Written Answers. - Grants to Foreign Firms.
Dick Spring
Question:
63
Mr. Spring
asked the
Minister for Industry and Commerce
if he will outline any specific plans he has to initiate changes in the existing grant structures so as to make it financially more difficult for multinationals to leave the country once they have established themselves; and if he will publish a timetable for the implementation of these reforms.
Dick Spring
Question:
65
Mr. Spring
asked the
Minister for Industry and Commerce
if he will outline any specific plans he has to initiate policies by which an incentive would be provided for multinationals who hope to establish themselves in Ireland to contribute a certain amount of their profits towards community development and job creation, especially in disadvantaged areas; and if he will publish a timetable for the implementation of these reforms.
I propose to take Questions Nos. 63 and 65 together.
I have no plans to initiate any policies of the type referred to or to alter existing grant structures for the purpose stated by the Deputy.
The Review of Industrial Performance 1990 which was undertaken by my Department, examined,inter alia, the position of overseas industry in Ireland and their contribution to the Irish economy. There are almost 1,000 overseas firms in Ireland, which, between them, employ some 90,000 people. This is equivalent to 40 per cent of the industrial workforce. They account for 50 per cent of manufactured output and three quarters of industrial exports.
The Irish Economy Expenditure survey carried out on an annual basis by the IDA analyses the expenditure by overseas companies located here on Irish services, raw materials and wages and salaries. The 1990 Survey (latest figures available) showed that total Irish economy expenditure of overseas industry amounted to £3,744 million broken down as follows:
|
£million
|
|
Wages
|
1,330
|
|
Raw Materials
|
1,075
|
|
Services
|
1,339
|
|
3,744
|
According to the IDA the growth rate in total Irish economy expenditure for the period 1983-1990 was 51.3 per cent broken down as follows:
|
Increases
|
|
Wages and Salaries
|
42.6%
|
|
Raw Materials
|
36.6%
|
|
Services
|
69.3%
|
The recent Culliton Report on Industrial Policy has acknowledged the benefits accruing to the Irish economy from the foreign firms located here and the additional benefits generated by their spin-off demand.
Apart from their Irish economy expenditure I understand from the IDA that in general multinational companies already contribute significantly to local community initiatives in their area. I understand that numerous activities are assisted in this way throughout the country including community development and job creation generally.
I also understand from the IDA that the current capital grant agreement which multinational companies in the manufacturing and international services sectors enter into with the Authority incorporates features for the control and security of the monies paid.
These are as follows:
—A performance clause where the grants are paid out against the achievement of agreed targets.
—A clawback clause where grants are required to be repaid in the event of failure to maintain job targets.
—A parent company guarantee where the parent or a nominated company which is a party to the grant agreement guarantees the repayment of the grants paid in the event of the failure of the grantee company to repay due to closure, receivership, liquidation etc.
The IDA have informed me that all grantees must also comply with a number of conditions when submitting a claim for grant payment.
