Vol. 491 No. 1
19 Mr. Allen asked the Minister for Tourism, Sport and Recreation the steps, if any, he is taking to prevent the abolition of duty free sales; the discussions, if any, he has had with his European counterparts on this issue; and, if so, where these discussions took place and with whom. [11272/98]
28 Mr. Belton asked the Minister for Tourism, Sport and Recreation the steps, if any, he is taking to prevent the abolition of duty free sales; the discussions, if any, he has had with his European counterparts on this issue; and, if so, where these discussions took place and with whom. [11278/98]
33 Mrs. Barnes asked the Minister for Tourism, Sport and Recreation the steps, if any, he is taking to prevent the abolition of duty free sales; the discussions, if any, he has had with his European counterparts on this issue; and, if so, where these discussions took place and with whom. [11275/98]
35 Mrs. Barnes asked the Minister for Tourism, Sport and Recreation the steps, if any, he is taking to prevent the abolition of duty free sales; the discussions, if any, he has had with his European counterparts on this issue; and, if so, where these discussions took place and with whom. [11274/98]
asked the Minister for Tourism,
Sport and Recreation the steps, if any, he is taking to prevent the abolition of duty free sales; the discussions, if any, he has had with his European counterparts on this issue; and, if so, where these discussions took place and with whom. [11277/98]
I propose to take Questions Nos. 19, 28, 33, 35 and 53 together.
As this is a matter which will impact mainly on access transport operators and Aer Rianta it is primarily the responsibility of my colleague, the Minister for Public Enterprise. However, I assure the Deputy that the Government is using every opportunity to raise this issue at political level in appropriate EU fora and to suggest the need for further study by the European Commission of the implications of the abolition of intra-EU duty free. Given concerns about the possible impact of the proposed measure on the development of the tourism industry generally the Minister of State, Deputy Flood, raised the issue at the EU Tourism Council of Ministers meeting in Brussels on 26 November last year. On numerous occasions the Taoiseach and a number of my ministerial colleagues have also been active in highlighting the importance of this matter. I understand the Minister for Finance, Deputy McCreevy, will raise the matter at the next ECOFIN meeting on 19 May.
The abolition of duty free sales will mean higher air and ferry fares into Ireland and will result in losses of £30 million to the Irish airlines, £9 million to Irish ferry operators, and £25 million to Aer Rianta. Costs will increase also. I am amazed the Minister has not made a personal initiative. The Minister of State raised the matter at a Council meeting last year but in view of the crisis now upon us, with its severe negative potential for tourism, I would have thought the Minister would have been more active with his European colleagues on this issue. I accept that the Minister for Finance will raise it on 19 May at an ECOFIN meeting but since it impacts directly on this Minister's area surely he should take a more vibrant involvement at European level. Has he any plans to take a personal initiative?
The only meeting of Tourism Council of Ministers was attended by the Minister of State due to my inability to be there. We have tried to raise it on every single occasion. As I said, it is not directly a matter for myself but it is vitally important to the tourism industry. I remind the Deputy that while his Government was in power it was not raised at a single Council meeting, nor at any summit. It is ironic that the Deputy continues to bring up this question and to use it as a stick to beat us with, when his Government paid no attention to this while it was in power.
That is totally incorrect.
Does the Minister not agree that if duty free sales are abolished it will have a serious impact on tourism infrastructure, in that the regional airports and sea carriers depend heavily on duty free income for their running costs? Has his Department carried out a study of the effects on tourism in Ireland if duty free sales are abolished? At the forthcoming ECOFIN meeting will his colleague, the Minister for Finance, ask the Council and the Commission to carry out a study into the impact of this abolition throughout the EU?
I agree that there are serious implications for the tourism industry, including issues relating to access, the regional airports and employment. One of the first studies was carried out by the EU and a more recent one was done by KPMG, which was presented at the end of March. The Deputy may wish to examine that study, which lists numerous implications of the abolition of duty free and analyses the arguments for and against the move. We have continued to raise this matter in Europe and have said we feel further studies are required. The move was first agreed on the basis that there would be harmonisation of tax by this time but that has not happened. On the basis of a lack of information, due to insufficient study, and the fact that there has not been a harmonisation of taxes, we believe this matter deserves further consultation.
Duty free is essential, but if our worst fears are realised will the Minister consider the possibility of asking Aer Rianta to modify the structure of retail stores in airports because duty does not apply to much of the stock that is retailed, yet in terms of advertising it would appear that duty applies to all stock? That is a misunderstanding on the part of the customer and Aer Rianta has been somewhat compliant in that regard. From a tourism point of view, it would help matters if the Minister clearly identified the items to which duty applies in the retail stores.
As we are the only EU country without a land boundary with Europe, surely the Government could argue that an exception should be made in the case of Ireland. In response to the cheap shot from the Minister, it was the Taoiseach, then Minister for Finance, who got us into this mess in 1991 so the Minister should not try to shift the responsibility to the Opposition.
A question please, Deputy.
The Minister is in Government now and he has the responsibility to protect the private interests of this country. I expect the Minister to give us a commitment that he will fight tooth and nail to win this argument which is important for tourism and the country generally and which has implications for jobs and excess costs.
I want to put to rest once and for all the question of the Taoiseach agreeing to this proposal. The Deputy surprises me in that he is not aware of what happened at that time. He should know this was one of the crucial decisions taken at the time in the context of the Single Market.
We were sold down the Swanee.
In 1992, rather than banning duty free sales from January 1993, as part of the harmonisation of taxes and the Single Market, the campaign which was led by several countries, including the Taoiseach on behalf of this country, managed to get an extension until 1 January 2000, which was a considerable improvement on what was then being proposed. That decision was taken as part of our joining the Single Market and on the basis that there would be harmonisation of taxes, which has not occurred. Studies require to be carried out on those issues and that is the reason we are continuing the fight.
The Deputy's point about Aer Rianta is a good one, but I am not the person to whom it should be directed. I could raise the matter with the Minister for Public Enterprise but perhaps the Deputy would put down a question to her because it is relevant and deserves a better answer than I might give today.
