I move:
That a supplementary sum not exceeding £1,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1988, for the salaries and expenses of the Office of the Minister for Tourism and Transport, including certain services administered by that Office, and for payment of certain grants and grants-in-aid.
When my colleague, the Minister for Tourism and Transport, moved the main 1988 Estimates for his Department in this House he had, because of time constraints, to limit his remarks on the tourism sector. However, he promised Deputies he would deal mainly with tourism matters when the Supplementary Estimate was being taken for his Department. The Minister is attending a ministerial meeting in Brussels today and cannot be with us but I, on his behalf, will honour that promise now.
I would ask the House to look on this Supplementary Estimate not just as a simple book-keeping exercise but rather as part of the ongoing development strategy that we have pursued since taking office. The occasion offers me an appropriate opportunity to review the progress that has been made and to sketch the path of our future progress.
The economic philosophy behind this Supplementary Estimate is the use of buoyant revenues, generated by our imaginative tourism and air transport policies, as the feed stock investment for further development in the tourism and aviation sectors.
I will deal with gross expenditure first. The main proposals in the Supplementary Estimate are to allocate an additional appropriation of £5.3 million to tourism, the provision of £1 million for grants for local airports and to make a number of minor adjustments within the other expenditure subheads in the Department's Vote.
As an offset to these the Appropriations in aid for the Department of Tourism and Transport are £7.1 million higher than forecast in the 1988 Book of Estimates due principally to a £2 million increase in the Aer Rianta surplus, being surrendered to the Department, and £5.1 million in additional receipts from the Eurocontrol user charges.
I would now like to address myself to the question of our tourism policy and performance. As the House is aware this Government have chosen tourism as a sector for special development because of its potential for wealth and sustainable job creation. We set ourselves high standards and targets.
The targets as set out in the Programme for National Recovery are: to create an extra 25,000 jobs; to attract an additional £500 million in foreign tourist revenue; to double the number of foreign tourist visitors. These are ambitious targets. We were confident, however, that with hard work, the right policies and increased investment they would work. In the course of my remarks I propose to show that our policies are working and that they provide a sound base on which further development can take place. Our core strategy to maximise the potential of Irish tourism was set out in the Programme for National Recovery. Briefly it is to improve our price competitiveness; develop and improve the quality of existing products and expand our product range; improve the promotion and selling of our tourism products. The results that we have achieved speak for themselves.
1987 was a record year. For the first time ever, total tourism revenue topped the £1 billion mark-up 18 per cent on 1986. Out-of-State tourism revenue amounted to £723 million — up 12 per cent on 1986. Over 2.1 million overseas visitors came to Ireland — an increase of 12 per cent over 1986. The domestic market, disappointing in previous years, also improved dramatically with revenue exceeding £290 million, a 34 per cent increase on 1986.
The momentum seen in 1987 has been maintained in 1988. Estimates for the first nine months show an almost 13 per cent increase in visitor numbers compared with 1987. All the indications are that we will be very close to achieving our 15 per cent growth target for 1988 as a whole. However, for me the most gratifying indicator of our success is that an estimated 12,000 new jobs have been created both directly and indirectly because of the increases in tourism numbers and revenue in the past two years.
These results amply confirm that we are on course to achieve the targets in the Programme for National Recovery. However there is no room for complacency. We must press ahead, continuing to keep our costs under control and improving the quality of the product.
In the growing international tourism market, price is a significant factor in the choice of holiday destinations. A major handicap for Irish tourism before we took office was the level of price inflation here and the impact which it had on our competitiveness. A central plank of the Government's overall economic policy is to control inflation. Our inflation rate for 1988 is estimated at about 2 per cent which is well below the average predicted for EC and OECD countries and has helped keep price increases in the tourism product to the absolute minimum.
At the level of the industry itself, we have also tackled price competitiveness. Among the measures we have taken have been a pilot car rental bonus scheme in autumn 1988 under which US visitors hiring a car for seven days were entitled to a $50 discount and the amendment of the VAT Refund Order, 1986, so that more imported tour coaches will benefit from the effective 10 per cent rate of VAT. Tour coach operators can thus improve their product and compete effectively with UK operators.
I singled out increased investment as a key factor for maintaining a buoyant and developing tourism industry. We have achieved this by direct action and by creating an environment conducive to and rewarding for investors.
The extension of the business expansion scheme to the export tourism sector has been a remarkable success. Already Bord Fáilte have approved marketing and development plans for 28 projects involving planned investment of about £23 million.
We have negotiated substantial special assistance for tourism development in the Border counties and Sligo through the ERDF and the International Fund for Ireland.
Last but by no means least in our list of direct achievements is the package we announced in August for the development of regional airports for tourism development purposes.
The various practical initiatives in increasing investment, improving the product and providing the infrastructure are essential ingredients for a vibrant tourist industry. However, we then have to sell our wares in international markets against fierce competition. When we took office we recognised that our marketing was jaded and lacking in penetration and that an urgent reappraisal of our approach was necessary. We introduced our own crash programme in May 1987 as a stop-gap measure. We then did something that no other Government in this country had done before. We went to the coal face to meet the practitioners in the industry. We convened a tourism forum involving some 100 representatives from the industry to get the industry's views on the marketing and other initiatives which were needed for the development of the industry.
The forum was a resounding success and as a result of its recommendations the Government allocated an additional £4 million for a special marketing programme for the 1988 season. This involved an innovative series of marketing measures recommended by a specially established tourism task force which significantly boosted tourist traffic in 1988.
The tourist industry reacted most positively to the campaign contributing over £2 million to top up the Government's contribution. This was a most heartening and welcome development not only for the extra resources provided but also for the clear demonstration that the industry again had the confidence and commitment which had been sapped by ineffective leadership in previous years.
In 1988 we continued at many levels the constructive dialogue we had established with the industry. In September Bord Fáilte convened a forum of both domestic and foreign operators in the Irish tourism market. Once again we have taken full account of the industry's views in adapting and developing our policies for tourism development. We were also thrown out a challenge by the industry at this forum. The President of the ITIC stated that if the Government allocated an extra £5 million to tourist promotion this would be matched by the industry. We took up this challenge in the spirit in which it was offered.
As a result the main provision in the Supplementary Estimate before us provides Bord Fáilte with a further £5 million for marketing purposes to boost traffic in 1989. However, the industry are also making a matching contribution, so that we now have a special £10 million marketing programme in place for 1989.
I am sure the House will agree that the direct involvement of the industry in this way is a welcome reversal of past trends when many operators in the industry tended to sit back and wait for the tourist to land on their doorstep.
Before concluding I feel I should notify the House of a few very important developments in EC tourism policy over the past year. In May the first ever meeting, albeit an informal one, of Ministers of Tourism in the Community took place. It was convened by the German Minister for Tourism. Mr. Bangemann. In September the Greek Presidency also convened an informal meeting of Tourism Ministers. However, on Wednesday next, 14 December, we will see the first formal meeting of Ministers of Tourism since the Community was founded. It may be a small step but it is a welcome one which shows that the importance we attach to tourism is also being accepted by most of our EC partners.
I would also like to assure the House that we will take full advantage of this new and improved environment for tourism within the EC when devising our national and regional programmes for assistance from the Structural Funds. We have continually emphasised to our colleagues in the various Councils of Ministers that there is no shortage of good quality tourism generating projects, particularly in the cultural and specialist leisure areas available in Ireland but the finance is not there to develop them as quickly as we would like. Financial assistance from the EC would not only make a major contribution to accelerating the provision of such facilities and support services expected by tourists but would undoubtedly encourage further successful investment by the private sector in these products.
A lack of appropriate resources is also responsible for our inability to develop major products such as the theme parks and outdoor pursuit centres which are now being established in other Community countries. These developments incorporate accommodation, all weather cultural, recreational and day visitor attractions and act as major tourist magnets for a region with significant spin-off benefits for the economy, especially in terms of employment creation. We have had discussions with a range of national and international entrepreneurs on the question of establishing such major projects in Ireland. However, because grant assistance or other incentives are not available currently for such projects entrepreneurs could not proceed. The lack of such facilities places us at a disadvantage with our Community competitors in the international tourism market. Therefore, we have argued that funds should be made available for the specific purpose of attracting such large scale projects here over the next four years. We will keep the House informed of progress in this area.
In conclusion I would like to pay tribute to all who have contributed to regenerating the Irish tourism industry over the past two years. I do not have the arrogance to pretend that we in Government did it on our own. We provided the leadership, resources and the framework but, without the co-operation of the industry, these would not have yielded the excellent results we have achieved. We were also fortunate in receiving some excellent advice from a range of sources, including I readily acknowledge, Members from all sides of this House.
The theme of a Bord Fáilte promotional campaign this year was "together we can do it". I would prefer to change the word "can" to "should" because, mar a deirimíd inar dteanga dúchais, "Is ar scáth a chéile a mhaireann na daoine". Molaim an Meastacháin Breise seo don Teach.