I move amendment No.1:
To delete all words after "That" and substitute the following:
"Dáil Éireann, recalling its approval of the National Plan, Building on Reality on 17 October, 1984, approves of the measures announced in the Plan to promote investment and the creation of employment over the Plan period”.
This motion from the Opposition seeks to castigate the Government's measures to deal with the unemployment problem. In the last year the Government have initiated up to 20 new schemes to deal with unemployment. We accept that this is not enough and we are continuing to work to devise more schemes and improvements.
The Opposition party, who criticise us in this motion, have had the freedom from the pressures of office to work out better ideas for the past two years. They receive an expenses allowance, to include research, from the taxpayer of £181,692 a year for this purpose, that is over a quarter of a million in the past two years. Yet in the two years they have not published a single policy document on any economic issue. One must assume that it is their intention to produce no ideas of their own and confine themselves to criticism. Yet common sense indicates, that in any walk of life, there is little point in criticism that does not contain an alternative approach. There is no merit in what the Opposition are trying to do here today. They should first do their own job and work out their own policies and put them forward. Then they will be in a position to criticise what the Government are doing.
I would like to talk about some of the measures that the Government are in fact instituting to deal with the unemployment problem. The first one I want to refer to is the proposed National Development Corporation. The details of the corporation have been set out in the White Paper on Industrial Policy. The National Development Corporation is designed to represent a new approach to State involvement in economic activity. It is not designed to introduce a new layer of bureaucratic decision making into existing State enterprise. Nor is it designed to duplicate the work of existing State companies or agencies.
All will admit that the existing approach to State enterprise in Ireland has run into some difficulties. That is not to say that it was not successful initially. Enterprises such as Bord na Móna and the ESB got many things going that might not have started at all without them. But times change and we must change our approach in the 1980s and 1990s.
The key new elements in the National Development Corporation approach to public enterprise are:—
(i) the fact that they will have to sell off their investments within a period predefined at the time of the making of the original investment; and
(ii) the fact that they will operate to a major extent in joint ventures with private enterprise.
It is important to recognise why these new approaches are being adopted. It is natural that those who are familiar with the existing approach of State enterprise, where the investment by the State is permanent and the State is usually the sole investor, should question why the same approach should not continue to apply to new enterprises. Some even see these changes as heralding privatisation of existing enterprises. This is not what they are about at all. They have nothing to do with existing enterprises but are a new way of investing in new enterprises.
These changes are being made so that a new form of enterprise will grow and expand. They are designed to take account of the most modern thinking in respect of the product cycle. They also are designed to recognise that the State has limited resources and must aim to get maximum new job creation for every pound it spends. They also recognise the fact that much State enterprise in the past has run into difficulty because of excessive bureaucratic interference. The requirement to sell off investments will have the great benefit of ensuring that the money invested by the State initially will be re-used in a succession of new projects rather than tied up permanently into the first one into which it is put. Thus we will get more job creation for a given amount of money.
This approach also takes account of the concept of the product cycle. This concept, based on modern industrial research, is that every product goes through a number of phases. The first phase is the research phase, the second, the product development phase, the third, the market entry phase, the fourth, the rapid growth stage, the fifth the maturity phase and the sixth the phase of decline. All products eventually end up in a state of maturity and ultimately of decline. The reality of State enterprise in Ireland today is that most of its money is tied up in products that were innovative when they started, but now are either mature or in decline. This is when profits begin to fall and eventually losses occur.
By requiring the National Development Corporation to sell off their investments at an early period, for instance during the period of rapid market development, this trap will be avoided. The State will get the maximum capital gain from the sale of its investment, reflecting both profits already made and anticipated profits. This money can then be reused by the NDC to start off another new project. The sale price obtained will provide a ready evaluation of how well the NDC are doing their job.
Let us remember that the new technology of the mid 1980s will be old hat in the mid 1990s. We do not want to tie up all our money permanently in the technology of the mid 1980s. We want to have a constant stream of funds available to invest in new technologies as they arise over the next 20 years. The "sell-off and re-invest" requirement has been designed specifically to ensure that the NDC can stay on the frontiers of technology without requiring a constant stream of new money from the taxpayer.
It is very important that Ireland should continually be on the frontiers of technology in industry. There are many countries in economic history who were on the frontier of technology at one time but then went into decline. High profits and prosperity are no guarantee against falling behind in the race. At one time Britain was the world leader in industrial technology. It is also arguable that Germany, very recently a world leader, is now falling behind. It may happen that in a few years time Japan will fall behind. Countries fall behind because they become too comfortable selling mature products, while continuing to make an adequate profit, and fail to reinvest and direct resources into new products. It is very easy to be comfortable if the balance sheet looks good this year and next year, and to forget about ten years hence.
We are designing the National Development Corporation to ensure that this does not happen. By requiring them to sell off old investments they will be specifically prevented from resting on their oars.
The involvement in National Development Corporation projects of private enterprise partners is very important. It is necessary to protect the commercial freedom of the corporation's investments. The sad experience of the past is that where a project is wholly State owned there is a danger that the Government will intervene from time to time to get the enterprise to do things that have a social or political value. This can demoralise those managing the enterprise if it runs counter to their commercial judgment of what is best for its growth. This type of interference has helped the decline of many outstanding State companies.
If the State enterprise is working in a joint venture with private investors, either on a majority or a minority basis, they will insist on a contract that excludes or regulates Government interference of a non-commercial kind. This is the best possible guarantee that the enterprise will work with the primary purpose of making profits for the taxpayer.
I hope that the National Development Corporation will inaugurate a new era in regard to State involvement in enterprise in Ireland. We should try to get away from the situation where people take ideological positions on the issue. Too many people try to defend the proposition that State enterprise is bad in all circumstances. There is no reason why this should be so. Equally too many people take the view that State enterprise is a good thing that should be pushed forward with little regard to performance or profit.
My aim in designing the criteria for the National Development Corporation, which have now been incorporated by the Government in the White Paper on Industrial Policy as their decisions, is to put an end to this futile and divisive ideological debate. I want to build a new consensus on a constructive partnership between public and private enterprise under strict and effective criteria. I know that there will be those who might want to hark back to old-fashioned ideological positions about public enterprise. I ask them to give the National Development Corporation a chance on the new basis that I have outlined. I am confident that the requirement to roll over and reinvest, which is unique to the National Development Corporation, will enable it to achieve the ambitions of both the proponents of State enterprise who want an active role for the State on the frontiers of new technology creating new jobs, and those who want investments that are strictly commercial and do not require a constant re-injection of public funds to keep them afloat.
Both can be satisfied by the basis upon which the National Development Corporation has now been designed and I look for the support of all parties in the House for the National Development Corporation legislation when it is introduced in a few months time.
I have given considerable time to the National Development Corporation because it represents a new approach to the State's role in job creation.
However, it is far from being the Government's only initiative in this area. Let me list some of these other initiatives regarding job creation. First, a technology acquisition and two new marketing grant schemes to help Irish firms launch new products and sell existing ones more effectively. These will be introduced during the year. Second, more money for enterprise centres by the IDA, bringing the total to five, to help people with ideas turn them into jobs and profits. Third, a linkage programme to help Irish firms win orders from importers. This will keep money in Ireland that is going abroad and allow many Irish companies to buy components produced here. Fourth, a social employment scheme to give the long term unemployed the opportunity to do useful work and to seek part time work without losing an assured basic income. This will help them to work themselves back into full time employment. There are too many people unemployed who could get work for one or two days per week but who cannot or will not take it because they fear they will lose benefit. This new social employment scheme will allow them to do that as well as working for two and a half days. It will help people to get back into work.
Fifth, we are introducing a special training scheme to help the long term unemployed, many of whose skills are redundant and must be replaced with new skills. We must recognise that some skills are redundant and people must get new ones. This scheme which will be introduced for the long term unemployed will do something about that by a mixture of training and work. Sixth, the Government have initiated a pay policy in the public sector that will, and has, lowered pay expectations generally. This will mean more jobs and much less taxation in the long run and it is very important for job creation. Seventh, we have introduced an enterprise allowance and a pay-related benefit lump sum scheme to help unemployed people set up their own business. Eighth, we have instituted measures to build up the equity base of Irish industry by encouraging investment in it by venture capital, employers and the National Development Corporation. A stronger equity base will help to insulate industries against fluctuations in interest rates. Too many Irish industries are going down because they have borrowed too much as they have not enough subscribed equity from their owners. By bringing in more equity, Irish industries will be less prone to buffeting by fluctuations in the financial markets.
Ninth, we have introduced an intensive campaign to get retail outlets to stock more Irish goods and to help Irish producers gain access to the shelves of foreign associates of retail chains operating in Ireland. We should not be satisfied just to get Tesco and Quinnsworth to stock more Irish goods in their Irish shops. We should aim to get them to use their influence with their companies overseas to get those shops to stock more Irish goods also. That is a campaign in which I have been intensively and successfully engaged in in the past few months. Finally, we are instituting a streamlining of the services of State agencies supporting Irish industry through an overall management committee at national level and "one stop shops" for the entrepreneur at regional level. Details of this were announced last Sunday. Any person in any region can get information in one place and at the same time on all the State services available to set up a business rather than having to traipse around one office after another.
I admit that no one of these measures alone answers the unemployment problem but they represent a coherent package. They will yield lasting results. They can be improved upon. I challenge the Government's critics on the other side of the House to abandon the wailing and hand wringing and to come up with better ideas — if they have them — which will complement what has already been done without adding to future tax burdens. Let us always remember that extra spending in 1985 means extra debt. Extra debt means extra interest payments in 1986 and extra interest payments in 1986 means extra taxation and more out of work in 1986.
We must constantly look for new ideas. I think one promising area for examination is that of the way we organise work. The era of the big organisation and the regimented 40-hour week workforce is over. Information technology has killed it. If Ireland is to win orders for work on world markets we must offer a more flexible package — working in small units, for irregular hours, on short-term contracts and in whatever way the customer needs. Our tax and welfare system need to be reformed to ease the transition to flexible working systems. This will take time, but that is where the critics should be looking, rather than calling for the solution of the 1930s to be applied to the problems of the 1980s.
The Government's planned reorganisation of tax allowances and welfare payments for children into a single child benefit, payable to all, is possibly the direction in which our entire tax and welfare system should move. The aim should be a scheme in which everybody can gain from extra activity and a society which recognises the value of all work — paid and unpaid — that contributes to a better society. We must begin to see the stigmatisation and isolation of those who have lost their jobs as much as a condemnation of our society's system of values as of its economic efficiency.
Having said some critical words about the general approach of the Opposition in this debate, may I endorse some of the remarks made by Deputy Flynn, whom I regret is not here at the moment. I endorse what he said about the need for all of us in politics to inject a mood of confidence in our people and to give them a greater appreciation of our country's inherent strength. We have the youngest population in Europe: that has been said so many times it has become a cliche. We have also the best educated population, one that speaks the language of international commerce — English — which gives us a great advantage over most Europeans. We have a highly regarded higher education system with excellent graduates leaving it. We have the ability that is second to none to co-operate as a people when we are faced with a challenge. One has only to look at what we have been able to do when put to the test to see how much potential there is here.
We need to appeal to our people's sense not just of material gain but also of patriotism to get ourselves out of the present problem. I know many will say it will be difficult to change our economic performance without radical reductions in taxation. There are people who assume that the only motivation that people have for doing anything is the prospect of financial gain. Of course we must do what we can in this area but we should not understimate our ability to motivate people to do something simply for the good of others. Let us remember that most of the work done in this country is not done for financial gain. Most important work is done in making homes and in voluntary organisations. Most of the work done, without which we could not survive as a society, is done without the prospect of a financial gain.
Therefore, let us hope and endeavour to rekindle a spirit of patriotism and to have pride in our country and confidence in its ability to overcome its problems. Let us also get away from the situation where we isolate from society those who are unemployed. Unfortunately, people who become unemployed soon find that they lose their friends, that those with whom they were associated while they were at work have less time for them than they had. Not only do they opt out of work, they opt out of activity in their neighbourhood in voluntary organisations and they become demoralised. We must realise that everybody, employed or unemployed, so long as he is doing something, paid or unpaid work, is contributing to our society. That is why I said that we see the problem of unemployment not solely as a reflection of our undoubted failures in the economic area but also as a reflection in part of a defective system of values. The more this point is brought to people's attention and the more the patriotism of our people is tapped, the more we can hope to overcome our unemployment problems, as I am quite confident we will succeed in doing over the next five years.
