would be the perfect vehicle for the co-ordinated market of Ireland as a tourist centre. I notice that in the papers the Minister is quoted as saying in regard to the Cork Harbour development plan that there would have to be central co-ordination so that the best national use could be made of available port resources and available finance. I would ask him if he would use the same argument to sustain a proposal for a national tourism selling agency for the tourist industry.
Once again it could be said that any aid given to an industry which enables it to increase the numbers coming into the country would automatically increase the number of new jobs available. The jobs, it should be noted, would not be jobs in the tourist industry alone but also in all facets of the economy, in the services, in food, in entertainment, and all of those would be required by the tourist organisers. As everyone knows, at present jobs for our people are desperately needed and the tourist industry has the potential to make many jobs available.
The two best-known benefits of tourism are foreign earnings and employment. Our share of the total export earnings has declined somewhat over the last few years in real terms, but tourism is still a major earner of foreign exchange and last year we earned around £160 million or 10 per cent of the total current account earnings. About half of this was in sterling, and with our record of public borrowing abroad and a widening balance of payments deficit it is very obvious that tourism has a renewed and increased significance in this field.
Many export industries require a high level of imports in order to manufacture their export products. This is particularly true of some intensive industries such as the chemical industry. Also, many of those industries are wholly or partly foreign-owned so that the profits to non-resident parent companies represent a further outflow of overseas earnings. Tourism has a very low level of import requirements, estimated at something in the region of 9 per cent, and also has predominance of Irish ownership and control. This is not surprising, because, after all, we are selling Irish goods and services and their Irishness is a large part of their attraction. We also have sufficient expertise and sufficient plant in the tourist business and we have seemingly the know-how. What remains is to attract those additional people to make use of all that.
There are other ways in which tourism contributes to the national economy. For instance, for every £1 spent in Ireland by a foreign tourist it is estimated that 68p is generated as Exchequer revenue. Last week it was stated that the State earned over £85 million from foreign tourists last year. This multiple return of investment certainly should fully justify State expenditure on tourism. Tourism also plays a major role in the field of regional economic imbalance, and when we link those strands together we have one irrefutable fact and that is that despite the present setbacks that tourism has faced, it is still a major force for economic growth. The total foreign and domestic tourism expenditure contributed 6½ per cent of last year's GNP; 4½ per cent of this from foreign tourism. If we take the multiplier effect of tourism it would be responsible for about 2¼ per cent of the GNP and if we have a 10 per cent increase in real tourism earnings it would generate a large increase on that. It might not seem a great deal but if we consider that the GNP increased by only 19 per cent between 1968 and 1975 and that it is forecast to increase at best by about 4 per cent this year—it fell by something like 4 per cent between 1974 and 1975—we can appreciate the potential of tourism. That is the way we should view it.
Selling tourism is a highly competitive field of endeavour and the methods employed to sell tourism with decent facilities are important. The selling of tourism is very costly and we should ensure that the money invested in its promotion would yield the best possible result to the largest number of people possible. While more money is needed we should have a look at the present structure, at the present agencies involved in the selling of tourism. At present it is sold by semi-State and private interests. It would be good if we could say that those individual interests have worked well to yield the greatest result to the economy. Unfortunately, that has not always been the case. A certain conflict arises between State, semi-State and private interests, and there is no doubt that the national interest suffers as a result of that. We have the National Tourism Council and they, I think, have not yielded the return that had been hoped for. That to a great extent is a conflict of interests. A serious examination of the functions of the various State and semi-State agencies and their association with private interests must be undertaken and a working formula devised because we cannot permit conflict to harm the development of the tourist industry.
A major example of this conflict has been the question of charter flights. When we discussed this last it was suggested that the Northern troubles posed the greatest threat to tourism. One of our Ministers, the Minister for Posts and Telegraphs, recently spoke rather unwisely when he said that there were murderous gangs infesting our island. The Government were using the Northern troubles, world economic conditions and decisions in Brussels as an excuse. The Northern troubles have been used continuously as an excuse for lack of progress in the tourist industry. Many of our visitors from Britain are well acquainted with conditions here and clearly understand that the troubles are limited to the north-eastern part of the country. I do not believe those troubles are creating the problems they did a few years ago. This view was reinforced by a statement last week by the deputy director general of the British Tourist Authority when he spoke at the National Tourism Council seminar in Cork. He gave it as his opinion that Ireland was losing British tourists because a holiday here was becoming very expensive, rather than because of the troubles in the North. He went on to give as an example the fact that a British holidaymaker could have a two weeks' holiday in Spain for £65. How far would that go in one of our seaside resorts?
Because of the high cost of promoting tourism it is wasteful to have a multiplicity of promotion campaigns in various countries. Co-operation in promoting tourism is more effective and economical than a series of individual efforts. Even with a rationalisation of the functions of various State and semi-State agencies and the maximum amount of co-operative effort within the private sector, we would still not have achieved the ideal structure for selling tourism. In this highly competitive and costly business, our best hope would be a national selling agency to embrace all those interests. Such an agency would be the ideal vehicle to market Ireland as a tourist centre. At present when nations must join together in larger groups, such as the EEC, to be effective, the combining of all functions in one agency makes good sense. Because of the conflict of interests mentioned, the setting up of a national tourist agency would require leadership by the industry and firm backing by the Government.
I raised by way of parliamentary question some time ago the reports which appeared in the Evening Press on 2nd November, 1976, and in The Irish Times for 4th November, 1976, dealing with travellers' objections to conditions. This takes on an added significance when we look at the number of tourists from Britain. According to Mr. Hogan, chairman of the Federation of Irish Societies in Britain, addressing a meeting in London attended by members of his committee and representatives of various travel organisations, the Irish in Britain are treated as second-and third-class citizens when they travel to Ireland. I asked that this be fully investigated and if those accusations did not stand up to examination, that should be made known and the results spelled out.
Again I ask the Minister to consider those submissions and even at this late stage to do all he can to ensure that the people in the tourist industry will be in a position to meet the targets which are set for next year and the years following and that we will not be coming back to this House pointing an accusing finger at the Government and the Minister in charge saying: "You have neglected an aspect of our economy which could be a good money earner and job creator." It is important that the Minister look at this as a matter of urgency.
