Richard Bruton
Question:4 Mr. R. Bruton asked the Minister for Enterprise and Employment the reason Ireland pays 66 per cent more per job for new employment in overseas industry than in domestic industry.
Ceisteanna—Questions. Oral Answers. - Cost Per Job Figures.
Bernard J. Durkan
Question:18 Mr. Durkan asked the Minister for Enterprise and Employment if the incentives available to investors here are capable of attracting job creating industry to this country notwithstanding competition for such investment from southeast Asia, eastern Europe and the rest of the EC; if he intends to take any measures to tilt the balance in this country's favour; and if he will make a statement on the matter.
I propose to take Questions Nos. 4 and 18 together.
I take it that Deputy Bruton is referring to the IDA cost per job figures for indigenous and foreign industry which I gave him in reply to the question he asked in this House on 18 May. I am informed by the IDA that the reasons for the difference between the two cost per job figures in question are as follows: first, IDA operates in an intensely competitive world market for mobile investment; second, foreign industry projects tend to be more capital intensive, reflecting a higher level of technology and associated costs and third, all grant offers to foreign firms are based on the minimum amount necessary to secure the project for Ireland.
The reality is, and this was a point the Culliton report recognised, that the IDA has to pay the going rate to attract foreign firms. In order to reduce the cost of attracting mobile investment to peripheral regions such as Ireland, we have constantly sought, and will continue to seek, more effective EC restrictions on State aid for industry, particularly in the more developed and centrally located member states. The control of State aid is central to being able to squeeze the budget for internationally mobile investment.
Nevertheless, I would emphasise that State financial support for inward investment is not given at the expense of support for the development of indigenous industry which is the primary focus of industrial policy.
Turning to Deputy Durkan's question, I believe that the incentives available to investors here are capable of attracting job creating industry to this country. Last year, for example, I understand the IDA secured 52 new projects in manufacturing and international services, as well as 41 projects for the International Financial Services Centre.
I also understand from the IDA that new opportunities are being created in niche areas such as data processing, environmental protection, specialised electronic components and equipment, health care, automotive components and production automation, and that Ireland offers major advantages for companies involved in these areas.
However, given the strong competition for mobile investment from the areas referred to by the Deputy, the IDA has informed me that it will be keeping its competitive position vis-à-vis these locations under constant review.
I am disappointed that the Minister has indicated no policy position of his own in response to this question. Is the Minister aware that the percentage of the industrial grant budget allocated to foreign industries has been increasing in recent years and is now 63 per cent? Is he also aware that the increment, the higher amount paid to foreign as opposed to domestic industries, has also increased? The allocation of 66 per cent this year is much higher than the allocation last year. Is he further aware that the total Irish spend of a foreign company per pound of export is 30p compared with 60p in respect of an Irish company, in other words, that more is paid for jobs which have a lesser impact on the Irish economy? Would he agree that this policy is not one we should continue to pursue and that we should accept the Culliton recommendation on squeezing the foreign industry budget?
I am grateful to the Deputy for his information. The recommendations of the Culliton report are in the process of being implemented. I have replied to the question the Deputy asked.
Does the Minister recall that when I asked him to indicate whether the foreign industry budget would be squeezed, as Culliton recommended, he refused to say if that was the case? Am I to assume that the Minister has changed his mind and the policy is now to squeeze the proportion of State money allocated to foreign industries?
The Deputy cannot make such an assumption. If the Deputy wants specific answers he should ask specific questions. Regarding the question the Deputy asked and the information avail-able——
What about openness and transparency?
That is available too, when it is in order. We will continue to pursue the policy of attracting mobile investment to this country. The reasons for the cost differential to which the Deputy's question refers are as set out in my reply. Having regard to the nature of the investment involved and following a detailed analysis by the IDA it is considered good value for money.
Is is not surprising that the facts which I have given are news to the Minister responsible for making policy decisions? Is it not the case he has given an IDA answer and does not know if it is sensible?
The Minister does not know the position, he is too busy touring the country.
That is not the position. I do not accept what the Deputy has said.