Adjournment Debate.

Job Protection.

I congratulate Deputy Calleary on his recent appointment as a Minister of State and wish him well in his new role. I thank the Ceann Comhairle for facilitating this matter on the Adjournment.

Exchequer returns for the first four months of 2009 were published yesterday afternoon and do not make for pretty reading. The deficit for the four months of this year is €7.3 billion. Taxes are down 24% with a 6% fall in income tax receipts and VAT receipts down more than €1 billion. Up to 384,448 people are registered unemployed, making an average of 5,800 people joining the dole queues every week. If unemployment continues to grow at this rate, up to 570,000 people could be without a job by the end of the year.

The plans of US President, Mr. Barack Obama, to overhaul the US tax code has sent ashiver up the spine of many US companies based in Ireland and has put many economic commentators on red alert. More than 570 US firms are based in Ireland, accounting for 70% of all IDA Ireland supported companies. More than 65 US firms are located in the mid-west region which has had some devastating job losses recently such as Dell in which 1,700 people lost their jobs. Almost two out of every three foreign direct investment projects which came to Ireland in 2008 originated in the US. In the same year, US firms paid €2.5 billion in corporation tax into the Exchequer, approximately 40% of the total corporation tax take for 2008. They contributed a further €13 billion in expenditure to the economy in terms of payroll, goods and services, etc.

Ireland's rate of corporation tax, 12.5%, was introduced by the rainbow coalition Government and has contributed enormously in terms of promoting the country as a location for foreign direct investment. While US firms contribute significant tax receipts, the lower tax rate actually makes those US companies more competitive, a point which the US Administration should bear in mind.

Some commentators in the US claim the US President's measures will target offshore tax havens rather than countries like ours which have low corporation tax rates. Ireland has also signed up to many tax treaties with the US. However, while Mr. Obama's recent speech on the US tax regime did not outline specific details, it is concerning that its accompanying factsheet identified three countries — Ireland, Bermuda and the Netherlands — as tax havens for US multinational companies.

Ireland has a long and proud history of association and friendship with the United States. No other world leader was fortunate to have had the opportunity to meet with the new US President so soon after his inauguration as our Taoiseach had. This is due to the rapport built up between both countries, culminating in the Irish taking over the White House on St. Patrick's Day.

The Shannon and mid-west region values the importance of American industry and tourism to its economy. The co-operation between both our countries will culminate shortly in the opening of full US pre-clearance customs facilities at Shannon Airport which is very welcome. I urge the Minister of State and my constituency colleague, Deputy Killeen, who is also present in the Chamber, to remind the Minister for Transport, Deputy Dempsey, of the urgency to bring the relevant legislation before this House so the facility can be up and running by 1 July as promised.

Many key US Democrats are not lit up with enthusiasm for this plan. Senator Max Baucus, chairman of the US Senate finance committee, reacting to Mr. Obama's proposals said further study is required to assess the impact of the plan on US businesses. There is much to play for and I believe the Irish US lobby is hugely influential. No stone should be left unturned to get the message across to the US that Ireland is not a tax haven. These proposals could have significant implications for the future of US investment in Ireland. Yesterday, the US Chamber of Commerce said they were an unacceptable burden on American firms. We cannot have another Dell scenario and I ask the Minister of State to put a co-ordinated strategy in place to deal with Mr. Obama's proposals.

I thank Deputy Breen for his good wishes and for raising this topic. This is an important issue and, consequently, it is being closely monitored and acted upon by the Government on an ongoing basis. However, I would encourage all to take a measured view of yesterday's developments. While the Government is treating the matter seriously, this is not simply an issue for Ireland. This is about how the US tax regime for US companies works globally rather than posing some imminent threat to Ireland.

The Government will make certain the mutual interests of Ireland and the US are highlighted during consideration of this issue by the US Administration and Congress on an ongoing basis. I agree with the Deputy regarding the importance of US foreign direct investment in Ireland. US business is the largest component of our overseas investment with more than 500 US companies operating out of Ireland which have invested over €55 billion. While detailed and final provisions are yet to emerge, the US President, Mr. Obama's proposals are likely to have some impact on this activity.

Ireland is, however, recognised as one of the best locations in the world for foreign investment for a wide variety of reasons. The level of foreign direct investment in Ireland, relative to the size of its economy, is one of the highest in the world. US and other international investors choose Ireland for several reasons — efficient access to EU and near-markets; skills mix; English and other language skills; and financial consideration, of which the corporate tax rate is one element.

The US Administration has announced part of its plan to reform its international tax laws and improve enforcement. First, reforms have been proposed to ensure the US tax code does not, in its view, unduly incentivise job creation outside the US. Second, the US Administration seeks to reduce the amount of US taxes lost to so-called tax havens, either through unintended loopholes or through illegal activity. There is an important distinction between action against tax havens and proposed changes to the broader US international tax system. Ireland is not considered a tax haven by the US and proposals in this area should not be any threat to our interests.

Deputy Breen called for a co-ordinated strategy to lobby the US Government and focused effort to protect jobs in Ireland. Both are already in place. The Government has been monitoring and expecting the recent developments. The issue was raised with the US Administration by the Taoiseach, the Minister for Foreign Affairs and the Tánaiste and Minister for Enterprise, Trade and Employment, who met with the US Treasury Secretary, Mr. Timothy Geithner, on recent visits to the US.

A monitoring system on developments in the US international tax code has been in place for several years. In addition, a contact group, comprising senior officials from the Departments of Enterprise, Trade and Employment, Finance and Foreign Affairs, IDA Ireland and the Revenue Commissioners, has been meeting regularly on US tax policy issues for the past six months and will continue to monitor developments closely.

Now that the US Administration has announced its initial proposals, we will continue to engage with it and with Congress as this issue develops. To this end, IDA Ireland has deployed a senior executive to the Irish Embassy in Washington as a point person to monitor and engage with this issue.

Regarding job creation and protection, we must continue to invest in our people to ensure we have the skills and knowledge to support the vision set out in the programme for sustainable economic renewal. We will support those who have lost jobs due to the economic downturn and provide them with opportunities to re-enter the workplace. More than €1 billion of the Department's budget for 2009 is targeted at labour force measures, including activation and training programmes for the unemployed, upskilling for those in employment and employment programmes. In addition to these major programmes, the Cabinet committee on economic recovery has been working across the Government to deliver the best support and results for enterprises. We are also supporting enterprises through other measures, such the new enterprise stabilisation fund with its budget of €100 million.

The US proposals must now go to Congress for intense and lengthy debate. Assessing the impact of the proposed changes on present and future levels of direct investment by US companies in Ireland is dependent on more detail and we should be conscious that nothing has been enacted thus far. The proposals have potentially wide-ranging effects for US companies as well as for destinations of US investment worldwide, including Ireland. Consequently, they have not been universally welcomed in the US. In addition, the US Government has clearly signalled that it is conscious of the need to maintain the competitiveness of US companies operating globally. The Government will make sure that the mutual interests of Ireland and the US contribute to consideration of this issue by the US Government and Congress on an ongoing basis.

Army Barracks.

I congratulate the Minister of State, Deputy Calleary, on his new position. I thank the Acting Chairman on behalf of the people of Mullingar and its hinterland, including in particular the serving and former military personnel of Columb barracks and their extended families for allowing me to raise this important issue. I ask the Minister for Defence to give a clear, concise and unequivocal commitment that he will not attempt to dispose of, close or in any way downgrade the status of Columb barracks, Mullingar, which has been in operation as an integral part of Mullingar since 1822 and which was the subject of a recent illuminating and informative lecture in the barracks by an eminent historian.

To say that I am shocked to have to raise this matter in our Parliament on behalf of all those affected in order to seek an unqualified assurance as to the future of Columb barracks is an understatement. I cannot believe that a sovereign government would ever contemplate closing such a major and integral part of the Defence Forces' facilities. The fact that my telephone line has been buzzing with deeply concerned people, including former and serving personnel and their families, is an indication of the anger and fear that has been generated following the reports by Conor Kane in this morning'sIrish Independent. We are gobsmacked but the people of Mullingar and County Westmeath will fight the closure tooth and nail. If the Minister is even contemplating such a move, I advise him to forget about it because we will not allow it to happen in any shape or form. I do not want mealy mouthed side steps or obfuscatory assurances such as a statement that it is not intended to close any more barracks in the short term. We will not allow the barracks to close in any term, whether short, medium or long.

Let me explain the importance of Columb Barracks to the economy of Mullingar and County Westmeath. It is the home of the fourth field artillery regiment. As one comes into Mullingar one can see signs of the town's pride in its association with the military. It is the last remaining artillery barracks in Ireland and, given its location in the geographical centre of the country, it is of great strategic importance and acts as a staging post for all our overseas and UN based operations. Over 200 serving personnel are based in the barracks, together with more than 20 highly skilled civilian staff. The income generated from pay, pensions and ancillary purchases is worth approximately €10 million to the local economy. The facility's 200 beds increases its importance to the western brigade. It also acts as a headquarters of the Reserve Defence Force and the 54th regiment. It is ironic that the blocks in the barracks have recently been upgraded for fire proofing.

Up to a quarter of the strength of the barracks is going to Chad on 21 May, continuing the fine tradition of our military personal of making significant contributions to the strength of the fourth western brigade on important missions. We are proud of the military personnel from Columb Barracks, Mullingar, and Custume Barracks, Athlone, who have served with great skill and distinction on important missions. The fourth field artillery regiment has in recent times been honoured by addresses of recognition by Westmeath County Council and Mullingar Town Council, which reflects the importance of Columb Barracks to the economic, cultural and community life and future of the town of Mullingar.

Two active groups, ONE and IUNVA, represent retired soldiers in Mullingar. Their members do great social and community work and ensure their colleagues are never forgotten. I salute them for their fundraising efforts and the work they do on behalf of their members throughout the country. Many serving members of the Defence Forces also do community work in their spare time across a range of voluntary organisations. Regimental Sergeant Major Noel O'Callaghan and his colleagues have embarked upon a fundraising venture to help the stroke unit at Mullingar hospital and, even though the campaign is only a few months old, have already raised over €30,000 for this worthy cause.

From an economic perspective, it is foolhardy to contemplate closing Columb Barracks. Apart from being unable to dispose of it in the current climate, all personnel would have to be paid disturbance money. No money will be saved, therefore. Families of serving personnel would suffer significant disruption if they are forced to relocate. They would have sell their houses, which is not easy in a collapsed market, and might face difficulties in securing school places elsewhere. I urge the Minister to put the serving personnel and their families, who have made long term decisions based on the future of Columb Barracks, to the fore in his considerations.

I thank the Deputy for his good wishes. One of the downsides of my new job is that I am no longer a member of the Joint Committee on Enterprise, Trade and Employment, which he has expertly chaired for the past two years. The Minister for Defence has asked me to convey his regrets at being unavailable to take this Adjournment matter in person. However, he is grateful to the Deputy for giving him the opportunity to address the misleading impression given by media reports this morning regarding potential barrack closures.

As he has advised the House on many occasions the closure of barracks and the consolidation of the Defence Forces into a smaller number of locations is a key objective of the White Paper on defence. The dispersal of personnel over an extended number of locations is an impediment to essential collective training and imposes increased and unnecessary overheads on the Defence Forces in terms of barrack management, administration, maintenance and security. The consolidation process is designed to facilitate higher training standards while also freeing under utilised resources and personnel for operational duties.

The funding previously realised from the disposal of surplus barracks and properties has, together with pay savings, provided some of the resources required for infrastructure, training development and equipment procurement. In this regard, the White Paper states that the Government's decisions are based on its recognition of the necessity to enhance the equipment and infrastructure available to the Defence Forces. It is the Minister's intention that the funding realised from the disposal of recently closed barracks will provide further funding for the ongoing re-equipment and modernisation of the Defence Forces.

The development and increased capability of the Defence Forces, together with the improved security situation along the Border, removed the rationale for seven barracks and posts in Border areas and provided the opportunity for consolidating units in fewer locations. In framing the 2009 budget the Government, therefore, decided to reduce the number of Army barracks to bring them into line with the operational requirements of the Defence Forces and achieve economies of scale. As a result, the seven barracks along the Border were consolidated into three posts.

This morning's article suggested that further closures are on the way. This is a complete misrepresentation of the current position and the documents provided by the Department of Defence under a freedom of information request. If anything, the manner in which the issue was reported is contrary to the purpose of the Freedom of Information Act, which is designed to inform rather than misinform the public on policy issues. The documents in question were prepared in the context of the 2008 budget and include a memorandum from the Defence Forces' strategic planning office from January 2008. These documents set out a range of possible options on barrack closures for consideration by the Minister for Defence and the Government.

Having considered the matter, the Government agreed in the context of the budget to announce the closure of four barracks, namely, Longford, Rockhill, Lifford and Monaghan. As the Deputy will appreciate and as the Minister has previously stated, the decision was based on the particular requirements in the Border region given the changed security situation arising from the Good Friday Agreement dispensation.

The Government has made no decision on other barracks nor are further closures under active consideration by the Minister or the Government at this time. The Government and the Minister must take cognisance of the requirements of the Defence Forces and ensure on an ongoing basis that the overall organisation and deployment of Defence Forces personnel across the country fully supports the ongoing professional development and training of our Defence Forces. While the Department and the Defence Forces continually review requirements relating to barracks, infrastructure and other military installations, it is important that the most recent changes be given the opportunity to bed down. Contrary to media reports this morning, there are no plans for further barrack closures.

There is no smoke without fire.

Water and Sewerage Schemes.

I thank the Ceann Comhairle for selecting this urgent issue on the Adjournment. I would like to pass on my warmest congratulations again to the Minister of State, Deputy Dara Calleary, who is following a fine family tradition and Fianna Fáil tradition, and I wish him well. Normally I would complain that the Minister for the Environment, Heritage and Local Government is not present to take this matter but I take the Minister of State's presence to be a signal that he has good news for Kiltimagh, County Mayo. I am glad I have given him the opportunity to give Kiltimagh the good news.

A new and updated sewerage scheme was mooted as far back as 1992 for Kiltimagh. It has been promised and reneged on many times since then but especially in 2002 when we were told its delivery was imminent prior to the election in that year. During that period the development of the town was held back and restricted because the treatment plant was incapable of dealing with the expanded capacity. For example, the owners of a hotel built in the town a few years had to install their own treatment plant costing them thousands of euro and everybody will be aware of the pressure hotels and the tourism industry are under.

However, this issue has become more serious in recent years because of the threat to the environment posed by raw sewage running into the Pollagh River, a tributary of the River Moy, which is the biggest salmon river in Ireland, if not Europe. I have seen this raw sewage with my own eyes on numerous occasions and few days ago I witnessed it again in the company of local Councillor Lavin. The reality is that if a farmer or industrialist caused the pollution in this river, they would be rightly prosecuted. I have attended two public meetings in recent weeks, as has the Minister of State, organised by the angling club in Kiltimagh, along with every other public representative. The official delegation was informed by the council that it is waiting for approval from the Minister for the tender report it supplied in order that the scheme can proceed immediately.

The entire scheme, including the network collection and the treatment plant, will cost more than €9 million but it is crucial that the Minister for the Environment, Heritage and Local Government gives the go-ahead now. The Minister of State and Deputy Beverley Flynn representing the Government informed people at the public meetings that the scheme would happen within weeks. It was supposed to happen under the former Minister, Deputy Dick Roche, in 2005. The people of Kiltimagh have waited long enough. The tourism potential of Kiltimagh and Mayo needs to be developed to its full potential, especially in these difficult times. I urge the Minister to give approval for this scheme.

As the Minister of State is well aware, the community has a case ready to go to Europe if sanction is not given immediately. I would like to put on record a Fianna Fáil press statement released on 9 May 2007, which states:

Minister for the Environment, Mr Dick Roche gave the go ahead last week for the €6m contract, which will upgrade and extend the existing wastewater collection system and will include the outfall from the new wastewater treatment plant. More than 5km of watermains will also be replaced alongside the sewerage works.

"I authorised Mayo County Council last January to invite tender for the construction of the new Wastewater Treatment Plans for Kiltimagh, This latest approval means that the way is now clear for the entire scheme," noted Minister Dick Roche . . .

"This new sewerage scheme will mean that Kiltimagh will be able to cater for new residential and commercial development well into the future and the local community will continue to enjoy the highest environmental standards," noted Deputy Carty.

I urge the Minister of State to give us goods news. I will cross the floor and shake his hand once he announces it.

I thank the Deputy for his good wishes, which were extended previously. I extend good wishes to him in regard to his activities next weekend.

We have been working on this issue together since our election in 2007. The Water Services Investment Programme 2007-2009, which was published in September 2007, includes 20 major water and sewerage schemes at various stages of planning and construction, with a value of more than €205 million for County Mayo. These includes Ballina sewerage scheme and the extension of Ballina water supply scheme to Crossmolina costing almost €24 million between them, both of which are substantially complete. In addition, Castlebar sewerage scheme costing €50 million and Achill Sound sewerage scheme costing €7.4 million are under construction. A range of other schemes is advancing through the planning process.

The schemes in the programme, including Kiltimagh sewerage scheme, will provide much needed modern water and wastewater infrastructure in many areas of the county. The Department of the Environment, Heritage and Local Government originally approved a budget for the Kiltimagh sewerage scheme in September 2008, and approved an increase in the budget recently, bringing the total amount approved to just under €9.2 million. The scheme comprises two related elements, which involve the upgrading of the collection system and the treatment works. Separate contracts are involved for each element.

The Department approved Mayo County Council's preliminary report and the preparation of contract documents for the collection network and wastewater treatment plant for a population equivalent of 3,300 in February 2004. The contract documents for the collection network were approved in May 2007, which allowed Mayo County Council to advance to the procurement stage. While tenders were received and examined by the council, the Minister understands from the council that the successful tenderer withdrew before signing the contract. The council is considering its options for progressing these works and the Department expects to receive a report on the outcome of this consideration in the near future.

The council's contract documents for the wastewater treatment plant design, build, operate contract for an increased population equivalent of 4,000, were approved by the Department in January 2007. The council submitted their tender recommendation for this contract, which includes the operational and maintenance element of the Killala and Achill Sound sewerage schemes, in late December 2008. The Department raised some queries with the council to complete its examination of the tender recommendation and the necessary clarifications were received last month.

The Minister understands the scheme is important for the local community, as it will ensure that the town has a sewerage scheme capable of meeting current demands, that there will be capacity to service new development and that environmental standards, including water quality in local rivers, will be preserved and improved for the benefit of the town and its residents. He will ensure that there is no avoidable delay in the Department finalising its examination of the council's tender recommendations and has agreed, on my request, to meet a delegation from Kiltimagh as soon as is possible. I will continue to work with the Deputy to finalise this project but, as he will be aware, there were delays that were beyond even the Department's control over the past few years.

Forestry Industry.

I wish to share time with Deputy Creed.

Is the 8% reduction in forestry premia announced in the supplementary budget last month legal? More than 20,000 people are employed in forestry and 16,500 farmers have invested in forestry. Forestry premia and forestry-related activity such as road building and planting cost the Exchequer a total €122 million annually and the 8% reduction will cost farmers in excess of €7.5 million. For that reason other farmers do not have the necessary security or confidence required to get involved in planting. Farmers are worried that there will be another 8% cut in November or in April 2010. Farmers have come to me who wish to invest in forestry but they have lost confidence and are shying away from it. Will the Minister of State outline his ongoing plan for forestry that will give confidence to farmers and demonstrate that the Government is dedicated to the sector?

I have some suggestions on where one might claw back the sum of €8 million. If we were to suspend the roads programme for one year, that would result in savings of €4 million that could be used for the forestry programme. Planting tenders have dropped by between 10% and 15% but Coillte, Green Belt and other companies are not passing on the benefit of the cut to the man who is planting the trees. A cut in the planting grant by 10% would yield a sizeable sum. Will the Minister of State outline a plan for the future for forestry to show that the Government is dedicated to the sector and support the farmers who wish to develop forestry? I suggest that, when forestry premium payments finish, perhaps in year 21 one could pay the 8% to farmers.

Forestry involves a commitment of 30 to 40 years on the part of landowners. At the simple stroke of a pen not only has the Minister for Finance and his Cabinet colleague, Deputy Smith, in the Department of Agriculture, Fisheries and Food taken money from farmers' pockets but they have simultaneously undermined their ongoing commitment to future afforestation because there is a fear that the viability of forestry as an income source could be further undermined at another stroke of the pen. That is penny wise and pound foolish.

The Minister of State, Deputy Killeen, is aware that there are legal penalties and sanctions for a failure to meet our obligations signed up to at European level to reduce our carbon emissions. Forestry represents the easiest and fastest way to meet our carbon sequestration requirements. In the budget the Minister has dealt a body blow to the industry and the commitment of farmers as landowners to planting and meeting future targets.

Deputy Sheahan referred to the legal principle of legitimate expectation. People who entered into a commitment to forestry as a land use measure did so on the basis that they expected their level of income to be predictable for the period of the grant — up to 20 years — but that has been undermined. Has the Department taken legal advice on the matter?

I seek clarity from the Minister of State on another matter on which there is uncertainty. Is it the intention of the Government that income from forestry which up to now was tax exempt will be subject to the various levies introduced in the budget by the Minister for Finance? That would be a further breach of contract between the Department and farmers and sound the death knell of the afforestation programme. The Minister should be concerned that the target set in the programme is hopelessly behind schedule.

What the Minister has done is penny wise and pound foolish. There are other areas in which funding could be saved. Closing the stable door after the horse has bolted is something at which the Government has become adept. A round table of the various interest groups has been convened to give the Government cover on this issue and it would have been preferable for the Minister to have embarked on this. With this precipitative action he has dealt a fatal blow to the future of the forestry industry which is critical to our economic future.

Gabhaim buíochas leis an mbeirt Teachta as an ábhar tábhachtach seo a chur faoi bhráid na Dála. I am pleased to have an opportunity to highlight the Government's commitment to forestry and my future plans for it. In essence, they are for the continuance of support for the forestry programme. The continued funding of forestry is an appropriate use of national funding from the Government's viewpoint, given the income it delivers to the rural community, the raw material it provides for industry and energy uses, the jobs it continues to sustain and the essential contribution forestry makes to carbon sequestration in furtherance of the national climate change strategy.

Deputy Sheehan has referred to the recent decision to reduce forestry premia by 8%. This reduction was necessary in view of the unprecedented pressure on the public finances and the need to work within limited resources. I acknowledge that this will have a significant impact on the annual income of premium recipients. However, it should be noted that, notwithstanding the reduction, approximately €58 million was paid to forestry owners this week in the annual premium run. I am sure the House will agree that this is still a substantial amount of money to invest in the rural economy. This is not the full extent of the amount to be paid out in premia this year as payments will continue to be made during the year.

The decision to reduce the premium was balanced by the need to maintain the establishment grants scheme, the lifeblood of planting and employment in the forestry sector. The continuation of the 100% establishment grants, coupled with expenditure on support schemes, is evidence of the ongoing commitment of the Government to forestry and our plans to continue that support of the sector. Forestry planting is labour intensive and the continued 100% funding of the establishment grants seeks to ensure continued employment in the nursery, planting and maintenance elements of the forestry sector. It should also be appreciated that, despite the financial pressure on the Department, the total amount of funding being made available for forestry and bio-energy is still approximately €120 million, only marginally over 1% less than that provided in 2008.

The rationale for continuation of support for forestry is the extensive contribution it makes to the economy, society and the environment. Evidence of this is the employment of some 16,000 persons in the forestry sector. Allied to this is the figure released by COFORD that Irish forest product exports for 2007 were worth in excess of €333 million to the economy, an increase of more than 14% in value on the previous year. This contribution is the outcome of the Government's commitment to forestry to date, as well as the investment by all of the stakeholders in the industry, from the nursery right through to the processor. However, it is essential that support is continued to facilitate an ongoing supply of raw material to use the capacity that has been developed to date and sustain the viability of the sector. The Department is seeking to ensure continued confidence in the sector in order to maintain this contribution into the future. To this end, I met today the forestry liaison group which consists of representatives of the stakeholders in the forestry sector to discuss proposals for a number of policy actions to ensure continued confidence in the sector.

Did the Minister of State agree anything?

I thank the Deputy for the alternative proposals, some of which were made by groups at today's meeting. I assure both Deputies that legal advice supports the Department's action. My understanding is that levies apply to all income, including that from forestry. We await the report of the Commission on Taxation.

The Dáil adjourned at 9.10 p.m. until 10.30 a.m. on Thursday, 7 May 2009.