Seanad Éireann debate -
Wednesday, 14 Dec 1983

Vol. 102 No. 8

Export Promotion (Amendment) Bill, 1983: Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Trade, Commerce and Tourism (Mr. M. Moynihan)

The Export Promotion (Amendment) Bill, 1983, while, in one sense, a fairly routine measure, is extremely important as it is concerned with the task of enabling Córas Tráchtála to continue their work of expanding exports.

I think everybody in the country, including most economic commentators, recognise and agree that as an open trading economy we have to export to survive and that our export achievements to date and capacity for further export growth is one of the few economic lifelines that we must hang on to and develop at all costs in our efforts to bring the country into a period of new recovery and prosperity.

The Bill makes provision for further grants to Córas Tráchtála to enable them to continue the work of promoting, assisting and developing Irish exports. The Bill also provides for ministerial control of the remuneration, allowances, terms and conditions of employment of Córas Tráchtála staff including the chief executive.

In 1959 when Córas Tráchtála were set up under the Export Promotion Act, the total amount of grants which the board could make was limited to £1 million. This amount was increased by subsequent amending Acts; the last one in 1980 increased the total amount of grants which the board could make to £90 million. This Bill proposes to raise the limit to £160 million, an increase of £70 million.

An increase of this size may appear very large but, in fact, it will just cover Córas Tráchtála's requirements for the next three years or so. In absolute terms it is, of course, a large sum of money but, the actual grant-in-aid provided for Córas Tráchtála in any year will continue to be the subject of detailed examination before inclusion in the annual Vote for my Department which comes before the Dáil in the normal fashion.

I do not have to spell out how vital exports are for the development of this country, the creation of employment and the reduction in our balance of payments deficit. The export performance over the years continues to improve and provides a real source of satisfaction and pride at a time when we hear so much talk of doom and gloom. In 1959 when CTT were set up, the total value of exports was in the region of £130 million. By the end of 1982 this figure had risen to almost £5,700 million and the indications are that by the end of this year our exports will have reached the impressive figure of £6,850 million — an increase of almost 20 per cent over 1982. This performance is, in my view, staggering and the crucial role which CTT play in this success story is fully recognised.

Down the years, one of the constant factors in Córas Tráchtála's performance has been their ability and flexibility to anticipate and adapt to changing demands. This is particularly important in those new and challenging markets such as Saudi Arabia, Iraq and other Middle Eastern states. They have to be conscious of the changing needs of exporters, of the requirements of foreign markets and they must be able to analyse and respond to these requirements so as to endure that Irish exports are what potential customers are looking for and that all the other conditions pertaining in those markets are satisfied.

It goes almost without saying that the activities of Córas Tráchtála require increased expenditure each year. Their level of expenditure has been rising each year and has almost doubled since 1980. The expenditure this year will amount to £16.24 million and this reflects the Government's strong commitment to the development of our export base and is a compliment to the initiative and drive of exporters generally. The present statutory limit of £90 million set under the 1980 Export Promotion Act will, however, be reached early in 1984 and in order to enable Córas Tráchtála to continue their valuable work the further increase proposed in this Bill is now necessary.

Córas Tráchtála spend their funds on providing a comprehensive package of export support aids and services. These activities range from advice and basic market information, specialist services in the field of market research, incentive grants for individual exporters visiting overseas markets, to the organisation of national stands at international trade fairs. The House will also know that Córas Tráchtála administer the employment support scheme which is specifically geared to increasing the number and quality of marketing executives who spend a considerable amount of time working and selling in their new overseas markets.

This scheme is proving to be an extremely successful one and already the marketing executive recruited under it are making significant contributions to the healthy state of our exports. There is obviously a heavy duty on everybody concerned with exports to ensure that Córas Tráchtála's funds are deployed in a manner which conveys the best support to the exporting community and which maximises the return to the State in terms of new job opportunities, contribution to balance of payments, and so on.

There is a great expertise and skill involved in deciding what is the best mix of marketing support and aids, or which blend in particular markets promises the best results. One of the priorities must be to ensure that the range of assistance and advice available from Córas Tráchtála will continue to be up to the minute and to be responsive to the needs of exporters especially in the area of new opportunities and new markets.

The House will recall that earlier this year legislation was introduced which broadened Córas Tráchtála's area of responsibility to include the export and development of a wide range of service activities and which permitted the provision of export credit insurance facilities in support of such activities. The indications are that there is enormous potential for the export of service activities particularly to new markets. Everybody who has been involved with a Córas Tráchtála-arranged trade mission abroad has been impressed with the long-term potential for Irish exports despite the cultural, language and other difficulties which confront our exporters in such markets.

However, above all they have been impressed at the way individual exporters have been able to present their goods and services and generally hold their own with the assistance and support of Córas Tráchtála through pre-arranged introductions, appointments, acting as go-between and general back-up service and help. It is this constant attention to detail, matched only by the earlier research in identifying markets for particular products and putting exporters in touch with potential buyers, which ensures that Irish exporters are able to compete successfully abroad.

We all owe a debt of gratitude to the part being played by exporters and for their efforts in bringing about economic recovery. The country's export performance over the past few years has been very impressive. It is clear the Irish exporters are now adopting a much more professional approach to marketing, product development and presentation and to the exploitation of new markets. Córas Trachtála are providing support in all these areas but it is clear that the efforts of Córas Tráchtála and of the exporters must be complimentary. Without the drive and initiative of individual exporters, Córas Tráchtála's endeavours could not bear the same fruit. I heartily and sincerely congratulate Irish exporters on their achievements in recent years. I have no hesitation in saying that the export performance is one of the few bright spots on an otherwise rather gloomy horizon. I am confident that continuing export growth can hasten the process of economic recovery and give real grounds for optimism and hope in the shape of jobs and a worthwhile future for our people.

Because of the important mantle of responsibility being placed on the shoulders of our exporters, we must all guard against complacency creeping in. Impressive as our export growth rate has been, this must be maintained and improved if we are to achieve our basic economic goals. This growth has never been more critical than now, confronted as we are with unacceptable unemployment levels and other economic difficulties. We live in an open economy and we must consolidate existing markets and seek out new export markets if we are to make any impression on the unemployment figures. The world recession, the depressed demand for goods and the regrettable tendency among some countries towards protectionism makes exporting a difficult and hazardous occupation nowadays, and emphasises even more the credit due to Córas Tráchtála and to the exporters for their performance down through the years.

However, the potential for developing our exports is enormous and the rewards are generous. We must continue to keep our respective fingers on the pulse of changing tastes and demands; we must continue to educate and inform our exporters in the skills of marketing and presentation; and we must continue to provide Córas Tráchtála with the funds to carry out their essential job which they do so effectively here in Ireland and through their network of 25 overseas offices in 19 countries and in all five Continents.

I am sure that this House will endorse the view that Córas Tráchtála must have adequate funds at their disposal to continue their vital work. The Bill also includes a provision regarding remuneration, allowances and terms and conditions of employees of Córas Tráchtála. This is to up-date existing provisions in the Export Promotions Act relating to these matters and in order, at the behest of the Minister for the Public Service, to bring them into line with standard provisions being inserted, as the opportunity arises, in the legislation governing all other non-commercial State-sponsored bodies. I ask the House to support this Bill.

Mr. Lynch

We support this Bill and welcome the Minister back to this House. The Minister referred to the tremendous achievements of Córas Tráchtála since they were set up in 1959 when the total value of exports was only £130 million. In 23 years we have reached the staggering figure of £5,700 million and almost £6.8 million by the end of this year. Tremendous work has been done by Córas Tráchtála and any help to develop further our export market which is the lifeline of this country will certainly be endorsed by this House.

While giving our full support to the Bill, it gives Members of this House the opportunity to raise any doubts or questions pertaining to the further expansion and further development of our export trade. I read through some of the comments made in the Dáil when this Bill was going through. Deputy Kelly referred to the fact that Irish industry has the smallest number of foreign-based permanent marketing executives in Europe. The Minister referred to this in his speech. He also referred to expanding markets in Saudi Arabia, Iraq and other Middle Eastern countries with their different cultures and traditions and the language barriers that exist and have to be surmounted. He also mentioned that Córas Tráchtála administer the employment support scheme which is specifically geared to increasing the number and quality of marketing executives who spend a considerable amount of time working and selling in their new overseas markets. I welcome that statement by the Minister.

Recently in County Meath everybody was staggered by the announcement that an international company, Westinghouse, were closing their doors at the end of the year. They are situated in the town of Ceannanus Mór, or Kells. Here we have an international company with a £10 billion annual capital expenditure budget. Not because grant support was lacking, but simply because they did not reach their potential market target which would be £21 million to £23 million annually, they are closing down. This Bill raises a question in my mind. Did this firm co-operate to the fullest extent with Córas Tráchtála and other State-sponsored bodies? We have the finest factory in Ireland situated in Kells and it is sad to see them closing their doors.

Other European countries have made remarkable progress in market expertise and export promotion. In the case of this firm which exported office equipment, the German manufacturers and export promoters took the market from under the noses of the people in Westinghouse. For this and many other reasons I welcome this Bill and any measures which will improve marketing expertise. While it concerns production and work efficiency, marketing, selling of produce and presentation are becoming more important and we need to improve our efficiency in every sector in this very competitive world of trade today.

I hope some of the extra money being provided in this Bill will be used to further improve our agricultural exports. We import something in the region of £500 million worth of food per annum. This is a national disgrace. If we are not fit to market horticultural produce and other items of food value in such a way that they are attractive to the Irish housewife and to the Irish purchaser, I do not see how we can hope to expand our export market in that sphere. When I last met the IFA they told me they were preparing a package for submission to the Government with special emphasis on proposals to improve the quality of horticultural produce. This is most welcome. I hope they will be able to come up with a programme which will be accepted and which will stem the inflow of food to this country and expand our agricultural export industry.

I should like to take this opportunity to ask the Minister to try to relieve some of the pressures and over-stringent administrative shackles at present in existence. With regard to small business enterprises geared mainly towards the export market, some of the regulations tend to discourage rather than encourage many of our smaller firms to expand their enterprises or to improve their export competitiveness. Many of these smaller firms based in rural Ireland have a tremendous work incentive. They have no labour relations problems. They are less prone to strikes. Strikes very rarely occur in the smaller type rural based industries. They should get an added incentive to develop.

We have a small firm employing 12 to 14 people with a projected expansion to double its capacity, its output and its workforce. When we see incorporated into a planning permission a requirement and a stipulation for an amount of £10,000 for the development of a road to this factory — and if this money is not paid out payment of grants by the IDA will be held back; and no relief coming from the IDA to cover that amount of money — that is wrong and in my opinion it is a disincentive.

I am a member of the all-party committee on small business. In the New Year we will be making submissions. Some startling revelations and submissions will be presented to the Minister. I hope, if radical changes are necessary and if radical steps have to be taken, they will be taken. We have so many State-sponsored bodies involved in industrial development, wearing many small hats specifically identifiable to the area to which they are allocated, I wonder are we fully happy that all the bodies are co-ordinating and co-operating in the best interests of trade in general and the export market.

I support the Bill and I welcome it. A sum of £70 million is a good hike all of a sudden. If the money being allocated proves, as we hope it will, to be positvely geared towards expansion, development and promotion, and pays the rewarding dividend we are all so anxious to obtain, this Bill will be well worth while.

Mr. Quealy

This Bill is worthy of considerable thought and one in which many people are interested. It increases the statutory limits on the funds of CTT to enable them to perform their export functions. The figures in the Minister's speech indicate the need for this kind of support. The total volume of our exports in 1982 reached £5,700 million and we expect a further increase of about 18 per cent to 20 per cent this year.

Córas Tráchtála are one of our better run semi-State bodies and they have the confidence of the business people. Export markets are fairly tough today and there is no soft money to be gained from them. If we are to market our produce, we cannot go on in a haphazard way and think that we can sell what we like where we like. We have not handled our food exports very well in the past. We can produce the finest products in the world, but we fall down on presentation and marketing.

It is regrettable that we have to import vegetables such as potatoes, carrots and celery. It is regrettable to see produce from Israel in our supermarkets. One of the reasons is the high cost of production here. We cannot compete. We heard what Kinsale gas, and more recently what Waterford oil, could do for our balance of payments and our economy, but out greatest natural resource is the land and it still has not reached its potential. It was reported recently that 60 per cent of the land was performing at a non-commercial level. Some of our farmers are able to compete with the best in Europe in terms of output and efficiency, but we have not got enough of them. As a result, the volume of the raw materials to beef plants and dairy processing plants is only a fraction of what it could be. There is a huge relative loss to our economy in terms of potential employment and much-needed foreign earnings.

Last year our total volume of gross agricultural output was over £2,100 million. It was a respectable performance I suppose, but a study published in April showed that potential value of our gross agricultural output last year could have been a staggering £5,400 million. If we reached that stage of development, Córas Tráchtála would have a major role to play in marketing that produce. Instead of £6,000 million our exports would be worth £9,000 million.

Another problem in the business of exporting is the question of delivery on time. The secret of marketing is having the right article in the right place at the right time. We have a problem with management-worker relations. They are not always the best. When we make contracts in foreign countries we must be able to supply goods or services by the prescribed deadline. If we are unable to do so a company may find itself in great difficulties in getting a renewal of contracts.

Some of our problems stem from a high inflation rate which is still ranked among the highest in Europe. It is much higher than that of most of our competitors. In that situation our profit margins fall. The only way we can compensate for that in business is to increase productivity or through a reduction in the work force. Any reduction in the work force is not very easily attainable. There can be strikes and many other problems and it will only add to our already high unemployment rate, which at present is 200,000.

The Minister must have a look at our high costs, especially our energy costs, which are the highest in Europe. Also our telecommunications and postal costs are probably the highest anywhere. In my view unemployment will continue to rise while those high costs continue.

CTT have done a good job in promoting our products abroad but they will be unable to promote them if costs are not right. If we are not competitive, how can they do the job? I appeal to the Minister to do what he can to reduce our energy costs especially because the main ingredient in most of our industries is energy. It is very important that we get our costs right.

We have a new Minister for Trade, Commerce and Tourism and I wish him well in these difficult times. I know that he has the initiative, the enterprise and the foresight to get us out of our difficulties. I know that he and the Minister of State will get us through these difficult years and achieve the proper balance in which we will have further major increases in our exports. I support the Bill and wish it a speedy passage through the House.

Mrs. Honan

I welcome the Bill but in doing so I feel I must make the following remarks because we are talking about a very large allocation of money from the Government in the amount of £160 million.

The stated functions of Córas Tráchtála are to promote, assist and develop in any manner which the board consider necessary or desirable the exportation of goods and the provision of such services as are specified from time to time by order of the Minister. With regard to the function that I have just outlined, it would appear from direct experience gained in dealings with CTT that the board are not able to back up this function with real muscle, by way of providing the necessary capital funds which are essential to assist industry in a meaningful way by the allocation of real grants to ease the burden of expense in exhibiting, researching, promotional work and the recruitment of staff of the right calibre by exporting companies.

Another function is to advise the Minister for Trade, Commerce and Tourism on matters affecting or in any way connected with the development of exports. I am not quite sure whether all these titles have changed since yesterday evening; anyway I am sure the relevant Minister and the Minister here this evening, for whom I have the greatest regard, will pass on my comments. The board are not providing services geared to the marketing of industrial goods as opposed to consumer goods. The organisation has not kept pace with the growth of industrialisation in Ireland.

Their third function is to provide an advisory, information and consultancy service to exporters covering product packaging and corporate design and product development. In respect of this function the general impression gained is one of commercial ineptitude and lack of positive commitment and application to industrial marketing, due perhaps to lack of in-depth front line exposure in industrial marketing situations with accountability for results, together with a marked reluctance to be assertive with client companies and lead from the front. That is usually where leaders are supposed to lead from. There is more than a suggestion, when recommendations are made, that if anything should go wrong the attitude is "Don't blame me; I am only an adviser". There is lack of continuity by CTT personnel with client companies. Frequent changes in personnel or non-availability do nothing for the credibility of CTT and even less for the confidence of the company.

I will make a few points that might be taken note of. Perhaps CTT should have a plan for the year ahead with a company, making a positive commitment to that plan in terms of funds allocated, and designate one person to monitor and ensure the implementation of that plan at regular intervals. Secondly, CTT could arrange for the secondment of personnel to work with a specific company or sections of industry with set and agreed objectives for a given period. Thirdly, CTT could rate the performance of companies and reward them through performance-related grant-aid schemes that are sufficiently worthwhile to motivate further the said companies to greater development of marketing expertise.

I would like the Minister to take note of a reference I intend to make to an actual situation regarding this Government agency. They are a Government agency and I will preface the case I am going to quote by saying that in my opinion they are probably too civil servantminded. That is deadly.

An Cathaoirleach

Be easy on the civil servants.

Mrs. Honan

I hope it is noted. It must be said. The quality of the monitoring staff is poor. This is something the Minister might take a look at. I understand that quite a lot of the staff are young and have big ideas and little experience. We might need an older-type person in that field.

I am sure the Minister, being such a sensible person, will note this case. A successful medium-sized Irish firm set up an exhibition in London which cost the firm £15,000. They designed a new catalogue for the exhibition which cost £5,000 to produce. They decided to send one person from the firm, with one of the owners, at a low cost to Córas Tráchtála of £150. What happened? After four months that firm got the £150 back and they had to wait 12 months to get any or part of the balance money.

I would go as far this evening as to say that maybe they need a more professional marketing section in Córas Tráchtála. I do not want to use the word "university" because it is a word I am not mad about. I am talking about a more professional group. I understand that AnCO in the past few days have embarked on a scheme to send people abroad to train. If this is true, I fully approve of what AnCO are doing and I would suggest that Córas Tráchtála might take a leaf out of their book and send people to become more professional in management, work practices, presentation and above all in selling.

Surely this whole Bill relates to the awful problem of unemployment. If our Irish industrialists have the proper service from CTT they will produce more jobs because the greater the sales on the export market, the greater the number of jobs at home. This is a Bill which affects industry.

I must refer to the cost of our energy. I understand that it is the highest in Europe. Taking that into consideration and knowing the situation of some of our small and medium-sized Irish-owned firms, I must compliment them on their competitiveness and the top class goods they produce. There is no sentiment about Irish goods when one goes to Germany or England or any of those countries because an Irish product has to be as good as what it is competing with. Some of those firms have done very well and are continuing to do so, thus giving us the jobs we need.

Córas Tráchtála should not take all the credit this evening for the jump in exports mentioned in the Minister's speech. In 1959 export figures were of the order of £130 million, in 1982 exports were £5,700 million and now we are talking in terms of £6,850 million. Much credit should go to the firms, the staff and management and the co-operation between unions and personnel on the factory floor. All the credit for that should not be taken by this Government agency. I would go as far as to say that the Minister might take a close look at this enormous amount of money and give a breakdown of where the money has been allocated. Some of us would be interested in seeing how that figure is being broken down.

Just in case the Minister might think I am not supporting the Bill, I wish to state that I am supporting it.

Mr. Lanigan

On a point of order, the Minister states that this is the Control of Exports Bill. It is not.

An Cathaoirleach

It is the Export Promotion (Amendment) Bill.

Professor Hillery

I join in the welcome for this Bill. I pay tribute to Córas Tráchtála for a job well done. The Bill before us is to provide CTT with money, the fuel by which the organisation works, and so enable it to continue its efforts in the crucial field of export promotion and development activities.

In a small open economy like Ireland's, exports, of course, are of the first importance. Exports are essential to economic recovery and to national development generally. It is heartening, therefore, to see the exceptional achievement in exports in 1983, an expected figure of £6,850 million. This figure is 20 per cent higher than in 1982. This gives a ray of hope in what is otherwise a bleak economic scene. No other country in the EEC will come near our export performance this year.

I want to make two points in particular. The first has to do with the development of our electronics industry and its importance for exports. The second one has to do with staffing levels in CTT which I find particularly worrying. Clearly we need better export levels if we are to make any real impression on our employment figures. On the industrial front there is hope, especially in the area of the electronics industry. It is expected, for instance, that in 1983 the new electronics sector in Ireland will export £1,400 million as compared with £300 million for 1977. Clearly, electronics exports form a very sizeable proportion of our total manufactured exports. Furthermore, there are now 300 electronic/electrical companies in Ireland employing 22,000 Irish people. Notwithstanding the very difficult economic situation only two such IDA sponsored companies have actually closed down.

It is estimated that by 1992 world annual production of electronics will more than double to £700 billion from £300 billion in 1982.

Ireland is well positioned to get its share of the huge electronics industry and thereby boost our exports further. We have a young, flexible and technologically educated work force. While overseas investment here is very welcome, it does raise the question of the link between foreign industry and native Irish industries supplying goods and services. The clear aim is to maximise the Irish content of inputs to industry and to retain the added value in Ireland. Research carried out by the IDA shows that the potential exists almost to double the current level of purchases of Irish goods and services to 32 per cent.

Overseas companies have launched us into the electronic age. Native Irish firms must be encouraged to participate. The signs are good. For example, former employees of Digital of Clonmel, and Measurex of Waterford, have set up their own companies to produce components for the electronics industry.

My final point relates to staffing levels in CTT which give cause for serious concern. The organisation is remarkable in having a relatively small staff. At present CTT have 320 employees, while the official staff level is 358.

This leads me to the blanket embargo on State employment under which only one in three vacancies can be filled. CTT are at present operating at 10 per cent below their official staff level. This reduction in staff has led to a reduction in some of their services and to the termination of other services. Everyone is agreed that CTT play a crucial role in our export drive, yet if CTT lose staff who possess scarce marketing skills they can only replace them under the one-in-three formula. If there is a case for slimming down staff in some of the State-sponsored bodies, I suggest that CTT is not one of them.

The role of CTT is far too important to our national recovery and to our future national development to suffer the loss of marketing people under an obviously rigid and inappropriate staffing formula. I understand the rationale behind the one-in-three formula but I am worried about its blanket application, especially for organisations like CTT. I would ask the Minister and the Government critically to review the embargo on State employment as a matter of urgency.

Mr. Lanigan

I welcome this Bill. Coming as it does on a day after which there has been a re-amalgamation of the Departments of Industry, Commerce and Tourism, it is very appropriate that we should now be speaking about this Bill. We must all welcome the fact that again we will see industry and commerce being joined together as they should always have been. As a result of this we will see a closer co-operation between the operations of the IDA on the one hand and the export board, CTT, on the other hand.

It is unfortunate that we have seen today the presentation of the Estimates for the Public Services. We are here today giving an increase to CTT and in the Estimates the outturn for CTT this year was £16,235,000. In the Estimates for next year they are being given £17,776,000 which is an increase of only 9 per cent. With inflation expected to be around the 9 per cent level, it is quite obvious that the services available from CTT next year will have to be run down. If we take it that there will be an increase in salaries, there is obviously no way there can be an appropriate increase in the staffing level. It is quite obvious that in a world in which costs of everything are going up CTT will not be able in the coming year to do the job they have been doing eminently successfully up to now in a very highly competitive world.

Let us be straight about it. People say that the bottom has come to the depression in the world scene and that because of this we can look forward to increasing industrial output and, therefore, increasing industrial exports which will be aided by CTT. In actual fact, the world market is so highly competitive at the moment that there is a huge need for an expansion of the services of CTT. There is no doubt that they have been highly successful with the limited resources available to them. When one looks at the range of exported goods that are going out — and these do not go out by chance, they go out because people go out and make a grasp for the sales — in 1982 £3,657 million worth of manufactured goods were exported.

There has been a huge increase in the areas of high technology products and engineering products, and these are new industries which have been set up here mainly by foreign capital and are in general owned by foreign companies. Much has been made over the past number of years of the cowboys who come into the country, set up a factory, take a grant, and disappear. That has happened but only to a very limited extent, and when one looks at the twelve-fold increase in exports — from £303 million in exports of manufactured goods in 1972 to £3,657 in 1982 — one can see that there has been a tremendous success story there.

CTT are working in an environment which is not hostile to CTT but it is a tremendously competitive environment, and unless we provide them with the resources abroad I am afraid that because of the nature of things we are going to suffer.

We have seen their success in recent years in many programmes they have set up, and some of them are worth mentioning because they could be useful to other people when they are considering going into the export market. It is very hard for a small company to get into the export market on their own because they do not have the resources in terms of finance for travel or in terms of manpower, though they can get a certain amount of help from CTT. CTT have set up a programme whereby they can put together a group of manufacturers in a certain sector and by doing so they can extend the amount of export promotion that can be done. The group marketing system has worked extremely well for relatively small companies. They have equally been very strong in their efforts to set up trade fairs for smaller companies abroad and that programme, again, has been amply successful.

They have brought in large numbers of buyers from abroad, and there is no doubt that the programme has been a success, but again resources which are available to bring in these buyers are limited. I reckon that because of the Estimates we have before us for next year the programme will be curtailed. The Estimates make sad reading.

The employment support scheme of CTT which gives smaller companies help in export promotion has been a success. Anyone who looks at the world scene in terms of trade will see that there is a changing emphasis. Up to 1959 agriculture and agricultural products were our major exports. Agricultural products now, I would reckon, are away behind our manufactured goods; they are increasing, but not at the same level as our manufactured goods, and I think we will see an increasing gap between the manufactured goods exports and our exports of agricultural products. That is not to say that our agricultural products will not go up in volume, but if we take them as a percentage of our total exports we will see that there is going to be an everincreasing gap there, and this will create problems as well. However, looking at what were considered to be the Third World countries who were selling what were considered to be cheaper goods around the world, places like South Korea, the Philippines, Indonesia, the Republic of China, Taiwan, Hong Kong and Singapore, it is highly significant that in those countries they are going away from the areas of manufacturing which needed large numbers of people into the highly technological manufacturing area. It was significant recently to read that the chairman of the Hong Kong Chamber of Commerce said that in the area of computerisation and technology they had done a great job in terms of mechanising and computerising their offices and their sales scene, but that they had not yet got down to computerising and putting high technology into their factories. People say there is a very cheap labour content out there, and this is quite true, but they are beginning to worry that unless they adapt their factories to high technology they are not going to be able to compete in the future.

A number of inhibitions are being placed on the export industry and again on CTT by virtue of the extremely high cost that the Government are adding to our manufactured goods here, in terms of VAT on point of entry for goods that are being brought in for finishing or marketing or for refinishing and then reexporting. We have the very high VAT content in all the input that goes into industry and, of course the 11.61 per cent PAYE-PRSI is a huge inhibition on anybody to set up any type of company, whether it be manufacturing or otherwise.

We have an energy cost which is at least 25 per cent above the next cheapest energy cost in Europe. We have a transport and telecommunications system which is not adequate. These are inhibitions that must be eliminated if we are going to get the success that we need in terms of What CTT are trying to do.

Again, there are areas where we must help CTT. Any inhibitions that are placed against trading with any particular country must be eliminated. Take the Republic of China, which is not recognised by us diplomatically at present, but which could be a very major exporting country for us — a country whose inhabitants are very anxious to broaden their trade outlets because they have found that for too long they have been too dependent on Japan as an export market. They are now extremely hard-working in Europe, buying and selling, and we could sell a lot more there except for the inhibitions that are put on the Republic of China because of our diplomatic scene. That should not create as many problems as it does at present. Even though we are not diplomatically represented there, there should be a method whereby major purchasers from the Republic of China who want to come here to buy can get visas and come into this country without having to send their passports to Singapore, to be sent back to Taiwan, which can take anything up to a fortnight or three weeks. When there is a trade mission in, say Europe, if CTT do a good job and persuade them that they can come in and that there are goods that they can buy here, they find that they cannot get a visa to come in, except by waiting for ten to 12 days. It can be said that if we allow some kind of a visa system to be evolved helping out Taiwan there will be repercussions from mainland China, but that has not been an inhibition to every other European country. Various European countries have their own ways of getting over this hurdle. I just take that particular country as one in which an inhibition which should be eliminated is being placed on our export potential.

The work being done abroad by our CTT representatives is unparalleled. Export promotion people from many, many countries will tell you that CTT are the most aggressive selling body for any country in the world. They do not mean aggressive in any derogatory fashion, rather in the sense that they know what they are doing and what they want and are quite prepared to work at it. That type of enthusiasm and skill have to be complimented here in this House. Too often we hear criticism of the work being done abroad by people from Ireland. When people go abroad and actually create the magic that has happened in the home manufacturing industry, they should be complimented at the highest level.

Another area that is only recently coming to the fore and becoming ever more important is our export of services. This is particularly important to us at a time when we cannot absorb many of our very highly trained young people coming out of universities and training establishments of all descriptions who cannot get jobs here. They can, if we extend our export of services category, get jobs abroad.

People have criticised, in this House and elsewhere, nurses and doctors for taking the money from the State, getting themselves very highly trained in very good training and education establishments and then going abroad and not repaying to this country what they have got from it in terms of subsidies that have to be paid for each student going through school. When one looks at the actual facts, 90 per cent of these people who are abroad are abroad because they could not get jobs here. I was out in the Middle East recently and saw the job being done under the management of PARC which is a subsidiary of Aer Lingus, and the tremendous work done by nurses and doctors out there who are creating for Ireland an image in the Middle East that we are not just a small, lethargic island race but that we have skills — and skills that can be used abundantly. Nurses also work in Saudia Arabia. There were management problems with an American company in Saudi-Arabia, but the Saudis said that they wanted the Irish medical teams to stay behind and that they would not be affected by the changes in management. I would hope that there might be a possibility that PARC or some other like group might be able to take over the management of the hospitals involved.

That is one area of services of which we can be proud and CTT should be given the opportunity to get more involved in it. There are other areas of service. The ESB have done a tremendous job for many years, particularly in the Middle East. Aer Lingus, Bord na Móna and various other personnel have gone there on service programmes which have had an invaluable effect on the economies of the host countries. This has extended our export possibilities and has also shown to people outside Ireland that we are well educated and well trained. The inhibitions being placed on increased exports, because of Government action, will have to be eliminated in some manner, otherwise our tremendous increase in exports will not be achievable in the future. The CTT 1982 annual report suggested a figure for 1983 and the outturn in 1984 is within a couple of hundred thousand pounds of what they felt they would achieve, which again is an indication of their professionalism. I appeal to the Minister to re-examine the 1984 Estimates to try to ensure that CTT get as much money in 1984 as they did get in 1983, in real terms. The 9 per cent increase that they are getting is definitely not sufficient.

It is heartening to see that our export base is widening, and to an enormous degree, over the past number of years. Again, it is very heartening to think that our fellow Irishmen, even though not under this jurisdiction, are taking a growing amount of products from us. Last year Great Britain, excluding the North, was our biggest market, then came West Germany, then France and the next biggest market for us was Northern Ireland. It is a very hopeful sign that they are buying from us and we are equally buying from them. The cross-Border trade that one hears a lot about is not a one-way trade. Last year our exports to Northern Ireland were in the region of £478 million, which is a lot of money for a very small geographical location.

In conclusion, I would like to compliment Córas Tráchtála. The legislation going through here this evening is very necessary. I plead with the Minister to try to get an increased subvention for CTT on the £17,766,000 that they are getting. That would at least have to go to £20 million if they are to have any chance of succeeding in the jungle that is the market place of the world at present.

Mr. B. Ryan

I will be quite brief. I could not let the opportunity go without saying a few things. On this occasion, I am not going to talk about poverty or social injustice, but am going to wear my engineer's hard hat for a change. I am, to some extent, a practitioner in that academic area and, therefore, have fairly strong views about the whole area of exports and, in particular, in the manufacturing industry. The first thing that crosses one's mind is that we have come close, at this stage, to establishing a third national aim along with the reunification of the country and the restoration of the language — and that is the restoration of competitiveness. It is talked about with almost the same rhetorical intensity that used to be devoted in the past to the language and, indeed, to national reunification.

It is somewhat confusing for me — because, whatever qualifications I might claim, I am not an economist — that in the year 1982 exports increased by 20 per cent at a time when we were told that we were pricing ourselves rapidly out of world markets because of our lack of competitiveness. What would those who say that we are pricing ourselves out of world markets regard as a reasonable export performance? If a 20 per cent increase in 1983 over 1982 is unsatisfactory because of our decline in competitiveness, what is a reasonable performance? I say that because this decline in competitiveness, to which has been attributed most of our economic ills, has, in turn, been attributed to the alleged greed of the Irish workforce, and in particular the Irish workforce in what is called the exposed sector of the economy — that part of the Irish economy which has to trade in the world market place.

It would interest me to hear at some stage the sort of gross export figures in manufacturing industry that those of us who say that our levels of competitiveness are pricing us out of the world market would find satisfactory. I know that a large part of that 20 per cent gross was in the areas of electronics, chemicals and such like. Another major area was in agricultural production. The question begs to be asked — where does our lost competitiveness show up in the light of those sorts of figures? I suspect that it shows up at home.

I do not share the consensus that seems to be developing about the future strategy of developing Irish industry on the basis of an export-led economic growth. I accept that export-led economic growth is the necessary, fundamental driving force for our social economic progress, but do not accept the assumptions on which most of our political parties now believe that development can be based. We are talking, in fact, about a whole structure of incentives to investment in manufacturing industry. In many cases, I would wear my engineer's rather than my socialist hat in terms of being sympathetic to some of those proposals. There is a certain naivety about the idea that simply by creating a structure of incentives manufacturing industry, and therefore exports, will automatically take off. It is a bit like putting bait on a hook when going fishing. If you go to fish where there are no fish, no matter how much bait you put on the hook you will not catch any. If you create a whole structure of incentives to attract people who have nothing to sell, no new products to put on the world market, no ideas, no marketing expertise, no capacity for innovation, then you will not get export-led manufacturing industry growth. Something more is required than simply a structure of incentives.

I would quite enthusiastically support a restructuring of our taxation system in favour of manufacturing industry as against investment, either in Government securities, in land, or anything else and, indeed, might be sympathetic to a certain reduction in employers' PRSI contributions in return for an increase in corporation profits tax so that employers would pay for their extra employment not out of the employment but out of the profits generated by that extra employment.

That would be reasonable and fairer on people who could therefore be compensated for bad years and retain their employees without the burden of large scale employer PRSI contributions. That would be in a context of something very different from what currently is being proposed and what has been the strategy in the past. We lack any real stretegy for innovation, any real commitment to new product research and any real commitment — in spite of Córas Tráchtála's admitted efforts — to marketing. The leaked Telesis Report, which turned up in Irish Business about two a half years ago, identified the fact that most of the major native manufacturing industries took no part in exports. I do not want to name names, because the Leas-Chathaoirleach would probably rule me out of order if I did——

An Leas-Chathaoirleach

I am sure that I would, Senator.

Mr. B. Ryan

I am sure she would. They are companies that are involved with tobacco and cement, both of which are virtual monopolies in terms in this country. The two biggest native manufacturing facilities are virtually not participating in the export drive. That does not say much for Irish enterpreneurs taking up all these incentives that are allegedly going to be offered. We lack the capacity or the will to believe in our ability to develop new products.

The most successful new product exported from this country in the last ten years was that combination of whiskey and cream called Bailey's Irish Cream. We have often taken a lot of credit to ourselves. It needs to be put on the record that Bailey's Irish Cream was developed by English researchers and English scientists in an English research establishment attached to those people who own Gilbey's of Ireland. It was not an Irish developed product. We are lucky that it turned out that they chose to use Irish whiskey and Irish cream, because something like 80 per cent of the exports of Irish whiskey are now contained in Bailey's Irish Cream. Something of which we should remind ourselves again and again is that it was developed outside this country at considerable expense. Most people are facing up to the fact that foreign investment is not going to produce manufacturing industry growth in the next ten years on the scale to which we have been accustomed for the last 25 years. Therefore, we are going to be talking largely about home-based industry producing new products and new services, as Senator Lanigan said — although I have some reservations about the services.

If we are, then we have to do more than just dangle a whole series of incentives in front of people, because regrettably as surveys published in the Irish Times last May show, foreign investors — who are probably the best judges because they are the people who have competed and are competing in the international market place — are not too impressed with native Irish manufacturers in terms of provision of Irish supplies to foreign investors. They regard them as rating from bad to possibly bad and in that survey 80 per cent of foreign investors in this country rated the delivery, the quality and the cost of Irish manufacturers supplying them with goods and services as bad to very bad. That does not say much for the quality of native Irish entrepreneurial activity.

I do not want to be negative, or criticising the whole time, but if we are going to talk about export-led growth based on Irish manufacturing industry rather than on foreign manufacturing industry, then we have to look at the whole area of new product development, of innovation and of market research, and we are putting very little money into those areas. The budget for Córas Tráchtála in comparison with that for the IDA is pathetically small. Our investment in research, as evidenced by the National Board of Science and Technology, is so small as to be insignificant. We have no real ability or facility to spend the large amounts of risk and high risk money in new product research and in basic first stage assessment of potential new products.

In the industry with which I have some connection — the chemical industry — you could take it that no more than one in a hundred of the new ideas that would be thrown up in an industry would ever get to the stage of being sold in the market place. So for every hundred ideas that potential Irish entrepreneurs, or young Irish engineers, or young Irish scientists would come up with, we can take it that 99 per cent will not work. Obviously, in the whole area of assessing those potential products for marketability, for a niche in the market place, we are going to lose a lot of money in the short-term, in order to develop the one successful idea. This indeed, was the experience of the parent company in the research which developed Bailey's Irish Cream — there was a lot of money lost.

The point that needs to be made again and again is that we have to start spending money on the scale that we are spending on Córás Tráchtála in market research and innovation, not in looking at other people's products. We have a dreadful lack of faith in ourselves, we seem to believe that we have to get other people's marketing expertise, research expertise and new product development expertise — that we cannot do it ourselves.

Again, as the author of the Telesis Report said recently on "Public Account", what we need in this country is very similar to what has been achieved in Scandinavia and in Switzerland — not a wide spread of products covering all areas of world trade but Irish unique expertise in a number of areas — small areas possibly in terms of world trade, but areas where we command 30, 40 and 50 per cent of the world market. That is the way the small countries of Scandinavia have achieved high level standards of living and that is the way we have to go forward, not by trying to attract in every dog on the road who has a manufacturing industry covering the whole spectrum, but developing Irish products to a high level of international acceptability. In that way Irish will mean something in the way that Swiss used to mean watches, and telecommunications are often associated very largely with Sweden, for instance. We have to do that for ourselves, and that means spending money.

That leads me to the next thing. I do not believe that the resources or the willingness to take the risk exist in the Irish private sector. Therefore, apart from any ideological or other bias of my own, it seems that the only sector in the Irish economy which could have the resources, could give the guarantees, and could provide those resources must be the State. What I am appealing for, in fact, is a new strategy for the State in terms of industrial development and industrial investment in the area of exports, and that strategy must be based on research into new products. I do not know what the new products are, because there is only one way to develop new products and that is to do research, to chase up ideas and to encourage young people. There is a major role for the Youth Employment Agency in that area, in terms of the number of young people leaving colleges with technological and technical qualifications who are unemployed. They are the people who can come up with ideas. We should be providing them with the facilities and the funds.

That is, largely, what I would like to say on this whole area of export promotion. I do not accept the idea of incentives alone. I do not accept the reliance on foreign investment. It is ultimately a matter for ourselves. We have at this stage a highly educated technologically qualified population. We must use that resources to develop new products, not copy other people's products, not persuade other people to make their products here, but to develop our own. There are certain restrictive practices that inhibit that. One which I mention here concerns the whole area of food production, particularly the dairy industry where one profession by law has to have a virtual monopoly of senior management positions, and that is the dairy science qualification. It inhibits the participation of the whole engineering profession in the development of our dairy industry, which is not a good idea.

Of course, there are specialist disciplines that have a role to play, but to exclude all other innovative disciplines from that major industry is obviously a restriction to growth, to innovation and is something that should be examined by the Government so that those who have ideas and skills can contribute to what should be a major area of development. It is a scandal and a shame that we develop so few identifiably Irish high quality products in the whole area of food and food processing

The strategy that was outlined in the White Papers is fundamentally wrong, because it does not put sufficient emphasis on large resources being invested in the development of new Irish products. That is the strategy that we need in the future; that is the strategy based on confidence in ourselves, not on the dependence on others that we have come to rely on for the last 20 years.

Minister of State at the Department of Trade, Commerce and Tourism (Mr. M. Moynihan)

May I thank the Senators for their complimentary remarks and contributions relative to the role of Córas Tráchtála and the Irish exporters for the dramatic break-through in exports to the foreign markets. Reference has been made to the difficulties of Irish manufacturers and to an extent there are factors, especially in the industry field, which place them at a disadvantage. The tributes and congratulations are all the greater, having regard to the fact that they do overcome these difficulties and succeed so dramatically. It is not a question of the major foreign-based industries here, but of a whole series of Irish-based, and especially small Irish-based, industries that have now developed the energy and determination and, above all, the enthusiasm to seek markets for their products outside our own shores. I congratulate all of them for the success with which their efforts are being rewarded.

This is, as has been said, the one bright spot on our economic horizon and the one hope of an improvement in our serious unemployment situation. My interest here this afternoon in seeking the expansion of these financial resources to CCT is to give further encouragement and further help to all industries and to all services that have reason to be brought in, in the hope that they will further generate new markets for Irish products and thereby create jobs for Irish people.

Senator Lynch referred to Westinghouse. I would be very glad to make inquiries into that situation and will be only too anxious to discuss with Senator Lynch afterwards how a contribution can be made by CTT and the firm concerned, with a view to improving a serious situation. I will make investigations and arrange to have discussions with the Senator.

Small indigenous industries are vital to the economy and CCT have a special section dealing specifically with these industries. The Department of Agriculture deal mainly with agricultural exports. I can assure Senators that there is the closest liaison between the Department of Agriculture exports section, CTT and my Department generally. Capital funds are not provided by CTT for industry. This is the role of the IDA. CTT operate within the annual grant-in-aid, which has increased from £8 million to £16 million in the last three years. This is a clear indication of a commitment to develop exports in this period of recession.

CTT submit a profile of their activities to the Department on a monthly basis. A senior official of the Department meets a senior official of CTT on a regular basis to discuss their activities and plans for the future. The Minister also meets CTT management regularly to discuss the part CTT have been playing in the overall effort to promote exports and reduce unemployment. Senator Hillery made a point about staffing of the CTT offices. I want to advise him that we are conscious of this, and my Department are in correspondence with the Department of Finance regarding the staffing levels in CTT. I cannot say yet what the outcome of these discussions are, but I would like to assure the Senator that we are conscious of the points raised in relation to the levels of staffing and the importance of work that the staff are doing with regard to our economy.

Senator Lanigan mentioned the necessity of involvement with China and the huge population and market there. I am glad to advise the Senator that during the year the Minister led a CTT organised trade mission to China. The possibilities for a significant improvement in trade with China are very good and are being pursued aggressively by CTT and a number of individual exporters.

Mr. Lanigan

I was speaking about the Republic of China, which is Taiwan.

Mr. M. Moynihan

No, the Minister went to China——

Mr. Lanigan

My point was about the Republic of China, Taiwan.

Mr. M. Moynihan

Senator Lanigan also mentioned the 1984 Estimates. The Bill before this House is concerned with the technical amendment to the export promotion legislation to enable a further £70 million to be provided out of voted moneys by way of non-repayable grants to Córas Tráchtála for the promotion of exports. The Bill is not concerned with the actual amount allocated to CTT in a given year. The 1984 Estimates show what the Government could allocate in the present difficult economic climate. The grant-in-aid for 1984 is more than twice the level it was in 1980.

Senator Ryan mentioned the loss of competitiveness. This is very often a problem with indigenous industries many of which have closed down in recent years. CTT are concentrating most of their energy in this sector in an attempt to identify those manufacturers which can be made viable in the export manufacturing industry which can benefit most from their assistance and advice.

Senator Honan mentioned the £70 million being sought. It is assumed that this is merely for a three year period. It is more desirable to have it done on this basis as was done by the previous Minister in 1980 to 1983, rather than for one year. That is the reason for the £70 million which it is estimated will be required over the next three years.

In conclusion, may I again thank Senators?

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment, received for final consideration and passed.