Tony Gregory
Question:3 Mr. Gregory asked the Minister for Enterprise and Employment if he will raise the IDA grant aid for industries starting up in Dublin's Inner city to 60 per cent so that it is a level similar to other employment black spots.
Ceisteanna-Questions. Oral Answers. - IDA Grant Aid.
Under the designation system, industrial projects in designated areas qualify for a maximum fixed asset grant rate of 60 per cent. This contrasts with projects in non-designated areas which qualify for a maximum grant rate of 45 per cent. In addition, industries in designated areas may get a two-thirds remission of rates for ten years at the discretion of the local authority. However, the fact of designation does not automatically guarantee support at the maximum rate nor does it guarantee rates remission.
The importance and impact of designation in industrial policy has lessened in recent years and maximum rates of fixed asset grants are seldom given. The grant level proposed for any project increasingly depends upon the economic benefits in individual projects. There is also a major shift away from fixed asset grants to supporting other areas of perceived business weakness e.g. marketing, research and development and management development. Support and grants in these areas are not differentiated on the basis of designation.
The Culliton report proposed, among other matters, that there should be a decisive shift from grants towards equity and that most of the grant schemes for indigenous industry should be scaled-down. The group felt that the fact that most industrial expansion and involvement by the State agencies involved a grant resulted in an unhealthy dependency mentality on the part of many indutrialists. Furthermore, greater selectivity continues to be pursued by the agencies with a reducing cost per job figure.
This in no way diminishes the primary role of our industrial policy which is to secure as many sustainable jobs as possible within the economy. However, this has to be achieved in the context of securing the best value possible for the expenditure of scarce resources. Designation as such does not automatically lead to this. In the light of Culliton's comments, and the manner in which our industrial policy has evolved over recent years, further gains can be achieved through the optimum use of the existing range of industrial supports rather than seeking to extend this range to particular areas.
The Deputy will be aware that projects suitable for grant aid locating in inner city Dublin tend to be small businesses rather than large capital intensive industries. The grant aid packages for small businesses tend to be concentrated on employment grants and other non-fixed asset forms of assistance, including grants for management development and feasibility studies. Thus, the issue of designation is of little consquence because it is only capital related grants which are differentiated on the basis of designated status.
Will the Minister explain why Dublin's inner city was designated between 1983 and 1988 for the maximum grant and then, for some obscure reason, that was dropped?
Is it not the case that being designated does not guarantee the maximum 60 per cent grant? The inner city is not designated.
There are some large sites in the East Wall area designed for high-tech parks which are not, as the Minister has been indicating, for small industries. Surely in that instance the availability of a 60 per cent grant would be useful? Does the Minister accept that since 1975 only 23 per cent of grant-aid to industry went to Dublin and productive employment in that time in Dublin was reduced from 37 per cent to 26 per cent?
The Deputy seems to be imparting information rather than seeking it.
No, I am asking the Minister a question.
Let us have regard to the time factor at this juncture.
Does the Minister accept that the Dublin Chamber of Commerce estimated that Dublin has lost out by about £270 million in grant-aid and that we in Dublin are not getting a fair deal?
We are having statements rather than questions. I ask the Minister to respond.
The reason Dublin's inner city area was designated in the first place is the same reason other areas of the country were so designated. It is because of persistently high levels of unemployment. I am not sure why designation was not renewed five years after it commenced. I will certainly look at that. I share the Deputy's concern about the continued failure of Dublin to receive the level of employment assistance to which it is clearly entitled. The fact that I share a constituency on the other side of the river with the Deputy has nothing to do with that.