Ceisteanna—Questions. Oral Answers. - Irish Merchant Fleet.

Seán Barrett

Question:

1 Mr. Barrett asked the Minister for the Marine the plans, if any, he has to maintain an Irish flag merchant fleet; his views on the fact that only 20 per cent of export/import traffic is carried under the Irish flag; if he will ensure that shipping is made eligible for EC Cohesion Funding; if he will seek changes in the Finance Acts to make leasing capital available for shipping activities to increase capital allowances to 50 per cent and to reintroduce the business expansion scheme for shipping; and if he will make a statement on the matter.

The Government is committed to maintaining and expanding the Irish registered merchant fleet in order to maximise the job opportunities in the shipping sector, to improve services available to customers and to ensure the highest standards of safety.

In line with that commitment, an overall review of shipping policy has been initiated with a view to identifying the strategies necessary to achieve improved competitiveness, operating standards and modernisation of the Irish merchant fleet. Consideration is being given in particular to ways in which the regulatory and fiscal climate for the shipping sector can be enhanced in order to support those objectives. The review is being undertaken in close consultation with the industry. In that context, the Department is currently examining a number of proposals put forward recently by the Irish Chamber of Shipping for fiscal and operational incentives to support the sector's continued development. Further discussions will take place with the Irish Chamber of Shipping shortly with a view to developing the substantive case for such support.

The review is also being conducted in the context of efforts at Community level to identify positive measures which would enable Community fleets to compete more effectively while at the same time ensuring against distortions of competition between member states. We will continue to support efforts to arrest the decline in Community fleets through the introduction of harmonised support measures on a Community-wide basis, while maintaining high standards of quality, reliability and safety.

I am determined to ensure the continued viability and growth of the Irish shipping industry to service the needs of Irish importers and exporters as well as a revenue earner in its own right. The fact that, as the Deputy points out, 20 per cent only of Irish trade is carried in Irish ships serves to underline the potential which exists for Irish-based shipping activity. Additional Irish ships operating competitively in the short sea routes to mainland Europe could pick up a significant proportion of that business, with consequent benefits in terms of balance of payments and seagoing employment.

The provision of high quality access transport services to and from Ireland is, of course, critical if we are to overcome the competitive disadvantages resulting from our island status and peripheral location. The case for redressing this imbalance through the provision of EC funding for access transport has been vigorously pursued with the Commission. The Commission's continued difficulties with the Irish case for assistance for mobile assets is, frankly, quite disappointing. But the Government remains satisfied that the case is fully justified for practical measures to offset the unique disadvantages faced by this country. Accordingly, we will continue to press for EC support for access transport services.

As I have indicated, the present review of shipping policy is examining the case for fiscal and other incentives to assist the industry including the specific measures referred to by the Deputy. Decisions as to the nature and scope of changes which might be sought under the Finance Act will depend on the outcome of that review process.

Will the Minister of State say whether moneys will be made available from the Cohesion Funds for our shipping industry? In addition, can he explain why the business expansion scheme was withdrawn from this industry, particularly at a time when further investment was badly needed for expansion and replacement? Furthermore, is he aware of the high costs involved? I understand that the cost of replacing a ferry is something like £100 million, whereas it is £8 million in the case of a container ship. While I appreciate that a review committee has been set up — which is the way this Government appears to deal with all problems, through committees and reviews — I am seeking action here. Would the Minister of State agree that it has been proven that there is a possibility of 2,000 jobs being created over the next six years within this industry? This would be one tangible way of demonstrating that we are positive in our thinking and are doing something positive about the unemployment position.

I agree fully with the Deputy that there is potential for job creation in this area. Indeed, that is the reason the Government has taken such a firm stand, particularly with its European counterparts, and has pressed its case for funding for mobile assets very forcibly and shall continue to do so. Indeed, the way to do so is to discuss the matter, in consultation with the Irish Chamber of Shipping, so that we can put forward a case that is unanswerable in Europe. Hopefully we will get the requisite funding so that we can realise what we consider to be a great need for this country.

As I asked in my question, will the Minister say whether he will seek changes in the Finance Acts since these are actions we can take ourselves? We can change Finance Acts to make leasing capital available for shipping activities, to increase capital allowances from 15 per cent to 50 per cent and reinstate the business expansion scheme for the shipping industry. Would he agree that these are things over which we have control without having to go to Europe? Will the Minister of State say whether his Government will give a commitment that these changes in the Finance Acts will be effected as soon as possible?

Obviously it is a budgetary matter but we shall be making a forceful case to the Department of Finance for that type of funding.