I move:
That in view of the current unemployment situation Dáil Éireann calls on the Government to establish without delay the National Development Corporation and to provide it with £20 million capital resources for investment in employment creating activities in 1982.
It is becoming very apparent that Ireland is facing an industrial crisis of major proportions. This has manifested itself to the public eye more by the rapid rise in the numbers on the live register in the recent past. It is a matter that was of great concern to the previous Government and the decision by that Government to establish the National Development Corporation was a reflection of the concern which that Government showed in regard to tackling this problem. It can be clearly observed in our history that Governments down the years played an active part in promoting employment and my party down the years supported the concept of a mixed economy where the private enterprise sector was encouraged to progress and prosper and, where necessary, the State sector was seen to play a positive role in ensuring State participation in commercial and non-commercial and industrial activities. That was an important contribution to the economic wellbeing of the nation. I can immediately call to mind a few of the ventures which my party were involved in starting up and supporting. The ESB, the Irish Sugar Company and the Voluntary Health Insurance Board are only a few of the State bodies which my Government actively supported in their establishment and promotion through the years. There are many more since then and it has become clear that the State have an active and positive role to play in the development of our economy.
My party certainly support free enterprise and the role of private investment is seen as of paramount importance to our prosperity. Therefore, it is important that we ensure that the environment for industry, which includes agriculture and agriculture-based industries, and the environment for commerce is such as to promote progress and prosperity in those areas which would result in the re-attainment of an acceptable level of employment. This is not now the case and there are some basic reasons why our economy has not been able to sustain an acceptable level of employment in recent years.
I would identify immediately the international recession which has become evident again since 1979 and which was evident in the mid-seventies as a result of the energy crisis. We have had about three energy crises in the past eight years which have done immense damage to the fabric of our industrial structure. The international recession, which is now affecting Europe and America especially, has done great damage to our potential as an exporting country and has also caused a sharp downturn in investment in Ireland by companies from abroad. Of course this is outside our control but it is a development which we should clearly understand and we should take the necessary steps to ensure that our own industry is aided in every possible way so as to preserve our own industrial structure intact and so that we shall continue to have an acceptable level of industrial investment here.
The other main reason why industry here is not prospering is the rate of domestic inflation. In 1981 it ended up on an annualised basis slightly in excess of 20 per cent. It is important to note that level is seriously in excess of the levels prevailing within the countries of fellow-members of the EEC. I should like to quote from a publication entitled European Economy No. 2, February 1982, Supplement A which is published by the Commission of the European Communities and which gives a table of consumer price indices in regard to 1977-81. The most extraordinary aspect of it is that the rate of inflation in Ireland is indicated in this table as 23.3 per cent. This was in fact the annualised basis up to mid-November 1981; it was slightly lower than that. Nevertheless, the important thing is the comparison which one must make in order to see the damage which inflation in Ireland is causing to industry and to our prospects for further industrial investment in coming years. That rate in Ireland of 23.3 per cent can be compared, for instance, to a rate of 8.1 per cent in Belgium or in Germany a rate of 6.3 per cent, in France a rate of 14 per cent and in the United Kingdom 12 per cent. I have chosen these countries as ones to which we export in substantial quantity and volume. That comparison indicates quite clearly that our inflation rate is unacceptably high in the context of industrial development. It must be obvious that with such a high domestic inflation rate we will outprice ourselves on the markets which are our main customers, and these are the countries to which I have referred. If we insist on pressurising the monetary system, which will result in continued high inflation levels, our prospects for industrial progress are not good. They will be seriously damaged if we allow this situation to continue. It has been quite clearly identified, for instance, in the winter Quarterly Report of the Central Bank of Ireland that the pressure caused by the budgetary policies of the last few years has been the main determinant of this high level of inflation.
The level of budget deficit financing is simply not acceptable. Unless the present Government have a will, we will have a bleak eighties so far as industrial progress and employment are concerned. Unless the present Government are committed to reducing the budget deficit to acceptable levels and eventually to eliminating it, one cannot have confidence in Ireland's future as a land in which foreigners will invest money in industrial enterprise. It is well to say that here rather than to dodge the issue. If we are to remain attractive to foreign investment we must first put our own house in order.
A second item, which again may not be popular for a politician to mention but which is a fact, is that our excessive income increases in the past few years are slowly making us uncompetitive. Our salary and wage rates are slowly but surely approaching those of our competitors, but the unrealised fact is that our productivity is not on the same high level as our competitors', nor indeed is our productivity on a level comparable with the countries to which we are looking for capital investment. Unless we come to our senses it will be very difficult to continue to attract capital.
The result of the international recession and our domestic inflation rate has been a steady increase in the numbers on our live register in the past few years. For instance, at the end of December 1979 the seasonally adjusted live register series showed 84,900 on the live register; at the end of December 1980 the figure had increased to 118,500, and in December 1981 to 137,400. I am mentioning that progression because it shows a steady and deteriorating situation.
It is also worth noting that the makeup of this unemployment increase is balanced seriously towards young people. For instance, people under 25 years of age on 24 July 1981, male and female, amounted to 26.9 per cent of the numbers on the live register. That is a serious situation, especially in regard to school leavers coming on to the market, who will have less opportunity for employment than was the case ten years ago.
As a politician who has survived two general elections in seven months I could not but be aware of the extreme frustration felt by young people who have great ambitions for themselves — ambitions which we would share for them. It was most distressing to encounter young men and women who wanted to work, to pursue a career, to become economically self-sufficient and who found that successive Irish Governments were unable to give them the opportunity necessary to become full members of society. That is something of which we cannot be proud and for which we have a responsibility. We have failed in that responsibility. I could say that it is Fianna Fáil's fault and I am sure that they would say that it is the fault of the Coalition Government. That is irrelevant. The fact is that since 1973 the level of unemployment for young people has gone steadily in the wrong direction and is causing serious social pressures on society.
I am mentioning inflation, the international recession and the unemployment level as the reason for the Coalition Government's announcement that the International Development Corporation would be established, that it would have £200 million capital potential and in 1982 £20 million available for capital purposes. The concept of this corporation is a sound and progressive one. It is sound because we were serious about implementing it and giving it effective power and finance. That is completely in contrast with the National Enterprise Agency which Fianna Fáil set up, without a statutory base and without sufficient capital to make any impression in the area of industrial growth or employment. The amount of money allocated by Fianna Fáil was in the region of £2 million, which of course would be entirely inadequate for the purposes which we have in mind for the National Development Corporation. It should be seen that the corporation would have responsibility in the area of venture investment — in other words that, its criteria having been established by the Minister for Industry and Energy and with the agreement of the Minister for Finance, it would have venture capital available, not only to State trading boards and commercial boards but also to enable them to enter into partnership if necessary with the private sector in ventures of mutual interest and of a new nature.
The public sector has grown substantially over the years and within that sector there is a vast reservoir of skilled manpower and expertise which should now be brought into use for the benefit of the nation. One immediate development which comes to my mind, because I had responsibility for the State board concerned, is the Electricity Supply Board. Their consultancy service overseas was a development which was sound, new and successful. It would be very wasteful if we did not bring into play for our benefit the vast amount of expertise available in State concerns. This consultancy activity of the ESB is something that springs to mind very easily and clearly indicates the potential which is there for further involvement by State companies in new areas of activity. The companies which were initially to come under the National Development Corporation were the Sugar Company, Irish Steel Holdings, Mín-Fhéir Teoranta, Nítrigin Éireann Teoranta and the Irish National Petroleum Company, which is due to be given statutory backing in the near future. I will be taking this up soon with the Minister. Other companies which were to come under the corporation were the Electricity Supply Board, Ceimicí Teoranta, the Irish Gas Board and Bord Na Móna. These are the major State enterprises which would be involved in trading or manufacture and the shares would have been transferred to the National Development Corporation. The idea of the corporation was not to support lame ducks. In fairness, we have to take a broad look at State bodies which are now active and some of which are losing substantial amounts of money annually. Two which come to mind are Nítrigin Éireann and Córas Iompair Éireann.
The Minister for Industry and Energy has a responsibility to ensure that public money is well spent and not wasted. He also has a responsibility to ensure that all State companies under his aegis are operating efficiently, that there is no waste of management or resources, that the taxpayer is getting a good deal for his money and that the nation is getting an efficient service as a result of the Minister's activities. If there is a social element involved in the activities of State trading companies, that should be clearly identified. This is something which should be dealt with by the Department of Social Welfare rather than by the Department of Industry and Energy. The National Development Corporation should be a vehicle for investment in new ventures of State bodies. That is obviously the first important responsibility which it should have. It should also ensure that these State bodies look to new enterprises which could be of benefit to the nation. The corporation will initiate State participation in existing privately controlled commercial enterprises, either by taking a share holding or establishing a joint venture together with private enterprise. State bodies should be allowed to use their expertise for the benefit of private enterprise which, in turn, would allow private enterprise to have the backing of such expertise to go into new areas and new ventures which would create substantial employment. It will also act as a commercial vehicle, where appropriate, for projects involving productive employment.
The co-ordinating role of the corporation is also important and the development strategy which could be used by a number of State bodies, not only within themselves, but also in partnership with private enterprise, could have a significant impact on technological progress and on new complete firms being established. We are, for instance, enjoying investment in technological type industry at present, mostly associated with computer industries but very few of these industries are complete companies. We need to develop a research base and a product development base as well as simply assembling parts of computers or whatever. I see the role here of a number of State industries being involved together with private enterprise in ensuring that we broaden our technological base.
The corporation will also have a supervisory role over the activities of the State enterprises held by this corporation. It will also provide venture capital in areas where there are viable product opportunities and where an investment may need to be made which may not be profitable initially but which would be viable in the long term. We have, of course, employment promotion agencies and industrial development agencies. The Industrial Development Authority have played a pivotal role in industrial investment for a number of years. Recent reports from the IDA show concern for future investment here and this has been recognised by the Department of Industry and Energy. The IDA now, unfortunately, have a prosperous rescue division which plays its part in keeping together firms in trouble. The experience there up to recently has been that the older type firms had been running into trouble and having redundancy problems but, more recently, a serious development has taken place with regard to newly established companies which some years ago were held in high regard. They were held up as examples of the types of industries we would like to see here. Those companies are now in trouble. I will mention Fieldcrest, which has gone to the wall but for which the IDA had high hopes. That company is a clear example of investment by the State. There are many others. A disturbing trend now is that newly-established industries, some of them in the highly technological category, are finding it difficult to get markets because of world recessions.
These are developments which must cause concern to the Minister. They indicate the crisis we are facing in regard to industrial policy. We have had the IDA playing a pivotal role in regard to the attraction and sustenance of industries. The ICC have been playing the role of merchant bank, and Fóir Teoranta have been playing an important role as a State rescue agency. Thus, we have agencies which act on behalf of the State in attracting capital, but in recent years the results in employment have not been such as to ensure that our young people can get employment: there has been a gap between job creations and the numbers entering the labour market. That gap is a serious problem for any Government and it must be tackled positively immediately; it cannot be put on the long finger.
For those reasons Fine Gael feel that there is a need for a new initiative in industrial policy, and that need manifested itself by the proposed establishment of the National Development Corporation. That was an initiative and an effort to harness the vast potential of expertise in the State sector, which is locked in and which should be used more adventurously and with more originality that heretofore. We must concentrate all the State's resources to ensure that progress in industry will be maintained and that we will move back towards full employment.
The employment creation policies of successive Governments have failed to ensure a level of employment that would cater for our young people particularly. That is not an indictment of the IDA. It is a simple reflection of the fact that the growth in our population is posing a greater problem than heretofore. It is because we have not been able to create sufficient jobs through Government policies that we must now try to find a new initiative. The National Enterprise Agency was a flop, a red herring, a failure, because there was lack of commitment by Fianna Fáil. We propose in our motion to embark on something worthwhile to harness the public and private sectors and to allow a much greater degree of flexibility in public sector involvement in the private sector for the benefit of the nation.
It must be understood clearly by the Minister that this is not an effort to bolster lame ducks. Fine Gael insist that all our State agencies should be efficient, and in that respect the Government have a grave responsibility.
I commend the motion to the Minister as a sincere attempt by Fine Gael to bring about a new initiative to achieve greater involvement by the public sector and partnership between the public and private sectors, especially in new ventures. I will conclude by congratulating the Minister on his appointment to a Department which will give him many problems but also many opportunities. I wish him well in that office in the coming few months.
