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Dáil Éireann debate -
Thursday, 24 Oct 1985

Vol. 361 No. 2

National Development Corporation Bill, 1985: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time".

Yesterday evening I was dealing with two specific aspects of the National Development Corporation. One was the clear lack of political will on the part of many members of Fine Gael and also of the Labour Party but, more importantly, on the part of the Minister himself. It is worth noting that quite obviously the Government did not believe that this corporation, which was being talked about for the last three years as the answer to unemployment and which was central to their Programme for Government and to Building on Reality, would stand on its own feet or could command respect or attention from the general public. They had to bolster it up at the last moment with a twin package of so-called tax reform and job creation. They clearly made up their own minds on that. I am not making up their minds. They had to bring in something to overshadow it and push it out of the way.

That is a strange way of doing business for a Government which in 1982 brought forward a programme for Government of which this was a central plank. It is only a pale shadow of what was on that programme, which was already watered down in 1982 in a White Paper on Industrial Policy. We saw many rows in public — and I am sure there were twice as many in private — between the sponsoring Minister, Deputy Bruton, and the Tánaiste, Deputy Spring, over what the corporation should or should not do. When it came to the crunch yesterday they decided on a big propaganda exercise and finally pushed it aside. This lack of political will is not evident just now. It must be the longest pregnancy in the history of this unhappy marriage between Fine Gael and Labour. It was there in 1973 to 1977 but yet never saw the light of day. It was there in 1981 but the tenure of that Government was short and there was only time for a rushed job in the middle of an election campaign which fell flat on its face.

After three years the corporation was finally brought into existence by, I suppose, the most reluctant sponsor one could imagine. I complimented the Minister yesterday for managing to keep it at bay and taking out the worst and most obnoxious features as far as his principles were concerned, representing in those principles many of those of the backbenchers and some of the Cabinet members in Fine Gael. Finally, he was pushed into the corner and had to make the gesture to preserve the unity of the Government and try to hold them in power for another little while. I am not so sure that if he had not stuck to his principles his objective in life to lead Fine Gael at an early date in the future might not have been realised much more quickly. His colleagues and everybody else know that he has no more belief in the National Development Corporation than I have. However, he chose, as did many others in recent times, to pay the price of political expediency and to hold on to power as long as the Government could, knowing that when he had to meet his maker — in this situation the electorate — their message would be that he would not enjoy the strings of power for very long, that the electorate would take the first opportunity to put the Government out of office.

I heard recently the NDC given the name of "No Dole Coming". When you come to think of it, that is the message that many Deputies on the far side would like the general public to believe. The Minister says that when the NDC get running next January, which I do not believe for one moment that it will, having been sold so hard particularly by the Labour Party, it will represent a new development in Irish life, that everybody will have a job. That is the greatest fraud being perpetrated on the people and more especially on the 230,000-odd looking for a job. They are being told that this is the answer and when it gets going everything in the garden will be rosy. I can only describe it as another clear demonstration of that new product which has come to notice in the last 12 months in this House and which has been described as political polyfilla. It has been used to fill the ever-yawning cracks which become more apparent day by day in the ranks of the Fine Gael and Labour Parties which make up this Government. There are cracks even in the individual parties. The NDC was the price that the Minister, Deputy Bruton, and many of his colleagues had to pay to keep Labour Party participation in Government. There was pressure from the Labour backbenchers and in that situation it was the greatest fraud to be played on the people and more especially on the unemployed who are still hoping, but apparently in the term of office of this Government will be hoping in vain, for jobs.

The National Development Corporation will also prove to be another unwelcome burden laid on the shoulders of what I can only describe as the bent in two taxpayers. In time it will be seen to turn out as that. Everybody in this house and outside it believes that the present level of taxation is far too high, too penal to be added to. This House should not be in the business of creating white elephants. It is not so long since that term was extremely popular with Members now on the Government benches. When we were in Government in 1982 and before that anything we brought up was called a white elephant. It is interesting at this stage to look back and pick out the two prime subjects for this description. One was the DART railway system. I am sure the Ceann Comhairle as well as everybody else remembers Deputy Jim Mitchell, the Taoiseach and many others on that side speaking about the folly of the Fianna Fáil Government in going ahead with that system. Why was the Minister responsible taking the heat? Today, will the Taoiseach, Deputy Mitchell and the rest of the critics stand up in public and say the same thing? I noticed that when it came to opening the DART railway system the Taoiseach was not behind the door and neither was Deputy Mitchell.

A dart at the DART is acceptable, but to make a speech about it is not in order on this Bill.

It is as close to State development and State companies as I can get and that is what the National Development Corporation is all about. It is a holding company to help semi-State companies to take on more projects.

You cannot have a Second Reading speech on it now.

I shall not have that. We shall press on very quickly from the subject, a Cheann Comhairle. DART is there and to stay. I shall grant this much — that if Dublin city transport and roads had been planned properly perhaps there could have been a cheaper operation, but Dublin city people, the commuters and the workforce are proud of DART. The Government should have been ashamed of trying to get cheap political gain out of labelling it as a white elephant, having changed the whole funding system to try to make it as bad as could be: We shall stop at DART.

We now turn to the other symbol of Fianna Fáil's foolishness and lavish spending — Connacht Regional Airport. As Minister I never walked away from Connacht Regional Airport. The Minister for Health, Deputy Desmond, is using his best efforts to try to confuse the Irish people, telling them that this project would cost £30 million or £50 million, misrepresenting the position in every possible way and forgetting about DART which runs along his back garden and provides a lovely service for his own constituents.

This does not arise on the Bill.

If I am to believe half what I hear, the NDC could be taking over DART, Connacht Regional Airport and any other projects. That is what we are led to believe by the Labour Party. We could see the day when Deputy Desmond, the man who condemned both, might by the creation of this little monster be taking them under his wing.

The Deputy cannot bulldoze his way through the Chair and everybody else. If he were to be allowed to continue in this way he could pick out every State-sponsored body and spend half an hour dealing with each. That is a waste of time.

I did not make the rules of the House and there is no time limit. Anybody who reads the Bill and the Minister's speech will realise that the NDC can be concerned with every aspect of State development. There could be a holding company. This is one of the most fundamentally important policy debates in this House and I hope it will be treated as such.

I hope the same and I will do my best to see that it is.

One does not get that impression at this early stage. The people opposite will have to swallow their negative aspirations because next Friday the green wings and the blue birds take off from the west and head for Europe. There are plenty of other projects which do not need a national development corporation. There are projects which could take advantage of that facility and when we get back to power, hopefully early next year, there are projects in mind which can make that other project viable and prove those Dublin cynics wrong. The pale stops at Kilcock as far as they are concerned and they do not see beyond it. We do not begrudge them their comfort up here but we like our share of the spoils in the country as well.

This baby monster called the National Development Corporation is being brought into existence finally after being stillborn in the mid-seventies. It is the result of the longest pregnancy in the most unhappy marriage which has been on the point of breakdown for quite a long time. Finally it sees the light of day, brought in by the reluctant Minister for Industry, Trade, Commerce and Tourism. I know full well that his colleagues on the back benches and some members of this Government have the same views as the Minister. I have no doubt that we will see Deputy John Kelly, true to his form of capitalism, stand up and tell us what he believes about the NDC. I will be amazed if he is not accompanied by people like Deputy Ivan Yates and Deputy Michael Keeting.

It would be unfair to label some of the junior Ministers because at the moment there is unease among them. I will not embarrass them by expecting them to tell the taxpayers what they really believe in case they would lose out on their little perks and their ministerial cars. There are others sitting in the wings who would love to put up their hands and say: "Taoiseach, bhfuil cead agam dul amach?" when this vote comes up. They too aspire to the seats which may be vacated by their colleagues so we cannot expect them to come forward in real political life. During this debate we will hear plenty of voices raised, although I do not expect all these people to vote against the Bill. People have talked about political credibility and doing away with hypocrisy. If Deputy Kelly were true to himself and his principles he would put his vote where his mouth has been for a long time and tell his colleagues in Government to stop before it is too late because they are on the wrong road. Perhaps he will do so. We will wait and see.

We can also say that the NDC is being forced into existence by a Labour Party who are reaching out their hands for the straws of survival, trying to clutch at anything that might keep them together. When the announcement finally came that the NDC was about to come alive we had the banners of the so-called socialist party raised in triumph, saying to the three or four followers they still have left: "Stay with us. We have finally triumphed and broken through". They have given up the hope of ever being able to entice back the lost brethern who left them and found refuge in the party they know represent their best interests and in whom they place their trust to give them half a chance to get a job and earn a decent living. Opinion polls clearly reflect what I am saying.

That has been the backdrop of the NDC. It is only a paper response to a national crisis of unemployment. I brought home the Bill and studied it closely with the Minister's speech and it is clearly a contradictory response to the unemployment emergency. We have the Minister saying that the NDC —"no dole coming" or call it what you like — will operate on strict financial criteria which the private sector bankers and investors use. Profit is what it is all about. I agree that without profit today one cannot have capital tomorrow to develop new projects and new jobs. The Minister tries to satisfy the Labour Party by saying that it is all about jobs.

During the course of the operation of the NDC, if they finally get under way — I do not share the Minister's optimism that they will be under way by January — those two objectives will not be compatible. If the corporation are to be concerned solely with financial criteria in time that will clash with the other primary objective of employment. If the corporation get a project which is not going too well, what will happen if a cutback in the workforce is required? Which of the twin objectives will win? Will the financial criteria or the employment criteria win through? Both cannot apply because, if one tries to hold the two together, one ends up with the worst of both worlds. I know why the Bill is couched in such vague language. It has to satisfy the Fine Gael philosophy on the one hand and also satisfy the Labour Party so that they can say jobs are the priority. Fine Gael will say that the profit motive is the priority. They are not compatible. The muddy thinking has to be cleared, as well as the contradictions in the Minister's presentation.

Is the NDC necessary? I accept that the party or parties in Government are entitled to push through their own philosophies if they genuinely believe they will work, but they have an obligation to try to forecast what are the difficulties in our industrial and financial structures to see if they can be rectified without creating another money-eating monster whose main result will be to consume the hard-earned money of the taxpayers. That money would be better disposed trying to create job creating business.

Let us be quite clear that this Bill seeks to create another baby monster. The onus is on the Government and on us, the Opposition, to analyse the position clearly before we do that. I have done a deep analysis and I am not satisfied that this Bill is necessary. The Minister devoted the first six pages of his speech to telling us what are the defects in our industrial and financial structures and how they could be improved to get maximum development here so that viable jobs would be created. However, my opinion is that this is only piling another layer of bureaucracy on top of an already overladen bureaucracy. Any of us who has worked the system we have today know that it has finally caught up with itself and is grinding to a halt. Yet, here we are today piling another layer of bureaucracy on top of that.

As I have said several times before, we have too many State agencies, many of them overlapping, many of them costing a fortune to sustain. Despite costly management structures there is too much overlapping, too much double thinking in relation to who does what. It is time we pulled them all together, streamlined them and gave them a clear objective. There is no use codding ourselves if we are in the commercial business and out in the market place that the semi-State sector is the same as we are. It is not. With some notable exceptions, the private sector has by far outmanaged the public sector.

That is what this debate is all about and I hope Deputies will be clear on that. We have the Government saying — we have heard it often before — that the private sector has failed the country. I have heard Deputies Taylor, Quinn and Deputies in Fine Gael saying that the private sector has failed the country. Let us analyse that for a moment.

To a large extent, Governments should manage the country in the way a private business is managed. Has the private sector failed the country? It has not. It is because of the huge increases in productivity and growth in exports that we are able to pay our way. The sooner the Taoiseach and Ministers realise that the better. The sooner it is appreciated the sooner we will stop squeezing the private sector to death by taxation. The people responsible for taking management decisions are being squeezed to death without reward or recognition.

The profit motive is scorned. Apparently, if you make money you must have either robbed a bank or engaged in some twisted, convulated business. It should be realised that you cannot run a business or get rich in Ireland without being attacked by a begrudging society. The sooner we turn that clock back the better for all of us.

Who spends what in the development of the country? The Government today spend 66p of every £ produced, yet we have members of that Government telling us that the private sector has failed. I will turn it around and send the argument straight back to those who say that. If the Government are spending 66p out of every £ produced in the country the onus is on them to see if we are getting good value for it. We cannot tell those who have only one-third of the gross national product that they have failed.

I would be the first to admit that the private sector has faltered. Why has it faltered? It is because it has been sqeezed time and time again by the heavy burden of VAT which has put many businesses on the scrap heap because the imposition of high rates of VAT have left no demand for the produce with the result that many fine traditional businesses have been closed. Week after week innumerable return forms have been heaped on small businessmen throughout the country who have not the time, or the wherewithal to pay people, to try to keep up with the bureaucracy. Do people here recognise that? I am sorry to say they do not. It will be appreciated only when it is too late, when there will not be enough people paying into the kitty to keep the system running.

Now, in this very important debate, is the time to recognise this and make up our minds about the road we want to travel. There are only two roads. This Bill represents more State involvement in the running of the country's businesses. If we do not want to see that we must turn our faces against this Bill before it is too late. Public expenditure of 66p in every £ of GNP is not equalled in many of the so-called socialist countries. Will anybody tell me in which State those socialist systems work successfully? We are not entitled to say that we want the State sector to be more involved and at the same time say that the private sector has failed us. With all the burdens it has to carry, the private sector is doing a magnificent job.

Is it not true that increasing taxation and retrospective legislation on taxation in certain instances have stopped our large corporations from taking on the multinationals? What have we done to those corporations? We have squeezed them out of business and left them without returns for their investors. We forced them to emigrate. We have had personal emigration for quite a time but we now have a new trend called corporate emigration, taking with it names like Smurfit, the Rowan organisation, Cement Roadstone and builders. All have gone on the corporate emigrant ship because this more than any other Government in recent times have put on the squeeze heavier than ever before. Business people throughout the country are sick and tired of us because they are not being repaid for the risks they have been taking. They are getting fed up with it. Small business people are saying: "If you do not stop we will".

The time has come when battered businessmen here will take no more. They will get up and go. Why would they not when they see the scant return one gets for money here today. That is why I suggested deep examination of the failing financial structure here. Instead of producing a panacea for our problems this Bill will only create bigger ones.

Where can we get the best return for money here? In the Post Office, under the five year savings plan, you can get a 61 per cent tax free return. No business in the country will give that return. Look at the Stock Exchange. Will you get that sort of return there? You will not. It is the most conservative institution in this city and it makes no contribution towards providing the funds so vitally necessary for industrial development. The same thing happens in regard to Government gilts. The best return may still be in property, even in the present depressed state of the economy. What is the return for risk capital here? Any businessman will tell you what the return is, not from working from 9 to 5, five days a week, but from working from Monday morning until Sunday night. He cannot get overtime or double time. He contends that he cannot work on a Saturday or a Sunday, that he must have his leisure time. Believe me, such people have had very little leisure time in recent years because, on a Friday, they must produce the pay-packet in order to pay everybody else.

They look to this House for guidance and leadership in these difficult times. What do we give them? We say: "No. We will give you another layer to run with that will cost you more money, that perhaps will create opposition in the private market place." But they will not have to face the commercial realities of life because they have the Government to fall back on for money when they run out of equity. It is not like the commercial sector. When they must face the realities of life, a receiver or liquidator is called in. The State or semi-State sector can resort to the endless pot of taxpayers' money. Perhaps for political reasons, because an industry has been established and is operating in a particularly sensitive constituency, the Minister of the day closes his eyes. When we politicians see others outside dragging down our profession it must be admitted that perhaps we contribute to that indictment through not recognising the realities of life. When such people look to this House in these difficult times in an endeavour to solve the problems obtaining, to develop more industry and see a Bill such as this emanating as a response is it any wonder they turn off and say: "Perhaps we will go along with the rest"?

To a large extent the work ethic has deteriorated and, in many cases, disappeared. We must ask: why is that? The answer is that the incentive to work or invest has been taken away. How many cases do we as politicians come across of people who feel it is better for them to lie in bed on a Monday morning, get up later, have a few jars, go to the bookies, watch the races on television and, at the end of the week, end up better off than their counterparts who got up at 7.30 a.m. on a Monday morning and went to work? There are too many such examples. What is the effect of that on the hard working man or woman who goes out to work? It must be remembered that, when people are out of work, they can get a reduced rent on a local authority house, medical cards, all the benefits available. The end result is that such people are better off on a Friday evening than their counterparts who go out to work at their industrial job. Is that the way to run our business? Do we think we can succeed in that way?

If that is the road we want to travel, then for heaven's sake, let us be honest and say we want a socialist State. We are already two-thirds of the way there. Let us travel the other third, rather than masking the fact of no jobs and no businesses being developed, with thousands of people being made redundant through factory closures, which has been the hallmark of this Government over the past three years. If that is what we want let us be honest about it and say so once and for all. Let us say we are not having that system any more; we have gone two-thirds of the way towards a socialist State; let us go the other third. If that is the sytem that is wanted, then I want no part in it because I do not believe in it.

I believe that deep down every Irish person wants to be and has the potential to be an entrepreneur. There is that characteristic in us all. Those who had to emigrate when there were not even half the opportunities obtaining here today proved their ability, entrepreneurial flair and spirit of enterprise whether it was in Britain, America or elsewhere. They proved that that is what switches on the Irish character and mentality. But, because of confused and muddled leadership here, the whole work ethos is deteriorating. The man who heads the present Government was the person to whom the people looked three years ago to be their saviour and Messiah. I must quote one of his backbenchers who said, in racing parlance, he flattered to deceive. He deceived his own and the country. He did not live up to the trust placed in him. Well he knows it because he is a broken man today. Perhaps he thought he could do the job. Perhaps he had the high ideals necessary to undertake the task but he has failed.

The Deputy can go into flights of fantasy but he will have to remain with the Bill.

If the Minister of State present, who is supposed to represent the Labour Party in the Kildare constituency, and if you, a Cheann Comhairle, think that what I have been speaking about for the past half hour constitutes flights of fantasy, then anybody who entered politics in an endeavour to make a decent contribution to the development of this country, to try to turn back the clock, should think again. That is what I think of the remarks passed here this morning. I am not engaging in flights of fantasy. I do not have to be an Abbey Theatre actor. I am saying what I believe to be true in this country from my experience. That is why I am standing up for a system which is being battered to death by the politicians. Now you can say what you want, a Cheann Comhairle, because I have been hurt by your remarks and I am entitled to complain about my hurt feelings.

The Deputy should have respect for the Chair. I have not interrupted or called Deputy Reynolds to order once when he was in order but, when he launches into an Adjournment debate, a state of the nation speech, or a political argument in the middle of this debate, that is not in order. He must confine himself to the Bill.

A Cheann Comhairle, there could be no more wide-ranging debate than that on this Bill. I believe the system of Government is at a cross-roads——

The Chair has not called the Deputy to order once when he was in order.

We can all lose our rag from time to time. But when I heard what I have been saying for the last 20 minutes or so described by you as flights of fantasy it hurt. I might as well tell you straight, it hurt.

The Chair wants to clarify the position. The Chair did not say or describe what Deputy Reynolds had been saying for the previous 25 minutes as flights of fantasy but said he was engaging in one at that particular time——

——and so he was.

I know the oldest trick in the game — interrupt people, kill their train of thought so that they will be unable to pick up where they left off. I hope I have made it abundantly clear that what is at stake here is a fundamental policy decision as to who will run business in this country in the future. That is what is at stake. Will it be the public or private sector?

I have clearly demonstrated in the course of my remarks here this morning that the public sector is spending 66 pence out of every £ and that it is that sector that is failing the country at present. The conditions they have created have made thousands of people redundant, closed many factories and this is supposed to be the panacea to get us out of all our troubles. If we want to close our eyes, to go off into flights of fantasy, hoping that some morning we will wake up and everything will be all right, if we want to believe that the world owes us a living — with more and more State involvement in the establishment and running of business — if we want to accept that philosophy, then let us go off into dreamland and remain there. But I must warn that we will wake up some morning and there will not be anything left. The Government are entitled to push through that philosophy.

Let this debate be used to extract views as to how we formulate future policy. The private sector has proven time and time again that they are capable of succeeding despite the many problems obtaining. I would not for one moment endeavour to defend some of the malpractices in the private sector. When taxation reaches a penal stage many legitimate business people who have never departed from the straight and narrow were forced, for the sake of survival, into the black economy, which is the only sector booming at present. The Government, by their policies, have squeezed the white economy to death while the black economy flourishes. When some people talk about taxation——

The Chair feels that the Deputy is straying from the Bill.

I might as well give up. The National Development Corporation has been set up to change the way in which manufacturing businesses will be set up in future——

The Deputy may make passing references to these things——

But who is going to pay for it? This little monster——

Please, Deputy.

If that is the way you want it I do not want to be seen as aggravating you and I will pick up my papers and go. If you want to put me out of the House do so.

The Deputy may make passing references but he cannot get into a wide ranging debate and deal in detail with social welfare, taxation, factories that were started years ago or State-sponsored bodies. The Deputy may only relate these things to the Bill by way of passing reference. I did not pull the Deputy up even once——

I would not expect to be pulled up when I am talking about taxpayers' money.

Please, Deputy, there is no necessity to get into a rage.

There is no necessity for you to stop me as often as you have.

I have been entrusted with this job and it is the Chair's business to see that time is not wasted and that Deputies confine themselves to the subject of the debate. That is all I am trying to do.

The House and the country can have their choice regarding the type of system they want. However, this House should enlighten the public as to where the money will come from to pay for the bad decisions that will, inevitably, be made in the future.

Deputy Taylor said that the State should take over because the private sector has failed. He is a successful solicitor and I cannot understand why he believes that because I am sure that most of his business comes from the private sector. Who will run the National Development Corporation? I heard Deputy Taylor complimenting the Minister on his decision to appoint nine directors to the board and hoping that they would be of the highest calibre. From past experience, I assume that the vast majority of those directors will come from the private sector. I know that they will carry Fine Gael labels but, if they do their job properly, I do not care. In saying that the State should do the job, Deputy Taylor contradicts himself because he knows that most of the people on the NDC will be from the private sector. Perhaps these will be people who have failed in the State sector and, if this is the case, they will also fail in the private sector. That will not work because, when they come into the State sector, they will not be remunerated for the responsibility they carry.

One of the great inhibiting factors which killed the spirit of enterprise and development in the semi-State sector was a report by Mr. Devlin who decided what the salary of the chief executive should be and also the salary structure of the rest of the employees. We have the ridiculous situation at present whereby chief executives with responsibility for thousands of people and for spending a budget of hundreds of millions of pounds are paid far less than a chief executive in a small private company without a fraction of the workforce or financial responsibility. That is crazy. If you pay peanuts you will get monkeys.

In my short term as Minister I stood up to the Department of the Public Service in regard to their foolish logic because they have destroyed the entrepreneurial spirit. They should not be surprised if the monkey they employ is doing a bad job. We must face up to reality. Remove the embargo and let the market forces decide. Put in the best man for the job, pay him the going rate and do not give him a job for life. He should get a three or five year contract and if in that time the figures do not add up, get rid of him. At present we have the worst of both worlds: we are paying people far below what they should get and the people who are below them are also being paid too little. When we lose a lot of money in the State sector we throw up our hands and ask if the State can do anything.

I do not have the Bill before me but there will be plenty of time on Committee Stage to examine it further. Perhaps the Minister of State can tell me if the salary of the chief executive in the NDC will be controlled in the same way as other salaries are controlled. He does not seem to know. However, I assume it will be because I remember fighting a hard battle in 1981 in relation to a specific State body. Subsequently, in 1983, one of the few chief executive salaries which had not been controlled by legislation was included by the Government, which was unfortunate. If this applies to the NDC, it will be killed before it starts. I started off by saying that the case had to be proved for the setting up of the National Development Corporation and I cannot concur that the case has been so proven. All over Europe similar State investment organisations were set up; in Belgium, Italy, the Netherlands, and the UK, similar State organisations have performed very badly. They all started off in the glow of high expectation. Unfortunately they all finished up by closing, taxpayers' money going down the drain and the Governments having to pick up the tabs. Can we not learn from the experience of others? I know at times we should go our own way but, in a high risk venture, we should look abroad to see what happened there. What will the NDC do that existing State agencies cannot or will not do?

I could not believe my ears when I heard the Minister for Industry, Trade, Commerce and Tourism, Deputy Bruton, say on the radio programme "Morning Ireland" a few days ago that we were confused, that we had not read the Bill and did not understand what it was about. He said the IDA were an agency there to give out free money and that the NDC were an agency to make investments. The Minister broadcast Fine Gael propaganda and, more luck to him, he got away with it.

Let me put the Minister in the picture. If he does not know the situation he should know it. He has been Minister for nearly three years. Has he ever read the IDA annual reports? These show quite clearly where the IDA have held investments in the past and for the Minister to say that the IDA solely give out money and do not make investments is sheer nonsense. Perhaps he thought nobody would pick him up on that statement. I refer him to a sale recently of the shares of the IDA in Cement Roadstone which they have held since the seventies. At that time they took shares in the expansion of that plant in Limerick and in recent weeks they cashed in their investment at a very good return. Yet the Minister sponsoring this project would have the country believe that the IDA cannot invest in companies here. They did it in my short time as Minister and I have no doubt they did it in his time. Let us have the whole truth when we are trying to debate a matter like this. The IDA can make investments like anyone else.

What can the NDC do that the NEA cannot do? They are being set up to do the same job. Perhaps Coalition Governments have a hang-up with names. We set up the NEA. They destroyed the agency and I had to set it up again. The only reason the NEA have not been more successful was because of the political uncertainty in which they have had to operate. Since I came over to this side of the House I visited that organisation on many occasions and I always heard the same story from the board of directors, namely, that they should get the political direction. They wanted us to make up our minds in this House on what we wanted to call the organisation while letting them get on with the job. Three years of uncertainty passed while that organisation had to operate with temporary staff on a day-to-day basis. How can one expect high-flying results from an organisation that was screwed up from day one? If the Government had allowed the NEA to do the job as they should have done, they would have much more to show for their time. It must be said that for the small number of people in that organisation their record is excellent.

In this project the Minister talks about the need for investment and co-ordination in the food sector. I agree that the present situation is completely nonsensical. There are three State Departments and seven semi-State agencies involved in the food sector. The Minister has tried to convince us that the NDC is the answer but that will not be so. All the statutory responsibility must be taken from the three Departments and put into one, and all the semi-State agencies must be put under one head.

Let us consider what the NEA have done. They have become involved in fish farming co-operatives and marketing. They have become involved in international services. They have secured in the Far East a management contract for managing a hospital. We want more of this kind of operation. They have taken an equity stake in a small company in north Leitrim. They have done nicely in the small tight operation they have been running with temporary staff, not knowing if they will be there next week. Why did the Government spend three years fighting and wrangling between themselves to bring forward this new monster? Why not continue with an organisation that was operational and that could do everything necesary if they were given the resources and if the political will was there? The NDC have been introduced as a political price that had to be paid to keep another party in Government. They demanded this sacred cow but to hell with the consequences for Ireland Limited. The NEA can do anything that is needed provided the political will is there.

Labour Ministers in the past week have tried to perpetrate a continuing fraud on the people by saying this is a £300 million job package. The only time that amount is mentioned in the legislation or in the Minister's speech is the reference to the authorised share capital of the corporation of £300 million. I could set up a company tomorrow morning for the princely sum of £37 by going down to the Companies Office and by giving in my own name and that of my wife. The Minister using two civil servants' names could set up a £300 million authorised share capital company but that does not mean a thing. What does matter, whether in a private company or State corporation, is the issued share capital. However, that has not been mentioned here by anyone on the Government benches. People think it is a £300 million package but will the Government put in £1 million or £2 million? Let the Minister in replying to this debate tell us what he will put in because only then can we make a rational judgment on the real commitment to the NDC. They should not try to confuse simple people by telling them it is a £300 million package when it is quite clear that is not the case. There is a vast difference between authorised share capital and issued share capital. Let the Government come clean on the matter.

Coras Tráchtála in the marketing business and Fóir Teoranta who are a rescue agency have given loans to companies. Yet, we are told that all of this will be done by the NDC. They have taken equity in companies, the same as we are told the NDC will do. They, too, have taken share preferences in companies and the IDA have done the same thing. Why have the NDC? As I said last night, if the Government genuinely believed this could make any contribution towards solving the unemployment emergency they should have done what I asked them to do almost three years ago. If the Government genuinely believed in their own philosophy and principles that the NDC could do the job, they should have set up the corporation on a company basis and had them operational within two days. They could have brought in the statutory legislation thereafter. There are many precedents for this. The Irish National Petroleum Corporation are still that kind of company and they are dealing in hundreds of millions of pounds. The Kilkenny Design Workshop have operated that way for years. It is not the most desirable procedure but if a job has to be done at a time of crisis it is the duty of the Government to do it. They should not stand behind the slowness of bureaucracy, thus holding up the business for three years. It is quite certain there will not be one single productive job as a result of the NDC in the lifetime of this Government.

It will keep the Government together.

They will be lucky if the chief executive is appointed. Everyone knows that the first thing to be done is to appoint a board of directors. There will be political wrangling about that. Then the board of directors have to look for a premises——

I ask Deputy O'Keeffe to put away the newspaper and to listen to the debate.

Then the board of directors will look for premises, and we all know how long that will take. The next step is that the premises will have to be furnished and then consultants will have to be employed to select a chief executive. I have experience in that area and I know what the time lag is and I can assure the House that that will not be done quickly because anybody worth his salt will have to give three months' notice to his employers. He in turn will have to appoint an assistant chief executive and recruit his management personnel. I challenge anybody to contradict me when I say that not one viable job will be provided for one person who is at present on the unemployment list in the lifetime of this Government. What is this exercise all about? That is the reality and I hope other Deputies will focus on this point.

The Minister spoke about the weaknesses in financial management structures and I agree with much of what he said, but the NDC will not solve these problems. I agree that the Stock Exchange is the most conservative institution in the city and that it has a role to play. I can only recall one new company coming on the exchange in the last number of years, and that is a sad reflection on the Stock Exchange. I agree that the Minister should try to do something about this and I wish him every success but, as I said, he is dealing with a very conservative institution.

He said one of the main weaknesses in the structure of Irish industry at present is the over-reliance on borrowing and a lack of equity investment. In this Government's first budget debate I told the Taoiseach that we should encourage venture capital to try to correct that weakness. He accepted my point of view, as did the Minister, but it took them 15 months to do something about it. When the package was finally presented here I asked the Taoiseach to refer to what I had said on day one, pointing out what I believed from experience would work. There have been one or two successes in the area of venture capital but that is not the success rate needed to tackle the deficiencies in Irish industrial structures.

The Department of Finance are looking at this problem with tunnel vision. They have taken the British system which, when set up, gave a new lease of life to venture capital and equity investment but, as it became successful, as always happens, the bureaucrats decided to close any little loopholes they found. When we started, what did we do? We took the tightened up version and started from that base. I repeat, if that is the way we are going to run our business we will never develop a proper venture capital market.

Let us look at what happens. A man may invest £25,000 and get a tax rebate but can he take that money out? No. Money could be invested in a project which is being researched but which might not go on stream for another six or nine months. If at the end of the day it is unsuccessful, a man could lose his money but, worse still, he cannot get tax relief because the company was never in business. This is the reality of life which the bureaucrats have failed to recognise. An investor must measure the risk and measure the reward and, if they do not add up, he is not interested. There are many other deficiencies which I could mention but they would be more appropriate to a budget debate.

The Government should release the spirit of enterprise and entrepreneurial flair which is abundant in this country and recognise that people must get a reward for the risks they are taking. This would improve our economy faster than all the national development corporations ever introduced in this small country. There is plenty of money here because when a quick buck was to be made by investing in Atlantic Resources, £1 billion appeared out of nowhere. Money is lying dormant but if the Government tell investors they will get a proper reward for the risks they are taking, people will invest. Every year pension funds amounting to £400 million are looking for homes for their money, but where can they find it? The taxation structure sends them in a certain direction. They do not have much choice because they must get a return on their money. They invest in Government gilts, the Post Office or property and a very small amount is invested in industrial projects. Why? Because the return is not there.

Anybody looking at this area will see that in recent times the average return on sales is 1 per cent. There is no way any industry can last very long on a 1 per cent return on sales. When we look at American companies setting up here, we see their average return on sales, because of the taxation structure, can be 15 per cent, 17 per cent and 19 per cent. Yet we expect Irish people to build an Irish industrial base, but if the taxation system is geared against them, then we are the culprits. A properly enlightened taxation system can be an instrument for industrial development and can decide where investment will reap the best reward.

There are too many office blocks. We do not need any more, but we need other service industries which can provide real jobs. If we have an enlightened taxation system which does not tinker with——

Would the Deputy confine himself to the debate? He has moved away from this Bill, although he may make a passing reference to these matters.

You are not as bad as——

I am trying to do my best.

There are many people around this House who have accused us of not reading this Bill, but they do not seem to recognise that this debate could be the most important in this term or the next.

Deputy Reynolds, on the Bill please.

We cannot divorce development from money for investment and where it will come from. I am not being political about this. That is the reality. I recognise that the Chair must do his job and I will try to keep within the parameters of the Bill.

Before the Government embarked on a national development corporation they should have looked at the deficiencies. I have mentioned some of them and said what could be done without a national development corporation being set up. It is clear that for reasons of political expediency the Minister had to introduce this Bill. He made the decision and let him live with it. I am putting down a marker on behalf of my party as to what we believe to be the real way forward. The proposed agency will not do anything that other agencies cannot do.

There is specific reference to forestry and I shall deal with that. The potential for forestry has not been tapped and as long as it remains within a Civil Service environment it will not be tapped. We do not need the NDC to do the job for us. In Bord na Móna we have a commercially orientated organisation up and running. That concern have many thousands of acres that are suitable for planting. Did anybody consider giving them the job or do we have to wait for a national development corporation to do that? I do not think so. When all the peat has been cut away, by the end of this century, we will have 200,000 acres available for other uses and I suggest that tree planting should be one of them. Such a move would underpin the future development and stability of Bord na Móna. We should not create another layer of bureaucracy to look at our forests and do the job within existing structures.

We do not need a NDC in the agricultural area. New products and new processes are needed in that area but we do not need such a corporation. We have heard about developing ideas that flow from our universities and that such a corporation is needed to implement them. I do not think so. There are other structures that can do the job equally well, as they have done in the past. Where are the new ideas and new products to come from that will be the engine of development here in the future, apart from those we import such as technology? They will come from our educational establishments. A programme on Wales shown recently revealed that the seeds for new processes and products emerged from their equivalent of the National Institute for Higher Education and regional technical colleges. I have no doubt that in such establishments there are plenty of ideas. Money should be available, as was mentioned in the White Paper, for the development of such ideas. Will the Minister put up the few million pounds for the development of ideas from the university campuses? We cannot turn off the tap on such work over night. We must start at the bottom.

If we want Irish people to be entrepreneurs and innovators we must start with children at national school level. We must switch them off the academic type education they have been getting for too long. They must be given a vision of the new society we want created here. The process must be carried through at second and third level. The ideas will come from the science and engineering faculties at third level, but is that area ever placed alongside those in the business and administration sectors? It is not. I suggest that six month post-graduate courses should be promoted where such graduates could process their ideas. We must recognise that the independent republics and lines of demarcation that abound here are the ruination of future development. People appear to look at their own little independent republics and are quite happy as long as they do a good job in that area. This little country will not break out of the strait jacket it is in unless there is a new and radical approach in the taxation or industrial areas. A new approach is needed in the educational area.

Educational institutions need money. New products invented in our universities or other educational structures should be sold on to the private sector for development on a continuing royalty basis. I accept that it is not easy to break into the world market with new products and in that regard I believe in the development company idea expressed in this regard. I endorse that idea fully but it must go a stage further. When we get into the market place on the development company basis doing the job for many small concerns that do not have independent resources we must, side by side, with that, have a distribution concern to distribute the products for the new companies. There is little point in selling a product if it is not possible to distribute it. The job must be finished. I have outlined what I believe are the defects in industrial policy here and we will have many opportunities later to deal with the provisions in the Bill on Committee Stage.

We did not need the NDC to do the things I have suggested. I am not convinced that such an organisation will do the things some people believe it will. We are not in the business of creating white elephants. This is a baby monster that will continue to grow. Political interference can take place because the organisation does not have to stick to rigid commercial criteria. It can move over into the social area. Once we move over that bridge politicians, being politicians, when they get the foot in the door will make use of this on the eve of a by-election or in the run up to a general election in a sensitive constituency such as that of the Leas-Cheann Comhairle in North Tipperary.

We should not allow the Minister, Deputy Bruton, and the Government, to try to convince us that this will not happen. As long as the electoral system we have exists with multi-seat constituencies, this is the only weapon the person sitting in the ministerial chair has to try to protect his or her political future and keep him or her level with the people doing the small jobs in the constituency. We should not be hypocritical and say this will not happen. This is a recipe for becoming an instrument of political policy for any Government. I do not like it wherever it exists. Let the people responsible do the job or, if they do not do it, let us remove them.

Deputy Reynolds has been most colourful in his presentation and I agree with some of his observations. We need a greater trust in our country and we need to invest in it but our problem is that we have not had investment. That has not taken place for a variety of reasons, social and political. It is fair to say that Deputy Reynolds' party were in power for most of the life of the State and they must realise that equity investment has not taken place during that time. Fianna Fáil tried everything from a protective economy through the forties and fifties to their latest escapade, from the 1977 election onwards, when they fed the State to such an extent that it grew to be an absolute monster.

Deputy Reynolds decried the fact that State investment got out of hand and drew attention to the fact that the State was spending 66p in every £ but he must acknowledge that he supported Fianna Fáil in 1977 when the greatest splurge of unnecessary expenditure was undertaken. That money was invested in the creation of short term jobs. We have tried to keep the ship afloat and our efforts have resulted in high taxation. The alternative would be to implement severe cuts in public sector employment, a move which would be wrong in present conditions.

The National Development Corporation Bill is a welcome innovation. It is an effort to bring investment to areas as varied as agriculture, forestry, fisheries, tourism, high technology and so on. It was difficult to listen to the Opposition spokesman on Industry, Deputy Reynolds, asking about State investment, having looked at today's Order Paper where Deputy Daly has put down a motion asking that this Government should have no private investment in forestry. The Deputy does not want this Government to do anything about forestry, even to provide jobs. It also seems to be Fianna Fáil policy, judging from what Deputy Reynolds said about people receiving too much unemployment benefit, that Fianna Fáil want to reduce unemployment benefit. After the next budget will they say that the Minister should have reduced unemployment benefit? They will not. They will have to adopt some kind of reasonable policy, as they cannot have it both ways.


What about the cowboys?

The Deputy will have his own turn to speak.

I am concerned about the performance of the other side who want to be into every emotive issue that exists while the Government are trying to get a move on investment.

The Deputy should not try to misrepresent what we are saying.

As far as I can see, Deputy Daly does not want any private investment in forestry.

Read the motion.

I read it.

You have not read it. Do not try to misrepresent it.

It is contradictory to object to the NDC. If they want to get into forestry will the Deputy object?

Do not try to misrepresent what is in my motion. The Deputy should read it a second time.

Will Deputy Carey continue on the NDC, please?

The Minister suggested that forestry will be one of the sectors in which the NDC will invest. I do not have hang-ups about where the investment comes from once it creates jobs.

Deputy Reynolds said yesterday that the semi-State sector was a failure with one or two notable exceptions, but he did not name them. Aer Rianta in my constituency is a successful semi-State body which has provided substantial jobs. In relation to a joint venture approach the Deputies should look at Bunratty and consider its success and the success of Castle Tours, a joint venture between the public and private sector. There is a need for further investment in the tourism area. I can think of a simple project in County Clare which the NDC could tackle.

The NDC could, for instance, establish an international conference hall in Lisdoonvarna. There is a lot of private investment in Lisdoonvarna. A former Deputy, Mr. Jim White, has invested substantially in Lisdoonvarna and has shown his confidence in the area. The real problem with the north Clare area is the decline in population, the small farms with small incomes and the fact that the tourism season in Lisdoonvarna is very short. A major conference centre in an area as internationally well known as Lisdoonvarna would be a project for investment by the NDC. If Fianna Fáil think that a wrong aspiration I would like them to say what is wrong with it.

Deputy Reynolds said that State investment companies such as this have been a failure in a number of countries which he listed and he gathered most of his information from an article written by Dr. R. S. Thompson of the Economics Department of University College, Cork, in the Irish Banking Review of September 1985 in which he dealt fairly extensively with the NDC.

Look at pages 22 and 23.

The article says that it is argued that neither basic economic reasoning nor comparable institutional experience elsewhere leads to an optimistic expectation about the NDC's future prospects. At least, Dr. Thompson outlines where the failures have been and the reasons why they failed and he is putting forward a reason why the NDC can be successful and he outlines criteria which the Minister could apply to the NDC to ensure its success. Dr. Thompson suggests that there should be high return projects rather than low return projects involved. The project I suggest for my constituency would be a high return project. Surely Deputies opposite realise that there are numerous bednights available in County Clare all through the year. I know many of them are taken up during the high summer season but it would be of great benefit to the resorts if they could take up all the slack time in the winter with a major conference centre. Look at how the British did it at Harrowgate. Can we not be as successful here? I do not have an ideological hang-up about it. Nobody will produce the necessary finance for such a high risk venture as Lisdoonvarna, although everybody knows that it can be successful as Lisdoonvarna is recognised worldwide.


In relation to any linkage programme on a national basis it might interest Deputy O'Keeffe's constituents that we are spending £30 million a year importing potatoes and potato products. Should the NDC not try to get all the warring factions in Cork together as they are capable of producing substantial quantities of potatoes on a commercial basis at low cost which could be distributed throughout the country? Surely the NDC could also consider such a project.

I should not point out these things to Fianna Fáil because there are high expectations there that they will be in power soon, perhaps in a day or two. I should not outline their political prospects for them and tell them not to dismantle the NDC because they could reap the benefits of it. County Clare has had the greatest injection of cash that one could get. There has been continuous employment in Shannon Airport as a result of a lot of political influence used by Fianna Fáil in keeping Shannon a high priority area. I acknowledge that.


Please, Deputies. Will Deputy O'Keeffe please control himself? The Deputy will shortly get an opportunity to talk. Will Deputy Carey please continue?

As a result of the major employment in Shannon there has been substantial liquidity in the area. It is difficult to see where there has been any major investment by the local community. There have been improvements in the living standards of the area. Housing has improved and services have improved but in relation to the future and job creation we have had no major investment in manufacturing industry in our county by local people, or by Irish people. That has been very disappointing.

How about Smithstown in Shannon?

Smithstown in Shannon came on as a result of a small indigenous industry programme by Deputy O'Malley when he was Minister for Industry, Trade, Commerce and Tourism. He was chucked out by the Fianna Fáil Party.

It is all locals.

This is a national development corporation not a Clare development corporation.

I will speak for my part of the 32 counties. I would like the NDC to succeed. I am outlining a couple of possibilities for this corporation under the terms the Minister has set out for their setting up.

Build conference halls.

I do not know much about those. Maybe I should consult Deputy O'Keeffe. The Minister has taken the right decision at the right time. It is advantageous to establish this corporation which the Minister has told us will be set up and in operation by 1 January 1986, despite what Deputy Reynolds said.

There has been lack of equity, but to knock everything or any new proposal without giving it a fair chance is not the purpose of a parliament. When the Minister says he is going to operate a thing he will stick to what he has said, and he has given a time scale. It is right for this Parliament to give guidelines regarding areas where controls should be exercised. Deputies have spoken about the fear that this might become a monster gorging up all the money available. That fear might be contained by the, criteria which the Minister outlines as a basis for good judgment. Let me illustrate. Aer Rianta have been successful in our area because their board, who were appointed by different Governments, have taken a responsible attitude. The principal benefits of Aer Rianta are linked directly with the Department and while the board of directors operate independently they are advised in their decisions by the Minister for Communications, and there is direct link there. As I see it, the NDC will have a link with the Minister for Industry, Trade, Commerce and Tourism, as the Minister outlined in his speech.

And the Labour left.

He can give guidance to the corporation without interfering with investments. The Minister will be empowered to give policy directives to the corporation from time to time. That has worked well with Aer Rianta and why can it not work well with the NDC? The Minister in excluding the possibility of giving directives in relation to particular investments is reducing the risk of high power political interference. Dr. R. S. Thompson of the Economics Department of UCC said that one of the risk factors was that there might be political interference. Deputy Reynolds talked about companies that would fail or near fail and Fóir Teoranta being brought in. If the criteria in the Bill are as the Minister has indicated we have nothing to fear. I am optimistic that if Deputies can come up with various projects a corporation properly structured as this will be will meet with success in the future.

I am particularly optimistic that this NDC can be used as a vehicle for the depressed areas, particularly in the west. Much of the hue and cry has been that Governments in Dublin have neglected the west. This corporation will recognise that, for instance in the case of manpower, the west has great resources, great ability to adapt to industrialisation, as has been illustrated in my county and in Limerick where we brought in people who were completely raw and trained them in a short time and they have become very productive and are now associated with major manufacturing companies such as De Beers in Shannon, SPS and so on. It is just a matter of will and I believe that the NDC will be successful.

The aspects illustrated in Dr. Thompson's article are welcome and if they are studied properly then in the long run Ireland will be the main beneficiary from this proposal.

In rising to speak on this Bill I remind you, Sir, that you accused me of reading the paper and I want to put that right. As I was coming into the House I was informed about something in the Irish Independent that would be relevant to the matter——

Deputy, please, reading the paper in the House is highly irregular.

I was checking on it.

You should have checked outside before you came in.

I was amused to hear Deputy Carey referring to the constituency of East Cork and the potato project which was promised by the Minister of State. Deputy Hegarty. Like many of the projects promised by the Coalition it is as far away now as when he announced it first. It was a potato chip factory. He promised to pay industry £1 million to save a co-operative who were marketing potatoes but he got a mere £100,000 from the Minister for Finance. That is an example of the kind of promise we get from this Government and that is how they try to mislead the people on a continuing basis.

We must look at why the NDC are being set up. I have here a copy of the Fine Gael-Labour Programme for Government dated December 1982, and now practically three years later they are talking about setting them up. It is obvious that the reason it has taken until now was dissension within the Cabinet. We are all aware of the strong opposition that was being promoted, and rightly so, by Deputy John Bruton in his capacity as Minister for Industry, Trade, Commerce and Tourism. He has been making efforts to condition this Coalition Government about the way this economy should move, and I agreed with him on that. On the other hand, it is frightening to think that three years on they have now been able to beat him down to agreeing to the setting up of this corporation. It is questionable three years after the Government were formed why we should not talk about the NDC. If the Government were sincere they would have set them up in the spring of 1983 to develop and to create jobs. This is just another political gimmick to satisfy the Labour element in this Government. Possibly the people in the Cabinet are satisfied, but this is to satisfy the extreme backbenchers of the Labour Party and their leftist organisation.

It is a contradiction on the part of the Government to set up a corporation to exploit the whole area of job creation. Let us take, for instance, their performance in the Cork area where in the private sector both Fords and Dunlops have closed and where in the public sector there has been the loss of Irish Shipping which we understand now will cost more to liquidate than they would have cost in terms of the losses they were incurring. In addition, there has been the closure of Cork Verolme Dockyard which was a venture or risk type project. If the Government had been sincere they would have kept that dockyard in operation. They are telling us now that the establishment of the NDC will result in the setting up of venture type operations and that if the corporation develop and work properly, they could be sold at some time in the future to the private sector. The Government are not being realistic. They are being most hypocritical in bringing in this Bill.

A headline in the Cork Evening Echo of 19 October 1985 read that the NDC can make a dramatic impact. That was a good headline and the article which accompanied it informed us that a Labour Party meeting in Cork had been told on the previous evening that the food processing industry and the fish industry would be two important areas in which the NDC could become involved. In that same article Deputy O'Sullivan is reported as having said that the NDC is a tremendous achievement for Labour in Government and that with proper funding the corporation could have a dramatic impact on jobs.

We are talking about £300 million share capital but this means nothing when we read the Bill because what is likely to happen at the end of the day is that a mere £2 million will be invested in the corporation. From the short address delivered yesterday here by the Minister for Industry, Trade, Commerce and Tourism it is obvious that he lacks commitment to the project. I am confident that the Minister is sincere but I do not believe that he considers the way in which the Labour Party have insisted that the Corporation be set up to be correct. The Minister does not have the support of the Taoiseach in this matter.

High costs are the main problems in our economy. We lack a proper climate for investment. We have had high inflation rates, high taxation rates, high energy, telecommunications and other costs. In other words, in every area that is important to our development there has been over pricing as any industrialist will verify.

The contribution of employer and employee to the PRSI fund is of the order of 20 per cent. In other words, one fifth of every labour unit is spent on PRSI. That is a frightening factor and it must be corrected.

The Deputy is moving into the area of taxation.

The Bill concerns development and if we are serious about that subject all those matters to which I shall refer briefly are relevant.

The Chair will not quarrel with a brief reference to such matters.

Because of high taxation many people in the haulage or manufacturing areas are now bringing into the country one year old lorries. These high rates of tax must not be continued. A survey in relation to electricity costs in the south of Scotland indicated that on average the cost of electricity here is between 35 per cent and 40 per cent higher than is the cost in Scotland. This presents a very serious problem for industry and for the development of our economy generally but the NDC will not solve that problem. They will be no more than another bureaucracy.

We do not have the problem of a shortage of capital for investment but the climate for investment is wrong. Until that problem is corrected, industrialists will not be prepared to invest here. A headline in last week's Irish Farmers' Journal refers to “the non development corporation” and the article which follows refers to the NDC being intended to promote enterprise employment in Ireland but poses the question as to whether there is any evidence that new business has been hampered by capital shortage. The article continues that business has been hampered by high cost capital and by excessive State credit costs involving energy, transport, employment and communications. These are the very matters I have referred to. The OECD report was not very encouraging. It pointed to our high taxation rates in the capital taxation area and in the income tax area, too. That is where the real problem lies.

The Government are deserving of praise for having granted permission for the extension of the national gas grid throughout the south of Ireland, especially to the co-operative sector who have played such a major and significant role in the development of the food processing industry, particularly in the towns of Mitchelstown, Charleville and Mallow. That is a very worth-while development and is worthy of praise even if it was a little late. I congratulate the Minister on his courage in extending the gas grid. Further benefit will accrue from that decision in the whole food processing area and this will be without any aid from the NDC.

Much has been said about our indigenous resources such as agriculture, fisheries and forestry, but capital costs are not the stumbling block in the development of these areas. The problem is the unsatisfactory climate for investment. Until such time as we change our entire taxation structure there will be no capital investment in such areas and no further worth-while job creation.

The greatest source of capital for any open economy is the Stock Exchange but in the past ten years only one new company became involved in our Stock Exchange. I refer to the Green Property group, and they were in the productive area. Many oil companies became involved from a speculative point of view or for other reasons but the advent of only one company in the productive area is most discouraging. The area of capital taxation should be reviewed with a view to creating a more attractive environment for the raising of money on the stock market. Capital gains tax is the problem in the stock market area. Can the Minister or the Minister of State give a guarantee that the NDC will pick winners? When we consider the whole semi-State sector we find that there are no winners to be picked.

It all comes back to the climate for investment. Subsidies and grants are not the answer to the problem. They only create an artificial climate which is of no value to the industry. The private sector have sufficient money to fund projects but are being penalised by our taxation system and the present high rates of cost. There is the example of the recent issue of savings certificates at 11 per cent per annum for investment over a five year period, tax free. Where is the incentive for someone in the industrial sector to invest in a productive project when this results in a high rate of tax and far less return because of our economic climate? That is the best example I can give.

There is tremendous potential for development of our fisheries. Recently a friend of mine was at a fair in Germany, at which I have never been, but I understand from him that 14 halls were taken up by displays of food. One very large section was fish — processed, filleted, presented, well packaged and on display. The vast majority of this fish was caught around our shores. This is an area which we have neglected. I say without fear of contradiction that the National Development Corporation will not have the expertise and ability to promote investment in that area. It is well known that the only area with an entrepreneurial flair is the private sector. That sector works best and is best for this country.

We also have to admit that agriculture has been totally neglected by the present Administration, although it is our basic industry. It accounts for 20 per cent of our national output and 12 per cent of our workforce are employed in it. A country undeveloped in agriculture imposes quotas on us in this, one of our brighter areas. Growth has been retarded by the Government's acceptance of the principle of quotas.

The Deputy must relate this to the Bill.

It is related to the Bill. It deals with the whole development area. There is talk about a revolving fund and that loan capital will be made available, but the corporation will have to borrow and lend this money out. Will this lending out be at a rate higher than the borrowing rate, or will it give a subsidised rate? This is a very important aspect which must be clarified.

The history of this type of development corporation throughout the world, and especially in western Europe, is not good. I am quoting from The Irish Banking Review of September 1985 under the heading “Experience in the U.K.”:

Experience of the Industrial Re-organisation Corporation (1967-1971) in the U.K. provides an interesting test of the validity of public sector expertise in choosing successful projects. This body was established with a high quality staff to initiate mergers and restructuring in key sectors of U.K. manufacturing industry. Its objective was to create firms to a size sufficient to capture available economies of scale and hence to be able to compete effectively on international markets.

That enterprise failed in the United Kingdom and it is, therefore, very questionable what would happen here. Experience elsewhere has been somewhat similar. In Italy, Belgium, France and Switzerland there were failures. Only in Sweden was there a return comparable with the private sector.

In his statement on taxation and jobs yesterday the Taoiseach made the appalling statement that he would have to appoint a larger number of sheriffs to control the cowboys who obviously were not paying their fair share of tax. I do not know to whom he was referring. The vast majority of the public have been annoyed at the erroneous figure of £700 million for unpaid tax. That is totally misleading because it is only an assessment.

I am very reluctant to interrupt the Deputy, but I have no alternative. He cannot possibly relate that to the Bill before the House.

We all know that the climate for business is not good and that people have difficulties but the sending out of wild assessments is not encouraging them to further investment or to keeping their businesses in operation. To call people cowboys who are taxpayers and are in the productive sector, trying to survive and develop and employ people and export, because they get wild assessments with which they do not agree, is nothing short of being irresponsible.

I appeal to the Minister to withdraw this Bill because it is only a con job. The whole idea behind it was ideological, to satisfy the Labour element in Government. We want to be productive but the investment climate must be changed and then this country will boom and we will have investment and jobs. This will be once more a country in which one will want to live and foreigners will readily invest. Subsidies and grants are of no value because of the high costs at present.

It is incumbent on any Member of this House or, indeed, any citizen to wish well to an initiative whose purpose is to try to tackle the problems of unemployment and the regeneration of a healthy climate for enterprise. It is proper that we should wish the NDC well and hope that it succeeds.

That is not to say that we should be unquestioning in our benevolence. I should like to raise a few questions which I trust might afford the Minister, in due course, the opportunity to present to us perhaps a more substantial case than he has had the opportunity to present thus far in the House for the existence of the National Development Corporation. It would seem that one of the criteria which should attend the setting up of any new institution of a State or semi-State nature particularly, should be to assess whether or not existing agencies have the capacity to deal with the venture which has been given to the new agency as its responsibility and to assess whether or not there were fundamental deficiencies in the existing agencies which would not allow them to be transformed into a suitable vehicle for doing that job. They should be quantified. Anybody who has witnessed the incredible spectacle of growth in the areas of public expenditure and the very central role which the State now occupies in handling our economy, would need very strong convincing to accept readily that any new State or semi-State agency should be established unless the case were not just presented but proven beyond all reasonable doubt. All of the examples in the past 15 years give us cause for great concern in the event of the setting up of a new agency without that case being adequately proven. It is difficult to welcome readily any new agency unless that context has been put in.

The central role of the State is really quite extraordinary in our economy. I have no doubt that it is one of the most stultifying factors inhibiting enterprise and initiative and reform of our tax and other systems. The burden is simply too great. In that context we have to be very cautious about the establishment of a new agency such as the NDC. This year, as per Government budget forecasts, gross current expenditure was projected to be £9,015 million and the PCP £1,806 million. These two combined amount to some £10,821 million out of a GDP at market prices forecast by the ESRI in July 1985 of £17,517 million and a GNP forecast from the same source of £15,657 million. When all that is boiled down it means that gross Exchequer current and capital payments for 1985 equal 62 per cent of GDP or 69 per cent of GNP. With other public authorities at local and regional level included, excluding Exchequer transfer payments which would represent double counting, Government at all levels now control some 70 per cent of GDP. The highest previously on record in any western democracy at our level of real GDP per capita was France in 1965 where the figure was 37 per cent.

In layman's language I am saying that there are eastern bloc countries where the dominant role of the State in managing economic affairs is not nearly so great or so fundamental. There are many members of the Communist Party in Yugoslavia who I am sure would be envious of the manner in which we have managed to facilitate the powerful central role of the State here in handling the economy. It is important that the NDC should not add to that preponderance of State management but should affect a qualitative change for the better. I am not sure whether that has been proven to the House or not. It would certainly be unacceptable and intolerable if a new semi-State agency were to be established which would simply add to the bureaucratic clutter without affecting qualitative change overall. Public expenditure in Ireland as a proportion of GNP has gone from something like 45.8 per cent in 1977 to 61.9 per cent a year ago. This brings home to us the path along which we are moving. There is no point in crying for reform of the taxation system or greater incentives for this or that unless we recognise that to continue along that path is not simply reckless but suicidal.

A central element in the hoped-for success of the NDC will be the degree to which it can effect a qualitative change and not simply be another tier of overlapping, duplicatory assessment and monitoring when a would-be applicant has gone through all the others, the IIRS for the technical side, the IDA, CTT for the export area and perhaps Fóir Teoranta if they are in trouble and need to be bailed out. That is a legitimate worry. I would not like anyone to misinterpret the expression of that concern as a lack of enthusiasm about a venture which we hope will be successful. It is simply a reasonable question to put and one which, I trust, has an answer.

It is important to state that this concern also finds an echo in the increasing number of regulatory-type Bills in the House and the dominant role of the State in handling our economy. It appears the prevailing philosophy is that virtually every area of commercial activity, and in some cases social intercourse, is to be strapped down in some way, as the Lilliputians strapped Gulliver in Gulliver's Travels. It is that kind of idea where every movement has to be regulated in triplicate and controlled. I am inclined to think that it is time for a fresh look at the labyrinth of regulations and an examination of whether we have gone too far in some areas. De-regulation in some respects might not be just helpful but fundamental if we are to get enterprise moving again.

Many of us would have a preference for the State to act as a catalyst in relation to industrial development, leaving the main operational aspects to the private sector and market forces, with due acknowledgment of the place for State-sponsored commercial enterprise where appropriate and deemed right by the Government of the day. It is not reasonable as a philosophic base for this discussion to suggest that the State should be in the business of complementing, supplementing and assisting and facilitating all of us to go about our daily lives. It should not be in the business of being the first guarantor in every case. It should not be in the business of living our lives for us. It is a question of outlook, attitude and philosophy. My view is that the best Government is more often than not the least Government, not just because I am a democrat but because for pragmatic reasons it is less expensive, less cumbersome and in most cases more efficient to have it that way. Those are the fundamental questions which a debate such as this allows us to ask. Such questions would concern the degree to which the State should not be the first in but the last in, the degree to which the State should be involved or if it should be involved at all. Every time a measure is introduced in this House by the Government the State should prove that it has to be so involved. It should not assume that it has the right to be involved. It should not assume that it has the right to control airwaves or to tell people what seeds to plant in the soil. It should prove that it has an obligation to do so in the common good. In many cases it will be able to demonstrate that, but it should not assume that it has the right to order our affairs for us. The State ultimately is the servant of the people and should be reminded regularly that that is the case.

I gather that the financial sector at present has ample funds available for investment. The problem is possibly twofold. It is a shortage of viable commercial projects and a discouraging taxation climate. These projects can only be generated if the climate for enterprise is right and if there is the opportunity to earn adequate reward to compensate for commercial risks. There are people in the House who might not like the though of that but it is the real world. Business people do not put a shilling anywhere unless they hope to get two shillings back. It is nothing to do with theology or philosophy or policy orientation; it is simply a pragmatic assessment of the way the world works. Some of us might not like it but that is the way it is. Industrial development, product and service, depend on the development of people and the encouragement of people who have ideas for viable, new and improved products and services and who have the skills, motivation and resources to bring these ideas to successful commercial fruition on home and overseas markets. It is my thesis that in general — there are exceptions — the State can help to develop these people and can and should support them by real resource transfer payments from other productive sectors of the economy but that the State cannot perform the function of entrepreneurship on their behalf. Unless it proves that it has to do so, the State should not attempt to perform the function of entrepreneurship. First, it does not have that automatic right, and second, regrettably it has been very bad at it whenever it has attempted to do it.

It is reasonable to suggest that at the very least we should be given a careful, considered justification for the NDC. A report from the OECD recently told us clearly that the key to industrial growth in Ireland lies in private capital rather than State grants, and its success would lie in the capacity of our country to help people to bring on stream their own projects rather than the State assuming that it has the wisdom, the flair and the capacity to do it on behalf of the people. That point has to be dealt with.

If we look carefully at the rationale for setting up the NDC we must consider four issues. First of all, we must show that to some extent all existing agencies are in some way not suitable or are deficient, or are not capable of being made suitable or appropriate to the job in hand. Because the NDC will be concerned particularly with equity and investment, we must deal with the implication that the existing capital supply arrangement is deficient in some way. That is the implication, that the NDC will see that it will work efficiently. Third, we must be able to show that the identified weaknesses, those in respect of which the NDC will be the answer, demonstrably can be dealt with by the NDC. Fourth, we must be able to deal with the degree to which the NDC will be able to operate on commercial criteria free from the constraints of policy input, of political pressure by the Government or Members of the House or other institutions.

In his speech, the Minister dealt in a sense with why, for example, the NDC has to be set up when we had the NEA. He gave reasons. For example, he said that the NDC are being set up by law of the Oireachtas whereas the NEA had been set up by administrative means. I suggest that that in itself is not a reason why the NEA could not do the job they were designed to do. I always felt that the NEA were in a state of hold from the beginning and I had a certain sympathy for them because they were shackled in their attempts to do what they were supposed to do. The corporate status of an institution, provided it has the capacity to enter into agreements, to underwrite guarantees and so on, in itself would not be a major problem, or if it was it could be corrected by re-establishment on a suitable basis. I am not suggesting that the NEA had the right shape or structure for the job the NDC are designed to do.

The Minister said: "This legislation provides the NDC with a proper capital base, the lack of which was a serious inhibiting factor to the operations of the NEA". Why were the NEA not given something more than a nominal share capital? That was simply a matter of operational mechanics and it was not a fundamental reason why the NEA could not work. The Minister said that the NDC would have statutory power to operate and to invest in areas as defined in the Bill. It is true to say that the NEA did not have the power to do that.

In essence, I am saying that I am not sure, after carefully reading the Bill and studying the issues, that one or other of our existing agencies, or two or three of the existing agencies integrated, would not have been able to do the job the NDC will be asked to do. In the Bill some of the work of the NDC in the business of propping up some industrial projects through advancing loans has administrative echoes of much of the work of the IDA, Fóir Teoranta, CTT or the NEA, and I am worried not just about duplication but about repeating the work five fold. As Chairman of the Committee on Public Expenditure during the past two years I have noticed the degree to which there is obvious overlapping and wasteful duplication in the way State agencies assess projects, people having to go through the same hoop on many occasions. I hope this will not simply be one more hoop. I hope it will be a new dynamic approach to the country's problems.

Are the NDC the right answer? Similar agencies abroad and the experiences they have had do not augur well for the success of the NDC. As far as I can gather, only Sweden has had a reasonably successful state enterprise agency. Other national organisations would lead one to be concerned. We might consider the examples of other countries which have failed in this so that we might learn lessons.

A recent study by the Trade Policy Research Centre in Britain examined public investment companies in a number of countries, Belgium, France, Germany, Holland, Sweden and the UK. In all of those cases, for a variety of reasons there were failures. The Italian experience was a disaster because social objectives came very much to the fore, as one would expect in a country with the physical, economic and demographic structures it has. The lack of clear objectives in the way the Italians handled their affairs conflicted fundamentally with the economic and commercial criteria of that agency. The Italian agency was liquidated in 1977 with substantial redundancies and record debts. There was a similar picture in the State Reconstruction Company, established in 1972 to modernise sections of Italian industry. Under political pressure it wilted and ended up a disaster.

An analysis of Belgium's national investment company is given. It was a State holding company established in early 1960. It managed to achieve a negative real rate of return in every year of its operation. It lost the equivalent of half of the initial investment in every one of the 16 years of its existence. I assume that the Belgians, the Italians and the Dutch are not fools, but they failed. The United States experience was even more unsatisfactory. The Reconstruction Finance Corporation was established in 1932 — designed to deal with the depression in the United States — and had boom years in the forties and fifties. However, it then got into what might be described as the more exciting market opportunities, took to financing the construction of bars, drive-in movies, those areas. Unfortunately, usually these deals end up becoming involved in political and financial anomalies — to use a charitable word — and the RFC was wound up in 1953.

In most European countries it appears that the experience to date of State investment companies has been less than satisfactory. They start with good intentions, highly motivated, with good staff. However, political pressure then commences, pressure to invest in a particular project in a depressed area. We have had echoes of that in this debate already today. One of this morning's papers carries a story about people who want the NDC to come in and help to develop their town centre. I read a story yesterday about a political grouping who want to ensure that they will have a certain number of nominees on the board. The National Development Corporation has not yet been established, yet the tugging and pulling has commenced. We had better be very clear about what we are setting up before we do it if those auguries are not to be other than solidly based. The simple truth is that, in general, State investment companies have not worked, for the reason that they are precisely that — set up by the State, accountable to the State, open to manipulation by the State, to pressure by the State and in this case possibly every one of us in this House. Perhaps the National Development Corporation is the right vehicle but, if so, it would be relatively unique on the European landscape.

The question of policy directives, set out clearly in the Bill, arises. What is a policy directive? When can it be given? How will it affect commercial criteria? For example, will it mean that the NDC will find that every time there is a change of Government there will be a change of direction? Will it mean that investors will say, "I cannot get involved in a medium term investment situation when, for example, the next Government might direct the National Development Corporation to pull the plug?"

Obviously it is not easy to suggest that we should set up an agency totally removed from some form of public control and accountability. At the very least we shall have to spell out clearly the degree to which the National Development Corporation can deviate from commercial criteria alone. If those commercial criteria alone were to be used — after all they constitute the key to return on investment and entrepreneurship — I have no doubt that the NDC would reach precisely the same decisions in general as the private capital market reaches at present. Therefore the extent to which they will deviate from them has to be clearly spelled out, the occasions on which they can deviate the extent to which they can do so, the basis for such policy directives as is mentioned in the Bill. All of those things must be clear.

Once social objectives become relevant the public agency simply has a discretion to depart from conventional commercial wisdom. Once it has that discretion, sloppy standards slip in, excuses for inefficiencies, for waste, apologies for not achieving targets. Not alone that but, in fairness to the executive of the National Development Corporation, whoever they will be, there would be frustration if there was to be an open-ended injection of "policy directives" on any suitable political occasion. Therefore, I have that sense of foreboding also. Obviously that discretion will be particularly attractive to us. It will become very fashionable for people like me to stand up here and demand that the NDC goes in to bale out company X despite the fact that that is not their role. I have no doubt that inevitably Ministers will have to respond to that to some extent and eventually that will percolate through to the way in which the National Development Corporation is run. The scope to pursue non-commercial criteria brings the whole company's investment approach down to the area of political and public choice and, when one gets into that quagmire, none of us could be overconfident.

It appears to me that if the industry is to be given a chance of working satisfactorily it will have to be free of political pressure to the maximum extent. The extent to which it will be accountable to policy directives will have to be clearly spelled out. A guarantee of day-to-day autonomy, such as many of our State agencies have at present, is not adequate and has not worked to date. In his remarks the Minister talked of policy directives, the possibility of Government giving direction to the agency as if we should be consoled about that. Frankly, and with respect, I am not. I am not because the Department designed to handle the NDC — I say this with respect to the people involved and with particular admiration for the current Minister who handles that Department — have proven themselves less than totally satisfactory, to put it mildly, in being able to handle and monitor the work of many of the agencies under their remit at present. Whether they be semi-State agencies or others, whether they be the ICIs, the PMPAs, the Irish Shippings, or whether they be the agencies at present under their remit, the Committee on Public Expenditure have reason to be less than totally satisfied about the manner in which that monitoring has gone on. Within the past fortnight the secretary of the Department admitted to our committee that they had not got at present a proper cost evaluative technique for price per job created by the agencies under their remit. How then can we be assured, happy, that yet another responsibility of this Department will be handled, not in the same way — because the same is not good enough — but better, different? I, for one, will need some convincing on that.

When it comes to the area of policy directive and monitoring by the Department, whereas perhaps the ordinary layman should be consoled that somebody is looking after our interests, I am not consoled, I am discouraged on the evidence to date. I am asking that the extent to which this National Development Corporation can depart from commercial criteria be spelled out in this House, in this Bill, so that we shall all know exactly what is meant by social objectives. None of us here is not in favour of creating jobs. The weighting to be given to different non-commercial benefits should be made explicit to this House so that management can be made accountable for deviating from those criteria. Whether even that will provide adequate insulation, as it were, from the political process and its inevitable effect in encouraging a departure from commercial criteria, whether that is sufficient, I leave to people to decide for themselves but at least it might give the National Development Corporation a fair chance to get off the ground.

The definition of social objectives elsewhere in cases where State enterprises abroad have been set up has rarely been defined. A State investment company inexorably tends to become what I might term a political investment company rather than a vehicle untrammelled by the political forces and devoted exclusively to industrial growth. That concern also is reasonable. Why this difficulty should arise I am not so sure except that sometimes in these discussions we make a basic assumption, a basic mistake that jobs are created. I have been hearing about job creation since I came in here. Nobody creates jobs as an end in themselves. Jobs are created as a means to an end. People do not set out to create jobs. In the private sector people set out to make profits, and there is nothing wrong with that. If they need to employ people they do so, but they do not set out to employ them. In this technological age if they can avoid employing people they will. The assumption that there is an end called job creation, that the State has the wisdom to create those jobs in a productive sense which can be self-sustaining and self-financing is a myth. Therefore, when the State says that one of its social targets is to create jobs it really means that it intends to create a climate of investment in which people will be encouraged to set up enterprises which will have jobs as a by-product. The State can obviously influence that by encouraging investment in labour-intensive areas. We do not do this at present and our tax system is an example.

One of the fundamental reasons for setting up the NDC is the supply of capital on the market. The problem, which was acknowledged in the White Paper on Industrial Policy, is that our tax regime has persistently encouraged loan finance and benefited investors in property and services rather than in manufacturing. The White Paper gives as an example the tax relief on new equity introduced by the Finance Act, 1984, as a move to redress the problem. If Professor McAleese was correct in suggesting that there was no overall capital shortage in Ireland, then it appears that the loan equity balance should be capable of being corrected in its own right by appropriate tax adjustments and not by a new State agency. I am not sure if the case is proven for setting up the NDC. We are trying to redress the problem because we did not ask the right questions in the first place. A pell-mell rush by the State to set up a corporate entity which can create jobs may not have cottoned on to the truth which is that jobs create themselves in a healthy economic climate; that that self-creation is because people set up enterprises for reasons which have nothing to do with going to bed with semi-State organisations. This has nothing to do with ideology or any of the nonsensical claptrap to which we have been listening for the last few weeks. It is simply an understanding of how the world works. Indeed that aspect often worries me in regard to the House because many Members — myself included — have very little, if any, experience of the business world which we move around on the chess board in here. When we have a problem set up another State body.

I note from the Minister's speech that there is to be an operating agreement between the IDA and the NDC. Obviously that has to be done but, unquestionably, many of the functions of the IDA, NDC, CTT and the IIRS are parallel if not overlapping. The IDA, for example, give grants and loans and the NDC will also give loans. In many cases the same entrepreneur will go to all the different agencies, groups of civil servants examining the same applications. Is that good State management? Maybe it is but it has not been proven to my satisfaction.

I mentioned the way the world operates in relation to jobs. If unemployment continues perhaps we will have to say that it is right and proper, as a social objective, to set up jobs as an end in themselves. We should not hope that things will be all right on the day if we plough enough money into State enterprises. However, that is a long way off. The implication of such acceptance is that we think it would be better for people to be employed rather than festering with nothing to do. We may agree that there is a price to be paid for such involvement and that we will marry the resource of unemployed people with the undoubted work potential in the community and pay for it, because it is good for everyone to have the dignity of work. However, that is not our present thinking.

If the NDC are here to stay — I am sure they will outlast many of us — how should they operate? I hope they succeed. We all really want them to succeed because there is nothing so destructive human potential than the waste that is evident at present in the unemployment area. I bow to nobody in stating that my constituency epitomises that area of despair. I see it daily. It is destructive and deadly and, for that reason, I hope the NDC works. This affords us a wonderful opportunity for public participation. Let us consider that we might, for a change, make every pound of public money which we pay out buy a little public participation and interest. The OECD examiners' report, 1985, entitled Innovation Policy in Ireland dated 18 September 1985, which is a restricted publication of the OECD, reference DSTI/SPR, page 37, states:

While under present circumstances it is understandable that the initial injections of capital in NDC will be State originated, the opportunity should not be missed to offer part of NDC's equity to the general public and/or venture capital funds under especially attractive terms regarding issue price payment terms for taxation treatment.

We have an opportunity now to let the public buy in and to take an interest in these corporations which they fund indirectly through taxation. This approach could help to extend the base for share holding in the community and to develop the Stock Exchange. The main emphasis should be on giving the individual taxpayer the opportunity to participate in ownership of a successful State commercial enterprise. It is incredible to think that we pay hundreds of millions of pounds of public money and yet no taxpayer can say that he has even a toehold in regard to ownership or interest of many of the enterprises which he funds. That would have major qualitative and quantitative advantages and would bring about a fresh attitude in terms of interest by the people and in encouraging investment. For example, if a constituent of mine had shares to the value of £25 in Telecom Éireann or Aer Lingus he or she would be a little more watchful about his or her investment and would take an interest in reading company reports. Leaving aside the question of whether he or she is entitled to that as of right——

The Deputy is talking about privatisation.

I will come to that in a minute. A minority of equity only need be placed on the Stock Exchange and the NDC should remain a State organisation. At this stage I am looking for a partnership. I am not asking that we should get involved in a political cul-de-sac about privatisation. I want the State to recognise the legitimate role of the taxpayer and for both to participate. Who knows what might come out of such a marriage? The House must know that if it now gets into an argument about privatisation nothing will be done.

Let us see what can happen in the area of joint venture. I think it would be a good thing if it were possible for a semi-state body to sell, say, 30 per cent of their stock. That would be healthy; it would lead to better management of the agency concerned and to greater public interest. It might also lead to less State regulation and involvement, which I would welcome.

I am asking for a minority of equity in the first instance. In order to prevent the accumulation of a significant shareholding in the hands of any shareholder, the terms of issue of the shares should state the maximum shareholding to be held by an individual and prohibit the registration of shares in the names of nominees. In that case we would not have blocs obstructing the public will.

I think a similar approach could be taken in the case of enterprises in which the NDC invest provided that such a share placement on the Stock Exchange is appropriate and commercially possible in each case. I admit it is a little more difficult in such cases but it is about time we tried to persuade the people we are propping up and whom we are grant assisting that there is a price to everything and the price may well be public participation in ownership.

The spread of shareholding in the community is socially and economically desirable. It would help to improve the spirit of enterprise on which job creation depends. It would help to improve industrial relations and would help to remove many of the deeply held misunderstandings in economic, social and political affairs. It is very important to extend share ownership to the employees of the NDC and of the enterprises in which the corporation invest.

We are not talking about transferring any public commercial enterprise to private ownership. We are talking about allowing the indidivual citizen to participate in his own right in the equity of any public commercial enterprise. Participation would be on the basis that the enterprise will continue to be a public enterprise in that the State, acting as trustee for all citizens, will remain the majority shareholder. The philosophy at this stage is not that of privatisation which is provocative and politically difficult but citizen participation with the State, a partnership, a joint venture. I am talking of a new approach not hooked on either extreme of ideology but a sensible arrangement where the State takes the citizen into its confidence and where both share in the enterprise.

The NDC should not go down the road of allocating their board membership as though it were some sort of prize in a raffle or a political lottery. If the references I have seen are anything to go by I would be disturbed by their implications. It is not my place to tell the Minister how to do his job in every respect but I assume the principal criterion to be applied will be that of demonstrable achievement in the commercial world. Anything else will be a waste of time. Even that will be difficult because of the regulatory controls of any State agency that an individual may not have had to contend with previously but at least we should give it a chance. We should put achievers on that board. Party political affiliation should not be the principle criterion for selection.

The Minister should attend to the need for public education about the role of the NDC. This morning I saw a reference to a town centre that the NDC were asked to bail out. There should be no mistake about the role of the NDC. They are not another cow to be milked: they are to be a dynamic in the Irish economy, free to the maximum extent from political pressure, where they can ignore please or requests for assistance based on anything other than commercial criteria designed to create jobs. Anything else will be a disaster, as has been shown from experience abroad.

In the first paragraph of his speech the Minister made an interesting point. He said:

The purpose of this Bill is to establish the National Development Corporation, which is an integral part of the Government's industrial and job creation strategy. It is a body with the task of investing in enterprises which might not otherwise develop or even get off the ground.

In itself that is a small flickering red warning light. The two main reasons enterprises do not get off the ground or develop are either because there is something inherently wrong with the proposal or because the climate is not correct. We can adjust the economic climate without creating another agency. If there is a problem with regard to any project I hope it will be evaluated carefully prior to the commitment of State funds. We must remember that if funds could have been raised elsewhere that would have happened.

In his speech the Minister said:

New products and new processes are essential to our national economic growth because markets are changing all the time and a country or a firm which fails to adapt will go into decline.

The Minister gives that view because the NDC are to become an integral part of the Government's strategy in respect of innovation. At the moment we have an organisation called the Institute for Industrial Research and Standards, a significant part of whose job is to develop new products and processes essential to our national economic growth. They do quite a good job of that. I am worried about the kind of reference made in this case because I am not clear whether the objectives of the NDC are fuzzy. Recently I visited the headquarters of the IIRS in Glasnevin and I found there very many busy people. They have over 600 employees many of whom are engaged in laboratories and in the field on the development of new processes and prod-must ensure that that work will not be duplicated.

Quite rightly, the Minister defined some answers to questions we have to face. He said there is a group of consultants working in his Department who are examining the potential for generating a greater level of institutional investment in industry. If the country is not awash with such potential investment funds, there is certainly a great amount of it available. A careful assessment of the reasons why those funds are not being invested would give us a strong clue as to whether the NDC will work. The predominant and principal priority should be to change the economic climate, particularly in the area of taxation, and then to supplement existing agencies or create new agencies if that is necessary.

In his speech the Minister said:

I want to allay any fears that there may be about an overlap or duplication of functions between the NDC and the IDA. It is my intention that there should be an operating agreement drawn up between the two bodies which will be subject to my approval. This will allow the NDC and the IDA to co-ordinate their respective functions and to act in complete harmony — thus ensuring the creation of the maximum number of viable jobs.

Earlier I made the point that experience to date does not augur well in that respect. An operating agreement is an arrangement between two bodies to work within a clear area of jurisdiction. I am inclined to think that if the whole project had been thought through that would hardly be necessary. I assume that what we are talking about is an operating agreement on the ground. I am worried that such work has not yet been done. It may well be found that in practice there may be an overlap or a duplication of functions. The Minister also added:

It also represents a new approach because, unlike existing State agencies such as the IDA, CTT, the Irish Goods Council and so on, all of whom provide excellent assistance to industry, the NDC, where it identifies a particular niche or gap in the market-place which the private sector is not yet exploiting, will be empowered to establish a business on its own initiative to meet that demand.

I want to ask two questions. First, why is the private sector not exploiting it if it is attractive, and secondly, I wonder if that is the State's function. I have no hard or fast rules about this but I would like to know if it is the business of the State to set itself up in business. Maybe it is as a means to an end, but as an end in itself, I am not too sure about it. The Minister went on to say:

The NDC will be in a unique position of being able to exploit all such opportunities. Obviously, its remit will be to invest in enterprises which are, or are capable of becoming, profitable and efficient and offer reasonable prospects for development and the provision of viable employment.

Obviously a matter of essential commercial judgment, and the repository for that commercial judgment is apparently to be on the board of the NDC, but we do not know yet its composition. It will have to be very good if it is to do better than the best in the private sector. This means that only winners should be on the board. The Minister went on to say:

The framing of this legislation is designed to take account of the fact that the State has limited resources and must aim to get maximum return in terms of employment from every pound it spends.

That seems to be very reasonable but one way of achieving that might be to have the State minimally involved because if the State is involved beyond a minimum, it ends up relatively more expensive and, arguably, more inefficient. The Minister adds that the NDC will further be required to notify him of the time limits for their involvement in the investment and of any subsequent decision to extend them. That would imply a great degree of "hands on" by the Department. Either the NDC will run their own affairs or they will not, but if they have to go to the Department for clearance every time they want to renegotiate a loan, they will be in trouble.

The Minister went on to say:

I am very pleased to note that the NDC will be able to be jointly involved with private venture capitalists in projects with a substantial financial dimension.

That is the kind of line I have been trying to encourage. He added:

The NDC will play a critical role in the Government's overall strategy for the development of the indigenous resource sector of the economy, particuluarly in relation to agricultural, fishery and forestry resources.

That is an area which will have to be very carefully considered by Government and if the NDC is to become a main vehicle in the Government's overall strategy for the development of a resource centre, which in itself may not have a high financial or employment yield but may be seen to be deserving of development, then it may have to depart from the commercial constraints I spoke of earlier. That is why I want the degree of departure explicitly spelt out in the Bill or, if not, in the regulations. The Minister went on to say:

Substantial investment is needed if production patterns are to be tailored to market needs.

I admit substantial investment is needed, but the first thing needed is planning. I hope a city Deputy can be forgiven for making this observation but I find it incredible that we pour hundreds of millions of pounds into the agricultural area without any agricultural plan or without any idea of what quotas of which crops we are going to produce. It is not just a question of investment. The investment will come about if the yield is there, but proper planning is essential, and perhaps even fundamental.

The Minister said:

I hope the NDC will, on its own or in partnership with other investors, be able to step in to assist in underpinning the development of long-term contracts or analogous arrangements.

"Underpinning the development of long term contracts". I presume that does not mean grants, or does it? Perhaps the Minister would develop that. I am worried about the word "underpinning". It sounds like buttressing something up. Frankly, the economic climate in which the NDC is to prosper and succeed will not allow for buttressing, particularly from PAYE funds. The taxpayers are sick and tired of buttressing and propping up, and from now on enterprise will have to pay its way or go to the wall. There is no reason why Joe Bloggs, working in a small company, should have to compete in a hostile environment while certain agencies and sections of the State are apparently immune from these chill winds. The Minister said:

The NDC's involvement will also fill an important gap in terms of State financial aid available to the tourist industry, as pointed out in the recently published White Paper on Tourism.

I am not clear precisely what he means by that. The problem is presumably the lack of aid and the answer is to give them aid. The idea that simply because we create an agency money will suddenly be made available is the kind of woolly thinking which has us where we are. It must be remembered that there are not any vast funds available, because they are exhausted. The Minister said:

The availability of investment funds from the NDC should act as a catalyst in establishing the initial viability of joint schemes of this kind throughout industry.

Unless I am very wrong, a catalyst is an agent which does not take an Act of Parliament, but is in the background. I wonder if that is what the Minister means to say because if the availability of funds is to help to establish joint schemes of this kind, then we are not talking about a catalyst. However, if it is a question of establishing something feasible, the IDA have feasibility study schemes. The Minister said:

The NDC's investment perspective will be longer than that of many traditional investors.

It will be aiming at making a profit, but I would like to raise one question about value for money. How is the State to judge value for money if the time horizon is so far in the future that we will not know for another 20 years if the project is successful? The State has a right to institute some system to ensure that value for money is obtained and to monitor that the investment is paying a dividend and giving the NDC distant horizons for a return on investment may provide them, and us, with a facility for avoiding the need to answer that question. The Minister went on to say that the giving of loans by the corporation would be subject to the following conditions:

(i) where financial assistance is being provided by the Corporation for a project, a maximum of the 30% of the initial assistance provided by the Corporation may be by way of loan capital;

I wonder why that kind of decision is being made now. Surely that pre-empts the whole point of the NDC's existence. If their job is to make an evaluation, put in whatever structure and funding arrangement as they see fit, why should we set a limit of 30 per cent? Is that an arbitrary figure? Why not 35 per cent or 25 per cent? What is its function? How does that figure relate to the work of Fóir Teoranta? The Minister goes on to say that there is no danger of the corporation losing sight of its job-creation function and becoming a State rescue service, yet earlier in his speech the Minister made a statement which does not gel with that — he spoke about being able to assist in underpinning the development of long-term contracts or analogous arrangements. Maybe I am misreading this, but if I am, perhaps the Minister would correct me. The Minister also said:

The corporation will be judged at the end of the day in accordance with its success in achieving these twin objectives.

I ask, how can that be evaluated? Cost per job? Number of jobs created by the NDC? What systems are in place to assess if the NDC create these jobs as opposed to all other agencies who claim they are involved in creating the same jobs? The Minister said:

The NDC will not be allowed to make investments in excess of £1 million without my consent, or in excess of £2.5 million without the consent of the Government

Are those limits arbitrary? Are they a constraint that is not necessary at this to give to the NDC? Are they index linked?

The Minister said:

As a further element of protection to the taxpayer, section 33 of the Bill imposes restrictions on the corporation entering into fnancial commitments in respect of items such as leasing or purchasing office premises or office equipment.

Are there circumstances under which that could be the right thing for a business to do? If that is so should not the NDC be able to say, "Go ahead and do it"? Why have a dog and do the barking yourself.

The Minister said:

It is not mine nor the Government's intention that the members of the board be appointed simply because of their political or ideological views.

I am pleased to see that and I trust that what he means is not just that the members of the board will not be appointed simply because of their political or ideological views but that their political or ideological views will have nothing whatever to do with their appointment. Those views could be known privately and I hope that they will not be known. I hope that their predominant characteristic will be that of an achiever, somebody who has achieved demonstrable commercial success. That is not to say that people in public life, or people with a political affiliation, by definition do not achieve that now and again but there is a whiff of cordite in the air in that area and I hope the NDC do not go down that road. If they do we can all throw our hats at it.

The Minister said that staff of the highest calibre must be attracted to its ranks, and, obviously, he is right. In that respect I hope we are not going to get involved in another large staff recruitment drive unless the existence of that number of staff will be justified prior to the recruitment. The Minister said he would like to draw attention to the facility to give policy directives to the corporation and I have some worries in that respect.

I hope the issues I raised this morning are interpreted in the spirit intended, as questions which need to be answered before we can all be sure that the National Development Corporation is what we want it to be, a central dynamic for creating a new sense of entreprise and initiative and a new source of jobs in the country. I hope, as I am sure everybody does, that it will be. I have put down some markers which I hope will be cleared up in the course of the debate, or otherwise. I admire very much the initiative, the hard work and the commitment of the Minister for Industry, Trade, Commerce and Tourism, not just in the area of economic generation but in his contribution to the general policy in relation to the National Development Corporation every possible success. I look forward to some of the issues I raised today being dealt with by him in reply to the debate.

At the outset I should like to pay tribute to Deputy Keating whose contribution has been positive and courageous. He has taken a view which transcends the next election. There is always a temptation for politicians to have a time scale which leads to the next election. I should like to compliment Deputy Keating on his contribution in that regard because he did not fall into that trap. In doing that I am aware that it cannot be easy for a Government Deputy to make the type of contribution he made. I am not making a political point about that.

Any proposal which would promise significant hope to the unemployed and a profit for the Irish taxpayer into the bargain merits the most serious consideration especially at a time when unemployment has climbed to record levels and the public finances are, as we all know, under increasing strain. However, close scrutiny of the Bill is warranted. Having scrutinised its provisions objectively I can only conclude that clearly it is a wrong direction at this time. The nation is on the bring economically and other responses are called for, indeed, some of the responses suggested by Deputy Keating. Some of the proposals and ideas he put forward are ones I could easily live with and support. I hope the Government will listen to such proposals because he has suggested the road to go. I do not think the Bill indicates the road we should travel for a number of reasons.

It is suggested in section 8 that the National Development Corporation should have a share capital of £300 million, divided into shares of £1 each. That section goes on to say that the Minister for Finance may, with the consent of the Minister, take up subscription shares in the corporation having regard to the amount of capital investment proposed by the corporation. What that simply means is that the £300 million is authorised share capital. People might have wondered why the original figure in the Government's programme of £200 million suddenly became £300 million. It was not that somebody found another £100 million but simply that it dawned upon the people who drafted the Bill that it did not matter if £800 million, £1,200 million or £3 billion was inserted because it is authorised share capital. It does not mean anything. It is purely a nominal figure that is pulled out of the sky. Every company has a nominal and authorised share capital. It simply means that one may issue capital up to that figure. It does not have anything to do with issued share capital.

My first criticism of the NDC is that it does not have an issued share capital. The Government of the day are allowed to sanction projects £1 million by £1 million. The issued share capital of the National Development Corporation on the day of its inception is the big sum of nothing. The first project on the table may get £1 million sanctioned and then we are away. That point is the kernel of the issue. The Bill permits the Government to invest in certain industries but I wonder if that power did not exist through the IDA. There is nothing to stop Udarás na Gaeltachta, the IDA, or other institutions, investing in a company if they wish to do it. All that is required is a small stroke of a pen, a change of a direction or a guideline here and there. The IDA have bought into companies. I can recall them buying a part of a company known as Lake Electronics. Údarás na Gaeltachta have bought into far too many companies. The National Enterprise Agency could do this.

All this fuss is saying that the Government may buy into companies. The figure of £3 million is mentioned but in effect it will be £1 million by £1 million. Really it is much ado about nothing. Certainly, it is very much a political measure rather than a serious attempt to tackle our economic difficulties. The corporation will unnecessarily replace the very effective National Enterprise Agency which, in fairness, has provided arms length venture capital in a much more effective and far less political way, forms of financial assistance and the spark that is needed in industry. They have done that admirably. Obviously, it is an insult to the agency when suddenly they are being wound up and replaced by the very politically toned umbrella agency which will act as a big brother.

I do not need to repeat that we are heading for, unfortunately, another layer of red tape. When people prepare such Bills I wonder if they think out the contents. Section 13 states:

It shall be the general duty of the Corporation—

(a) to assist in the creation of the maximum amount of viable employment in the State, and

(b) to carry out its objects, which shall include the realisation of investments made by it as soon as is financially and commercially prudent, in such a manner as to enable the Corporation to earn a reasonable return on any investment made by it and ensure that funds are available to the Revolving Investment Fund for Employment.

Under section 13 of the Bill the object of the NDC is to realise its investments as soon as financially prudent. When is it financially prudent to realise investments? When they are doing well, of course. We are trying to enact a Bill which says we will get rid of all of the good investments and keep the bad ones. Have the Cabinet thought about that clause where it says the object of the Bill should be the realisation of investments? I know there was a political squabble about this as to whether they should be forced to sell or whether it should be just wishful thinking. I wonder what the word "object" means. If it was not carrying out its objectives, would that be contrary to the Bill? It would be contrary to the Bill. They are duty bound under this Bill to sell off the investments as soon as it is commercially possible. In other words, they must sell their investments as soon as they get going and hang on to the bad ones and throw them in with ICI, PMPA and all the other companies we have hanging around our necks, leading to fury in the PAYE sector because of high levels of taxation.

This is nonsense to put before the House. I say that in a national sense. It does not have £300 million in it, it does not have 10p in it, and it insists that they sell off the good projects and keep the bad ones. This is crazy legislation put foward as a solution to our economic problems. Assuming the National Development Corporation have to put in a few million pounds, it will add to Government borrowing and to taxation. One does not have to be an economics student to figure that out. In relation to Government borrowing and taxation and the National Development Corporation's role in it, have we considered that four or five years ago this country owed the princely sum of £8 billion and today we owe £20 billion?

It was only £12 billion yesterday according to your spokesman.

That is foreign debt, Deputy Kelly. I am talking about total national debt. A proposal like this will be organised with some further borrowing and the results are dubious. The national development approach has been tried and found wanting in a number of countries. It is a pity to think of the time and energy wasted by everyone involved in drafting this legislation when the country has been crying out for some straightforward proposals. Some of the proposals put forward yesterday were quite good and would be far more in line with what this country should be pursuing. The PRSI proposal which I suggested from these benches for many years, involving a tapering of PRSI so that the more people we employed the less PRSI one would have to pay, was adopted yesterday and I am pleased that that has happened. That is the direction which is much more important than setting up this smoke screen to pretend that it will handle the problems, to give hope to people which will not be fulfilled.

The return on investment that a number of these companies will expect, given the political undertones and, as Deputy Keating pointed out, the requirement of the NDC to underpin a number of situations, is unlikely to be anything close to what it should be in a real commercial situation. We should therefore admit that this is a social service rather than a commercial enterprise. If that is the tone of it, it will not be of any use.

I do not wish to be too pessimistic about this because, considering the shape of our economy, any proposal put before the House must be seriously considered. But I cannot help feeling that the effect of section 13 will be that in a few year's time we will be standing here debating what to do with the litany of lame ducks and white elephants that have been set up, belonging to the NDC, and asking that they be given further injections of funds to keep them viable because they will be in somebody's constituency and, after all, another half a million pounds will keep it going. The Minister will have the final say, and why should he not authorise it? We will want the Minister down here or in front of a public meeting to demand that a factory in a town should be kept open. There we will go again on the merry-go-round of poor decision making and crazy economic decisions. I am not exempting any side of the House from making bad decisions. They have been made by all sides for too long by too many Governments. This Bill goes in the wrong direction and it should not be continued with. It is a continuation of the kinds of difficulties we have faced for a long time.

Section 14 also indicates the kind of thinking that is around. It says:

The Corporation shall inform the Minister in writing of each investment made by it, the time limit fixed by it for its involvement in that investment and any subsequent decision to extend any such time limit.

In other words, they must tell the Minister everything they have done and everything they are doing, not once a month or once a year. Each single investment must be reported. It is quite clear that this organisation would very quickly become the political arm of whichever Government were in office, because the Minister has to sanction each and every million pounds. Just think of it, 300 political decisions to be made if each decision costs £1 million. Will that not be great fun over the next ten years?

You are going to abolish it next year according to yourself.

I heard your leader promise, despite having disclaimed making any more promises for the rest of his political life, that he will abolish the NDC if he gets back.

No doubt Deputy Kelly will support that move. I will await his speech with interest. I have a feeling that Deputy Kelly might support that decision if we decided to do that. I look forward to the Deputy's vote on that occasion also.

This organisation will be a political arm of any Government. The bottom line is that the pressure on political people in the next couple of years under this company will be enormous, because the company involved and the people working in it, the management and ownership, will know that the buck stops with the Minister and they will know where and how to apply the pressure to get the maximum political input. Then we are into emotional situations about sugar companies and so on, an area where nothing has been decided on its merits but having regard to whose constituency it is in and whether or not we should have a strategic fleet and all these semi-emotional areas. If people thought the buck did not stop with the Minister they would take decisions on a different basis. I feel very strongly about this Bill. It should be looked at again in the interests of sense.

Another area which shows the political thinking in this Bill is illustrated in section 11 (f) where it says:

(f) No person shall be appointed auditor of the Corporation without the approval of the Minister given with the consent of the Minister for Finance.

They cannot even appoint their own auditor because two Ministers must approve it. That is not a big thing but it indicates the thinking and politicisation of economic development that will occur under this legislation. It also points out in another section that any sum over £250,000, which in this day and age will hardly buy a proper computer system for a major operation, must be specifically sanctioned by the Department. That is from an institution who supposedly will be at the frontiers of new technology.

I have talked about the £1 million that the Minister has to sanction. It is worth putting on the record that the Cabinet, the Government of the day, must consider any proposal for over £1.5 million. One can imagine the whole business of Government. Instead of a Cabinet, a Government, dealing with major policy, decisions and directional matter — if this achieves even half their ambitions — they will be absolutely bogged down in scrutinising and poring over cash flows and so on involved in sanctioning what is in theory 300 £1 million projects or maybe 600 £0.5 million projects. That would keep some Cabinet busy for about five years poring over maybe 600 individual investments, or some hundreds in any case. That also leads to considerable scope for political interference.

Section 13 expects them to keep the bad ones and get rid of the good ones. Section 10 is equally ludicrous. Let us stand back for a minute and think what a knot we are getting ourselves into. Section 10 provides that:

(1) The principal object of the Corporation shall be stated in its memorandum of association to be—— and paragraphs (a), (b), (c) and so on talk about investing with semi-State companies in something. Those eight or nine paragraphs suggest getting together with semi-State companies to invest in some new project. Think about it. We have the YEA, the IDA, CTT, the IIRS, the NBST, Fóir Teoranta, AnCO and now the PMPA and ICI. We are falling off the end of the letterhead with all of these companies for accumulating and amalgamating. Therefore, what can we do? Instead of using one of these agencies or existing semi-State companies to set up these companies that are being suggested, we say "OK, we will not do it that way; we will set up the NDC. They will approach the semi-State company and between the two of them they will invest in ‘profitable enterprise'". If, say, the ESB, CIE, Aer Lingus or any of these companies see a good project and want to invest in it, why can they not go ahead and invest in that project at the moment? There is no reason. Of course they can go ahead and do it, and they are doing it all the time. Aer Rianta are an excellent example of this. They have very good shops and they are expanding and making money. State companies who make money have my support; State companies who do not make money have not my support. I wonder why we must have an NDC to get on the telephone to Aer Lingus or Aer Rianta to say "would you like to go into business with us and we will set up a third unit?". Here we have on the one hand an existing semi-State company, a new NDC over here getting together to form a third company who will be a profitable one because they have not only one big brother now, they have two big brothers so they will do twice as well. Bring in a third one and they will do three times as well. It is crazy thinking, with the economy on the brink, to set up this albatross so that an existing company can get their act together and invest. Tell State companies at the moment to make those investments if they want to make them. Do not wait for the telephone call from the NDC to the effect that they have a team of whizz kids who are going to straighten the company out. Take sections 10 and 13 together and you are heading for economic chaos and disaster by allowing this Bill to become law. Rather than creating a number of viable jobs it will maybe create some short term jobs. At the end of the day the only jobs it will create are those in the head office of the people who are running the organisation. They will be quite busy with memoranda and so on pouring out for the next couple of years.

There are better ways of initiating the kind of action we need than by setting up what can only be described as a major white elephant. Forget it. Give the National Enterprise Agency their head and build them up. They are a good agency who have made some good investments and they have the right arm's lenght approach. Give them their head and they will do an increasingly good job. If anything they have been too cautious with the £5 million or so which we gave them. They have not managed to invest all of it yet because they are not satisfied that they have got the right projects.

Secondly, we could tackle the defects in the domestic capital market which are an impediment to meeting the financial needs of Irish industry. That is a whole subject which I will not go into today but the Government would do well to examine that area. We could develop the venture capital market and listen to what the people involved in that industry are saying. I posit to the Minister for Finance two or three budgets in a row. The venture capital idea introduced was very sound thinking and we suggested to him that he had to take some risks with it because what happened in effect was what many of us felt would happen. It was a very good idea but he just threw cold water on it, tied it up with red tape, and it was not taken up by the people who were supposed to take it up. The result is that we have now only two funds going in the venture capital area at the moment where we should have 20 or 30 funds going. In the coming budget he might take the wraps off that and let it rip a little. If you do not let something like a venture capital business rip you will not get the kind of activity you need.

Next, we must reward the creation of wealth. I have been four years in this House and to my memory we have spent 90 per cent of that time debating the allocation of wealth and its distribution and which area we are going to favour with £2 million so that the Minister can say that he is providing £4 million in the Estimates. Like hell he is. It is taxpayers' money provided by nobody but the taxpayers. That type of approach, where we constantly discuss and debate whether we give £2 million to education, £2 million to industry or whatever else, takes up much of the time of the House; but how much time have we given in this House to the creation of that wealth and the production of it so that we can all at leisure arrange to distribute it? We seem to have forgotten that elementary economic necessity to create that wealth, and there are ways to create it. I have laid out in this House on a number of occasions some suggestions as to what we can do in that area. One is to so adjust the taxation regime — in fairness, some movement was made on this yesterday — so that the wealth leaving this country will stay in it and be invested in it.

If anyone can talk about high taxation as having a silver lining, one of the silver linings at the moment is that everybody caught in that grip of high PAYE and very high taxation is looking around for ways to create activity for himself or herself by which to earn some income which does not come under the crush of that type of taxation. That has led some people into the black economy, which is unfortunate, but an increasing number of people can be led into the white economy if the taxation system is adjusted. In other words, if you are paying 65 per cent tax you are paying nearly half your income in taxation and if the Government of the day suggest that they will give tax breaks in certain areas if you get into those areas, what will you do? You will get into those areas because the weight of taxation will force you into them. Therefore, the correct direction for this or any Government to take is to open up the tax breaks in the economy that allow the wealth to be created and the companies to be formed. Some of yesterday's proposals went in that direction. The city centre one which allows for 100 per cent increased capital alowances if you invest in an area illustrates a policy that has been used in this State since before the time of Deputy Seán Lemass in allowing mining people to have tax free holidays and so on. It is an economic policy which has stood the nation well and I recommend strongly that we continue on that road because it is the road that will help us enormously.

I shall conclude by referring briefly to the thrust of what Deputy Keating had to say. Perhaps it is the day for the crazy left not to be talking. A number of us are beginning to say what Deputy Keating has been saying and what perhaps one might expect Deputy Kelly to say also, that is that £2 out of every £3 spent in the country is spent by the State. More than 65 per cent of all spending is on the part of the State and that money comes from the taxpayer. That leads us to a conclusion that sometimes it may not be attractive politically. In his contribution to this debate Deputy Taylor said that the reason for the NDC was that the private sector had failed, that that sector had not created the jobs and that therefore the public sector had to step in. One might be forgiven for wondering where Deputy Taylor has been living if he is not aware that more than 65 per cent of all spending is spent directly by the State. While there have been some successes in State enterprise, some notable successes that we should continue to support, the drift of State involvement is clearly in the wrong directiion and that is the direction in which this Bill, too, is leading us. Instead of rolling back the involvement of the State in the economy we are rolling out that involvement further. It is not too dramatic to say, though it could be misinterpreted, that Governments do not create jobs. They create the atmosphere which allows the Irish people to create jobs.

Hear, hear.

We are at a watershed so far as this Bill is concerned. It is regrettable that the issue has become so political. It might usefully have been dealt with by a committee, for instance, allowing all of us to stand back a little from it, as it were. Deputy Keating talked of our becoming like an eastern bloc in that spending by the State here is far in excess of the State spending in any other western economy. Anybody who wishes to march or to complain about the levels of PAYE must begin to support the type of movement away from State involvement that is needed. Unfortunately, though, we are beset by the double think. I attend meetings all the time at which people criticise our high taxation levels and where 20 minutes afterwards the same people are on their feet asking why we do not spend more money on such organisations as the IDA and CTT. The time has come for some clear thinking and for the realisation that either one supports and advocates State involvement as the solution to our economic problems or supports the notion that what is needed in this regard is less State involvement. I say that we should have less State involvement in terms of solving our problems.

I wish to pass on the House the experience I have gained in my capacity as vice-chairman of the Joint Committee on Commercial Semi-State Bodies. I refer to the matter of Údarás na Gaeltachta. Assuming this Bill will be passed I offer this suggestion to the NDC by way of advising them on a road they should not travel. Údarás na Gaeltachta, incidently, have just written off £20 million of taxpayers' money as a result of the failure of the companies in question. What happened in Údarás was that they were approached by a large number of people from the private sector and decided innocently on the purchase of ten to 15 per cent of the shareholdings of certain companies. They did so to enable the companies concerned to get off the ground because without that push that would not have been possible. Subsequently these companies ran into trouble and asked the State for a loan. Údarás passed on the loans but after a while when the companies got into further trouble the loans were converted to equity. Consequently, though having begun with only 10 per cent of the companies, Údarás found themselves with 51 per cent of the shareholding. When these companies got into further trouble the Government said that perhaps the time had come for liquidation but that did not happen. The companies remained in existence and all the debts were paid off. Eventually the companies closed down. That has been the experience of State companies buying in innocently 10 per cent in private companies and then being sucked in to a much larger extent.

Once the State becomes involved even to the extent of 1 per cent, neither the banks, other State agencies nor international customers will refuse to facilitate the company because they know the State is involved, regardless of how minimal the shareholding. I am reminding the House of the Údarás experiment solely to indicate that my objections to this Bill are not founded on what might happen but on what has happened in an almost identical organisation who have been making these investments for many years. The cost in their case has been the writing off of £20 million.

Údarás na Gaeltachta have now changed a number of their policies and may get it right from now on. They are starting off with a clean slate and I wish them well. However, the lesson they have learned has been an expensive one but let us not spend £20 million for the experience of the NDC not learning from similar mistakes.

In conclusion, then, my main objections to the Bill are that it is over political, that there is already too much State involvement in the economy and that the NDC will result in the country being littered with dozens of white elephants especially in the context of the requirement that the State moves away from the good companies but keeps the bad ones. The House should now debate what is the right direction for our economy.

I find it difficult to disagree with anything Deputy Brennan has said except in relation to the very small degree to which he brought politics into his speech. I am very much in sympathy with the point of view he puts forward. There is no use in trying to pretend that the Bill is devoid of an ideological background or that the delay in introducing it has not been due to some extent to ideologies. To say otherwise would be disingenuous and foolish of me but in order not to appear to be damning the Bill and in an effort to put it into some perspective I must say that all the ideology did not come from the Labour Party.

The first reference I recall to a national development corporation was about 1976, in the latter days of the Coalition Government lead by Mr. Cosgrave. The proposal was articulated first in my hearing by Mr. Brendan Halligan, but there were people in my party who considered the idea a good one so there is no special ideological taint about it. The idea featured in the Fine Gael election programme of either 1977 or 1981. While there is no question that an ideological strand runs through the Bill and its history, it would not be fair to say that the ideology was all on one side and that the other partner in the Coalition has been dragged 100 per cent unwillingly into producing the legislation. That would not be my experience, whatever foundation there may be for the general perception.

I did not hear Deputy Taylor speak so did not hear the sentence in his speech to which Deputy Brennan has just referred, but it does not surprise me that it came from him. I have often heard the same thing said before. I have frequently heard it said, not so much or so loudly from the Labour benches but very loudly from The Workers' Party benches and outside the House, that the private sector has failed the Irish people, that it has failed to produce the jobs so the public have to take up the slack and do what the private sector have failed to do.

Debate adjourned.