Vol. 436 No. 5
7 Mr. Clohessy asked the Taoiseach his views on the conclusion of the recent NESC report that says that the variety of agencies involved in the local development process could give rise to confusion or duplication of resources, or wasteful competition for resources; and if he will make a statement on the matter.
The National Economic and Social Council has welcomed the Government's enhanced commitment to a local development strategy. I share the view in the NESC report — A Strategy for Competitiveness, Growth and Employment — that local development initiatives should be co-ordinated within a national framework for local development.
In the National Development Plan 1994-1999 the Government has proposed an integrated local development programme comprising the county enterprise boards, new partnership structures in areas characterised by high levels of long term unemployment and social exclusion, an extended community employment development programme and urban renewal measures. The programme will be co-ordinated by my Department.
The NESC recognises that different agencies are required because of the differing needs and priorities in the process of local development. The detailed arrangements for the implementation of the local development programme, including arrangements to secure co-ordination will be contained in an operational programme which is being prepared at the moment in consultation with the European Commission.
At national level the Government has established an interdepartmental policy committee on local development chaired by my Department in direct consultation with the Office of the Tánaiste which is representative of all relevant Departments and agencies. This committee will ensure full co-ordination of all aspects of the programme as well as avoiding or eliminating any overlap.
Would the Taoiseach accept that reading the list of quangos in the National Development Plan is like reading the list of ingredients for the witches brew in Macbeth — eye of newt and tooth of frog — except that the list of ingredients in Macbeth is infinitely less obscure. Reference is made in the National Development Plan to the CEBs, the CEBP, the PCs under the Programme for Economic and Social Progress, Leader, NDP and the LDP, to mention but a few. Will the Taoiseach agree that all that will be achieved by that proliferation of quangos is an increase in bureacucracy and perhaps a scatter of jobs for the boys but no real jobs for the unemployed? Will he further agree that agency-driven solutions have failed in the past and will fail in the future? If the Taoiseach is serious about creating jobs he should tackle the basic issues in the economy, by which I mean the tax wedge, the integration of taxation——
The Deputy is embarking upon a speech——
A budget speech.
I want to help the Deputy to elicit information but it must be done by way of brief, succinct and relevant supplementary questions.
Will the Taoiseach accept that agency-driven solutions have failed in the past to create jobs? I ask him to hazard a guess as to why the agencies now being set up can succeed when previous agencies failed in the past. How can the Government ignore all the signals being sent to it——
That should be adequate, Deputy.
——by the people who say we must get the basics in the economy right,——
That should be sufficient.
——by which I mean job creation policies?
Throw the alphabet at it.
I totally reject the points made by Deputy Quill in regard to the usefulness of the central review committee and the other agencies to which she referred. I can assure the Deputy that these agencies will produce jobs not alone for the boys but also for the girls and women. I accept that improvements in certain areas of the taxation system can make a contribution to a restructured economy but it is not the entire story and should not be presented as such. Improvements have been made in respect of the lower paid in the tax wedge. Successive Governments have endeavoured in budgets to take more and more of the lower paid out of the taxation system. Having regard to the resources available in the immediate future, the Government is committed to taking more lower paid people out of the taxation system, thus improving the tax wedge. I do not accept that eliminating the tax wedge is the answer to all our problems, but I recognise that it has a contribution to make in solving the problems in this area.
May I——
Perhaps a brief question, Deputy.
I will be very brief. Will the Taoiseach accept that this is the first time in six years that the tax wedge has got worse? Will he concede that all of the agencies to which I referred will inevitably lead to wasteful duplication and competition for scarce resources?
I do not accept what the Deputy has said — each agency has a different purpose. There are different priorities in regions and sectors. For example, the county enterprise boards will support and encourage local enterprise which employ between one and five people. This type of support system was not in place previously. I often heard it said that the larger agencies were not interested in supporting local initiatives. The new agencies can make a very useful contribution to the creation of employment at a local level. Over the past two years considerable success has been achieved in the area of rural development. It is only by combining the efforts in the various areas that we can maximise our efforts to solve our unemployment problem, which I accept is the major unsolved problem in our economy.
Does the Taoiseach not think it is significant that it was only after the establishment of the local bodies that the Government started talking about a national framework for their development? This seems to indicate that the decision to establish these bodies was not based on any assessment of how to ensure successful rural development. Will the Taoiseach agree that when the Minister for Enterprise and Employment, Deputy Quinn, was in Opposition, he put his finger on the real weakness in the 36 county enterprise boards, that is, they are grant-giving bodies which produce more local bureaucracy?
The Deputy has given his views as to when the strategy for local development was pulled together. However, he should look at the Programme for Government to see the thinking of the two Government parties in this area——
The Taoiseach should read what the Minister, Deputy Quinn, had to say about it. Does the Taoiseach want it recited chapter and verse?
——and what it has produced. The county enterprise boards will simply replace the county development teams and no extra costs will be involved. People living in areas which did not previously have such a structure will be given the opportunity under the county enterprise boards to set up businesses. When I travelled around the country it was regrettably pointed out to me by local chambers of commerce, community development groups and others that all the decision-making took place in Dublin. There is now an opportunity to encourage and support local enterprise and for the decisions to be made at a local level.
The Taoiseach in his reply referred to the tax wedge. Will he agree that the tax wedge is a theory which relates to a relatively small proportion of the workforce and that any steps taken to deal with this issue will have a minor impact on the creation and maintenance of jobs? Will he give the House a guarantee that any measures taken to address this issue will not be used as an excuse to roll back the social protection for those at work, the unemployed and those who are sick?
I said that I believed the tax wedge was only one factor, which has limited application. Nevertheless it can act as a disincentive to taking up low paid employment — some people would be better off at home than taking up low paid jobs. That is what I mean when I refer to the tax wedge. While improvements in this area can contribute to solving our unemployment problem it is not the entire answer to the problem, and I never pretended it was.
Is it part of the answer?
Order, please.
There are a number of factors involved.
Will the Taoiseach say when the Government will seriously consider lifting the State tree with all its branches from the body of the small businessman who has to pay VAT, PRSI, rates, etc. The county enterprise boards have no teeth or money and can do very little to help people set up small businesses. Until such time as the Government takes steps to eliminate all unnecessary bureaucracy there will be no future for small businesses.
I accepts some of what Deputy Fox has said. The county enterprise boards have approximately £250,000 to spend between now and Christmas and it is a matter for them as to how they spend it. I agree that small businesses have to fill in too many forms — the State leans too heavily on them. That is why the Minister of State at the Department of Enterprise and Employment with responsibility for commerce is examining the entire system together with small business people, the people in the best position to say which forms need to be done away with. I have suggested to the Minister of State, Deputy Seamus Brennan, that he should put all the forms which have to be filled in by small business on the walls of his office and call in the officials who drew up those forms to see how many of them are needed today. I am sure that a number, if not the majority, of these forms, could be done away with. Unlike large businesses small businesses cannot afford the overheads involved in filling in an unending number of forms. Businesses in the private sector should remember that when they call for more regulations they are calling also for more forms and the employment of additional civil servants to monitor the filling in of forms and ensure that the regulations are implemented. The employment of these extra staff is another contributing factor to higher taxation. I agree with the sentiments expressed by Deputy Fox. Plenty of room exists for improvement. I hope that when the review takes place all the unnecessary bureaucracy will be eliminated.
Let us deal with Question No. 8.
May I——
A brief question, Deputy.
Will the Minister of State, Deputy Brennan, apply the same criteria to his rationalisation of Fianna Fáil?
Please, Deputy Carey.
Will all bureaucracy in Fianna Fáil be got rid of?
Deputy Carey may not interrupt from a sitting position.
Will he do that?
Deputy Carey may not ignore the Chair.
I would like to ask the Taoiseach if the demarcation lines need to be more clearly defined between many of these bodies. The confusion which seemed to exist prior to the setting up of the county enterprise boards, for instance, was referred to by the Taoiseach when he said that it was perceived that large organisations seemed to be helping the larger operator. Does the Taoiseach recognise that much of the IDA activity, for instance, has been in regard to very small businesses although they do not receive the same attention as the Digitals and Amdahls? Would the Taoiseach agree that what is happening is in fact a postponement of the radical change in the area of taxation rather than a measure to help reduce unemployment? It is simply postponing the action that is needed in areas such as work sharing, which we discussed earlier, guaranteed basic income and the tax reform that will shift from labour to resources. Would the Taoiseach agree that only action in these areas will make a dent in unemployment?
The areas mentioned by Deputy Sargent will certainly have a contribution to make but there is no single answer to the unemployment problem and no one should pretend there is. In relation to support for small businesses, it was reflected in Culliton that international companies should be separated from indigenous companies and Forbairt was set up with the sole responsibility of developing indigenous industry. The county enterprise boards were established to identify companies who would employ two, three or four people and it is up to the other agencies, if they progress beyond that, to take those companies on to the next stage. Nobody would deny that gaps existed in this area which needed to be addressed and the restructuring and reorganisation should provide a more focused effort in relation to the sort of problems to which Deputy Sargent referred.
