Seanad Éireann debate -
Wednesday, 12 Feb 1986

Vol. 111 No. 5

National Development Corporation Bill, 1985: Second Stage (Resumed).

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

Mr. Fitzsimons

When I was dealing with this matter last week I focussed on the unemployment problem. This is the most important aspect of this Bill. It has as a main intention to deal in large measure with the unemployment problem, in a positive way not simply as an overspill from the National Development Corporation. It is important for all of us to bring the plight of the unemployed to the forefront of political and parliamentary discussion. I have been critical of the various employment schemes. It is only fair to welcome this Bill in so far as it may do something about the unemployment problem. We on this side of the House, do not think it will do so. All the experts have reservations. The one that is quoted most often is from the Irish Banking Review, September 1985, where it is pointed out that we take a very pessimistic view of the National Development Corporation's future operations and that experience elsewhere hardly supports any other opinion. That is an indictment of the Bill, and a very damning one. Nevertheless, as I say, to whatever extent it helps with the unemployment problem, we welcome it.

I said, when we were dealing with this matter of unemployment, that the Government should have approached it in some radical way, realising that we have a crisis of change in the whole area of society. I highlighted this last week to some extent. With all the changes that have taken place since the industrial revolution, and since Tudor times and the changeover from the feudal system, there has been no change in the concept of employment, jobs or work. It is a fundamental fault in the Bill that it does not focus on the problem of unemployment. It does not analyse it. It does not try to deal with those changes.

We have a number of groups linked together as failures — the retired, the ill, both mentally and physically, and the unemployed. In past times the unemployed were the uneducated, those who were unable to get jobs in manual or menial occupations. At the present time we have very highly qualified people unemployed. They are all grouped together as failures. This concept is wrong. At the present there is neglect of research into this whole psychology of employment. I have already quoted from Ann Sharp in the Technology Ireland, May 1985. A number of factors emerge. We have fear, distress, numbness and apathy, and then socially disruptive behaviour and reactive behaviour.

What the Government seem to be trying to do with this National Development Corporation is to make some inroads into the unemployment problem without taking into consideration the changes that have occurred. They have not taken notice of the fact, for example, that technology has taken over to a very great extent and that the whole concept of work has changed. Some people feel that in the future much time will be spent in leisure occupations. No examination of this probability was carried out in a scientific way. That is a fundamental flaw in the Bill. Primarily, while the Bill and the National Development Corporation try to deal with the two problems — the commercial aspect and employment — it seems to me that by far the greatest problem is in the area of providing employment. All the experts say the Bill is not going to provide that. The evidence in Europe is that, where similar Bills were passed and where they had similar development corporations, they were a failure in every instance except in Sweden.

On the basis of being tried and tested, it seems to me that the National Development Corporation is a failure from the word go. If it does anything in that area, we welcome it. We are all in favour of anything that would help in the smallest possible way. We ask ourselves, is it possible in this instance that we could be the second country where such a scheme is going to be a success? It seems to me that the answer must be no. No matter what commercial operation we start, jobs will only be a means to an end. As I pointed out last week, the whole trend has been to try to reduce employment and to increase the use of machinery. Machinery is punctual. It turns on with a switch. It does not get sick. It does not stay away on Mondays. By and large, the whole trend has been to try to reduce employment by increasing the use of machinery. Now, of course, in this age of technology, with computerisation in all the other areas, this trend continues. There is a big conflict here which I do not see resolved in any area of the Bill.

This examination into the concept of work is most important, and I think it is coming to the forefront generally. I refer to a book by Charles Hanly, The Future of Work, which I do not have time to quote from. At present there is a series of programmes on radio concerned with the future of work. All these things show us clearly that the concept of work must be examined. We must have a different evaluation from that which we had in the past. In other words, we must come into the modern world.

With regard to this Bill, both parties in the Government claim that they have a long-standing commitment to the National Development Corporation. Here we have two extremes — a capitalist side, and a social side looking for full employment and which is not necessarily linked to the profit motive. In this area there is bound to be conflict in a Coalition Government. It brings me back to my own youth and to the time when in County Meath, Fine Gael were identified with the big landlords. It always seemed strange to me that labourers on these estates should associate themselves with people who were not committed to solving their problems. I see an incompatibility there. The problems will be left over to be carried out by a Fianna Fáil Government. I feel that this Government will no longer exist and that in a sense this is the reason for the delay in bringing forward this Bill which was promised for so long.

There are many people who have wrong views about the unemployed. There are people who claim that it is an advantage to be unemployed and that those unemployed are better off. To some degree a case can be made in this respect. I wonder, if those in employment and those unemployed had their wages pooled and divided, what way it would work out. As I stated previously, the problem with the unemployed is not simply being unemployed but a recourse to crime, the abuse of drugs and all those related problems in the health area.

We know that the climate for investment is not right at present. We must try to find a climate in which it will be possible to invest. There is no incentive for investment. We must try to create a climate where it would be profitable to invest. There is no incentive for investment. I feel that the consensus with regard to the budget is that, by and large in this regard it was mainly negative. There are many people who feel that the Minister for Finance could be compared to somebody with a metal detector going around to find out wherever there is wealth and then digging it up. This does not help with regard to investment. The cost of finance is too high. It has been stated that a loan equity of one to one is the most desirable, but in fact in this country it works out at about 14 to one, which is out of all proportion and which makes the cost of financing operations far too high. There is no doubt that high taxation is the cause of failure in most firms. There would be sufficient capital if there were tax or other incentives. Indeed in that situation there would be no need at all for the National Development Corporation.

Many times in this House I have spoken about research and its importance. There is no question whatever but that research is very important, no matter what risks are to be taken. The risks can be minimised through research. At the same time, I believe that at the end of the day a certain amount of good luck is necessary, or whatever it is that makes the difference between success and failure. In my time when going to school we did permutations and combinations in mathematics. Brought down to the practical level, it was shown for example, that if I tossed a penny 20 times and it came down heads on the 21st time I throw it up, there was still a 50-50 chance for heads or harps. That holds in business. It is very true in business that there is no foolproof way of knowing beforehand that a project will be successful. There is always this uncertain element. Luck is also necessary, but the risks can be minimised. In many cases they are not being minimised. At the same time, comparing the National Development Corporation to a company in a private situation, I do not think it would have the same thrust. One does not have the same hungry fighter seeking to win. The sights are not set in the same way as an individual entrepreneur would set his sights. The same ambition is not there or the same commitment to prove oneself. Possibly the same ruthlessness would not be there. These are all problems which, in my view, pose a question mark after the National Development Corporation.

There is also the aspect of realising the assets — in other words, turning over the finances in a rolling situation, as it is referred to. In one sense, while I understand that a case could be made for that, on the other hand it seems strange that the National Development Corporation would take the risks, make a project viable and profitable, and then at that stage turn it over to a private group. It seems to me that that part should be reexamined. I am not saying it is wrong, but it is a policy about which I would ask many questions.

With regard to research, I believe that in social engineering it is necessary to define the objectives. While they are defined here in a commercial sense and in the employment sense, I think that they should be more strictly defined. Of course, this may only be possible as a policy directive. Again, it may have to await a change of Government.

We have, of course, many graduates who, I am sure, could lift this country up by its shoestrings. I have no doubt about that, if they were given the opportunity. Indeed, many of them are being lost to other countries. There are great possibilities there. On the other hand, we all could recount from our experience cases of many individuals who have been successful in business and who have been unable to read or write. I know of many of them myself. Some of them are millionaires or are regarded as millionaires. While many highly educated graduates from our colleges and third level educational establishments are being lost to the country at present, we rightly look to such graduates for help in this regard. On the other hand, there are many people who are unable to get education. I feel they also have something considerable to contribute. Perhaps some of those people whom I spoke of have no formal education but they might quite possibly have something to contribute when this Bill is passed and when the National Development Corporation is set up.

There is a great need for change. My party have produced a policy document on science and technology which I feel is very important in this area. It points out the need for change and the potential contribution of science and technology to economic development. It states quite categorically that this is not being realised at present. It gives a number of reasons. May I just name a few of those?

Responsibility for different elements of the science and technology framework is spread between different Government Departments without any formal co-ordination including the Departments of Labour, Education, Industry and Commerce and Communications. In important respects the different elements of what is presented as science and technology policy conflict. Industrial development efforts in high technology areas are being or will be, hampered by the inadequate levels of support for science and technology research and training activity. The technology capability of Irish industry is very low compared with our competitors.

Firms in Ireland devote considerably less resources to Research and Development than firms in other EEC countries.

Of 4,652 Irish owned manufacturing firms in 1982 only 74 had formal Research and Development departments. Only 231 conducted any research and development.

There is insufficient industrial spin-off from college-based research in science and technology. The importance of the Information Technologies is not acknowledged by the allocation of resources to promote awareness. Appreciation of the importance of high technology industries is not backed up by intensive efforts to select market areas in which Irish firms may succeed.

I believe these are all areas where the Government could help; and it does not require a Bill of this kind to do so. In regard to agriculture — also dealt with under this Bill — much more could be done. I believe that we could have far more employment on the land. For example, in 1928 the ratio of those employed on the land to those employed in all the other industries was 18 to 20. In 1968 it was 60 to 40. In 1978 it was 22 to 78 and I am quite sure that this year it would be a complete reversal of 1928 when it was 20 to 80. That is extraordinary in a primarily agricultural country.

Much can be done in the area of horticulture. We have a motion coming up in this regard. Membership of the board will probably be restricted to those with a record of achievement but I think that those with ability should have an opportunity of being on the board. In this way it would be possible to make the greatest inroads into those problems.

Staff should be of the highest calibre. Education is very important; but just as important is gumption, cop on or whatever you like to call that shrewd sense of feeling that individuals have. It is felt that this is a political measure rather than one to tackle our economic problems. At least this is the cynical view but the article to which I referred in the Irish Banking Review states that the extent to which the NDC can depart from normal commercial criteria should be fully detailed. I think this should be done from the start.

There will be political pressures with regard to operations in this area and I suppose we will all be making representations. At present we encounter many people who want to set up in business and they have problems. All of these seem to feel that their project would be a success. It will be difficult to make the selection. The latest project about which I was approached was in relation to the processing of potatoes. A man who is an authority in that area — and, indeed, has a Ph.D. to prove it — feels that he can process potatoes as either chips or full potatoes peeled. He maintains that they will retain their appearance and their flavour naturally for 35 days. It would take £1,250,000 to set up the plant to carry out that operation.

Will that kind of project be helped by the National Development Corporation? Certainly, it must be considered; but there will also be representations made by politicians and other concerned people and I wonder to what extent political expediency will be considered.

It has been pointed out that the intention is not to bail out firms in difficulty, but at the same time I am sure there would be many firms in difficulty that it would be proper to bail out. It seems to me that it would be wrong to eliminate that area totally. It is not only manufacturing industry which will be considered, and I think this is important. I could refer to the State-sponsored bodies but this has been referred to in detail in the other House and I do not want to go over the same area.

I would like to ask if the National Development Corporation will cream off the paying industries. I think that this would again be wrong. They will be in a monopoly situation or they certainly will be in a position to monopolise in that area. I wonder what restriction will be on them in regard to that.

We have witnessed the closure of many factories, mostly big factories and some small ones. I do recognise that in the past 20 years or so the small factory has come into its own, the enterprise with a small number of people. I am sure that there is far more scope in this regard. I feel that, as firms grow bigger, it is more difficult; and there is always the danger of collapse as they get too big for themselves. I believe there are some firms that are more or less deemed to be small and that if they grow to be large firms they will become non-viable.

The Small Firms' Association, as well as many other groups, made submissions before the budget and the response, by and large, was negative. Many of them were extremely disappointed. Many of the established small companies, if they got financial help in the budget, would have been able to give more employment. As it is, somebody with a small business looking for a loan from the bank has to give personal guarantees, perhaps mortgage his house, and the interest rate is somewhere in the region of 23 per cent, whereas I believe in Germany money can be borrowed at 5 per cent. That is a big difference and that is an area where the Government could help out. Statistics show how good small firms have been and the Government could have been imaginative in that area.

In regard to section 84 loans, which were referred to by the Minister, I should like to point out that my understanding is that these are not available to small firms and that, in general, between £100,000 and £200,000 must be borrowed. Therefore, in reality section 84 benefits only large firms. Since the budget there is an additional surcharge of 15 per cent, which is a clawback to the Government and, again, is a big disincentive. The Leader of my party has pointed out in his submission in the other House that the micro-electronic revolution is an area where much could be done. This is something with which we would all agree. Fisheries and forestry have been referred to, but I do not have to go into them in great detail.

I should like to refer to a few areas in the Minister's speech. He spoke about the development of an environment. Of course, it is the prerogative of a Government to achieve this. He spoke also about a gradual process requiring a significant change of attitudes. If he refers to employment and labour, I would agree; but in the area of commerce I am not really convinced.

The Minister spoke of a less conservative attitude towards risk taking. I cannot see that being achieved because, by and large, people who invest are looking for profit and at the least risk. So, while it seems very convincing to read that, in practice I think it is meaningless.

The Minister also spoke of the emphasis in this year's budget which was aimed at the creation of a better climate for investment in industry. As I said, the general consensus was that the overall effect of the budget was a negative one. The Minister stated that the National Development Corporation was an integral part of the Government's industrial and job creation strategy. He went on to say:

It is a body with the task of investing in enterprises which might not otherwise develop or even get off the ground.

That would have to be expanded more. They would have to have some other claim rather than simply being enterprises which could not get off the ground because I would ask why did they not get off the ground. If the answer is simply finances, then possibly a case could be made if sufficient research projected that some operation would be a success. But to state blandly that it is a body with a task of investing in enterprises which might not otherwise develop or even get off the ground, is not a convincing argument.

The Minister stated that the National Development Corporation was also designed as an integral part of the Government's strategy for innovation. This project was tried, tested and failed in other countries, so there is no innovation there. Neither is there innovation with regard to the labour and employment element, with regard to our approach to employment and a change of emphasis about employment, so that employment would not be regarded as it has been regarded since the industrial revolution, in the sense that somebody working in a semi-skilled job, for example, was defined as a labourer simply because he worked at the project. It related to his employment and why should it? I do not think that is right. That whole concept would have to be looked at. I do not see how the Government can claim that there is any innovation there. The Minister said:

... that the National Development Corporation must be viewed as one important element of the Government's overall package to tackle the unemployment problem and to stimulate a greater level of investment in the traded sectors of our economy.

He then went on to say that:

The potential contribution of the Corporation is enormous but it should not be expected to cure the problem of unemployment of its own accord.

I do not think it is going to do anything for employment. Last weekend we had a situation where the number on the Unemployment Register rose to 240,000. If we can believe the papers, the reaction of the Government was to say that they were very well satisfied with those figures. In other words, they were saying that the figure that might have been expected could be more. In that situation any figure could be accepted.

I am not an expert in this area I do not pretend to be, but reading those who are experts in the Irish Banking Review and other articles, I find it stated that this has been a failure in other countries. They see no reason why it should be a success here. We are all very much concerned about the unemployment problem, so if it does succeed in doing anything in this area, that will be welcomed.

Mr. A. O'Brien

I welcome the Bill sincerely. It is a wise departure from what has existed heretofore in so far as companies can be helped in areas of difficulty. We know of industries that have collapsed in the past because assistance was not forthcoming at the critical stage. This Bill is intended to do that. I would like to compliment the Minister on the very comprehensive statement he made introducing the Bill outlining his provisions. It would not interfere with the work of the IDA or Fóir Teoranta. He gave a clear exposition to the House of the purposes behind the Bill.

The big problem facing the country is unemployment. The Bill is being introduced to reduce unemployment. Some Senators gave the impression that unemployment was a new experience for us in Ireland and some Senators say the problem of unemployment dates back only three or four years. Unemployment has been a problem in Ireland since the State was founded. It was relieved by emigration during the thirties and forties when over 70,000 people emigrated. The countries to which these people emigrated also have unemployment problems. They are curtailing the number of emigrants.

We are faced with the problem of how best to provide work for our people. It is made difficult for a number of reasons. One of the reasons for unemployment is the worldwide recession. We have a very high young population in Ireland. It will tax the best efforts of governments in the future to provide full employment. We must face up to the fact that technological advances are reducing the manpower required for several industries. The problem is a very big one and is not confined to this country alone. There are approximately 14 million unemployed in the countries of the EC.

Everyone must be aware of the enormity of the problem that confronts us and, at the same time, recognise the genuine efforts made to ease the problem. I believe that a genuine effort is being made at an opportune time to do that. We should all give it our blessing and watch its effect. Since the State was founded we have failed to solve the unemployment problem. A shortage of capital is one reason, a shortage of raw material, industrial expertise and so on but various steps have been taken by different governments to improve some of these matters. There is an improvement in our expertise, capital is provided, and assistance is given in different ways to get industry established. There are some areas where we have every reason to be proud of the progress made even though we might be disappointed that the progress was not on a bigger scale.

As the Minister pointed out to the House, a number of industries from time to time have collapsed because capital to keep them going was not readily available at a rate they could afford. The position in the last few years was compounded by the fact that exorbitant rates of interest prevailed. Many industries that went to the wall because of the exorbitant rates of interest demanded of them on borrowed money would have survived if money had not been so dear. Other industries have failed because the capital was not there to install new plants. The capital might have been just barely sufficient to keep it going working on outdated machinery, but then competition became so keen — we live in a highly competitive world — that this outdated plant was not able to produce the goods at a rate that made them competitive on the world market. So it was inevitable that these industries or businesses would go to the wall in a very short time. That, indeed, happened.

Others have failed because of poor management and of a failure to recognise that there were progressive changes in the consumer demand. The type of goods, the presentation of goods that did ten to 15 years ago just will not do now. These changes in the consumer market just passed some managers and their agents by. The order books ran short, men were left off and places were closed down. That has been the sad litany of what has been happening. It was in very large measures, though not entirely, due to the fact that capital was very difficult to obtain at a price that the business or industry could afford and remain competitive.

Another very important point, in my view, is our rate of absenteeism from work. It is at 13 per cent of our work force, according to figures issued by the CII, and is by far the highest rate of absenteeism in the EC. We cannot continue to compete successfully in a highly competitive market as long as we have a rate of absenteeism of that magnitude. Sometimes there is a failure on the part of the management in industry to move with the times. At other times it is a failure on the part of the workforce to realise that they are in a competitive world and that there is no compulsion on people to buy the products that they send out on the world market if they are not of top quality and are not competitive in price.

As a proof of what I am saying, I refer very briefly to a dispute in a bacon curing plant last year where the rate of productivity per man employed was about one-third of the productivity rate in the best run bacon curing plants in the country. If people working in a place like that, with very low rate of productivity as compared with their competitors at home, not to mention the Danes and others, want more holidays and shorter working weeks, it is complete proof of the fact that these people do not realise that they are trying to eke out an existence in a highly competitive world. That sort of approach is outmoded. If it is not cleared up by the wise leadership and guidance of the more responsible people in their groups, then there is little hope.

Neither is there any hope for development in this country if you have responsible people making the kind of promise that was made a few years ago to car workers in the city here that they were assured of a full week's wages even if they never did a day's work. One cannot have the proper approach to responsibility of work force and to a proper understanding of what they are up against if you have that kind of leadership.

Senator Conway last week referred to the fact that when the Irish people went abroad, especially to America, they won greater fame and respect for their ability as workmen and women. I think the main cause of that is something that American friends of mine keep telling me: that you are only a very short time in the United States of America when you clearly understand that, if you do not work, you do not eat. That is the force to drive people to do a full day's work.

The Minister referred to a certain reluctance on the part of people to invest in industry. That is a well known fact. Senator Fitzsimons referred to it also. It is due, in my opinion, to a number of reasons. One reason would be the number of industries that collapsed without paying any dividends. In the early years of the industrialisation of this country overemphasis was placed on introducing textile and footwear industries into this part of the world at a time when it was becoming obvious that in traditional textile areas like Lancashire and Yorkshire, and also parts of France and Italy, the textile industry was under tremendous competition from the Far East. Indeed, that competition from the Far East has gained such strength that even in these traditional textile areas there was a slump.

That is not to imply that I think the IDA did not do useful work. I would like, in passing, to pay tribute to the wonderful work by the IDA, but I believe what I have said with regard to some types of industries that were introduced — that they were the wrong choice because of what was happening the world over. That also left people with a reluctance to invest.

As Senator Fitzsimons pointed out, it is true that investment in industry does not yield the same return. I have a few lines here from the CII Newsletter of 7 January 1986. It deals with the question of investment that the Minister referred to. It states:

There is need for a major improvement in the climate of investment. At present most people prefer to invest their savings in Government stocks or in the Post Office rather than in productive enterprise. Ireland needs enterprise. We have one of the highest unemployment rates in the European Community. But more jobs and better living standards can only come from greater wealth creation through more rapid growth and productive output. Yet last year individuals and institutions invested 20 times more in risk free Government stocks than in new risk capital manufacturing industry. The reasons are obvious: profitability is low; the cost of essential services are exceptionally high; and the taxation system is biased against equity investment in industry.

That is the view expressed by the president of the CII. I agree with everything there. The burden of taxation which hits industry is a spin-off effect of reckless borrowing in the past which left us with an enormous foreign debt. As conditions improve it would be right, as the Minister said, if people did invest in industry in order to build up prosperity, because in the last analysis the standard of living depends almost entirely on what we produce. If we produce greater wealth, we should have a higher standard of living. We cannot build up a higher standard of living on borrowed money. Our standard of living depends on our productivity. Our productivity depends on our being abreast of modern developments, on our having management with expertise and salesmen with expertise and a committed workforce determined to do a full day's work every day and reduce the rate of absenteeism.

An industrialist friend of mine from Europe pays tribute to the skill, intelligence and adaptability of the Irish worker but he cannot understand their readiness to stay away from work for trivial reasons. He regards some of the medical certificates that are sent in about pains in the back and so on as triviality and a desire to avoid work and an irresponsible approach to their commitment to their employers. What I have been saying is part of what is necessary if we are to become a successful country in a highly competitive world. We are on the western fringe of the EC, competing with countries with long industrial experience and great expertise. As an agricultural country we are competing with farmers in Denmark and other people who have developed agriculture to a very high degree. We can no longer rest on the notion that they will buy products because they are Irish or because it is labelled with shamrocks. We must produce good products at a competitive price. That can only be done by good management, by a good response from the workforce and by the ability of the people involved in setting up this industry to depend on financial relief in times of difficulty at a cost they can meet. This Bill aims to do that and therefore must be welcomed.

In the CII Newsletter of 7 January 1986 it is encouraging to read that:

The food processing sector showed steady growth and the output of many traditional sectors of industry was higher than the level at the end of last year.

There is great potential for the development of the food processing industry. Other Senators who have spoken here share the same view and it is confirmed by the CII. Anything that can be done to develop that industry will be to the good of the country as a whole.

Other encouraging signs listed in the CII Newsletter are:

The rate of inflation in Europe declined rapidly throughout the year. For the first time in many years Irish inflation in 1985 came into line with that of our main trading partners and a rise of only 0.2 per cent was recorded in the last quarter of the year. Indeed wholesale prices, export prices and import prices have actually declined in recent months. These trends point to the possibility of a very low rate of inflation in 1986, possibly about 3 per cent.

If you compare that 3 per cent with the 20 per cent inflation which we had a few years ago, it indicates how close we are to being able to make rapid strides forward.

The Newsletter continues:

The medium term interest rate trend should also continue to decrease, despite short term hiccups, with rates dropping further this year. The importance of bringing our inflation rate into line with our main trading partners was highlighted by the improved performance of many longer established sectors of manufacturing industry during 1985.

These are hopeful indications that generate a certain amount of optimism, provided we face up to reality and that we realise that we are in a competitive world, a world not run on sentiment.

With regard to further development, I was pleased to see that forestry and tourism were mentioned by the Minister. It is encouraging to know that tourism generated more wealth last year. Other Senators spoke about the potential in forestry development and timber production. I will not repeat what has already been said. In my constituency, around the Border counties, we have a certain disadvantage because of the Border which has affected the economic development of that area.

With regard to the aid package we hope to get from the United States as a result of the Anglo-Irish Agreement, I hope that a percentage of that will be spent in the south. A major part of it will be spent in the Six County area. The Border counties have a special claim to a major share of whatever comes to the Republic. A few years ago when a firm of consultants were asked to examine the prospect of development of the Erne catchment area for tourism and industry and other activities, one of their main findings was that the approach roads to the Border were in very bad repair — the worst in the country. It is not possible to build up industry with a very bad road structure. The creamery in Killeshandra, County Cavan, and McCormick's Milk Products, sited in the same town, are under a great disadvantage because of the poor road structure especially from Killeshandra to Cavan. Constant complaints are being made about springs being broken and delays on the fleets of lorries. I hope that development in that area will be assisted by the terms of the Bill, but before it can be done we will want the infrastructure that is necessary for it. I would also join with the Senators, who drew attention to the boon it will be for tourism to have a link-up between the Erne and the Shannon. The potential for tourism in that part of the country is very high. I look forward to its being attained progressively over the next few years.

It is bad for our thinking as a people that we should refer to so many things as being free. At a very early stage in life, the child is introduced to what he is told are free books, free education and free buses. We get the belief developed in the young mind and it is developed in the mind of the adolescent, that lots of things are free. The truth of course is that none of them is free. They may be free to the person involved but they are provided by the taxpayer. The sooner we get rid of that belief the better. We can give what assistance we can afford. I am in favour of helping people in their education. I am in favour of helping people to buy books if they are unable to do it themselves. I am in favour of helping people with footwear if the family's finances cannot meet the bill. These things should not be described as being free because it generates a line of thinking that if you know how to play the game properly you can get through life for free. That is not the right approach. That is not the fact. The fact is that somebody, by his thrift, his entrepreneurial spirit, his hard work or his dedication has put himself into a position where the Government decide that because he has done so well, he should help so many other people. We should have a greater realisation as a people, that to get on well we must work.

I would like to compliment the Minister on introducing the Bill and the way in which he did it. I hope the tax structure will improve to such an degree that workers will find themselves in a position to invest in the industry they work in as the Minister hopes they will do.

Mrs. Robinson

I welcome this Bill to establish the National Development Corporation. I deeply regret that it has been introduced at least two years too late. For no good reason there has been delay in the introduction of the Bill itself into the Oireachtas and this has meant that the establishment of the NDC and getting it into working order is unlikely to have occurred during the lifetime of this Government. I say "for no good reason" because if Members look at the Bill itself, it is neither a particularly complicated nor a particularly innovative nor a particularly complex Bill. It is a very minimalist Bill. It tells us very little about the National Development Corporation, other than the bare bones of its structure. Nonetheless, it has taken a very considerable time, far too long, to get this far and to get to the stage of having the Second Reading of the Bill in this House.

It reveals the very real difficulties of getting any kind of radical change in this country. I am an enthusiast about the establishment of the National Development Corporation. I have believed for a long number of years in the importance of the role it can play in our economy. I have watched with a kind of depression and despair the political difficulties in getting the base of support for this measure. The establishment of the National Development Corporation has been a major economic plank of the Labour Party for a significant number of years. It was promoted by the Labour Party and has formed part of its strategy for a broad-based industrial policy. It is evident that there has been much more reserve and much more ambivalence even right up to the moment on the part of the Fine Gael Party in its approach to the National Development Corporation. I very much regret this, although I can understand part of the reason for that reserve. It is this ambivalence of approach and difficulty in endorsing fully what the National Development Corporation is about which has resulted in the kind of internal divisions which caused this unwelcome delay.

That delay is regrettable, not only for the reason I have already stated — that it means that the National Development Corporation itself, its staffing, accommodation and the way in which it will approach the formulation of its objectives as set out in section 10, the assessment of various projects that may be put forward to it, that all of that is delayed and is unlikely to be in a productive stage during the lifetime of this Government — but also for the reason that a good deal of the impact of the Bill and of its leverage in the economy has been lost or has faltered because of that delay.

Many people who felt this was a very important lever and a great way of making progress in the economy have lost some faith in it. Many young people who were aware that this was one of the commitments of the Coalition Government when it came into office, became disillusioned by the lack of progress on this measure. Many have questioned why it has not been pressed more strongly and why greater efforts were not made to ensure that the clear commitment was fulfilled within the first year of the Government. There is nothing in that Bill that required any long period of complicated drafting. It is a very simple, minimalist Bill for what it sets out to do.

The structure of the Bill is in a standard format, establishing a limited company. The Bill provides for the formation, registration of the National Development Corporation, provides that it will have a memorandum and articles of association but these are not before Members of the House.

We have had a number of recent examples of this kind of legislating. It is about time we questioned it. We had it in the Postal and Telecommunications Bill establishing An Post and Bord Telecom, The same minimal structure in the Bill and Members of the House did not have sight of the draft memo and articles of association of those two major State companies. We should have sight of the memo and articles of association of the NDC at this stage. They should be circulated to Members so that while we are discussing the NDC we know at least structurally and from an administrative point of view, what the format of the corporation will be. It must fit into the general structure of the Bill itself but that structure is set out in very broad, minimalist terms.

There are three key sections to the Bill. Section 10 sets out at some length the principle objects of the corporation, and I will come back to some of those. Section 13 sets out two overriding duties of the corporation, which must colour its own approach to achieving the objectives. These are:

(a) to assist in the creation of the maximum amount of viable employment in the State, and

(b) to carry out its objects which shall include the realisation of investments made by it as soon as it is financially and commercially prudent in such a manner as to enable the corporation to earn a reasonable return on any investment made by it and ensure that the funds are available to the revolving investment fund for employment.

The third section, which tells us a good deal about the way in which the corporation will operate, is the control over the maximum amounts of investment. I think those three sections taken together are really the heart of the thrust and viability of the National Development Corporation. Before I come to the objectives in detail I think it necessary, in the light of what I have been saying and other contributions on the Bill in this House, to pose the question: do we in fact need a National Development Corporation? Is it a measure which is required and justified? Is it to be welcomed as I have already indicated I welcome it?

Even a superficial glance at our overall industrial performance over the last few years and our population structure to the end of this century — which is probably far enough for us to look — reveal that we have what I would describe as horrendous problems. We have problems of a quite staggering nature and we do not seem to want to face up to them seriously and to realise what a responsibility this places on us. If we look at our overall industrial performance in general terms we see, despite very considerable State incentives, State incentives of approximately £3 billion between 1970 and 1980 to the private sector, that employment in manufacturing industry is now slightly lower than it was in 1973, the early part of that period which I took. Manufacturing industry has contributed only marginally to the creation of new sustainable employment in other sectors of our economy.

We have not seen an imaginative response from the private sector to the major social problem facing us, the problem of creating and sustaining lasting employment, notwithstanding very substantial incentives. Possibly the greatest incentives were during that period in 1977 and that did not result in any dramatic increase in employment in the private sector. On the other side of the equational picture, we have to look at our overall population structure and in particular our current unemployment levels. We have to realise that the situation is not static. It is one which is putting more and more pressure on the system, because we are going to see over the coming decade — each year estimates vary from between 20,000 and 30,000 new people looking for employment — a worsening of the already staggering unemployment figure of in or about 240,000.

That figure has been mentioned by almost every Senator who has spoken in this debate and has been deplored. Words are easily come by. I do not think we have in fact an appreciation of the seriousness of our overall unemployment problem and of the fact that it is no longer to anything like the same degree a youth unemployment bulge. We still will have, and continue to have, a high percentage of young people who are unemployed; but the really serious bulge now and over the next ten years is going to be in the older group in their mid-to-late twenties, early thirties, mid-thirties. These are the people, men and women who are going to be in very substantial numbers and who are already unemployed.

How do you sustain family life in those circumstances in a country where we try to pay a lot of lip service to family values and family life? How do you sustain it? How do the young couple with children engage in normal social relationships and social encounters? The answer is that very many cannot. There is private misery and within families a breakdown of marriage relationship purely because they cannot afford to sustain that relationship and are deprived of the kind of opportunities to participate which are vital to their own well-being and that of their families.

We have an enormously difficult problem in this country and I find it very interesting that there still seems to be such unqualified faith in the possibility of enormous movement coming from private enterprise. I want to make it very clear that I am not an absolutist on either side. I am not somebody who believes that we can only make progress by it all being done by the State or public investment. Nor, as is obvious from my contribution, am I a believer that we must roll back the role of the State — is that not the language at the moment? — and create the tax incentives to give the initiative to private industry. It is patently clear that that has signally failed, that either course on its own is not suitable to our small, open, island economy, and that in fact we need an intelligent and imaginative combination of public and private and proper linkages between them.

It is fascinating. It is very interesting at the moment to see hundreds of people going to political venues in various towns and cities around Ireland. Hundreds, in some cases thousands of people are going to political meetings and they are being told by the new party that is attracting them — The Progressive Democrats — that that party stands for a change in climate. We would all like a change in climate, even a change in the real climate, but it is not exactly very specific. What do you mean, a change in climate? Or, more specific still, the Progressive Democrats stand for change of environment. I would not mind a change of environment either. The environment in this House at times is very oppressive. The scaffolding is very unattractive. These are wonderful, broad statements to make and they are drawing the crowds, as I say. None of this is for real. None of this in fact is going to bring about the magic formula the people so desperately hunger for. I appreciate why they hunger for it and that their interest is both a genuine one and a very strong desire for change. In fact, they are tilting at windmills.

We have had the experience of very substantial inventives to private industry and they have singularly failed to change the so-called climate, to make a substantial dent on our unemployment figures and to provide the sustained, long term jobs that are vital. We need to stop codding ourselves and to stop seeking to fool ourselves that this is the way in which we can make progress. Nor, I hasten to add — and it was even more clear in the course of my contribution, do I believe that simply establishing something called the National Development Corporation and drawing a line under it is going to achieve very much. It very substantially depends on the day in which the objectives established under this Bill for the National Development Corporation are approached by the personnel. It depends on the political commitment behind the establishment of the National Development Corporation, the link which it forms throughout the country and the manner in which it is able to achieve its tasks.

I turn now to some of the potential areas where the National Development Corporation is being mandated to promote activity and enterprise and to do so in the context of creating and sustaining employment. Like other Senators, I am pleased to see that certain areas are mentioned specifically in section 10, not only that the corporation can either establish or co-operate with or invest in enterprise, but also that it can similarly co-operate with and invest in co-operatives. This is a very important dimension of the National Development Corporation which has not been sufficiently discussed or considered up to now.

Secondly, like other Members of the House who have already contributed, I welcome the fact that specific reference is made in the Bill to the development of our natural resources and tourism. Again, these tend to be the hackneyed areas that are trotted out as having great potential for employment, and yet the fact remains that we have appalling underdevelopment of our natural resources and we are doing the wrong things about it in many areas, one of the areas being fisheries and our inland waterway system. We are failing to develop that in a way which could provide us with a job creating and enormously important tourist potential, apart from being financially rewarding for people within the country. Similarly our forestry and our sea fisheries areas are still seriously underdeveloped and have the potential for further development.

I believe, although it is not in the same way specifically spelt out in section 10 in regard to the principal objects of the corporation, that we need to have much more regard to the potential of the export of services from this country. We do export services in a number of areas — specialist agricultural areas, medical services to various countries, the service contracts now being won by bodies like the ESB and others. An Foras Forbartha, etc. That is a fast growing market in the world, and Ireland, particularly because of our links with developing countries, is a country which is potentially very acceptable to provide services of this kind in developing countries which would be of benefit to those who do the work, of benefit to the economy of the developing country and of enormous benefit to this country as a growth area. I do not think we have explored the full potential of that to anything like the degree that we should, and it is an area which fits into our own structure of having, by and large, a well educated, mobile, talented young population who should be encouraged to develop fully and to find opportunities in the export of their services for a number of years in positions of responsibility where they can bring their expertise and skills to the service of less developed countries or indeed equally developed countries but ones which have the need for the particular services. I would like to see much more done in that area.

There are other areas it is not too difficult to find. For example, the next item on the Order Paper is the Committee Stage of the Chester Beatty Library Bill. This is a Bill to which a number of us contributed on Second Stage. Everyone who contributed and who knows the resources of the Chester Beatty Library spoke about the most fantastic but underdeveloped resources. It is an unbelievable library and yet most of it is uncatalogued, unknown, the world does not know about it and we do not know about it. There is a huge market for developing a resource like the Chester Beatty Library. There is an absolutely huge market for something like this, particularly because the art of every description is of the highest quality and is worldwide, of every culture and of every country which has a major cultural tradition. That is just an example of how, with imagination, a body like the National Development Corporation could be used. After all the Chester Beatty Library is in trust to this nation. This nation is getting probably a 1 per cent benefit from the library and it is about time we brought that up to 60 per cent or 70 per cent. If we did so we would do so with remarkable benefit to this generation of Irish people as well as to the library itself and to the world of culture and learning. It is not difficult to find potential projects if we wish to do so.

This Bill establishing a National Development Corporation on its own is not sufficient. It is not a magic formula. The Bill must coincide with an injection of a new sense of both urgency and community involvement in tackling our industrial strategy and our programme for creation of employment. The Progressive Democrats, whom I have been criticising earlier and whom I continue to find very strong on climate but very short on the specifics, have stirred up a hunger and a yearning for the kind of overall strategy and coherence which people desire. They are prepared to put up with hard times if they believe that this will lead to greater opportunities and a greater future for their children and for themselves in the longer term in this country. I believe that has to be part of the National Development Corporation. It must link in with generating a broader interest in the country for its potential. Therefore, the personnel of the board is absolutely vital. Ireland is a small country and, therefore, whoever heads up something like the NDC in fact not only personifies it but will determine the extent to which it will have a capacity to inject the kind of momentum which I have been talking about. When the chairman and directors are being appointed by the Minister this should be important, possibly even more so when the chairman and directors come themselves to appoint the managing director. She or he will have a very vital role and responsibility and I believe will have to make up for lost time, will have to, in fact, accelerate the speed and the manner in which the National Development Corporation get their act together to make up for the unacceptable amount of political delay in bringing forward the Bill and having it passed by the Oireachtas.

It will be vital to see, in the first instance, the quality of the personnel involved at the most senior level in the National Development Corporation and I would hope — though again there is no reference to this specifically in the Bill — that the opportunity would be used to generate a very broad debate throughout the country because it is certainly true that in every county in Ireland at various levels there is the most serious discussion going on at county level and urban level about these issues of potential industrial location, potential job creation, potential for developing some resource in that particular locality and in particular the size and the way of trying to make some impact on the local employment problem. So I think it will be part of the function of the personnel of the NDC, when it is established, to get out and link with people, to promote the NDC through being close to people who are involved on the ground and linking in with their ideas and listening to them and generating in that way the kind of response from the ground up which would be the basis for expanding and developing the objects as set out in section 10 of the Bill.

The over-riding consideration is that we do not have any time to lose. Although we all in our contributions referred to the level of unemployment and to the seriousness of it, none of us do it in the kind of language in which we really should where we appreciate and spell out the dangers to our entire democratic system if we continue to have the kind of polarised divide that we have at the moment in our society. We have become two nations. The gap is widening between those two nations and I believe it is the most serious threat to the entire democratic and social fabric we have inherited and to which we pay a great deal of lip-service and that we claim to cherish.

As I said at the outset and I say this unequivocally, I welcome the National Development Corporation. While involved with my colleagues in the Labour Party I worked for more than a year on an economic committee examining and indeed trying to advance the proposals and the kind of approach and work which a national development corporation could do. I have to express some of my frustration and disillusionment that it has taken so long to get this major piece of economic strategy into this House. It is still not passed as a Bill. The situation in the meantime has become more urgent and more demanding. I hope this Bill will get a full debate in this House but also a speedy passage so that the corporation can be established and get under way and imitiate the kind of linkages I have been talking about in order to begin the process of genuinely raising the hopes of those people who are looking for this magical change of climate.

Mr. McGonagle

I am always in a dilemma when speaking after Senator Mary Robinson because she leaves very little to be said. I will endeavour to fill in any gaps that I thought she left. She has said much of what I intended to say. I want to congratulate the Government on this progressive piece of legislation. Having said that, I am not impressed by the delay. This should have been number one priority for such a Coalition because there is a Labour input. I will deal with the question of compromise. It is not compromise, as I would understand it, between Fine Gael, on the right, and the Labour Party, slightly on the left. Delay in this country seems to be inevitable. In 1947 I proposed an economic council for Northern Ireland and an economic council for the Republic, with a liaison body. That was at the ITUC, as it was then, in Waterford. The two economic councils were set up in 1964. That is how long I had to wait.

I stand here with a certain amount of pride looking at this piece of legislation. Inside the executive of Congress for many years we discussed a national corporation to do exactly what is spelt out in the Bill. In 1972-73 I presided over conferences and made my own contribution. I stand with pride looking at the results but they were not fast enough. Like Senator Robinson, I do not believe we will see any results in the lifetime of this Parliament. We may see results between two and five years. It will be a long haul and we should not be disappointed at having to wait. The ingredients are there. I have congratulated the Government. I want to congratulate all the political parties since the State was founded and the men and women who had the vision to use the State apparatus and mechanism when the economic demand indicated what had to be done. The State apparatus was moved by men and women through all the political parties and we are a very young State. They saw what was required, they did it and had no ideological hangups about State enterprise or about private enterprise. Private enterprise is a funny animal today. It gets so much State money that sometimes they do not know where the cheques are coming from or what they are for. It is not private enterprise as we understood it. When people get into arguments about private enterprise on the one side and the public sector on the other, they would be as well to identify what they are talking about. Private enterprise is State subsidised to the very hilt. The private sector has failed to broaden the base notwithstanding massive financial support and other kinds of support. One of the reasons we have an Irish Productivity Centre is to teach them how to reduce unit costs by the use of work study and all the other various studies that are aimed at the reduction of unit costs. That is imperative in our society.

The setting up of the NDC was inevitable. Given the economic circumstances in the Irish Republic and the waste of the potential contribution to the national economy and the well-being of the country, an unemployment figure of 240,000 is unacceptable, so the Government have moved. It is an indictment of our managerial society. Politicians are managers. It is an indictment of the politicians' failure. Financial handouts in the form of dole payments are no alternative to gainful employment. The right to work is a human right. There will be people who will argue that it is not and that society owes nothing to anybody. I do not accept that. Strangely enough if you examine the United Nations Covenant of Human Rights and the European Convention on Human Rights and you will not find among all the rights the right to work. The reason I believe that they cannot enshrine it in these convenants and charters is that they have accepted their inability in western civilisation to implement the radical changes necessary, to give the right to work. I believe it is a human right and as long as it is denied that is an indictment in itself.

It is, therefore right and proper to approve of the measures proposed in the Bill aimed at the stimulation of job creation and the output of goods and services. This would be good for the economy. Even a child at school would know that. We live in a consumer orientated society and the demand has to be stimulated all the time for the goods and services that you create through job creation. This is the cycle.

The Bill should be seen as one of the most significant radical movements in the history of State involvement in the economic affairs of the Irish Republic. It is a progressive piece of legislation, and the object is to create jobs and wealth. You can create jobs but you may not be able to distribute wealth on an equitable basis. You can create too much wealth by too many people employed at doing one thing. That is happening in Europe. The capitalistic intervention system is trying to control that. You produce too little of something else and have so many people on the dole as well. These are contradictions which, if not attended to will lead to conflict.

The new progressive movement and the euphoria about it is symptomatic of disillusionment only; it is not positive. It is a barometer of disillusionment. The traditional political parties should pay attention to what is taking place. You will find that this splinter of a right wing party is still a right wing party so there is no change and there is no breaking of a mould, not in that sense. They will find the same problems and difficulties if they take office or become part of a coalition as the Fine Gael and Labour coalition found and as Fianna Fáil find from time to time. There is no miracle cure about unemployment unless radical changes and measures are introduced by the Government in power. I hear people say: "You will never see full employment again." I always say that should be amended to read: "You will never see full employment as long as we run society the way we run it". That is different. There is a change in that; but everybody knows what it means because the words are simple.

It should be understood that the State, which is the forum at the top of the political structure, is the servant of the people. The obligation is squarely on the State managers to deliver according to the needs and the wants of the citizens. That is why they put themselves forward seeking mandates on various social, economic and political matters and they were elected to debate them in both Houses of Parliament.

We are faced with a tremendous challenge to cure the cancer of unemployment — a cancer it is. The Government have acted, albeit slowly, in a positive and intelligent manner. It reflects the thinking of the Irish Congress of Trade Unions and all its deliberations for some years back. This is what we wanted. Now that we have it, we congratulate the people who did it. We believe it will work. It has to work. Otherwise there will be an explosion which can destroy democratic institutions and standards.

What is proposed in the Bill is not a compromise. The connotation of a compromise is a weakening of stronglyheld views on one side or another, a watering down in the interests of peace or agreement. This is not a compromise. There is no watering down. A compromise is an agreed version for peace. The substance of the Bill is a fusion of two strong influences — the private and the public sectors. The entrepreneur who has all kinds of skills will be brought into play alongside the initiative taken by the Government to fund, to assist, to manage and to overlook. Ministerial power is limited. Control between the Minister and the Government is there of necessity. It is an overlooking body. This is a simple Bill, as Senator Robinson has stated. The two influences are fused, not in a compromising way, but in strength to produce the vital components that will bring us nearer the object of full employment. The full resources of the State — £300 million — are to be granted in the form of finance, managerial know-how, research and development. Research and development possibly would be outside the abilities of the smaller business types. Only the multinationals could provide this. It is only right that we should do this research and development ourselves with our own indigenous materials, which is not to say that we cannot import materials if a person sees that by importing materials he can provide viable employment with his brain power, together with State assistance. Then you have State assistance on the one side and private entrepreneurship on the other. It is a fusion, not a compromise.

There will be arguments, disagreements, discussions and debate about details of the National Development Corporation. This is rightly so. There is nothing wrong with this as the Bill goes through both Houses and is debated publicly as well. What is not debatable is the fact that the Government should have moved in this regard. They should have moved. No one can cay that the Government should not have moved. Any Government, of whatever composition, would have had to so move, given the same economic circumstances.

From the beginning of the State — not so long ago in historical terms — the Irish people have lifted themselves up by their boot-straps by doing what they saw to be necessary for economic progress. They had no ideological hang-ups about private or public sectors. We had a narrow industrial base, which was broadened in the sixties. It is neither broad enough nor deep enough. Our mainly agricultural economy was widened by resourceful and thoughtful people who did not have the hang-ups I am talking about on what is commonly described as State intervention.

I do not like the word "intervention". I prefer to use State "activation" or "participation". "Intervention" is like a referee who is not liked very much but it is necessary for him to come in. This is the language of the free marketeer who does not like State enterprise. He calls it "intervention"; I call it "participation" or "activation" by the State. These are healthier words. This is State participation, not intervention. When economic necessity demanded an application of our resources — financial, manpower and indigenous material wealth in forestry, fishing, food and tourism — the Irish people acted. Again, through the medium of the Government, they are acting.

It is of paramount importance to recognise what is involved in the Bill. The ideas of conflict between those who believe that the market economy provides the only and complete answer to our economic problems and the rigid and inflexible attitude of those who hold the view that total State involvement is the only answer is outdated. I have explained the fusion of State enterprise and the private entrepreneural abilities which the people have. They know when to use both and merge them into one strong influence, as they have done in the National Development Corporation Bill. The economy clearly demonstrates that what I have stated is true. We have a mixed economy in the way I have described. A total State monopoly is out of date; it is old hat socialism. Private enterprise, we know, has changed also, as I have stated.

The National Development Corporation is a further step in a synthesized process. We are looking at a synthesis between public sector, represented by State activation or participation, and private enterprise, which has changed somewhat, into one format: we call it the NDC. These ideological arguments and hang-ups are about nothing and they will have to be dismissed. We have to go forward and do what is necessary, as the people have demonstrated to us in the last 60 years since the State was set up.

The man or woman, the boy or girl, who is unemployed could not care less whether is it a private enterprise which is employing him or a public State body. They want work and are not impressed by any of the arguments I have been advising should be dismissed. It would be foolish to dismiss entrepreneurial ability and the innovative skills of the people and it would be equally foolish to dismiss State activation — some call it intervention — and I have explained what that means. I call it State activation and participation. It is positive, not negative. Dogmatic approaches to the unemployment problem are profoundly inappropriate. The well-informed unemployed will not thank those who deviate from the proposals in the Bill. They will monitor what is going to happen in the next ten or 20 years, because with technological development the situation could get worse. Senator Robinson has stated this. The National Development Corporation can handle situations which might get worse with the changes in technological applications to our industrial fields.

Debate adjourned.

Sitting suspended at 5.30 p.m. and resumed at 6.30 p.m.