Vol. 426 No. 3
8 Mr. O'Malley asked the Minister for Enterprise and Employment the progress, if any, he has made to date in establishing Forfás and two autonomous agencies, Forbairt and IDA Ireland, under its aegis; and if he will make a statement on the matter.
22 Mr. J. Mitchell asked the Minister for Enterprise and Employment whether the new agencies dealing with foreign and domestic industry will provide grants on a different basis; and if he will make a statement on the matter.
36 Mr. Rabbitte asked the Minister for Enterprise and Employment the specific measures, if any, he intends to take to promote job creation, in view of the record unemployment level at the end of January, 1993; when it is intended to establish Forfas and the two separate and autonomous agencies for indigenous industry and foreign investment respectively; and if he will make a statement on the matter.
46 Mr. Creed asked the Minister for Enterprise and Employment the plans, if any, there are for integrating the international trade support with the other elements of industrial policy under the control of his Department.
48 Mr. Nealon asked the Minister for Enterprise and Employment the reason the Government believes it necessary to have Forfas to supervise the work of the two autonomous boards dealing with indigenous and foreign industry.
I propose to take Questions Nos, 8, 22, 36, 46 and 48 together.
The Programme for a Partnership Government indicated that the Government would establish, under the aegis of Forfas, two separate and autonomous agencies, to be known as Forbairt and IDA-Ireland, each with its own board, managing director and grant-in-aid.
Forbairt will be empowered to develop indigenous industry and will be organised sectorally with a strong regional base. IDA-Ireland will be empowered to attract international mobile investments to Ireland. Forfas will have its own chief executive and will exercise certain co-ordinating functions.
It is my intention that the legislation establishing these structures will be in place by the summer recess of the Dáil.
The fundamental rationale behind the establishment of these structures was set out in the Culliton report. It has now become axiomatic that there is a need to have a changed emphasis in the way we seek to develop indigenous industry. There is a consensus on the need to move away from the stright grant or project financing approach to one based on building the capabilities of companies in an integrated way encompassing management, technology, marketing, financial and other functions. Forbairt is intended to facilitate this approach.
It will address the much criticised feature of the present system, whereby small Irish companies with limited managerial resources are forced to go to three separate agencies with different information requirements when their development needs indicate an integrated package of all of those components.
In this regard, Culliton recommended that all grant-giving and advisory supports of a functional nature provided by IDA, ABT and Eolas be brought together within one agency. I, therefore, am currently considering how best to achieve that objective in the context of the establishment of the Department of Tourism and Trade and the assignment of ABT to the Department.
The proposed organisation is consistent with Culliton's reasoning that the present structures do not place the necessary emphasis on the core of industrial policy. It will also ensure that State support for the development of businesses will be integrated, cost-effective and cohesive.
As regards IDA-Ireland, this agency will be empowered to attract internationally mobile investment to Ireland. Its main focus will be on the broader development needs of the industrial base in Ireland coupled with the realities of trying to secure internationally mobile investment at an optimum cost.
All the existing range of State assistance will remain available to both Forbairt and IDA-Ireland. However, because of the specific functions allocated to each agency, it will be possible to have a clearer focus on the measures of assistance required and the optimum areas which need addressing in an integrated manner. In this context, there will be a greater emphasis on those grants which will help build up the fundamentals of firms.
On reflection, does the Minister consider that the best approach to the endemic and horrible scale of unemployment now obtaining is that we engage in further bureaucracy? We have a Department of Enterprise and Employment, the National Economic and Social Council, the National Economic and Social Forum, the IDA, Forfas, Forbairt and county enterprise boards. What the people are really looking for is the jobs these institutions can help create. Does the Minister acknowledge that given the horrifying levels of unemployment we have, people will soon expect more than a mere reiteration of the implementation of Culliton which, in the first instance, was expected to do no more than contribute about 10,000 jobs annually?
One of the main thrusts of the Culliton report in respect of agencies was to eliminate bureaucratic overlap and to integrate them into what is known as the one stop shop approach. This was particularly for indigenous Irish industry which has a low managerial base and does not have either the time or the resources to go from one agency to another and comply with a different set of criteria in order to obtain assistance. To that extent, the thrust of the Culliton report will be implemented by this administration. The legislation is in the course of preparation and it is my intention to have it enacted, with agreement of this House and the Seanad, before the summer recess. In order to avoid the bureaucratic difficulties we experienced in the establishment of FÁS, it is also my intention as soon as possible and practicable to establish interim boards that would reflect the proposed structures so as to minimise any difficulties that might arise.
The Minister's reply is fine up to the point about Forbairt and the IDA with regard to mobile investment. Then he moved on to talk about a Department of foreign trade and that the link is breaking down in the relationship between the two and his ability to control what happens. Culliton continually emphasised indigenous Irish industry and the weakness on the research, development and marketing sides. How will these companies, working through different agencies and effectively through different Departments, have streamlined access to the market which can deliver jobs at the base level we are talking about? It is not clear from his reply that bureaucracy is being removed. It seems to be further compounded by involving a separate Department in this area.
I do not agree there is any lack of clarity. Basically, what An Bord Tráchtála has done in the past has been to help companies to sell at home and abroad. We are focusing, in the new structures on selling abroad because of the importance to trade.
If we learned anything over the past few months, it is the absolute necessity to diversify that trade in a structured manner.
My Department, and the agencies under it, will have primary responsibility to assist indigenous industry in a focused and clear one-stop-shop manner on how it can develop and trade at home. There is logic in all of that if one has regard to the Porter Book which influenced the deliberations and considerations of the Culliton report. It was to enhance and encourage clusters of competitive indigenous industry at home to the point where they were strong and big enough to trade abroad. That kind of approach is actively mirrored in the approach we have structured in these two Departments. I do not see any conflict whatsoever.
(Limerick East): What role does the Minister envisage being played by agencies such as Údarás na Gaeltachta and SFADC in the promotion of industry? Will he integrate these agencies in the scheme he has outlined or will they maintain their present status and existing functions?
It would be fair to say that the final role for these bodies has not yet been determined and I would welcome the assistance of this House in the processing of the legislation to so define. I envisage that wherever a person is located in indigenous industrial terms, be it in the Gaeltacht or in the Limerick region there will be no ambiguity as to which agencies that person, he or she should call upon to seek all the necessary domestic assistance that is available. It would be the intention of my Department to ensure that there is no ambiguity or confusion in the minds of any would-be entrepreneur or small industry seeking to expand as to which agency should be approached for comprehensive assistance.
In view of the commendable logic of the one-stop-shop, how does the Minister propose to integrate the county enterprise boards, which I understand are now his responsibility, into this structure since some will necessarily deal with small and medium sized enterprises?
The question is a pertinent one. Having regard to the fact that it is now my Department which has responsibility for the county enterprise boards, we are in the process of designing a structure that will provide a continuous stream of assistance to established indigenous industries on the one hand down to the small community enterprise type of activity that would seek assistance. We are attempting, against a very difficult unemployment background, to ensure that scarce taxpayers' resources are used to maximum effect. We are not in the business of establishing bureaucratic empires to complete against each other.
Why does the Minister see the need to have a supervisory agency as well as his Department which was charged by Culliton as having the essential policy thrust? Why have this second part of the pyramid? In relation to major projects, is there any danger that the internationally mobile investor will have access to more favourable terms than an Irish person who has to go through the alternative body? Does the Minister envisage the regional base which is supposed to be knitted in with the sectoral breakdown having its own devolved decision-making powers or is it to be a branch office of this board?
There is need to ensure that the role and activities of IDA-Ireland and Forbairt are complementary, are not wasteful or in any way duplicating each other's activities. That is the primary, if not sole function, of Forfás and it will become clearer when the legislation is brought to this House that the membership of the board of Forfás will reflect elements of the membership of both the board of IDA-Ireland and the board of Forbairt.
In respect of the sectoral and regional division of the activities of the indigenous side of Forbairt, we are trying to reflect the need to avoid travelling to Dublin to a Government Department or a Government agency, while at the same time getting the strength in cluster terms by dealing sector by sector with industrial manufacturing and general enterprise needs. Given the geography of this country it could be argued that that might not be a heavy-handed way of doing things and I am conscious of that. We will consider what is the best for each region and where as referred to by Deputy Noonan there are agencies in situ such as Údarás na Gaeltachta or SFADCo we will try to utilise the strength and market position of those bodies.
As regards the Deputy's last question about a preferential rate of financial assistance between one body and the other, it is precisely to avoid such a conflict that the Forfás linkage holding company is being established.
Would the Minister agree to think again about breaking up the IDA; if it is not broken, why fix it? Will we not lose valuable time in the fight against unemployment by allowing a situation to develop where institutional rivalry will be inevitable? If the question is one of refocusing the interest of the IDA on indigenous industry, surely that can be done without creating a multiplicity of new agencies?
The Deputy's question would be valid if it were not for the resounding consensus of opinion contained in the Culliton report which effectively said the IDA could not do the two jobs simultaneously. It also stated that the culture, ethos and energy required for IDA-Ireland to attract mobile investment into this country was virtually incompatible with helping Irish indigenous industry to prosper and grow. For a variety of reasons, with which the Deputy is no doubt familiar, the mobile investment that comes to this country already has research and development capabilities, an international market and an international distribution network — all the things Irish indigenous industry does not possess. I am sure the IDA is not broken.
The thrust of the Culliton report suggests it is not achieving the objectives for which it was established and hence the reason for dividing it. I have been down this road before in relation to the White Paper on manpower services that led to the National Employment and Training Agency Bill which subsequently became the FÁS Bill and I assure the House that neither I nor my two colleagues will allow any territorial rivalries to grow up during the next couple of months in respect of the utilisation of taxpayers' resources for the development of industry. I want that message to go out loud and clear.
The heads of the Bill are in the course of preparation at present. The draft memorandum is currently before my colleagues at Cabinet. It is my intention to introduce the Bill shortly and to put the personnel in place so that we will learn from the lessons of how FÁS was established and the delays which accompanied the filling of personnel positions over a period.
How is it proposed to select the membership of the various boards? Would the Minister agree that his options have been considerably reduced in view of the fact that the boards of Eólas, NET, Coras Tráchtála and various State agencies were unceremoniously filled in the run up to the negotiations to form a Government? Why did the Minister, as one of the architects of the new Coalition government, stand idly by while hospital boards, some of the main levers of State and economic boards were ruthlessly plundered on behalf of the Fianna Fáil Party in order to put their own hatchet men, lackeys and party workers——
The expression "lackeys" and so on is surely not parliamentary——
Obviously, the Deputy knows more about the composition of these boards than I.
The Minister of State, Deputy Brennan, can give the Minister a list of all 600 of them. That is more jobs than he created during his time as a Minister.
Let us hear the Minister's reply.
In respect of the pertinent question which the Deputy put to the House, the membership and composition of the boards in question will be selected on the basis of the people best equipped to fulfil the functions which will be entrusted to them. In that regard, I will not feel bound by the appointments made by other administrations in respect of bodies whose legal existence will be terminated by a vote of this House when the new bodies are established.
