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Dáil Éireann debate -
Wednesday, 3 Dec 1997

Vol. 484 No. 1

Other Questions. - Duty Free Sales.

Jack Wall


19 Mr. Wall asked the Minister for Tourism, Sport and Recreation the views of his Department on the impact of the abolition of the internal duty free industry within the European Union on the Irish tourist industry; and if he will make a statement on the matter. [21686/97]

Highly profitable duty and tax free sales are currently being used in part by air and sea transport operators to keep charges and fares down. Abolition of duty free sales could have an adverse impact on tourism through potentially higher charges by airports, airlines and maritime transport companies. This could be particularly problematic for low fare airlines and ferry companies, slowing down tourism growth to Ireland where more competitive fares have underpinned above average growth in tourist arrivals in recent years.

I assure the Deputy that the Government is availing of every opportunity to raise this issue at political level in appropriate fora and to suggest the need for further study by the European Commission of the implications of the abolition of intra-EU duty free. Because of the potentially damaging impact of the proposed measure on the development of the tourism industry generally, the Minister of State at the Department of Tourism, Sport and Recreation, Deputy Flood, raised the issue at the EU Tourism Council of Ministers meeting in Brussels on 26 November. The Taoiseach and the Minister for Public Enterprise have also been active in highlighting the importance of the matter. Last week the Taoiseach raised the subject at the EU Employment Summit in Luxembourg and he reported to the House on the outcome in some detail on 25 November. There is a special committee studying the implications for Ireland in his Department and he intends putting down a further marker about Ireland's concerns at the December summit.

The Taoiseach outlined in his statement on 25 November the Government's strategy which is to continue to seek to have the matter raised with transport Ministers, ECOFIN, the European Council and the Commission.

The Minister stressed the importance of this matter. Does he know when a final decision will be made on the abolition of the internal duty free industry? Is there a set criteria in relation to that date? I have had numerous representations from people in the industry and union representatives on this matter.

There is no final date for making the decision. The Deputy is aware that the date is in 1999 and we are arguing the case at present. The last meeting the Taoiseach attended concerned unemployment. We want the EU to provide a proper study. The only study to date has shown that the abolition of duty free would lead to approximately 140,000 job losses throughout the EU. The last summit meeting dealt with unemployment and there is a case for asking for a study on the impact which the abolition would have on Ireland in light of the projected job losses. The matter is ongoing and we are continuing to use every opportunity to raise the matter. My colleague, the Minister of State at the Department of Tourism, Sport and Recreation, raised the matter recently at the Council of Ministers meeting in Brussels. The abolition of duty free would have disastrous effects on employment here and in Europe. If we are serious about unemployment in Europe, it is only proper that we have the study, which was promised, to find out what the ending of duty free would mean.

If, as the Minister predicts, the proposed study shows that major damage will result to Irish tourism and associated jobs, is it within the remit of the Government to veto the decision? What measures can be put in place to protect as far as possible the number of jobs under threat?

The abolition of duty free will result in major job losses in all sectors and will increase travel costs for tourists. Does the Minister agree that the Taoiseach seemed to throw in the towel on this issue at his recent meeting in Europe when he said there was little interest or support among his colleagues for this matter? Does he also agree that studies alone are insufficient and that what is required is critical action at the highest level?

It is completely at odds with the truth to say the Government is not raising interest in this matter. I put it to the Deputy that we are raising this as a major political issue in Europe. This issue was not raised once by the previous Government during any of the summit meetings. It is now at the top of our EU agenda.

I was quoting from the Taoiseach.

The issue was not raised even once when the Deputy's party was in Government and attending summit meetings.

The Taoiseach said there was no support for and very little interest in this matter.

We have raised this issue at all meetings and intend to continue to do so. We are calling for a study on the effects the abolition of duty free would have.

We know what will happen. It will result in job losses and increased fares.

There has only been one study to date and it should be updated. We are aware of the effects predicted by that study and we are trying to get the Commission to take another look at the issue in the context of unemployment.

The Government has thrown in the towel.

Regarding Deputy Wall's question, the decision has already been taken. We are now trying to make sure we can raise the issue at different levels in order to increase interest in this matter. It has a major impact on us as a country on the periphery of Europe, particularly in tourism where duty free has been responsible in large measure for the low access fares to the country.