I move: "That the Bill be now read a Second Time."
When introducing their recently published document, An Economic Accord for 1992, Fine Gael announced their intention to publish this Bill. It is a comprehensive Bill, attempting to cover all aspects of preparation for 1992. Fine Gael believe it is only by a comprehensive, integrated approach that the country will reap full benefits from the Single European Market.
The process of preparation for 1992 is the last opportunity Ireland has this century to lift itself from the relative economic decline from which it has suffered for over 100 years, almost since the Famine. In the Single European Market every inefficiency in our economy will be exposed, any costs that are out of line will lead to job losses, any sluggishness in our response to market opportunities will be fatal; others will get in before us. That is why every aspect of the economy must be modernised in preparation for 1992. A comprehensive Bill of this kind is the quickest way to remove a whole series of legal roadblocks to our development. If each of the legal changes proposed in this Bill, ranging from education right through to roads policy, is left aside to be dealt with in individual Bills emanating from individual Departments, valuable time will be lost. Some of the measures may not be implemented for years because they are low in the priorities of individual Departments.
I do not expect that the Government will agree with every detail of the individual provisions in this Bill. They may even want provisions to be removed entirely. That can be dealt with on Committee Stage. The issue to be decided now on Second Stage is a different one. It is the question of whether we should seek to have a comprehensive Bill to deal with 1992. Do the Government agree that 1992 issues should be put at the top of our legislative agenda and dealt with right away? This Bill would enable the House to do that, to put 1992 and everything germaine to preparing for it at the top of our agenda and deal with it comprehensively and quickly. If politicians can be seen to work together to prepare for 1992, as would be seen to be the case if this Bill is accepted, this example will encourage others. If, on the other hand, politicians are seen not to wish to co-operate in a matter of this kind, some of the ritual sermonising to the rest of the economy about preparation and co-operation for 1992 will seem much less credible.
Let me refer to some of the detailed provisions in the Bill. Section 12 sets formal targets for national industrial performance as a result of the measures proposed. We must set our sights high and aim at something worthwhile. These targets will be established by law, and are to achieve by the years 2000, (a), an increase in the labour force at work by 100,000, that is up to 320,000 in industry and related services and, (b), a doubling of Ireland's share of the world market for industrial products by reference to our share in 1987. These targets are not drawn from the air; they are based on the OECD study on innovation policy in Ireland published in 1987. The Bill also provides in section 12 for the establishment in all seven regions of the country of regional development authorities similar to SFADCo, who already operate successfully in the mid west. All agree that SFADCo have worked well. Why then should other regions be denied the same opportunity that SFADCo afforded to the mid west? Local talent can best be harnessed if there is local decision making. The flair and imagination of our people will not be harnessed by schemes and plans that are simply handed down from Dublin. There must be genuine local responsibility. That is the way to get results and that is why in this Bill we propose regional development authorities throughout the country.
The Bill provides in section 7 for regular reporting by the Government to a joint committee of the Dáil and Seanad on the progress of preparation for 1992. This committee could provide the basis for a national forum for 1992 as proposed in the Fine Gael document An Economic Accord for 1992. Such a national forum of 1992 would bring together politicians of the main parties along with the social partners. One of the positive achievements of this Government has been the constructive involvement of the social partners in decision making. If it has been successful in the limited area to which it has already been applied, why not, as was done in the New Ireland Forum in regard to Northern Ireland, extend this consensus approach to involve political parties as well in regard to the economy? Surely 1992 is a topic important enough to warrant such a radical departure. Such a forum on 1992 would provide a means whereby the valuable work of bodies like the NESC could have a direct input to the political system. The NESC have produced numerous reports on a variety of topics in respect of which there is no direct access to the political system and which, as a result, have little impact. The involvement of all the major political parties in a forum on preparation for 1992 would also tend to obviate the danger of a recurrence of manifesto politics of the 1977 variety. Regardless of whether one has read that manifesto document, one must agree that manifesto politics of that type did nothing but harm to this country. With a forum approach in which fundamental economic policies were being looked at together by politicians of all major parties, the scope, the temptation and the credibility of manifesto politics will be greatly diminished.
The Bill provides in section 8 for the statutory establishment of an independent national roads development authority. Such an authority have already been set up by the Government but on a non-statutory basis. Section 8 would enable the Minister to give them a statutory basis. Only if they have a statutory basis will they have real authority, as is intended, to make decisions.
It is essential that there be effective, co-ordinated, long-term planning for road development. This cannot be left to a multiplicity of local authorities pursuing individual plans. One can drive at present on a wide spacious road but suddenly the road narrows, the surface worsens and one realises that one has crossed into a different county council area. That is no way to plan and a national roads authority would ensure that this type of phenomenon would become a thing of the past. Delays on our roads can cost dearly in competition for orders in the European market. Just in time delivery to minimise the holding of stocks in industry is a key element in industrial success. If goods are supposed to be at the harbour in Antwerp at 5 a.m. it is not a sufficient excuse to say that they were stuck in a traffic jam at Lucan. That is why we need a road development authority.
Section 8 also requires the Minister for the Environment to present to the Dáil before 30 June a report on improvements to country roads and the reclassification of roads. The recent cuts in the rate support grants by the Minister for the Environment make such a report on the situation of county roads a matter of urgency. Reclassification of some of these roads would relieve some of the pressure on them. Many of them are carrying traffic volumes which are inappropriate to their status as county roads.
Section 1 of this Bill makes statutory provision for the first time for the promotion of the teaching of continental languages in our schools. It provides that EC funds should be sought for the retraining of teachers in additional continental languages for this purpose. A certificate in continental languages for adults as well as for school children is also proposed. International teacher and pupil exchanges are to be promoted under the terms of the Bill. Only in this way will Irish people begin, through learning both the language and lifestyle of continental Europeans, to think as Europeans. If we continue to see ourselves, despite all the hype about 1992, as really part of the Australian-American culture, we will not get the best out of Europe.
At present the vocational education committees and regional technical colleges are precluded by law from co-operating effectively with industry. Section 1 (2) of the Bill will give them for the first time the statutory authority to co-operate with industry. This will allow for the placement of students and graduates in firms with a view to promoting employment and technological competence in Irish industry. It will enable regional technical colleges to do research for industry. Linking industry and education is a key area. Most people would agree that innovation is the key to success. The OECD in their study on innovation policy in Ireland identified above all else better links between industry and education as the key to success. This Bill provides for the first time the statutory basis on which this can be done, both in regard to vocational and regional colleges in section 1 and in regard to higher education in a later section.
The Bill also provides for the introduction of effective competition policy in our economy, thereby reducing business costs. This is necessary if we are to increase our share of the international market. It is to be done under this Bill by incorporating EC competition legislation, Articles 85 and 86 of the Treaty of Rome, in domestic law through section 14 of this Bill. These Articles of the Treaty of Rome would then become directly enforceable in the Irish courts as regards domestic as well as international business transactions. Predatory pricing, market sharing and all other abuses of a dominant position in the market would then become crimes in Irish law. That is the only way to stamp them out. It is much more effective than our present cumbersome procedure whereby there has first to be a complaint, then an inquiry, a report, a recommendation to the Government, the drafting of an order which has to be approved by the Dáil and finally action. That process can take two or three years. This Bill would make such activities illegal from the date of enactment and legal proceedings could be instituted without any of that wasteful process.
I recognise that a study is being done by the Fair Trade Commission into the feasibility of bringing Articles 85 and 86 into domestic law. I recognise that the Minister for Industry and Commerce may wish to have this report before bringing section 14 of this Bill into effect, if the Bill is passed. There is, therefore, provision in section 14 to give the Minister the power to deal with various administrative matters by regulation and also the power to delay the implementation of this section until he has the report and is satisfied that everything is ready for its introduction. I hope this overcomes some, if not all, of the objections the Minister advanced to an earlier proposal along the lines of section 14 promoted by Deputy Cullen and the Progressive Democrats.
Section 12 also requires regular reporting by the Government on the actual reduction of Irish costs for energy, electricity, road transport, postal services, telecommunications and air and sea transport to a level at or below that obtaining in other member states. It is important that there should be a legal requirement on the Government to report regularly to this House on the progress they are making in bringing down our costs. Only then will the Government have consistent pressure on them and be able in turn to put consistent pressure on the relevant agencies to bring down our costs to European levels. There is a great discipline for the public service in the requirement to present a regular report to this House on progress in a particular area. That provision in section 12 will be of great assistance in ensuring the consistent application of policy to reduce to European levels and below Irish energy, electricity, road transport and other relevant costs.
Section 6 of the Bill amends the Higher Education Act to give the HEA a specific mandate to promote links between institutions of higher education and industry. This will be achieved, for example, by joint ventures and research. At the moment the Higher Education Authority have no particular mandate to concern themselves with whether individual colleges are making an effort to establish links with industry or are making no effort. If colleges do make this effort, they may perhaps do it to get money to maintain programmes they want to continue. That is not the best motive. We believe that there should be a consistent policy applied by the Higher Education Authority in favour of getting closer links between higher education and industry for the reasons I have already quoted in regard to the OECD report.
The Higher Education Authority are also being required under section 6 to make provision for second chance or part-time education for those who have already spent time at work. Second chance education is vital as a means of providing a route back to work for those who have become unemployed. By putting emphasis on second chance education, we can also help to reduce emigration. Voluntary emigration is highest amongst those who have been in full-time education up to graduation from university, without ever having worked in Ireland. Young people who go from school to university, who have helped to finance their university education by summer jobs in America or Britain, never work in Ireland. Immediately on reaching graduation those young people see jobs in Britain or America as their natural destiny. If more of those people, in order to qualify for the maximum grants for university, or in order to have enough money to help finance their education, were encouraged to work for some time in Ireland before going to university I believe they would have a greater tendency to look to the Irish job market as a possible place of employment rather than, as many seem to do, going straight from the country to admittedly better paid jobs overseas. The brain drain is one of our biggest problems. It has been probably the biggest single problem inhibiting the development of the country since the famine.
In the case of the Finns, the Austrians and others who have suffered much more trauma than us, their talented people have to stay at home. They do not have the option of emigration because of the linguistic barrier and they are prepared to work, perhaps for less than they could get in America or Australia, in their own country. They may not have a choice because they do not speak sufficiently good English to take up a job in America, but the fact that they are forced to work at home means they invest their talent in their own economy. We have, on the other hand, a process whereby the best are being creamed off by recruiting agencies from overseas. People who should be the natural leaders in this community will become the natural leaders and wealth creators in other countries and that has been happening since the famine. We have had a process of negative selection in so far as our population is concerned over that period.
If we are to get into the European fast lane rather than the slow lane between now and 1992, we must do something about that. Putting more emphasis on second chance education, putting more emphasis on going to work for a while before completing higher education — preferably working here rather than elsewhere, but at least giving an incentive to people to work before going to university — is one way of fixing more of our people here and encouraging them to put their talents back into our economy. The composition of the Higher Education Authority is also being altered under the Bill in order to give greater emphasis to broad national concerns in the planning of higher education. More non-academic members are being introduced to enable the HEA to better perform a genuinely independent analytical role. Academics totally dominate the Authority at the moment. This is unhealthy. In future, under the Bill, a minimum of ten members of the Authority should be non-academic, of whom seven shall have had practical commercial experience.
The Higher Education Authority are also being required under the Bill to emphasise university disciplines which have good employment prospects in Ireland, and to eliminate unnecessary duplication of facilities. There is a high degree of wasteful duplication of facilities at the moment. This is money we cannot afford when so many of our young people are still leaving school without any basic qualification. As a result of this Bill, Irish higher education will be given a new statutory mandate to prepare for the next century.
Fine Gael believe it is essential that banks give greater support to economic development. Section 2 amends the Central Bank Act to this effect. The Central Bank are being asked to co-operate more closely with industrial development agencies. The asset fixation of our banking system and our bankers must change. Human resources, not physical assets, are what produce wealth. Human resources should be the best possible security for our bankers. They are not at the moment but I hope we can in a small way through legislation like this change those fundamental attitudes in our banking system.
Delays in obtaining planning permission from local authorities can inhibit commercial and industrial development. We propose in sections 3, 4 and 5 to reduce the time limits for decisions on planning applications. Similar provisions are being made in regard to by-law approval in urban areas. Section 4 also requires that, in the case of all planning applications, a notice shall always be erected on the site.
Ireland ties up a disproportionate amount of its national savings in houses. We are a relatively overhoused population in terms of our actual needs. Ordinary people do not tend to save at all in the form of wealth generating assets. The general public must be encouraged to put their savings into productive business which generates new wealth rather than the generation of consumer goods like houses. We cannot afford to have a disproportionate amount of our savings tied up in fixed assets where the employment spin-off on a continuing basis is small or nil.
Section 9, therefore, makes a radical new proposal to encourage greater investment in Irish industry by ordinary individuals. Taxpayers will be allowed under this section to use any unused portion of their normal mortgage interest tax relief as tax relief on interest paid on borrowings for investment in firms established under the business expansion scheme. Taxpayers with no, small or declining mortgages, will thus be given a major incentive to invest in job creation. This is much more productive than the present system which encourages people who have no, small or declining mortgages to invest only in trading up to a larger house in order to ensure that they get the maximum tax relief. By providing an option to take that tax relief in the form of interest on investment in something that will generate a flow of wealth rather than being a consumer good itself, like a house, we will remove the bias in favour of fixed asset investment in housing. We will then move more of our private savings into the productive sector.
It should be remembered that the Government, whoever is in power, cannot create jobs on their own. It is only if private individuals are prepared to use their savings as well to create jobs, and get a profit for so doing, they they will lift our economy. A tax incentive of this kind, which would encourage ordinary people to use mortgage interest relief as a means of investing in shares, will help us to achieve our full potential in that area.
The Government are asked under the Bill to investigate the possibility of selling shares in State companies to provide funds for the expansion of employment and activity by those companies. There is a provision in section 12 that the Government must present a report on the possible sale of shares in State companies to the House on or before 30 September 1989. I stress that the purpose of the sale of such shares would be to finance expansion by the companies concerned into other areas. The section also requires that the report be objective and cover the disadvantages as well as the advantages of the possible sale of shares. I trust that nobody could object to such an inquiry being conducted. Certainly it is a subject upon which a great deal of heat has been expended and, perhaps, the proposal in the Bill will shed a little light on to it and lead to constructive action on an agreed basis. It might perhaps find a way in which the Government could get over some of the objectives they are facing from some members of the central review committee in regard to this matter.
The creation of a single European market provides major opportunities for Irish agriculture. Irish agriculture still suffers from severe structural problems. Much of the land of Ireland is under-utilised. This is because the occupiers of the land are too old in some cases to utilise it fully but, for understandable reasons, do not wish to surrender ownership of the land. Long-term leasing provides a solution to this dilemma. It allows the ownership of the land to be retained by the original occupier while a younger or more highly motivated person has the opportunity to actually use the land and use it more intensively for a period on a secure basis.
Section 10 proposes to more than double the existing tax relief available to those who let their land under long-term leases contracted before the end of 1992. The provision of a cut-off date, the end of 1990, for this extra tax relief and the revision after that date to the present level of relief in designed to ensure that such leases are contracted speedily. This will give a major boost to long-term leasing and will provide a target towards which agricultural advisers, solicitors and others can work in ensuring that these leases are drawn up. It will be, if accepted, a major agricultural reform.
The 1986 Finance Act introduced a tax incentive for investment in research and development by Irish companies. Complex restrictions were however included in it by the then Minister for Finance. These have meant that these improved incentives have remained unused, despite the good intentions of the promoter and his advisers. Time is always available to people to repent their errors; therefore section 11 of this Bill proposes to remove these unnecessary restrictions. This is very necessary. Research and development are vital in preparation for 1992. State funds are not available to finance sufficient research and development, at least on the scale that we need it here. This section if approved will provide the means to get more private Irish money into research and development in Irish companies. Some of the money that is now going out, through the Irish Stock Exchange, to oil companies that are engaging in speculative developments in the South China Sea or off the Northern Coast of South America will be attracted back into similarly speculative research and development in Irish companies by the offer of a better tax deal for investment into research and development than is available for investment in offshore oil in those exotic locations. It is a pity that our Stock Exchange is most exciting and excited in dealing with the development potential of the continental shelf in such remote parts of the world. I would like, through this tax incentive, to create conditions in which our Stock Exchange might perhaps become excited about research and development leading to major products being produced by Irish industry.
The mandate of the Industrial Development Authority is also being radically altered in this Bill. The Minister for Industry and Commerce is being required in section 12 to report to the Dáil on the progressive reduction in the share of IDA aid being given to fixed assets and the commensurate increase in the share of the systems to marketing, research and development and the acquisition of product and process technology. This is already policy but it is simply being included in a statutory form to ensure that it is implemented in full. In one of the recent years there has been a lapse away from this trend and this would be exposed under this section.
The IDA is also being required by law in this Bill to work towards a replacement by private equity investment of State grants as the main source of extra finance for industrial expansion. The IDA will be specifically required to encourage small companies to take in outside equity and strengthen their boards of directors with outside expertise. This is vital. Too many companies fail because they do not take in outside capital and equity or if they do they take it in too late in the form of a director from Fóir Teoranta and funds from that source which was available until it was prematurely and unwisely stopped by the present Minister. There is a need to give the IDA a clear statutory direction to reduce the level of grants and increase the level of private equity right across industry, and that would be a very healthy development.
If a programme of modernisation of our economy is to work we must develop the Irish venture capital industry. At the moment this is unduly concentrated in Dublin. It has a heavy banking bias; many of the people involved are former bankers. It is cautious and, like all bankers, in Ireland at least, it is asset-oriented in its investment policy.
Section 13 proposes that the National Development Corporation be required to establish regional investment funds. Regional investment funds of this kind will bring venture capital closer to practical reality throughout Ireland and out of the office suites of Dublin 4 and Dublin 2.
