Is é cuspóir an Bhille cead a thabhairt don Institiúid Taighde Tionscail agus Caighdeán airgead a fháil ar iasacht chun dhá chríoch ar leith; an chéad chríoch, chun caiteachas reatha a íoc agus, an dara chríoch, chun trealamh capitiúil a cheannach.
The purpose of the Bill is to enable the Institute for Industrial Research and Standards to borrow temporarily such sums as they may require for current expenditure and to borrow on the security of their own lands and premises without any guarantee by me, such sums as they may require for the purpose of purchasing capital equipment, where the institute can show that they can fully service the borrowing through the earnings effected with the equipment.
I would like to put the Bill in context by saying something about the institute and their operations. Senators, I am sure, are aware that the overall objective of the institute is to promote the efficient operation of industry and to maintain and stimulate where possible, industrial growth. Their activities are distinguished from those of other State bodies such as CTT and the IDA, in that they are centred on industrial technology. The function of the IIRS is to ensure that industry has access to, and uses, the most up-to-date technology available for the creation of wealth, high quality employment and a higher standard of living for the Irish people.
The institute strive to achieve this objective in two ways. First, the provision of a technical advisory service to ensure the efficient operation of industry.
These services, for which fees are charged, are provided under the headings of specialist testing and analysis, problem solving for industry, and technical information and advice in general. Simply solving industry's problems, however, is not enough. The institute also engage in applied research and development which can lead to the development of new industrial units and the creation of new jobs by providing the necessary technological support for firms committed to grow and by providing viable investment opportunities for such firms. This research and development service now represents about 20 per cent of the institute's activities and the institute are hopeful of increasing this figure.
In addition the institute also act as technical adviser to the Government. Indeed, as Senators know, only recently the institute were given the lead role in the Government's energy saving campaign.
The institute receive the bulk of their funding from State sources. The total Exchequer grant-in-aid in 1979 amounts to over £5.1 million of which £1.4 million is for building and construction at the institute's headquarters at Ballymun Road, Glasnevin. On top of the £5.1 million, the institute expect to increase their earned income this year to over £2 million. Indeed, over the past ten years the institute's income from clients has increased dramatically from £83,000 in 1968 to its present level. In 1968 income as a percentage of the current expenditure of the institute came to only 15 per cent. It now represents over 33 per cent.
This increase in earned income has brought its attendant problems. Experience has shown that because of the delay in clients settling their accounts there is a substantial amount owing to the IIRS at the end of each accounting year, to be received in the early months of the following year. The outstanding amount has had to be financed by bank overdrafts to meet the cash flow problem at the end of each accounting year. The Industrial Research and Standards Act, 1961 makes no specific provision for borrowing powers by the institute. Section 2, subsection (1) of this Bill proposes to permit the institute, with my consent and the concurrence of the Minister for Finance to borrow temporarily by arrangements with bankers such sums as they may require for the purpose of providing for current expenditures.
It has been the practice since 1975 that the overdrafts are cleared very quickly in the new accounting year. This will continue to be the practice and Senators can be assured that these overdrafts will be purely year-end phenomena. The Bill currently before the House also proposes to extend the borrowing powers of the institute in section 2, subsection (2) to cover the acquisition of capital equipment which can pay for itself on a self-financing basis from fee income earned by the institute. With the increasing technological content of our exports in recent years, and the demand for certification of exports as meeting certain standards, it is becoming increasingly more obvious that there are certain areas of product-testing where the income generated from these tests would be capable of paying for the investment necessary to meet the demand. This Bill proposes, therefore, that in such cases the institute be allowed to borrow on the security of their own assets—their lands and buildings without State guarantee for the repayment of the sums borrowed. These borrowing powers will only be exercised with my consent and with the concurrence of the Minister for Finance.
I should like to assure Senators that it is not the intent of this Bill to place the institute at any disadvantage in borrowing compared with other State bodies. Quite the opposite, the aim of the Bill is to give the institute a flexibility in borrowing which they have not got at present. The reference in the Bill to "without State guarantee for the repayment of sums borrowed" is to make it clear that the institute's borrowings for capital equipment are to be on a self-financing basis and that the institute will have to satisfy themselves before considering such borrowing that they have the capacity to repay them from own resources and to ensure that the institute will be borrowing for clearly worthwhile capital investment.
Measaim go n-éascóidh an Bille na deacrachtai a bhi le sarú ag an institiúid agus molaim an Bille don Teach.