Skip to main content
Normal View

Seanad Éireann debate -
Thursday, 20 Feb 1986

Vol. 111 No. 8

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

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

Last evening when I was making my opening remarks on the Bill to establish the National Development Corporation I spent some time in developing what I felt to be the background to proposals for such agencies within the context of planning. I have no intention of being repetitious today. Let me summarise by saying that I was developing an analysis of what I felt was the mind of the Right which, imperceptibly, had influenced Irish political and administrative thinking. Let me begin most controversially by saying how worried I am about one extension of this. I welcomed yesterday the support even of those who have reservations. There were many speakers who said that they accept the prinicple of there being an agency which could intrude on the appalling problem of unemployment but who expressed reservations about it.

I have in a sense a reservation that is of a different nature and deeper in turn. It derives from my prefatory remarks yesterday concerning the influence of British Department of Finance thinking on the Irish Department of Finance in the early days of this State. As a defender during all of my political life of the role of the public service there has been an ethos constructed at times within the service which is anti-innovative and not able to bring forward energetic proposals which go beyond the constraints of time. I will be more explicit. I spoke about the diseased economy which can grow from a banking system that has a limited time horizon and a limited asset perception. For example, in the case of the Irish commercial banks, their failure to develop other than a nominal venture capital section has made them the exceptions in the banking system of Europe. By and large Irish banks do not take risks beyond a particular time horizon. Neither are they anxious to accept as collateral the innovative content of a piece of technology or a set of ideas, preferring assets that are realisable.

The story of many family businesses who extended at times when they felt that the market could bear expansion and who are now under pressure from the financial institutions is that they are turning to the banks in desperation, a banking system that is now looking for its security, that is cushioned by high interest rates and is protected in a very interesting way by our present Central Bank Act. When the banking groups approached me concerning the bank levy — I must confess that I have always preferred taxes on banks rather than levies — a point I made to them was, if you have the protection you do enjoy from the Central Bank Act and if you are protected in a rather unique way by not taking long term risks, where is the justification for your being judged in taxation terms in the same as any other business that takes the risks of the market place? These are important issues.

I must confess that I am worried by the time horizon within the public service itself. This was brought rather dramatically to my notice. It has caused me the greatest concern. A former Cabinet Minister speaking in Dáil Éireann on 23 October 1985 stated:

On being made Minister in 1982 I asked for the file on the National Development Corporation. I will not say what the boys in the Department said to me, but I knew by the smiles on their faces that they did not want to bring me an empty file. Finally, they brought a file and I will not attempt to try to describe to the House what the corporation was supposed to mean.

It goes on. That statement is of immense importance. It should be denied by the senior public service unions. If it is true, it represents something that is very dangerous. My source is the Official Report of 23 October 1985, Volume 361, column 345. I believe it to be a dangerous statement. Despite all the arguments — which I made a précis of yesterday — going on about planning since the seventies when we moved on from changing the whole sectoral committee reports we had in the sixties to the great case we made for planning and the 1958 publication of a programme that is not a substitute for a plan, the insinuation was that the National Development Corporation was perceived by senior public servants as something of a daft idea upon which you should not prepare material. This has a terrible consequence because public servants cannot speak in either House to defend themselves. I am worried about this statement. I suspect it is not quite true. I repeat my words very carefully. I suspect it is not quite true.

Let me deal with the hypothesis that if it was true, it means that everything I said about the rolling on of Irish financial and fiscal thinking from the foundation of the State under the wing of the British Treasury has an appalling consequence. Back in the seventies the Economic Research Institute which, acknowledging the population increase and the immense problems of unemployment changed its title to become the Economic and Social Research Institute, had been speaking of the need to take planning seriously. We had begun to set up in the penumbra of the formal public service a number of agencies to deal with sectoral targets, population projections and so on. For example, the National Economic and Social Council, in its commentary on projections proposed by Professor Walsh for the period 1966 to 1971, at paragraph 13 stated:

Professor Walsh projects an increase of 200,000, from 1.1 million to 1.3 million in the number of men and women seeking work over the period from 1971-1986, an annual average increase of 13,000 to 15,000.

Professor Walsh estimated the possible loss in employment. He projected a continued downward trend in the family farm labour force with the share of the total labour force declining from 21 per cent in 1971 to under 11 per cent in 1986. As a result of the assumptions relating to emigration, participation rates and the decline in the numbers in agriculture he projected that the numbers seeking employment outside agriculture would grow by 300,000 from 0.9 million to 1.2 million. In academic circles, people who are far from being left wing and socialist, were saying you must look at the population projections. They were saying this in the seventies, were feeding it into the different new bodies established, and were seeking a response to it. In November 1975 — I am not anxious to give lengthy quotes — the OECD in the introduction of its Report on Ireland stated:

A study of population and employment trends by the National Economic and Social Council suggests that between 1976 and 1981 some 12,000 young persons may enter the job market annually. In addition, the Secretariat estimates that about 8,000 persons may move out of agriculture and 8,000 jobs may be lost in the traditional manufacturing industries. Thus, unless the pattern of migration is reversed a total of around 28,000 new jobs may need to be created each year (over and above the recovery of employment from the present recession), a figure substantially higher than what was achieved in the past when real GNP was rising at an average rate of about 4½ per cent. A similar rise in activity over the medium-term would apparently not be enough to provide sufficient employment opportunities.

The theme that has informed the discussion in this and the other House, from all sides, about the necessity of a body like the NDC has always been this question that we need to do something to address the unemployment problem although that is not the sole justification for the NDC.

Let me summarise much of what I have been saying. From mid-April 1972 to mid-April 1974 the total non-agricultural labour force only grew by 12,000 to 13,000 per annum. The people who have been developing what I referred to yesterday as the climatology argument about economics, must go back and justify their arguments. Are they saying that, in our best times if we could only produce this number of jobs, that logic, that reasoning will be sufficient to make any impact on the unemployment problem. If you think about that kind of question that is put to them, you come to the very simple conclusion, and the cruel assumption that the unemployment problem is not their top political priority, that it is not their top social concern.

It is rather like the sun spot theory, the idea that if you cut back this growth that is called the State the sun will shine on plants that will bloom and produce flowers, never seen before and in time unemployment will come right. This is a harsh, nonsensical, derived, second rate, borrowed doctrine from debunked unrespectable institutes such as the Centre of Economic Policy Planning in London producing selective out-of-date figures which are finding a vogue among all sorts of areas. When I hear the question about rolling back the State the image that occurs to me is rather that of a man or woman who would have been addicted to quack medicines and had a dresser full of bottles: when they need to take medicine to ensure life itself they simply look at their rows of bottles and say not another bottle. That is exactly the quack argument that has come out against the National Development Corporation: not another State agency.

Better people than I have said that this is not an agency to enter into competition with the role of any other existing agency. It is an agency that was construed in Labour Party thinking in the early seventies as a vehicle for innovation and investment; in projects that were beyond the scale of private investment; that were beyond the research and development capacity of private development; that would be large enough to hold their own in the international trading and marketing environment; that would be able to draw on people who would be trained in a sheltered way, perhaps for a longer time scale than conventional Irish industry.

Let the opponents of the NDC say how they will secure their place in international marketing, how they will change something that has never produced jobs, that has never taken the risks and that has never really heavily invested in research and development. Where are they going to get the alternative to this? I will leave this part of my argument by saying that there are probably fewer societies in Europe that have paid a higher price for their ingrained antipathy to the planning process than in Ireland. People lived in fear of debt in the late fifties using words like "programming" because they were within a decade of the clatter of the crozier that had said that planning was interference with the principle of subsidiarity. It was reaching in beyond the family and beyond the market-place. Everything in the ethos of our country had this notion that out of private scratching individualism would come somehow or another the reformed stuff of a modern nation.

Academics who worked with me and who I studied with when I was young wrote glowingly of how the Irish State had continued despite its revolution. They looked at every institution that was in place and said that it revealed more a continuity rather than any principle of innovation. It became then, as it is now in a revised sense, fashionable to speak of stripping everything back that we created ourselves. That is the philosophy of the graveyard and it is the most dangerous, sinister kind of thinking that is taking place at present. In the social sciences we see it every day. The London institute I spoke about have published reports that do not only deal with Ireland. We are faced with a world burdened with debt, where Mexico pays two-thirds of its export earnings in servicing its debt, in which one country after another has to make a choice between child immunisation, food and so on and paying their debt. I am not making the case here — I will make it again — in relation to the arguments that have been put forward for defaulting on payments and so on. But this loss of nerve and this reaching back into the worst period of our own cowardice to produce new Right wing pieces of bigotry against the State is disastrous. That is a summary of what I had to say in my opening remarks.

People in Ireland of the Right, Left and Centre can no longer reject the case for planning. Remember that this is what is happening now. There are people writing every day making suggestions. People on television hold a pound note, they fold it in two and then they fold it in two again and say: "How much of it is your own?" The idea is to let us get the State out of our lives. But the people who argue in favour of getting the State out of our lives are trying to create two nations in this country, a nation of those who will work and a nation of those who are left without work. Will they live with the consequences? I warn them that they will get changes far more radical and different from the ones I am advising in this House. If they want to go back to the supremacy of the market-place, if they want to strip back every institution, if they give a mandate to an alliance politically that will freeze social welfare payments, who will not want the State to be providing general health care and so on, I warn them about the society that will then be created. My advice to the society that would then arise would not be to accept such a situation with docility. In the end when talking about economic planning, in the NDC and everything else, begin with the question as to whether we in this House or our colleagues in the Dáil serve the orthodoxy in economic and financial thinking that is often out-of-date or do we serve the people. We have not accepted the philosophy of planning.

I now come to my practical points about this Bill. I welcome this Bill, although it is much less than I wanted. It is less than what I wanted because some institutional reforms were necessary in advance. I had hoped when we were first debating within the Labour Party in the seventies the form of the corporation, that by now these would have taken place but they have not. First, I had hoped that within the public service itself the central orthodox influence of the Department of Finance would have been shaken. I had hoped that each different Department of State would have had by now over a decade of experience in drawing together, through sub-planning commissions different projects, different targets for achievement in their own areas. May I give a tragic example? Let us think of what has happened in relation to fisheries and mariculture. I remember the first report on the state of the fishing industry nearly two decades ago. One technical report came after another, but what we have had are sectoral committees and development committees succeeded by task forces and so on. Meanwhile Norwegian investment funds became available in Ireland. Their stocks are exhausted, our stocks are available and in many cases are undeveloped. What was needed to establish that industry — and it is one which is singularly appropriate for the NDC — was the need to settle the question of the coastline. There was the need to straighten out the situation where to put a raft into the sea to farm mussels requires dealing with 12 Government Departments.

Note the difference in my criticism. I was in favour of an integration of functions within the public service. I was not talking about the demolition of the public service. That is the distinction between those of us who are progressives in relation to planning and this new Right-wing nonsense that is growing up which says more or less, as the people who broke out after a revolution, "Let us burn everything. Let us roll everything in the State back". I had hoped that those changes would have taken place, that the central harmony of the Department of Finance's orthodoxy would have been substituted by a more concertative process in relation to planning right across every Government Department. That has not taken place.

Within the public service there are the most talented people, many of them who choose consciously to serve the public. I am amazed at the abuse that is piled on them daily by people who should know better. For example, am I to admire a doctor who works in the public service more than someone who chooses exclusively to practice private medicine? I will give you a better example. I was a member of a health board for seven years and we had approval for a position of an orthodontist. At £27,000 a year, plus limited private practice, we could not attract an applicant despite the fact that every unskilled worker who pays tax was subsidising medical education and dental education in this country. I fought in the Seanad for expansion of dental facilities and proper training for medical schools and so forth. But what of the mind, this mind that is glorified now every day, which says you should think about yourself, you should count the money in your own pocket and make sure you give none of it back to the State. That is the thinking that produced the idea and left us with the situation that the children of working people would grow up with their teeth crooked, their lives in ill-health and that the State would have an enormous expense later on in hospitals etc. I make no excuse for it. I have no mandate from the Irish public other than from the graduates of the National University of Ireland to speak for anything other than the philosophy of greed which exists in this country. That private, individual greed is being encouraged now every day. People are being encouraged consciously to hate the State, to not respect its institutions and so forth.

I support everyone who works in the public service, but I am very saddened that so many of their lives have been delivered into a conservative ethos and structure of the public service that has not enabled it to achieve its full fruit. There are a number of important points that will arise in relation to the NDC. That is a defective environment in many ways for it to work. There is so much orthodoxy directed against it. It will be a miracle if it gets past that. I hope it gets moving very quickly and that the people with ideas in all sections of Irish society will come forward and participate in what we are doing. It is a very small step but it is a good step, a step in the right direction.

I hope the people with ideas and all sections of Irish society will come forward and participate in what we are doing. It is a very small step but it is a good step, a step in the right direction. Only the ignorant can say that it is interfering with the other agencies that exist in relation to research, industrial promotion and so on. It has an investment role. It can identify new opportunities externally, as I mentioned yesterday, in relation to the trading sector and services, and internally in relation to forestry. I mentioned mariculture, the loss to value added from the agricultural sector and the difference between an agricultural sector and a food sector. The NDC have drawn a great deal of abuse upon the Labour Party. It has been suggested that our colleagues have been burdened with a piece of unfortunate Labour Party rhetoric.

Recently I had the good fortune to look at the history of Erin Foods and the Irish Sugar Company. Let me place it on the record of this House that the people who are the principal proponents of new right thinking are offering us an example of a person who probably made a major contribution to destroying the capacity for a native Irish food processing industry. I am referring to the restrictions placed on Erin Foods who were refused permission to trade in the Irish domestic market because they would be interfering with the Irish sector. At that time our antipathy to State investment and planning went as far as galvanised buckets. You could not make a bucket if someone else was making a bucket in some corner of the country because you were supposed to be this virile child that would grow up to be the Irishman. Private industry would be affected. A private career of wealth and aggrandisement was built on the selling out of the capacity of Erin Foods to deliver into the multinational market. Exploitation continued in the international markets. I am one of those who criticise that. I have visited many countries and worked in some countries where such would be regarded as a crime.

This was followed on by further Irish entrepreneurial imaginative development and the question of the shell companies. People bought companies that had a few old employees perhaps making textiles or something like that. You threw them out, realised the assets, took your money and invested somewhere else. Then you looked at the balance sheet, off you went again and before you knew where you are you had a bundle of money and you started speculating again. We have been told by the climatologists from the other side who were here the last time to create the climate for all of this. When all the gamblers come home together maybe they will have a whip around for the Irish economy. This is the sick, diseased mind of the Irish speculative part of the private sector. I admire many in the Irish private sector. I am not condemning everybody but I am condemning the mentality that is involved in that kind of capital accumulation. I am saying nothing new. Some people who have heard this from me before are obviously bored. We have now reached a situation where, under pressure of population, declining opportunities in agriculture, declining opportunities in traditional industry and declining market conditions for many of our existing products, we have the choice of falling back on that kind of thinking and letting loose the immense social problem that this vast unemployment will create. It is a very dangerous nonsense and it is one that will bring us nothing but peril.

I said that I hoped the public service would by now have been reformed. I equally had hoped that by now there would have been a public acceptance of the planning process. There is an enormous difference between the word "programming" as it has been used in the first programme, the second programme and the abandoned third programme, and the word "plan". When I speak about planning I believe that I am no further on now than when I started 17 years ago. People then had a fearful image of the State reaching into their lives, taking over personal decisions and saying, you must do this or you must invest in that. There have been 50 economies that have used the word "plan" since then. There are people who revised their thinking about the differences between indicative and directive planning. There has been the whole French experience. There have been all the mistakes and there have been all the advantages that we could have drawn upon.

The one thing I thought was important about planning, and it does affect the NDC is the question of participatory planning. A statement for sectoral aims from an élite group, however talented, is not a substitute for a genuine participatory plan. I believe, for example, that if you wanted to develop mariculture or forestry you must do so by involving at all stages of development the people who are on the ground. It involves not only marine scientists but also marine technologists, the people who will wade into the water and show how a raft is to be anchored. I have seen these in practice but we have had such an antipathy to planning that we have not reached the point where we would have accepted it as a natural part of our lives, where the different participatory mechanisms would now be all in place and we would accept it as natural to say we have limited resources.

We have a youthful population that could be regarded as a great asset. It is only when you have that atmosphere of acceptance of planning and participation that you have a true democracy. It is then that you can debate where you should be spending the money in education or in health. I am not one of those who are in favour of this sort of planning and of State involvement. One is always talking about more and more State investment. I do not accept that. I am not one of the people who say you should never cut expenditure. There is such a thing as wasteful public expenditure as much as there is wasteful private expenditure. But there is a fundamental reality that has to be accepted in this country. I am sorry if I emphasise it because I will not have an opportunity again to return to this theme.

This is the price we pay if we do not accept the normality of the planning process. It has implications for our teaching. For example, when one looks at the person who is watching a television programme and the person moderating the discussion will start by saying, we will first have a view from the economists. He will hear three or four different views and they are nearly always bad. Then you might have another section of the panel who will have a few people with bleeding hearts. They will all say, of course I knew a woman who tried to commit suicide last week because she did not have enough to eat and she was bringing the children to a clinic and so on. People are moved by this. Then he says, now to the politicians. What does that tell you about Ireland? It tells you that economics has been made into a subject which is beyond common understanding. In Third World countries they regard it as the second or third stage of their literacy programme. They will explain the purposes of the plan to the people. People will participate in the economic and social choices facing them. In Ireland that is not so. It has become a reserved kind of skill, a priesthood if you like, a form of theology.

The other one is caring, compassionate and so on but it is supposed to flourish in the sun. People can moan more but sometimes they criticise structures and bring home a liberation theology they had learned abroad. Then you come to the politicians. There is a subversive influence, our problems are not amenable to political solution. Out of that destruction of the faith in the political process comes an ever-growing tendency to the right. Thus today I would be presented as almost demented because as a political scientist I ask the question, if the political mould is being broken in Ireland is it not significant that it is being broken from the right? Here we are with the youngest population in Europe, the highest unemployed, some of the worst social problems and the shattering of the political mould as people go on about it being from the right. This is quoted approvingly, particularly by many people in the media who suggest that what this island full of all these people with all this needed investment requires is a further shift to the right.

What is expected to happen to all of these people? It is suggested that we do something very practical that we should establish a significant margin between the highest rates of social welfare for those people who, in accordance with everything that was thrust upon them, had large families and the wage they would get if they took whatever job was available to them. The climatologists tell us that that will create an incentive to work.

The idea, therefore, is that 250,000 people will be energised and a new Republic will be formed. People will go looking for work but where will they find it? Can they all cook hamburgers and flog them to each other in the streets like a Third World economy? Are we supposed to have the people at home baking and sending the children running on to the streets with pieces of bread and people walking around consuming it? That is the implication of that mad, lunatic thinking which is coming from sections who never knew what is was to be unemployed, who knew little of poverty, who had been the beneficiaries of my taxes and the taxes of many other people who are not as privileged as I am. They took all the taxes. They did not make the trains run yesterday. They paid the extra to sit in a different part of the train. They did not build hospitals. They took the extra money from their pockets and went into a different part of the hospital. In the old days they did not go to the dispensary and they never educated a doctor. They took the benefits of their privilege. They inherited benefits. The investment and the new wealth that will come from the Bill is nonsense. Over three-quarters of all wealth in Ireland is inherited. It is because of these young Turks that people like me will have to leave the country. They are a myth. They are like the five-legged horse. They never existed.

I apologise for straying from the Bill. It is in that atmosphere that the Bill is being opposed. I do not accept the views of people who say that we are all worried about unemployment. We are all concerned that the National Development Corporation is going to be another wasteful State agency. What are the alternatives? The National Development Corporation should have been much stronger. It should have come earlier and in an atmosphere of a greater commitment to planning. Equally it should have come in relation to much more reform as in the case of the public service. I would like to have seen it preceded by a reform of the banking sector. The question has been asked where the money is going to come from.

I can give a practical example which will no doubt set off another flurry of nerves. In 1970 a structure came into existence in Sweden which put together the investment of insurance funds. In about six years it was providing 54 per cent of venture funds for new Swedish industry. In other words, institutional funds which had been lying there were now invested in State-led initiatives.

This led to a situation in Sweden of very successful international trading and competent companies under a major holding company, for example, the selling of services internationally in relation to the establishment of comprehensive forestry programmes and so on. There were campaigns on the streets of Stockholm. People said this was the end of the old Swedish social democracy, that they had gone Marxist. The "well heeled" were never good at marching but they could hire trucks. They went up and down the streets and set up an opposition. There was not an international crisis. The Swedish currency was still traded in. I do not recall any great run of funds in the end. Within a matter of ten years just about half of the new venture funds required were being made available for a body such as this. I would like such a proposal to be made here.

Secondly, I do not agree with the autonomy of the commercial banking sector with regard to the planning process in Ireland. Their time scale of investment is short. Their view about collateral is narrow. They are, in fact, savaging some of their customers at present. Maybe the Minister of State would bring back the idea that there should be a proportion of deposits required. I am sure it would be received with enthusiasm.

An Leas-Chathaoirleach

I am sure at this stage the Minister is wondering what I am doing in the Chair. Certainly I let you stray for the past half an hour.

I am sorry. I was speaking on the preparatory conditions which should be there. I will not introduce others except for one more. There should have been a comprehensive taxation reform. The National Development Corporation is weakened to some extent. It is separated from the existence of a national planning commission. This commission should have by now participated in a number of debates with all the State agencies and the Government Departments on the question of allocation of resources.

An issue has been raised which is of importance. The question is why are we discussing this agency rather than the other agencies? My reply is that it has a new legislative role. A discussion took place on the National Enterprise Agency. This Bill gives a much stronger legislative standing to the NDC than the NEA enjoyed. This will logically lead — and provision has been made in the current year of £9.5 million — to a capacity to expand, borrow and so forth. It is an extremely important point.

I also hope that it will be seen as the innovative unit that it is. Some Member said that in the other different agencies they are now worried as to which functions they are going to lose. The whole thrust of the Bill is to create a new function for a State company in relation to investment with the end result of creating a secure base for employment. In fairness to the people who have supported this Bill from all parties, its strongest proponents have not said that it is an answer to the unemployment problem, It would be totally dishonest to say so. It is one contribution towards the solution of the problem. I hope it will work. It can do so only by the most intelligent and brightest people coming forward with venture proposals which can be adopted by the new agency and delivered to fruition.

The best way of judging that is to look at what happened internationally. In Finland, around Helsinki, there is the lowest unemployment rate in Europe. There is a major State holding company. In Austria, the two major socialised banks own something like one-third of the economy. The largest German industry at the moment has just been bought by one of the major co-operative banks. Why should we be the exceptions in the new whole of Europe in feeling suspicious about a State body that would begin very tentatively with a tiny investment to stake out what might be significant niches for Irish industrial activity in the future?

Therefore, to summarise my position I welcome this Bill with all the worries I have. I apologise to the House if I have spent a great deal of time dealing with the critics of the Bill. My reason for this is simple. I do not own a newspaper. I cannot run articles attacking the State everyday. This is the only opportunity I have. I am sent in here by the graduates who tell me that they are worried about unemployment and who feel that, as an economist and political scientist, my purpose should be to speak about what I believe are genuine political options for this country.

I hope that the NDC will do what the private banking sector did not do. I hope it invests in Irish intelligence. When we look at the whole ranges of information technologies and the many opportunities that exist, there will be choices that will have to be made selectively by very skilled people. That is one natural area in many of the information technology areas where the NDC will have a very significant role. It will be able to sustain the investment. It will also be able to pay for the time that is needed to launch new initiatives in that regard. We should not look at it with any kind of jaundice but rather we should use it as a jab to our consciousness. We should turn away from all this wasteful, negative thinking about what is wrong with what brave people have been trying to do within the public sector for some time. We should wish it well. I hope that is the atmosphere that would exist in Ireland. I hope its establishment will set up a broader debate about this question that I mentioned about the normality of the planning process and of the ability of ourselves to influence things.

There is nothing as pathetic as politicians saying that you can explain all of Ireland's economic difficulties by external constraints alone. We have powerful external constraints in a small open economy. The whole question of world trade changed relations in relation to currency, questions of credit, debt and so forth. But there is not any point in taking the national debt, dividing it by the population, adding in the cat and the dog if you have them and saying that we are all walking around with a proportion of it, like some kind of financial AIDS. There are things which we can do and initiatives which we can take. I wish the Irish private sector well in difficult trading times. There is a very urgent necessity for a body like this, given the unemployment problems we have.

In the next Stages of the Bill perhaps there are things that the Minister can clarify, particularly in relation to section 8 (3) of the Bill. I must confess to not having the skills of understanding of other Senators here as regards the phrase:

The Minister for Finance may, with the consent of the Minister, take up by subscription shares in the Corporation, having regard to the amount of capital investment proposed by the Corporation and the amount of capital available to the Corporation derived from its own funds.

I am not very clear in my mind about the construction of paragraphs like that. Equally, in relation to section 11. You, a Leas-Chathaoirleach, spoke about directors not being politically drawn. In that regard we would all agree. But I think much more so than that. I make the point in relation to what I have said about the public service. They need to be people who are committed to the philosophy of the NDC.

I agree with the people here in many cases who say that if you bring this body into existence and you compose its directorate of people who are hostile to the thinking of the NDC then it will not reach its full fruition. Again, in relation to section 13 (b) there has been much public disquiet about that and it would be wise if in discussion we could have a certain resolution of the suspicion that exists that this is really the capacity to sell off the more favourably trading aspects of the NDC in time leaving it as a kind of antique store for lame ducks and rocking horses. It would be wise to clarify it. Perhaps I am the only person confused, but then that is widely suspected by the public anyhow.

The last point I would make is in relation to the taxpayers' money that will be spent on this. It is a good point which was raised by many people contributing and it is important. Many people would object less to the high levels of taxation they are asked to pay if they saw results. The kind of social atmosphere that will prevail if agencies like the NDC are successful will be welcomed even by those who have to pay high rates of tax. With all those reservations and with great gratitude for allowing me to reply to what I cannot reply to at length elsewhere, I welcome the Bill.

An Leas-Chathaoirleach

There are only about two minutes but if Senator Ross commences it will give him the right to continue at 1.30 p.m.

I do not think Senator Higgins should make any apologies to the House for speaking at such length. I do not share his somewhat ecstatic triumphalism about the passage of this Bill. But because of the history of the Bill and how it came to this House, I understand the feelings and the sentiments behind his speech. The Bill has been in gestation for a long time. We all know exactly why it has taken so long to get to this House and what the motivating force behind it was.

An Leas-Chathaoirleach

As it is now 12.30 p.m. would the Senator move the adjournment of the debate? It is agreed to suspend until 2 o'clock.

I suggest we resume at 1.30 p.m. because there are as yet some people trying to get in who probably will not get in if it does not resume at 1.30 p.m.

Sitting suspended at 12.30 p.m. and resumed at 1.30 p.m.

I was just commencing my speech when we adjourned. I do not support this Bill for a very basic reason. That is because I believe that it is the triumph of one ideology over another. The emphasis in this Bill is completely different depending on which party in Coalition is speaking. It is an open secret that the Minister at the time, Deputy J. Bruton, when he introduced the Bill was not over-enthusiastic about it. It is also well known that this was a Bill and an ideology which the Labour Party had pushed for many years. It was a price which had to be paid by the Fine Gael Party to the Labour Party for coalition.

The Minister in his introductory speech in the Dáil justified the Bill by saying that the enterprises sponsored by the National Development Corporation would be judged by the profits which they made. The Labour Party emphasis is continuously on the employment which the National Development Corporation will give. The Minister said on many occasions that the sort of money which would be invested by the State in the National Development Corporation would be what he described as "patient money". I do not understand what the meaning of this phrase "patient money" is. I suspect that what he means by it is that it is money which is prepared to rest in an investment for a certain time without demanding an immediate return. There is nothing wrong with that. However, I fear that this "patient money" will be money which will not be put under the sort of pressure or commercial criteria which would demand a return at all. I am sorry but I think "patient money" is possibly a euphemism for money which does not demand any immediate return and which is not directly answerable to anybody except the State.

The Minister also said that there was a lack of equity capital in the State and that this was another reason for the National Development Corporation. I shall come to that later. I do not believe fundamentally that there is a lack of equity capital in the State. I think there is a great fault in the emphasis of where equity capital is put; but in regard to a lack of actual money to be invested within the State, that is not the case. It is there, but it is being channelled in the wrong direction. What the Minister talked about was the twin objectives of profits and employment. These are the twin objectives of this Bill. What I am afraid the Minister means by this is that one party in Government is looking for profits from the National Development Corporation, although it is reluctantly introducing this Bill, and the other party in Government is looking at the National Development Corporation as a means to relieve the unemployment problem.

The lack of enthusiasm for this Bill by the major party in Government will be a major problem in the implementation of this Bill. It does seem that there is a lack of political will from the Fine Gael Party behind this Bill, although they have introduced it reluctantly. If the National Development Corporation is not pursued with enormous enthusiasm it will not succeed. If it is regarded, as many in the Government regard it as the price which they pay to their Coalition partners, they will put it on the statute book but that is as far as they will go. They will not pursue it with the enthusiasm which a Bill like this deserves. In that case the National Development Corporation will falter and possibly die. One only has to see that, although the authorised capital is £300 million, the provision made for the NDC is only £9 million. That is, some would say, a modest, cautious, sensible provision to start with. To me it appears to reflect the lack of commitment to this and the reluctance of the major party in Government to pursue it with any great enthusiasm.

Having got over the ideological bickering, we have to accept that this Bill will go through. I accept fully that the Labour Party have won a victory, as they are quite entitled to, for the ideology behind this. I do not accept the ideology behind it, but I obviously accept their victory. I believe that there is a conflict in the Government between the need for State enterprise and the need for private enterprise.

Many industrialists and economists see this Bill as something of a kick in the teeth for private enterprise and for the profit motive. Many of them are saying "What can this do that private enterprise cannot do?" There are many investors — large investors, institutional investors, small investors and private investors — searching for profitable homes for their money and cannot find them. There are many people in the private sector willing to set up the sort of things — and I say "the sort of things" because the National Development Corporation's terms of reference are vague as well — which will yield the sort of returns which we are talking about and which many have talked about in this debate, but they have not been able to find them. When the board of this National Development Corporation is set up, with people who, we are assured, will be from the private sector and who have the National Development Corporation behind them, I cannot see why they can possibly say that they will be more successful in the public sector than they would be if they were looking at it from a private enterprise point of view. The reason, I am afraid, is because once again it is the ideology behind this which has set it up and not the profit motive.

There is apparently, according to the Minister, a lack of equity capital in this country, a lack of venture capital and, generally, a lack of capital. That is why the NDC has been set up so that the Government can provide the necessary capital for these sort of ventures. I dispute that. I do not believe there is a lack of capital in the country at all. What there is is a lack of outlets for that capital. One only has to see the hundreds of millions of pounds going to Government stock every year from pension funds, insurance companies and the banks — a lot of it optional — to know that there is capital available in the country to go into any venture which appears to be long term or short term profitable. The figures which I see daily going into Government stocks are staggering. That money could quite easily go into other sectors or other investments or could provide venture capital. It is not tied money. It is not tied to Government stocks, but it goes in because the Government are offering the best return on these stocks to an investor.

This is one of the great problems in the economy. It is one of the great problems with the National Development Corporation, because the Government in order to get money are soaking up an enormous amount of capital in this country. That capital could be released if the Government did not need so much money for this sort of project which the National Development Corporation is envisaging.

The second reason why all this money is going into Government stocks and not into a different type of venture is because the climate for setting up new industries and developing new enterprises in the commercial sector is wrong. We have heard a certain amount from this side about the taxation situation. I do not think it is a cliché. People will not put money into private commercial ventures at the moment because the climate is wrong and because taxation is too high. They feel that there is no incentive whatsoever for these sort of investments. It is a much easier choice for them to say "We will get 11 per cent or 12 per cent, which is a very high return as against prospective inflation next year of under 2 per cent" than to say "We will take some sort of sensible risk with our money on which we may get a high return or we may get a low return" because they get 11 per cent to 12 per cent on their money guaranteed now.

That is one of the reasons why, in the Government's view, the NDC has to be set up; nobody else is going to provide the money for this sort of thing because they are taxed out of existence in terms of VAT, in terms of capital gains tax, in terms of squeezes on the private sector at every turn. They take the easy choice. They are right to take the easy choice because the climate is not there for them to do this. I see it regularly in the stock market. People look at the possibilities of putting money into Irish industry or into various public companies but they will not do it for several reasons. Capital gains tax stands at 60 per cent on short term borrowings. There is nothing wrong with putting money into Irish industry via the stock exchange but there is no point in putting it in because if you make any money you lose over half of it.

The climate created by the Government in that way deprives people of the sort of outlet which the National Development Corporation are talking about. In addition, people are paying huge taxation. One of the disadvantages of the NDC is that we are going to have to pay more money in terms of income tax or VAT to set it up. This continues the cycle of funding state projects out of private enterprise which makes private enterprise less attractive. The whole emphasis of the tax system is definitely against the commercial private sector.

I would like to say a few words about the employment element in this Bill. The public perception of the Bill is very simply that the NDC has been set up to give employment one way or the other. The public perception outside this House and for those who have not read this Bill very well is that £300 million is being spent on the NDC. It is not, but that is what they think. This has been presented as a panacea for relieving, if not curing, the unemploymet problem. It is time that all parties in Government, and all parties in opposition, recognised one thing about unemployment and that is that unemployment as it stands at the moment is a worldwide phenomenon. It is time we stopped being dishonest about it and pretending that we can cure it. It may be unacceptable, politically, to say it but unemployment in the foreseeable future is here to stay. There may be all sorts of ways to relieve it or to reduce it. There may be ways to study what one can do with the unemployed now that they are unemployed, but it is wrong to produce panaceas like the National Development Corporation and say "this will be the answer to unemployment". It will not, and it is dishonest to say so.

I do not see any promises of jobs in this Bill. Certainly, the bureaucracy of setting up the NDC will create jobs. Beyond that I see very little. I remember in this House, perhaps four years ago, one had a similar situation when a similar Coalition Government, in a parallel situation, introduced the Youth Employment Agency. That was introduced by a Fine Gael Government as one of the prices they had to pay to the Labour Party. It was a Labour Party promoted Bill. That was perceived and presented to the public as a means of relieving the unemployment problem and as the Government's gesture towards unemployment. The Youth Employment Agency has not provided employment. The Youth Employment Agency has taxed people. The 1 per cent levy was introduced as a result of it. To a very large extent it has trained people for jobs which do not exist at the end.

I see this parallel coming with the National Development Corporation. I see the promise of employment. I see the hopes of the unemployed being raised, but dishonestly raised, because I do not think jobs can be promised as a result of it and certainly not with the £9 million provided for in this Bill at the moment. It will create more State bureaucracy which will create a very limited number of jobs for the unemployed, but I do not think it will create very much more.

The Youth Employment Agency is parallel to the NDC in one other way which worries me. In the end the Youth Employment Agency turned out to have too big a budget. They had too much money and they had to give some money back. I hope this does not happen to this Bill. I do not believe the political will is behind this Bill to give it the impetus to succeed. There may be a very strong possibility that at the end of the day whatever is given to the NDC — it is not given for anything specific but it is given as a sort of blank cheque at the beginning of each year — may have to be handed back when the NDC find what private enterprise has found and that is that there are no worthwhile commercial projects. Otherwise, they may put money into projects which are not commercial and they will then run into even more trouble.

The other principal objection I have to this Bill, which was touched on by Senator Honan yesterday, is that there is a grave danger that the NDC will become a political instrument for whatever Government are in power. The board appointments will be very significant but they will obviously be political appointments, as is unfortunately the tradition in this country. Appointments of this sort are made mainly on political grounds, all other things being equal. I do envisage a situation where there is a great danger that money will be channelled by the NDC into certain areas which will be to the benefit of whatever Government are in power. Unfortunately, there is a history of this in other countries where a similar national development board started off with a large amount of goodwill, using commercial criteria as their first priority, but where they drifted into a situation in which money was then pushed into certain areas which benefited the party in power.

I would hope rescue operations will not be launched by the NDC specifically to help certain people in certain constituencies. I hope the board will not decide, for example, at a time of a by-election, that they will use their money to set up factories or create employment in a certain area. Because this board is being set up and because the appointments to the board are political that danger is there. I would attribute that possibility to every party in power, not particularly to the Government. It may become, as other State bodies have become, a means to dispense political favours in all sorts of ways. That is a very dangerous situation.

I do not see—as others on this side of the House opposing the Bill have said— why we think that we, in Ireland, will succeed where other countries have failed. I do not see how we are going to succeed in a situation where virtually every other country which has set up a similar corporation has failed. The only country, as has been pointed out, that has been successful in terms of the private enterprise criteria in the last 50 years seems to be Sweden. In Italy social considerations dominated after a certain amount of time. We had similar-type corporations set up in the United States, in Great Britain, in the Netherlands, in Belgium and in Germany.

It appears that only one out of seven has succeeded. The others have become either very clumsy, bureaucratic instruments of the State or they have just failed, been incompetent and invested in non-profitable industries. The pattern has been that they start with good commercial criteria but they come under political pressure at some stage and then collapse. Senator M. Higgins said that it was wrong to compare the NDC with the other semi-State bodies such as the IDA and CTT. I do not believe it is, because the terms of reference of the NDC are so broad that they can overlap with every other organisation. They can overlap with Fóir Teoranta, the IDA or with Bord Fáilte.

The Minister in his speech stated that the NDC could get involved in tourism projects. It would be very wrong for the NDC to get involved in tourism projects, because it is impossible to measure the return on tourism projects. One of the problems with Bord Fáilte has been that it is very difficult to know whether they are a profitable organisation or not. I maintain that they are not. One cannot measure a return on something as intangible as that. In that situation, the NDC will get itself into a situation where one cannot measure whether it is making money or not. What one can tell is whether it is giving employment but one cannot tell whether it is getting a return on its money. It would overlap with the IDA and CTT.

It is also difficult to see how the NDC can compete with private industry on fair terms because the National Development Corporation, if it is competing with private industry, will have one great advantage and that is that it is State-backed. If it goes to a bank for credit, or to any particular place for credit, it is going to get it, whereas a commercial organisation will not. There will be no problem with the operation of the NDC in terms of credit, which will certainly give it an unfair advantage.

I oppose the Bill because it is the triumph of one philosophy over another, and I do not share that philosophy.

Having listened attentively to the ideological arguments of both Right and Left in this House, I fear generally for the success of the NDC. It is obvious from the opposition of Fianna Fáil to the Bill that, if they are returned to power, they will disband the National Development Corporation. By then, it will not have been given a fair chance.

I welcome the establishment of the NDC. There are possibilities within the establishment of the NDC for the future of our country. Many speakers have referred to the current economic situation, which is extremely difficult, and to the levels of unemployment which are a cause of great concern to all of us. What we need, therefore, is some imaginative initiatives and probably some risks taken to alleviate these problems. Such initiatives and developments can take place under the umbrella of the NDC.

In times of recession companies and entrepreneurs are obviously extremely cautious, as is evident in industry today. The banks gave out money freely in the early seventies but have now totally withdrawn from that position. Many of our problems, and many of the problems of industry and small private enterprises, are caused because of the new policy of the banks. The NDC could penetrate such cautiousness and give a lead in risk-taking. Obviously, some of these risk ventures would fail. This is the nature of all business and business ventures. It is important to stress, however, that the NDC will be required to act in a commercial manner and will, therefore, be subject to the same financial constraints as any other company. The Minister pointed this out carefully here in this House and in the Dáil.

There is no question of the NDC being used to create employment which will not be viable in the long term. It is stressed in the Bill that all enterprises invested in by the corporation should be a profitable and efficient, or be capable of becoming profitable and efficient, and have a reasonable prospect of development and expansion. The corporation must not be used to create white elephants, as has been pointed out, or to prop up weak ventures which would be a further drain on the Exchequer.

I am particularly interested in section 10 (d) and 10 (g) of the Bill. Section 10 (g) states that the principal aims of the corporation will be to invest in any enterprise involved in the exploitation, development. production or marketing of natural resources, including agriculture, fishery and forestry, as well as any enterprise which is being established to cater for tourists. Coming from County Kerry, the location of major food-processing facilities, the Kerry Co-operative Company, a county with wide expanses of timber and bog, with over 300 miles of seacoasts and with, I consider, massive mariculture possibilities, I welcome the setting out of these areas of particular interest to the NDC. I see within my own county the possibilities for development in those areas. County Kerry has a population in excess of 112,000. It has an unemployment figure of approximately 10,000 people, which figure could easily be reduced considerably if those vital areas were exploited to the extent possible.

It is a cliché now to comment that as a nation we have failed to maximise the economic potential and the employment possibilities of our natural resources. Coming from County Kerry, I am acutely aware of the lost opportunities. I would like to refer to a number of possibilities in these areas where the NDC could possibly be involved. All along the west coast there are limitless opportunities for fish farming and mariculture, particularly the cultivation of mussels, oysters and salmon and eel farms. Most of these enterprises by their nature will be small-scale operations, employing five to ten people. The gap in the market presently is in the processing and marketing of these products. The NDC could establish a number of processing plants along the west coast. This would create very worthwhile employment. At present the vast bulk of our mariculture products are being exported unprocessed, with a consequent loss of value which could be added, which is invariably the most lucrative economic activity. It is not feasible for small-scale producers to engage in sophisticated marketing operations. This could be done successfully by the NDC. I am thinking in terms of the large markets in Britain, France, the Netherlands and West Germany. The seas along our west coasts are almost pollution-free, a huge advantage which must be capitalised on for the benefit of our people. The consumption of farm salmon has outstripped that of wild salmon. I have recently read reports in the newspapers that Norwegians are now seriously looking to Ireland to establish salmon farms, due to restrictions in their own country. This is a further indictment of us as a nation and it will be a scandal if we once again allow our resources to be exploited by other countries.

There is enormous scope for the NDC to get involved in forestry, especially in the production, harvesting and marketing areas. Our advantages for forestry have been widely publicised and need not be dealt with here. Over the years various Governments, including the present Government, have put forward policy documents on forestry; and I regret that there seems to be an obvious lack of commitment as regards the fullest possible development of our forestry. Again, all Governments have to be blamed for their obvious failure. Our advantages for forestry have been widely published, but facilities like kiln drying are needed urgently to improve harvested wood and make it suitable for industry.

The export potential in this area is also quite promising especially when we consider that there will be a huge shortage of timber in Europe by the year 2000. The effects of acid rain on continental forests is also quite evident from recent reports. Our forests, as yet, are free from such hazards. We must, therefore, capitalise on our advantages and create the best possible employment opportunities. There seems to be some reluctance about private investment in such natural resources. This is probably due to the seasonality of production and the prospects of long-term rewards more than short-term and, of course, the financial risks involved. An NDC type operation could overcome these problems by co-ordinating the produce from a significant number of smaller producers who obviously could not risk the capital investment of large processing plants. This could apply in the case of fish, vegetables as well as trees.

Criticism has been mounted against the NDC involvement in tourism here today, whereas I feel that there is room for such type of involvement as is proposed. For example, most countries in Ireland would benefit enormously from outdoor pursuit centres. I have spoken previously in this House about the wonderful contribution made by the outdoor pursuit centre at Cappanalea in Killorglin, County Kerry. Unfortunately, due to a shift in policy from the Department of Labour, this centre is now in danger of being closed and I would earnestly request that the Department of Education would ensure that the centre is kept open until such time as the responsibility for this centre is handed over to the Department of Education. Other centres can be constructed throughout the country, particularly on State lands adjacent to rivers, lakes and mountains. With proper promotion these could become excellent tourist attractions.

An Leas-Chathaoirleach

I do not like interrupting a colleague, but would the Senator come back to the matter of the National Development Corporation?

I am talking about the National Development Corporation and tourism.

An Leas-Chathaoirleach

The Senator was referring to so many Departments that I found it hard to keep track of him.

I mentioned Cappanalea, which is in danger of being closed and which has been very successful. It is a matter which was brought up in the other House recently. With proper promotion such centres as Cappanalea could become major and excellent tourist attractions, especially today with increased emphasis on healthy life styles and pollution-free environments. Such centres could become self-catering and become havens of tranquility.

The NDC could also play a major role in the promotion and support of R and D programmes in manufacturing industry. Mention has been made already about the possibilities of NDC involvement in both these areas. Every manufacturing firm, if it is to survive, must introduce new products to the market-place on a regular basis to replace existing products which are sliding down the slope of technological decline towards obsolescence. Unless a manufacturing firm is structurally strong, with a sufficient equity base to finance R and D programmes for new products and to seek out new products and then have a sufficiently committed management to do both these tasks, it will inevitably go to the wall and produce the misery of unemployment for its work force. It is a matter of concern that a significant portion of Ireland's export-orientated industry is of the manufacturing only branch plant variety where the R and D laboratories which produce the new products are located outside Ireland. In the case of such international firms the managers who plan strategies for picking manufacturing locations for new products have the whole world to choose from, and Ireland will not be chosen as a location purely on the basis of sentiment. While on the subject of R and D, I am glad that two centres have been set up in Tralee recently, one by Kerry Co-Op and another by a German firm, Beru, which will concentrate on research and development. This is a very welcome departure for Irish firms.

People may ask — and again mention was made of this aspect in this House today — where will the innovative ideas come from. I have no doubt that they are in abundance. This is proved, for example, by a visit to the Young Scientist of the Year Exhibition in the RDS early in January, where 600 young people brought 450 projects to a level where they are capable of public display. In the regional technical colleges young adults, especially those in third year NCA diploma courses, do major projects each year many of which could be commercialised as new manufactured products. I am sure that similar projects are being carried out in the universities and the higher education colleges. I am familiar with this from the agricultural engineering diploma course in Tralee RDC. I am sure there are similar projects in the universities and research institutes.

Many people working with manufacturing firms have ideas for new products or for significant improvements of existing products. Many people in secure employment who are in their late 20s or 30s and who are potential winners, could be encouraged if they got support to go it alone. In this instance the NDC could offer them a source of support if they venture out on their own. I would recommend that young people sell their ideas to structurally strong firms rather than trying to make a commercail go of it on their own. It may be hard to do this but it would be much more practical and they may seek royalties or a job in the firm which they sell their ideas to.

I should also like to mention the extensive laboratory and workshop facilities of the regional technical colleges which must be harnessed in a systematic programme of releasing the innovative talents and ideas of so many of our people. Innovation parks, one stop shops and similar structures should be placed beside these colleges. This would mean that good ideas could be brought through the research and development phase to the stage where the new NDC could give it serious consideration. This idea could take place in any one of the 11 towns or cities with third level business, science and engineering facilities. This regionally dispersed set of laboratories and workshops forms a powerful national network of great importance to the development of the NDC and I hope that the NDC board will work very closely with the colleges and universities towards the development of future ideas. This is vital for its success.

I return again to the need to tackle job creation by encouraging innovation in enterprise in individuals and more particularly in structurally strong firms. If the NDC either act alone or in co-operation with other sources of venture capital turn these innovations into marketable products particularly for the export market. then I feel we will make worthwhile inroads into the creation of some of the 19,000 to 23,000 new jobs per annum just to let current unemployment figures stand still. If the NDC get a snowball effect rolling, which I fear they will not. then I do not doubt that we will also reduce the high figure of 244,000 at present unemployed despite the gloomy recent predictions of the OECD and EC.

I welcome the Bill. I see in it real possibilities if the goodwill of both the private sector and the public sector are totally behind it and if there is co-operation between both sectors. Otherwise, from the arguments put forward by various Senators here today and especially on the other side of the House, I fear for its future success. I feel that the country and the various institutions have been demanding this type of body for so long that it would be unfortunate now if it was not given an opportunity to succeed. I earnestly request the Opposition to give it this chance and, with the co-operation of all concerned, I feel we could have very significant effects and make a significant impact in the unemployment situation for the future.

I certainly do not want to go down the ideological road because the question of job creation and unemployment is much too serious to get any hang-ups about it. Having said that, one must at least sketch in what has been happening in society, particularly western industrialised society and the effect that that has had on the unemployment situation. That is the kind of road that I should like to go down and certainly not on the basis of any hang-ups. In 1956, 30 years ago, the proportion of the population over 65 years, for example, was exceptionally high and the proportion of working age correspondingly low. We complained then that the failure of the population to expand gave rise to economic difficulties. We also complained that, notwithstanding the flood of emigration, large scale unemployment persisted.

We were complaining on two fronts. At that time 7 per cent of the insured population or 71,800 people were unemployed which at the time was six times more than the British rate. Had the British rate been similar to ours on that occasion, they would have had one and a half million people unemployed. They had 250,000 people unemployed. The fundamental cause of emigration is economic. It was so in the mid-fifties and in the sense of leading into the question of the NDC and job creation, one could say that under the system and on the basis on which they operate, western industrialised society does not seem to have changed very much. All that has happened is that the emphasis has got that bit worse.

All we can see in this society is that jobs are being swept away, not by the thousands but by the millions. That is happening in the industrialised countries. On the other hand, the Third World seems to be the beneficiary. For example, the less developed countries are in a position to tear down their barriers to trade. They have plenty of labour at a cheap price. They could offer low costs and exceptional tax concessions, and safety and everything else went by the board. You could say they graduated to be called the newly industrialised countries. Not only did they become the suppliers of the raw materials but they started to export manufacturing goods.

While this remarkable thing was happening in Singapore and places like that, around 1973, the corresponding period, when they were booming, 3.5 per cent of a labour force of 320 million people in the western industrialised countries were out of work. By 1975 in the OECD countries that had risen to 5 per cent. In the EC countries the unemployment actually doubled between 1973 and 1976 from 2.6 million to 5.2 million. What was the reaction of the economists at the time? They claimed that this was a temporary thing. They blamed it on the doubling of the oil prices by the OPEC nations but I think we all know that this was not true because the trend has continued no matter what has happened to oil prices.

At present unemployment in the OECD stands at 30.5 million or 8.4 per cent. The European figures are even grimmer. For example, in the EC unemployment was 12.2 million last year or 10.3 per cent. That is the highest since the depression began. We are talking about job creation and whether it is through a national development corporation or anything else, this question of unemployment is not temporary, What we are dealing with is persistent mass unemployment and it will spread. In order to do something about it, the western industrialised countries will have to create anything up to three million jobs per year in the 1980s not to wipe unemployment out completely but to make it less acute. I do not think you are ever going to get the situation where you can wipe out unemployment.

Economists will give you different reasons. Some of them will give you the micro chip as a reason. When we first heard about the micro chip we were told as trade union officials not to worry about the coming technology, that we would create more jobs and that more money would be available. But as we know, the micro chip destroyed jobs. It was supposed to create jobs as well, so the losses and the gains did not balance out with the coming of technology. It changes so rapidly from year to year that there is no way technology will be the answer to unemployment. The frightening thing is that there is no cure. I say that within the capitalist system alone there is no cure. Even working with the State and the State taking the initiative that it is about to embark on now, I believe that we will still be in difficulties over unemployment but I see it as a necessary step and, therefore, I must welcome it.

We are in an unfortunate position. We are not like the Third World or the underdeveloped countries such as Singapore. We cannot put up trade barriers to fight off competition, because on the one hand it is argued that competition is good for creating jobs and wealth, so therefore it would be a contradiction if we tried to put up trade barriers and, besides, we cannot put up such barriers because we are a member of the European Community. A case can be made against import controls.

We have to realise that unemployment remains a serious problem. It is inevitably a live political issue during election time. It is a very distressing indignity to the unemployed. The Labour Party, whether they are in Opposition or in Government, always acknowledged their responsibility for contributing to a solution to the problem of the rising unemployment or job creation. They press for the implementation of policies that would assist in bringing about some solution to it. Hence, we believe for a long time — it is not new and it has been said from the rooftops since 1969 — that public sector enterprise must lead the way. We have argued that a substantially large role for public sector enterprise in the achievement of full employment was essential.

As Senator Ross said, there is great animosity towards the public sector getting involved directly in the creation of jobs. This has been the experience down the years. Successive Irish Governments have constrained the public sector and they have never allowed them to make their full contribution towards the economic life. Despite many of the constraints imposed, we have seen many State companies that have shown good imagination. I am not suggesting that they are all on cue at the moment, but over the years they have done a very good job. They showed great initiative in discharging their responsibilities.

Whenever we try to put the argument forward, what is thrown back to us is that State enterprises that are likely to operate in a deficit situation. The reality is that many of those companies in this position are by statute rightly required to have regard to social needs. We just cannot throw that away; it is there. Obviously, they should be responsive in relation to the commercial needs as well. It is not always the fact that they are not responsive to the commercial needs. In fact, they have been very successful in some areas. In many cases there is inefficiency at the top by people who were appointed there. It is not necessarily attributable to the work force alone or to the fact that they did not respond to the commercial aspects of their own responsibilities.

Public sector enterprises have made and can make an important contribution to the development of our economy. It is an unfortunate road that we travel when we make this argument about State enterprise. I should like to point out that not too long ago there were 100,000 people employed in 20 main trading public enterprises in the Republic. Many of them were making contributions to employment and to the development of the economy. I speak of Aer Lingus. When I thought about this first I could have spoken of Irish Shipping, but unfortunately things went sour there. I am not going down that road, but it was a very successful company. I should like to mention Bord na Móna, the Electricity Supply Board and the Agricultural Credit Corporation. They were all very successful enterprises. They have outstanding records not just in satisfying the minimum statutory obligations on them but in extending their activities and employment into wider fields of enterprise. Looking at the lack of opportunity that has been given to it, one will see that in the manufacturing sector there are only about 6,000 people or 3 per cent employed there. The scope for this sector to develop on the manufacturing side has always been limited.

Senator Ross was critical of the Labour Party putting pressure on their Coalition partners. Of course, they did. It was not accepted blindly. There are 15 Cabinet Ministers. There are many backbenchers and many people were consulted. The Labour Party always campaigned for this. It is not new and they did not have to wait until they went into Government. The commitment is there to the National Development Corporation to spearhead the development of the public sector enterprise. The trade union movement supported it and continue to do so. In fairness to the Government, no matter what reservations were expressed in the early stages of it or what alterations may have taken place, the Government did take action in this area and they did not allow considerations of political partisanship to blind them to the job creation potential of the public sector. It has become reality now that the job cannot be done by the private sector alone.

Having regard to the background of western industrialised society and the state it is in with regard to employment and lack of job creation, the climate for such an initiative for any Government was never more favourable. When one hears of money being put into State enterprises one would think there was no money thrown into the private companies, I should like if somebody could point out ten companies in this country that have not had substantial handouts from the Government in one way or another either directly or indirectly. There is a contradiction. For example, if there was reorganisation or an introduction of new technology, as long as it was being done for export reasons very substantial grants were available. Those grants were given to companies — this is the irony of the whole thing — so that they could introduce this new technology so that the new technology could lay people off for whom the State would again have to take responsibility. It was a double edged thing. Where do you go in this argument? Has anybody ever calculated what actually goes into private enterprise only? Does it not become a little bit ridiculous to be talking about private and public enterprise in the final analysis? I doubt it very much if the figures could be got together. I admit you may be able to draw the line when it comes to the question of risk capital where people may, in fact, lose. In general, the private sector does as well out of the Government as any of the State sectors do.

One of the problems, of course, with most Governments down through the years was that planning was a dirty word in the private enterprise system. If one talked about planning for economic recovery, people were liable to pour scorn on you. We hear it being used quite a lot now but one begins to wonder whether we are still talking about programming or actually planning. Where are the permanent structures established to ensure economic and social planning? Not too long ago we were talking about an unemployment task force of key economic Ministers, led by the Taoiseach and the Tánaiste, who would share the initiative for the immediate employment generating process. I do not know what is happening at present but that was bandied about.

On the question of the new employment task force that was talked about some years ago, the intention then, as I understood it, was to work with a new national planning board composed of a small number of experts, persons of national repute who were to reflect the general economic and social interests. This task force plus the National Planning Board, had it become a reality, would have worked through sectoral committees in each area of economic activity. They would bring together Government, management, workers and farming interests in joint employment planning exercises to maximise output and employment. I do not think that became a reality. It ran into too many crisis situations. By the very nature of society and the rate and pace of change in society which have their effects on Government that situation never developed. The way is still open to some degree for this sort of task force, the National Planning Board and the sectoral committees to do much more in the nature of the creation of jobs.

Possibly, within the scope of the National Development Corporation this is something that might be looked at. They can have short term aims about planned economic recovery. The best advice is available from industry and agriculture. I am not going to say that they can take advantage of the upturn in world trade. Quite frankly, I have been listening to that for the last few years and there are no signs of it. If the figures I gave earlier are correct, or nearly correct, there is certainly no upturn. Nevertheless, I still think that within the context of our own economy there is a role for a task force of this nature. They can do much in the short term.

When we talk about planning we say it differently from other people. We are not talking about budgetary projections. We talk about the positive harnessing in the most effective way possible of all the available resources. For example, we would not be too carried away by a laissez-faire White Paper which drew up targets and no procedures for actually achieving them. That is our experience of many of the White Papers. Our ideal would be to set out objectives and examine their feasibility and consistency. We would look at bottlenecks through expansion. We would identify them. We would look at the broad targets such as industrial output, break them down sector by sector and again examine those for feasibility. We would have a continuous system of feedback from the firms and sectors which would be set up so that there would be a continual review of the programme targets and their achievements. There are many things to be done in planning but the type of thing we get in White Papers falls very far short of planning in the sense that the Labour Party would see it.

We would have regard to the NDC and what makes it relevant in such a situation. We would look to the achievements of the plan's targets. We would see that it would be facilitated by the increasing of the role of State enterprises. We would take steps to ensure that direct public expenditure and the activities of State bodies would implement the plan. That would be our attitude to planning. I do not think that would be consistent with the other parties but it would be our plan. I do not go down the ideological road but I see that as being a logical way of dealing with planning. We are in a crisis with regard to job creation and unemployment. You have now got to think seriously ahead. We have an age problem at present, a great imbalance in age with a dependancy ratio, for example, of about five to two. On the one hand we have the social welfare recipient and on the other the unemployed youth under 25 years of age. Quite frankly, that is a problem that is going to stay with us until the end of the century.

It is getting bigger.

I would have to agree with the Senator. It is a very serious problem. That is why the State cannot be kept out of it any longer and why it is not a question of ideology any longer. It is a question of reality. What has happened in the past with regard to the public sector is that they were confined to two roles. They were confined to the role of providing utilities where a private monopoly would be socially dangerous and to providing services or developing resources which private enterprise had failed to promote and develop on grounds of unprofitability. Naturally, this was never expressed in the coherent statement of the State's role in the economy but there was wide acceptance of the real, if unarticulated, limits on the scope of State economic activity.

The public sector has been developed in such a way as not to interfere with private enterprise. It has been designed to conform with market criteria. There has been no formulation of the social role of the semi-State bodies. In the past — and I will reiterate there were some inefficiencies — most management teams were judged on a straightforward profit and loss basis as if they were only in the business of making money for private shareholders. That is not what they were actually set up for. There was a failure to find the social benefits which accrue from their operations. Possibly, this led to some sort of managerial paralysis. Consequently, I am describing it as a sort of inefficiency in high places. I wonder am I right? That is what it looked like to the man on the street. Possibly, by the way they were nobbled they were paralysed in this respect.

I say that in this context. The business world do not want State enterprise as a competitor, they only want it as a support. We can see that from Senator Ross's contribution today. Successive Governments have supported this demand. For example, the Erin Foods situation was very badly damaged. When one looks back to it there were many restrictions imposed on Erin Foods by the Department of Finance. Those restrictions actually prevented Erin Foods from competing in the home market. They were doing their trick for exports and everything was all right. Even in their existing product lines there were restrictions on them to compete in the market. The Department seemed to hold the view that they could compete with private enterprise in the export market but certainly not on the home market. This obviously affected the scale of economies.

Apart from the open hostility or antagonism towards semi-State development there was also the covert opposition to what was there. It is still there in some official circles, notwithstanding the involvement of the Labour Party in Government, and I am not talking about our colleagues in Government. It can be found somewhere near the Central Bank. There may be a little bit in the Department of Finance. There is opposition that we have to overcome when we are talking about the National Development Corporation. That is where we have to overcome the opposition and deal with the question of ideas on the grounds of sheer necessity. The whole anomaly of the employment problem and the transparent failure of existing reliance on private enterprise to generate sufficient employment must be hammered home so persistently that even the strongest opponents of the idea must be overcome. We are in too critical a situation. We are here to solve problems and create jobs.

Opposition to State enterprise, for example, could be overcome. The National Development Corporation can make a beginning. It can be overcome at a technical level. It can be used as a technique for solving the problems rather than expressing an ideology. To do so it must be related to its potential. It cannot be denied its potential. I do not think I will go any further on this. I have covered it very substantially and I have got the points across that I wish to make. To be worrying about ideologies when you come to look at human misery must be frowned on by everybody. I would like to say to those people in this House who may have been critical of the pressure put on by the Labour Party to bring about the National Development Corporation that as long as there is no work for a family, as long as there is a family without a home, as long as a man or a woman are in badly paid jobs and conditions, as long as there is a sick patient waiting in a queue for hospital treatment, as long as there is someone suffering from discrimination, as long as wealth is not being properly distributed, as long as education at a higher level is being denied to the working classes, there will be a role for the Labour Party. That role exists and we make no apologies to Senator Ross or anybody else for enunciating it loudly and clearly.

A great deal has been spoken in recent days on this National Development Corporation. In regard to one point which Senator Harte made in his closing remarks, it is terribly relevant that we bear in mind the situation that confronts the unemployed. They are very concerned as to who is going to meet their very urgent need of getting employment. That is important. This National Development Corporation, which has been discussed at great length in both Houses, clearly is put forward and presented as a positive and definite initiative on the part of the Government to tackle very seriously the question of unemployment and the generation of a healthy climate for enterprise development. Therefore, it is incumbent on everybody involved in the whole political scene to lend his or her weight to the success of this effort. I wish the National Development Corporation well. I earnestly believe that it can succeed. I advisedly use the words "can succeed" because I am firmly convinced that it is going to require a great deal of unity of effort on the part of all parties concerned to make sure that the National Development Corporation does succeed along the route it is following and in regard to the various areas that it aspires to cover. As is set out in section 10 of the Bill, it is a very wide-ranging Bill, its objectives are extremely wide-ranging. There is absolutely no restriction on the type of enterprise and the type of developmental area in which the National Development Corporation can engage. There are, of course, certain very wise restrictions stipulated that the corporation cannot be involved in situations of rescue. That makes a great deal of sense. One point I would like to make quite clear is that as is clearly outlined in various aspects of the Bill and in the addresses from the Minister in this and in the other House, there is no conflict between the objectives of, for example, the IDA, SFADCo, CTT or any other agencies and the National Development Corporation as is now put forward.

The definition of enterprise is extremely important. It extends right across the spectrum, including the whole industrial area, manufacturing services, the whole tourist area, the whole agricultural area in its various forms, primary production level, processing level, marketing level — indeed, it embraces the whole area of natural resources. For that reason we must be very mindful of the extent and scope of this legislation put forward by the Government.

I have already referred to the plight of those unemployed persons. In this country at present we have, regrettably, a figure in excess of 230,000 persons unemployed. That is the official figure for the live register. For the whole European Community we have a figure of something in excess of 17 million people unemployed. In regard to our own situation, which is the one we are predominantly concerned with, we must be mindful of the scene around us. There is no doubt that solving or partly solving the unemployment problem is and must remain a top priority for our Government in the time ahead. We will find it extremely difficult to get back to what we knew as full employment in the past. That is a reality we must acknowledge and recognise. However, our best efforts can make a very positive dent on this massive unemployment figure. Unfortunately, it is unlikely that we will achieve the level of full employment we knew in the past.

That will bring despair to many people.

I would remind Senator Fitzsimons of the reality of the situation. We would be dishonest as a Government to say that in the space of the next few years we will totally obliterate the unemployment situation. There will always be a certain amount of unemployment in existence. It is our duty — both the parties in Government and those in opposition — to make sure that we reduce to the lowest level possible the numbers unemployed. I do not think that that kind of objective, in spite of what Senator Fitzsimons says, can in any way bring despair or despondency to people if we are clearly seen to be tackling this in a positive and meaningful manner and achieving results. There is no point in tackling something if you are not getting the results. I am confident that the NDC, when it is functioning fully and performing well, will achieve those results. There is no doubt about that.

It is important to bear in mind that this legislation does not suggest any exclusive rights for the involvement of persons from the public sector or the private sector. It envisages the public sector being involved in job creation. It can do this in partnership with the private sector in joint ventures or in co-operation with State-sponsored enterprises. It is important to have latitude to allow problems to be dealt with by the appropriate methods as the situation warrants. Clearly within the Bill there is an awareness, expressed by the Minister in his remarks, of the plight of these young people who make up part of this vast number of unemployed persons. There is a positive intent to try to get those young people working again.

Coupled with giving back jobs to people, the whole matter of confidence arises. It is vital that we regard this aspect very fully. We are not just providing a job; we are giving dignity back to the people. We are giving them their right to have a meaningful job, to perform a function and not have to live on handouts, something they would be happier to do without. I acknowledge very fully that in the absence of jobs being available to people they have to be assisted by social welfare and other such methods. But it is regrettable that we have so many people who are relying on social welfare. It is relevant to mention it in this context that there is a certain proportion of the official number of unemployed who are working in what is known as the black economy. According to studies that have been carred out, we have something like £2 billion which is not going through the tax system. It is estimated that we have approximately 100,000 persons who, in addition to obtaining social welfare benefits, are working as well. I am not suggesting that these people are not in need of the money, but there is an element of exploitation which requires urgent attention. Many people do exploit the system. When we talk about the black economy it would be inappropriate to confine one's remarks to the PAYE workers and social welfare recipients; we must consider in the same context the position of the self-employed, the people in professions and businesses and so on who are evading the payment of tax which they should be contributing to the State.

I have already mentioned the area of agriculture, forestry and fisheries and so on. I would like to home in on a few of these areas. There is vast potential for development in the area of fisheries and forestry. It is an area where a body like the NDC can contribute very significantly to meaningful developments. Likewise in the whole agricultural area there is vast potential and scope for a body such as the NDC. We have a very important area of import substitution whereby a sizeable amount of our imports in the food sector can be replaced by home produced foods. This is a matter which has been referred to in this House before. It needs constant referring to until such time as positive action is taken. The potential for the replacement of a big proportion of our food imports, both for human consumption and animal feed, is quite sizeable. One is talking of approximately £300 million in value. That is the amount of substitution one could make of a total bill in excess of £800 million. You are talking about a very substantial proportion of import substitution which can be made by our producing what is required at home. It would help our balance of payments and also help the whole area of employment which is vital at this time.

In conjunction with import substitution there is the vast area of added value which is talked about very frequently but which unfortunately in many instances does not get beyond that stage. Most of our products are being exported in a very raw state, a state very far from the completed product that the housewife would require, whether in the form of food or some other product. There are many good examples of this but the one I have referred to as the clearest example of all is the side of beef exported from the meat plant as against sending out that side of beef when it has been processed in various stages further down the line and nearer to the consumer needs. There are many other examples.

We must recognise that we have a problem with regard to unemployment which demands new and definite approaches and the adoption of new systems that have not been applied up to now. Only in that way can we bring about the sort of radical improvements required. The NDC can play a very vital role particularly in the whole area of small industries. It is important that the target would be the helping of small industries. If the objective could be to help as many small industries as possible, it would be a step in the right direction. The Minister indicated that the upper limit of £2½ million is the amount he can approve. Government sanction is required for anything over that amount. Up to £1 million can be spent without ministerial sanction. Those are important safeguards.

I would envisage much lower levels of investments to a much larger number of industries or projects. I would be talking about assistance in many instances, not necessarily as a definite and inflexible rule, of £300,000 or £400,000 to units employing up to 100 persons. There would obviously have to be variations in that regard. The Government, by its positive stipulation with regard to the upper limit of £2½ million and £1 million, is clearly mindful that there is no question that the £300 million being made available to the NDC is going to be spent on five, six or seven different projects. That is not going to be the case. It would be very wrong if it were so.

I mentioned earlier the position of the IDA, SFADCo, CTT and other vitally important established agencies. I am satisfied that the NDC will fit in and complement those agencies which, in their own way, have done a very good job for the country. There is now an opportunity to invest with the State. This is a new and welcome development. The Bill clearly outlines the area of natural resources, our land, forests and seas. Emphasis has been laid upon the potential that exists in these areas. This could not be overstressed because we have only scratched the surface in getting from these different areas the potential they are capable of yielding. Because of our soil type, our climate and our expertise, the development of those resources is possible.

Over the years many industries have gone to the wall due to lack of finance at the correct level of interest. This is something that has to be acknowledged. While the NDC is not intended as something to prop up lame ducks it is going to perform a very vital function in giving capital assistance to what are potentially viable units. As I said earlier the NDC can carry out this type of operation either on its own or on a joint venture basis. In the eighties we must be conscious that we are in a new era compared with what existed in the sixties and seventies, when we had a very buoyant situation. For that reason we must not in any way sit on our oars because it is essential that we acknowledge that buoyancy and recognise that we are in a different economic and social era. It is a totally new ball game. This is why a new strategy is now required. What would have been successful in the seventies and sixties would not succeed today and would not give the results that are required.

This body will have great scope to involve itself in the whole area of research and development. That is important because the identification of worthwhile projects is a very important area and research into it is vital. It is leaving room for a good imaginative spirit and the right investigatory approach to be carried out by all concerned. We should recognise that there is a big replacement of money required on an annual basis in order to keep our fixed assets. This is something which very often has been overlooked. Overall we would be talking about £1.000 million being required to replace fixed assets on an annual basis.

Reference was made by a previous speaker to the semi-State companies that have existed in the past and that have performed well. I would share the view that a lot of our semi-State agencies have over the last 30 or 40 years, from the time of their coming into being, contributed quite well to the development of this economy. They have helped enormously in employment and other areas. For example, the ACC and Aer Lingus have made a vital contribution to this State. I link them together because they were both established in 1937. Bord na Móna was established in 1946, the B & I in 1965, Ceimicí Teoranta in 1938, the Irish Sugar Company in 1933, CIE in 1945, the ESB in 1927 and Irish Life in 1939. These various bodies have in their own way done a good job, but times have now changed and changed dramatically. It is therefore vital that we take a new look at this situation because what was appropriate at the time of the formation of these bodies is no longer relevant.

A vital question is the financing of the NDC. Various possibilities could be talked about such as flotation on the Stock Exchange for funds. Unless this was Government backed there would not be great support for it. There could be an Exchequer loan towards it, but with our national debt at £22.5 billion that would not be a great possibility. The financing of this corporation will have to be examined in great detail because we must have regard to the present state of the economy and the present serious lack of funds for investment. We are talking about a substantial sum of money if the NDC is going to get off the ground. It would be a sad situation if good ideas and good projects were to be inhibited for lack of finance.

Some speakers earlier referred to the make-up of the NDC. I would stress that at board level and indeed at executive level it is essential that we have nothing but people of the highest calibre to do the job. The Minister, Deputy Bruton, is on record as giving a very positive assurance that directors and others would not be picked on political grounds. That is the way it ought to be. It is the way a Government faced with a very serious matter should approach a situation like this. But there will still be a great challenge for these people — I expect that we will have nothing but the best people making up the board of directors and acting as managers and executives — to carry out the various objectives of the NDC. We are at a stage now where hope and confidence is needed.

Finally, I want to refer to some of the objectives as stated in section 10 of the Bill. In some way this sets out what the Bill proposes to do. There are quite a number of objectives and I propose to refer to just a few of them. The first objective of the National Development Corporation will be to establish either alone or in co-operation with a State-sponsored commercial enterprise any enterprise which in the opinion of the corporation is capable of becoming profitable and efficient and has reasonable prospects for profitability, development, expansion, growth or providing viable employment.

Their second objective is to invest, in consultation where appropriate with State-sponsored bodies, in any enterprise, including any enterprise which is wholly or partly owned by a State-sponsored commercial enterprise, which in the opinion of the corporation is profitable and efficient or capable of becoming profitable and efficient and has reasonable prospects for profitability, development, expansion, growth or providing viable employment.

The third objective is to manage, assist, financially or otherwise, including by participation in joint ventures, in the establishment, promotion and development of any enterprise, including any enterprise which is wholly or partly owned by a State-sponsored commercial enterprise, which in the opinion of the corporation is profitable and efficient or capable of becoming profitable and efficient and has reasonable prospects for profitability, development, expansion, growth or providing viable employment. Fourthly, to invest in any enterprise which is being established or has been established to cater for tourists which in the opinion of the corporation is profitable and efficient or capable of becoming profitable and efficient and has reasonable prospects for profitability, development, expansion, growth or providing viable employment.

There are just two other objectives I want to make reference to: to assist, financially or otherwise, manage or act as a holding company for any State-sponsored commercial enterprise established after the passing of this Act which in the opinion of the corporation is capable of becoming profitable and efficient and has reasonable prospects for profitability, development, expansion, growth or providing viable employment. The final one is to assist, financially or otherwise, manage or act as a holding company for any enterprise established by a State-sponsored commercial body which in the opinion of the corporation is profitable and efficient or capable of becoming profitable and efficient and has reasonable prospects for profitability, development, expansion, growth or providing viable employment.

There are six further main objectives which I will not go into, but that does not take from their importance or relevance. The main point I would emphasise is that with these very clear objectives stress is positively laid on something that has potential for viability and is going to yield the results. I appeal to everybody to lend their support and to give their assistance to ensure that this legislation brought in by the Government does have the results that it sets out to achieve. Before I conclude, I would like to pay tribute to the Minister of State, Deputy Collins, for his input into this whole area, together with the Minister for Industry, Trade, Commerce and Tourism at the time, Deputy John Bruton. A very fine job has been done here and we must as politicians lend our full support to making sure that the results set out in this document are achieved.

I sincerely welcome the Bill, which I believe will make a major contribution towards alleviating the problem of unemployment. I do not, however, subscribe to the pessimistic viewpoint expressed by Senator Ross in his contribution that this Bill will falter and that it will not achieve its objective. I honestly believe that it will be a major success and will make a vast contribution to the creation of jobs.

There are a number of key sections to the Bill which I hope to discuss. Section 10 sets out at some length the principal objectives of the corporation. I do not hope to go down through all the items in section 10 but just one or two of them. In all of its investments the corporation will be required to act in a commercial manner and investments may be made only in enterprises which are profitable and efficient or capable of becoming profitable or efficient or providing viable employment. Investments may be undertaken directly by the corporation or in joint ventures with the private sector or in co-operation with a State-sponsored commercial enterprise. The section also requires the corporation to establish an investment fund known as its revolving investment fund for employment. Section 10 is very comprehensive and covers the development of the indigenous resource sector of the economy, particularly in relation to agriculture, fisheries and forestry resources.

I hope one of the first steps of the National Development Corporation will be to examine the food processing industry. Many experts who examined this industry said there is a potential there for the creation of up to 25,000 new jobs if the industry is developed and the products marketed properly. There is no doubt that agriculture is our greatest natural resource. There is immense scope for the development of a modern food processing industry. There is room for intervention by the National Development Corporation in this regard. The fact that we have not been able to develop the food processing industry to its full potential is an indication that State development agencies have either been unwilling or unable to get involved to the fullest degree.

Other speakers have mentioned the role which the National Development Corporation could take in relation to afforestation. We had a debate in this House before Christmas on afforestation, so I do not want to go into it in depth. Our forests have been neglected since the foundation of the State. We do not have a proper timber processing industry. We import an enormous amount of timber every year which runs into millions of pounds. There is need for a new approach to the development of afforestation and a national timber processing industry. The NDC could set up a holding company which would promote a more vigorous tree planting policy, organise our forests properly and establish a timber processing industry. For far too long we have failed to recognise the tremendous potential and opportunities which lie in the forestry industry, such as job creation, developing the industry and preventing imports of timber.

The National Development Corporation can play a vital role in developing our fishing industry. Much of the achievements in this area to date have only been piecemeal. I hope the NDC will bring about a more uniform approach. We are an island situated in the midst of some of the richest fishing grounds in the world and it will be our own fault if we continue to allow other nations to capitalise on what is effectively one of our greatest national resources. Unfortunately, we have not taken advantage of this natural resource. We have not developed it or created the opportunities for jobs in the processing of fish. This is an area in which the NDC can play a major role, together with private investment, in bringing in modern techniques to develop the fishing industry and creating the maximum number of jobs.

The NDC can also play a major role in tourism as we have only touched the tip of the iceberg in this regard. As a member of the Oireachtas Joint Committee on Small Businesses, we recently produced a report on tourism. We also discussed the recent White Paper on Tourism in this House. It was the general consensus that tourism, which is our third largest industry, has up to now been neglected by successive Governments in comparison with agriculture and general industry. The NDC should participate in a new imaginative dynamic tourism development project. The time is coming when people will have more leisure hours and longer holidays. This means that tourism and its servicing will become more important and more competitive. This is an area in which Ireland must not slip behind. People involved in tourism lay great emphasis on the fact that the NDC could help them to build a tourism infrastructure. They are talking, not only for grants but of expanding hotels and leisure facilities and also road infrastructure to make travel easier and more attractive. They are talking about the provision of clean, hygienic and well-serviced camping sites to cater for the young tourists who visit here without much spending money. Statistics have shown that this is one of the greatest growth areas in holidaymakers right across the continent of Europe. The NDC could make a contribution in this area and make it a principal source of income.

There has been much comment that the NDC will be a duplication of other State agencies such as the IDA, Údarás na Gaeltachta, SFADCo, Fóir Teoranta, and so on and it is said that we will be on a collision course with some of their objectives. However, as laid down in the Bill the principal function of the NDC will be to take an equity stake in industry by investing in suitable projects, some of which I have already mentioned, with a capability of providing sustainable and viable employment opportunities. They will not be empowered to make grants available to industry as are the IDA and Údarás na Gaeltachta. Their powers to give loans will be limited and may be exercised only in the specific circumstances laid down in the Bill.

Fóir Teoranta is a State rescue agency whose objectives are very different from those laid down for the NDC. I am satisfied that the Minister has spelt out that there will not be any overlapping of functions with existing State agencies.

The IDA was set up 30 years ago. It has done a tremendous job and made a valuable contribution to industrial development and job creation. I live in a Gaeltacht area. I am very familiar with the workings of Údarás na Gaeltachta. Despite the much-maligned activities of Udarás in other directions, there is no doubt that the work they are engaged in is first-class and an ideal prototype of what the NDC should be doing. Údarás differ from the IDA and SFADCo to the extent that while the latter two bodies provide funds for investment and grantaiding, Údarás go a step further and take equity shareholding in some companies over and above a special level of investment. This is a type of enterprise which I would foresee as the prototype for the National Development Corporation.

The Minister referred to the limiting of the level of investment in any company. It is only right and proper that this should be the case. If the figure goes above £1 million there must be consultation with the Minister. That safeguard has been built into the Bill. Reference has also been made by the Opposition to the authorised share capital of £300 million as distinct from the issued share capital. Had this Bill provided for the issuing of £300 million, the Minister would have been accused of not taking proper care of the taxpayers' money. There must be careful scrutiny of the expenditure of taxpayers' money, particularly in times when money is in short supply. One has to accept that the NDC must, if it is to be worthwhile at all, make a rate of return which will be in excess of the rate of interest paid by the taxpayer on the money borrowed to finance them.

One of the major functions of the corporation is in the selection, administration and disposal of their investment. If they do not make profit, they will not be able to create jobs. One of the chief duties of the corporation is to assist in the creation of the maximum amount of viable employment. They must dispose of investments made as soon as it is financially prudent to do so, such as when there is a financial gain on the investment, thereby releasing further funds for the revolving investment fund for employment. One of the crucial factors which will determine the success of the corporation will be the level of expertise and commitment of those appointed to the board and staff.

I was glad to hear the Minister state that the nine-member board will be made up of men and women who have proven business and economic skills. The Minister hopes to attract staff of the highest calibre to carry out the work of the corporation. These people will have to work aggressively and with determination to create the employment we need so desperately, using the opportunities that have been given to them by way of this Bill.

I hope that, as a result of the debate, we will have a strengthened National Development Corporation and one that is earmarked to do a particular job, to inject equity on a minority basis as part of a programme of small business development. This is a new development and challenge. I believe we can meet that challenge, which will be of tremendous benefit for our economy and for employment.

I will be brief. The entire saga of the NDC has been one great contradiction. We have the Government whose policies have put tens of thousands of people out of work claiming to have set up a body which will eventually solve our unemployment problem. Let us remember that this is the Government who have presided over the cuts in education, health and capital spending. We are also presiding over the shutdown of countless enterprises both public and private such as Fords, Verolme and Irish Shipping, just to name a few. Because of their disastrous record in regard to employment creation, it is impossible to take this Government seriously when they talk about a new corporation to stimulate employment.

The setting up of the NDC stands in awful contrast to the monetarist policies the Government have pursued. It does so because this is the only time which the Labour Party have had an input into economic policy during the Government's lifetime. What a pity they could not have influenced the Fine Gael Party to do this at a much earlier stage. Are we seriously expected to believe that the Government will nourish the NDC and foster its growth when Fine Gael's record in this Government is one of starving the State development agencies of funds? Why should the NDC be any different especially when it is an open secret that many Government members consider it a waste of time? Not only will the NDC add to the nation's bureaucratic mess but it will further undermine the role of the existing development agencies which served the country well in the sixties and seventies.

The eighties, of course, present their own problems, and thus the National Enterprise Agency was set up. Now, for purely political reasons, the NEA is being replaced by the NDC. The NEA and the IDA could act quickly to set up enterprises now being brought under the NDC. There will be masses of paper work, and one can only hope that the Government employ some extra staff to handle this paper work. Then, at least, the NDC will have created a few new jobs.

There would be no need for the NDC if the Government made full use of the existing bodies through which there is great scope for development. With 18 per cent to 20 per cent of our workforce unemployed what the country needs is not a weak, half-hearted body to be added and given precedence over the existing development bodies but that these existing bodies be "beefed up" and allowed pursue their tasks of employment creation to the full.

I wonder how many members of the public understand the reasons behind the setting up of the NDC or understand how it is going to be funded? The funding commitment in the Bill is vague. There was no mention of the NDC in this year's budget. The truth is that the NDC has been foisted on to the Fine Gael Party of this Government unwillingly. If there was any real commitment to it, the NDC would have been established immediately after this Government came to office. Instead, we have had a compromise. This is not the first time we have had a compromise. Fine Gael have diluted the NDC so that it is virtually useless. First, it is restricted to the manufacturing industry sector. This means that areas such as construction and agriculture are ignored. Secondly, the NDC can spend no more than £1 million without the permission of the Minister for Industry and Commerce.

The Minister will have the chance to reply very soon. In effect, this means that the NDC is the Minister's puppet. Why could the Minister's Department not look after national development? After all, that is what they are there for. They do not look after national development because there is no will on the Government's part to create employment. Instead, capital spending has been slashed by 25 per cent in real terms since this Government came to power. One of the results of that is that there are almost 50,000 people now unemployed in the building industry today. The NDC is a front behind which the Government are trying to hide. They wish the NDC to carry the can for development when, in fact, this is one of the Government's functions. The Government are running away from their responsibilities for job creation and industrial development and are passing the buck concerning job creation and industrial development. They are passing the buck on to the NDC which is being set up to make it seem that the Government are doing something to counter unemployment.

I say forget about the NDC, but build on bodies that already exist, bodies like the IDA, the ICC and the NEA. We have many authorities and agencies to look after national development. They should be allowed to attend to their task instead of being held back to make room for a body which has virtually no independent power. What can the NDC do that the other agencies cannot do if the Government allowed them to function effectively?

I would like to thank Senators for their contributions on this debate. They were most constructive. I regret intervening in the course of the contribution of the last speaker. I was forced to do so because I felt he should at least be informed of the contents of the Bill. It would have been a help to himself if he had read the Bill before coming in here making inaccurate, cynical and unfounded statements on a Bill which he has obviously not considered in any great depth at all.

Most of what has been said on both sides of this House has confirmed my belief that the National Development Corporation can and, indeed, will be a major force for job creation in this country. Furthermore, it has strengthened my conviction that this legislation has struck the right balance and provided the basis for a vibrant, commercially-orientated and successful State investment agency.

I would like to comment on the content of some of the contributions which have been made in the course of the debate. Senator Fallon spoke at length about how the climate for investment in this country is all wrong, how the climate for risk-taking is all wrong, how we need to divert investment funds from non-productive sectors like property into the trade sectors of the economy, and how industry must be encouraged to rely less on borrowed capital and more and more on equity-style funding. I have yet to hear a better argued case in favour of the National Development Corporation, because that is exactly what the corporation is about.

If I have one criticism of Senator Fallon it is that he chose to ignore the very positive measures introduced by the Government with a view to improving the environment for productive investment.

The Minister, Deputy Bruton, then Minister for Industry, Trade, Commerce and Tourism, in introducing the Bill, referred to some of them in his opening speech. It is worth reminding Senators briefly of the range of action aimed at tackling the problem on a number of fronts. The measures include the business expansion scheme, tax incentives to encourage workers' shareholding, the prompting of the Stock Exchange to launch their new market for smaller companies, reduction in the rates of capital gains tax on long term investment, changes in the taxation of dividends from manufacturing companies, a new tax incentive to encourage investment in research and new product development, and proposed amendments to company law to allow for the buying back of shares.

Through the introduction of these measures, the Government have demonstrated a willingness to act positively to create the better environment for which, indeed, both Senators Fallon and Hillery spoke. Senator Fitzsimons was also of the view that this year's budget did nothing to promote a healthier investment climate. I would urge Senator Fitzsimons to reflect further on that comment of his. Three of the above measures were included in this year's budget. The tax code is under continuous review. I would not rule out the possibility of further initiatives in this area in the future. The main reason that major changes in the tax code have not taken place, on the publication of the tax reports, is the present financial budgetary situation. We are moving towards a reasoned and rational tax code reform policy. I am confident that over a period there will be substantial reform of the tax code.

The final element of the current package is, however, the establishment of the National Development Corporation. The NDC will not only be source of State funds for investment through joint ventures with the private sector, but will be in a position to encourage a less conservative approach by private institutions. For example, let us assume that the establishment of a large new manufacturing project was being proposed, provided the right investors could be found. It might not be attractive for a private investor on his own. The amount required might be enormous. The level of risk might be unacceptable. The pay-back period on the investment might be too long. The NDC however, will be an investor of "patient money". Of course, they will want to make a profit. That is the only environment in which they can invest, but they will not necessarily want to make it overnight or in the short term. They will be prepared to wait and give the project time to get on its feet. This is the advantage of the equity funding concept in the NDC Bill, that it is not strapped for cash by having to meet monthly deadlines. A further repayment of investment interest to the bank under the terms of this Bill would be a new type of approach to the nuturing of industry, particularly indigenous industry.

This long term perspective of the NDC in regard to its investments and the advantage of being able to share the risk would be an important factor in encouraging private institutions to be more progressive in their approach to investment. I will refer to this aspect at a later stage. This point also answers the question raised by Senator Connor, who suggested that there were many investors around looking to make a quick buck and asked why was this money not being diverted into industry. It is clear that the Government are trying to do just that in this Bill.

Senator Fitzsimons drew attention to a recent article in the Irish Banking Review which took a very pessimistic view of the potential of the NDC and suggested that the failure of similar agencies elsewhere in Europe, except Sweden, supported this view. The Senator added that he felt obliged to accept the advice of the experts. They are his words, not mine, in this matter. While it would not be my intention to belittle those who contribute to the Irish Banking Review, I must point out that the experts in this instance are not altogether correct. They have ignored the exploits of the MIP in Holland, which is a very successful organisation and very much in the mould of the NDC. Neither is there any mention in the article of the British Technology Group who have continued their State investment role under a Conservative Government and could certainly not be dismissed as being unsuccessful. The Swedish experience, without going further afield, and these three European countries, whose experience in promoting State equity investment industry has been very positive indeed, cannot be disregarded.

Senators Lynch, O'Donoghue and Honan touched on the level of funding of the NDC. It is not too easy to respond to the points made because Senator Lynch thought they were getting too little money to do the job efficiently, whereas Senator O'Donoghue thought they were getting too much money. The only sure thing is that we cannot, much as we would like to, please all of the people all the time. I do not wish to be flippant in this regard.

The total capital funding for 1986 is £9.5 million, of which the National Enterprise Agency gets £2 million to allow it to continue until the NDC is established. A sum of £9.5 million must be compared with £3 million spent by the NEA in 1985 and £1 million in 1984. As the NDC is intended to build and expand on the work of the agency to date, it must obviously have a greater level of funding than heretofore. However, one does not want to be overtly extravagant.

The Government's intention in regard to the funding of the NDC is aimed at protecting the commercial orientation of the corporation and encouraging development of a profitable and well-balanced portfolio of investments. This can be achieved by restricting the level of funding of the corporation in any one year to an amount necessary for it to carry out its investment programme for that year.

I would also like to point out that under section 13 (b) it is also intended that the corporation, by making a reasonable return on its investment, would ensure that funds would be available to the revolving investment fund for employment. This is also enshrined in the Bill and will allow the corporation itself to build up a revolving fund which will be internally generated for re-investment.

The NDC is not an all-new body requiring a long lead-in time before it gets a head of steam. The momentum is already there in the form of the NEA. I want to pay tribute to the work done by the NEA. The corporation will require capital funds from day-to-day. I can assure the House that the NDC will not be deprived of any funds necessary for genuine investment in companies which it is allowed to invest in, especially under section 10 of the Bill.

Given the investment programme on hands in the NEA, I do not think the level of funding provided for 1986 is either too great or too small. It is what is needed and what will be provided by the Government. Senator O'Donoghue gave us an interesting historical perspective on the NDC. Indeed, I was here for his contribution and we had a tête-á-tête. However, I feel that some of the conclusions it led him to were somewhat erroneous. Certainly, the Senator seemed to imply that because the NEA had been successful to date there was no need to set up the NDC and, particularly that there was no need to introduce legislation to do so. I contradicted him on the day he was here. I think I would subscribe, as I am sure most Members in the House would, to the concept that where we have a State agency involved in considerable sums of money it is only proper and correct that the agency should be put on a statutory basis. That is exactly what we are doing. I did not quite follow the long term logic of Senator O'Donoghue.

I think the fact that the NEA has been successful to date is a tribute to the staff of the agency, given the difficulties they have encountered. These difficulties were not of the Government's making, I hasten to add, as we have been actively encouraging the agency to get on with its job. However, difficulties have arisen because of the inadequate administration structure around which the NEA operated. These inadequacies will be eliminated by the introduction of an appropriate legislative framework. The legislation will also remove the uncertainty arising from the inappropriate funding structure which mitigated against entering into long term commitments. I think this is a point which Senator O'Donoghue missed. It is a weakness in the NEA.

Legislation is extremely desirable in the case of the NDC and similar bodies because it provides the Oireachtas with an important say in regard to the operations of the corporation. It provides also for a level of accountability in regard to what the NDC does with the taxpayers' money.

Another benefit of this legislation is the provisions regarding the giving of ministerial directives to the National Development Corporation. This touches on one of the points raised by Senator Connor, who asked if the provisions of the Bill were tight enough to avoid the NDC becoming a political pawn. I would like to refer Senators to section 31 of the Bill, which deals with this matter quite clearly in precise terms. In section 31 ministerial directives must be general in nature, may not relate to day-to-day operation of the corporation, may not relate to any particular investment in which the corporation is or may be concerned and — perhaps most importantly of all — must be given in an open manner and laid before each House of the Oireachtas.

That section of the Bill is an important section and is a section which Members of the House will be pleased with. It will remove any possibility of political interference, in the bad sense of the word. It is important that the corporation should be seen to act with independence. These provisions would preclude a Minister of the day from directing the NDC, for example, to invest in project A or project B, or to refrain from disposing of project C, or to provide for financing of project D. Also, the Minister of the day would be discouraged from giving politically sensitive directives to the NDC, because in order for such directives to have any force in law they would have to be laid before both Houses of the Oireachtas. This is the type of transparency which I think Members of both Houses will welcome. No such constraints apply in respect of the NEA because no legislation exists. This is another example, in reply to Senator O'Donoghue. of why it is vital to have a legislative framework for a body of this type. In response to Senator Connor, it is clear that the provisions I have outlined are extremely tight and should be welcomed by the House.

Senator Connor suggested that the NDC should be given a special role in regard to depressed areas of the country. I can understand the Senator's reasons for suggesting this, but we would need to consider very carefully the implications of such a move. The criteria in the Bill are the correct criteria. It is really one of viability but also the components of section 10 are certainly biased towards indigenous industries and tourism and natural resources. One aspect of section 10 which has not really been touched on in this House is (h) which refers to long term supply contracts between producers and processors. This is a very innovative subsection and I am sure it will interest many producers and processors when it comes into operation. I am satisfied that the provisions of section 10 will allow the corporation to become involved in a nationwide development and I would certainly wish it to do so. In that sense its provisions will meet with Senator Connor's wishes.

The NDC is a commercially oriented body which will aim, in all its investments, at making a profit. Its investments must be selected in accordance with the commercial criteria laid down in section 10 of this Bill. They are not intended to be, nor will they be, a rescue agency. I want to make that quite clear to the House. There is no intention of the Government using this Bill as a rescue agency. We already have a rescue agency Fóir Teoranta. I think it is doing a fine job in a very difficult economic era. This Bill is not intended as a rescue agency Bill. If they were actually given a special role in relation to hard pressed areas of the country, there is a great danger that they would become deflected away from the commercial orientation. I do not envisage, therefore, the NDC having any regional or sectoral bias imposed upon it in the sense of it becoming a rescue agency.

Senator Connor suggested that private individuals should be allowed to invest in the NDC. This is not provided for in the Bill and I do not see it as a feasible option at the outset. Perhaps, in the future this may be possible and I will certainly keep an open mind on it. However, in order for the NDC to be an attractive investment for private individuals it must itself be seen to be successful and remain committed to its commercial and profit-oriented role. After a period of years, when that is seen to be the case, then it might be possible to consider allowing private investment in the corporation.

At this point I should reply to Senator Fitzsimons's suggestion that the extent to which the NDC can depart from their commercial mandate should be detailed in the Bill. Perhaps, the Senator does not fully comprehend the binding nature of this legislation. The NDC will not be empowered to depart from commercial criteria under any circumstances. They must aim at making a profit in all of their investments. Any departure would be counter-productive and would defeat the purpose of the exercise. That does not say that every investment which the corporation will make will be a success. There will probably be failures. But to divert from the criterion of making a profit on their investment would be very wrong and it would be very wrong to enshrine that in the Bill.

Perhaps the most popular criticism of the NDC is that it will not be able to achieve anything that is not already within the ambit of the existing State agencies. Without hesitation, I would reject that opinion which is held by members of the Opposition. Senators on the opposite side of the House are clutching at straws in this case and are in danger of deceiving themselves by perpetuating this myth. There are, of course, parallels between the NDC and other agencies. So there should be. Any industrial policies whose various strands did not run parallel would be very misguided indeed. The NDC will have a role which is substantially different from that of any other State body in the industrial promotion field. A cursory examination of the respective measures will make this obvious to even the most uneducated of observers.

A recurring theme from Senators on both sides of the House was the importance of the role to be played by the board of NDC and in particular the managing director. All were in agreement that if a suitable candidate was to be found, then an appropriate salary would have to be paid to him. If this meant breaking with the traditional pay levels set by the Devlin scale, then there should be no hesitation in doing so. In reply to this point I can assure Senators that the Government intend to recruit a person fully qualified and competent for this job. The fact remains that the actual salary rate, terms and conditions of this appointment are matters for determination between the Minister and the Minister for the Public Service. The NDC did not exist when the Devlin review body examined the remuneration of the chief executive and, clearly, the appropriate level of remuneration for the NDC post will have to be considered in the light of the particular requirements of that position.

Senators — including Senators Hillery and Honan — suggested that there is nothing in this Bill to help in the creation of jobs. They say instead that there should be a better climate for investment in the infrastructure of industry. Senators should look at section 10 of the Bill. It is very comprehensive. It is wide-ranging in character. It is effective in direction. Quite clearly, it empowers the NDC to do all of the things which Senators Hillery and Honan expressed a wish to see done in this country. The arguments they have used against the Bill are, in reality, very substantial arguments in favour of the Bill.

Senator Hillery suggested that there is plenty of money but not enough projects to invest in. This is a very interesting area. There is a gross mismatching of funding for industrial enterprises. There is finance available for industries which are successful and established. There is money for those industries to expand and develop. The fact remains, however, that there is a dramatic shortage of funds for start-up or early stage projects, what we call seed or venture capital. The investment community should lower their risk thresholds in order to fill this gap. It is an important investment gap which exists. I hope the Government will be in a position — it has, indeed, taken steps — to remedy this situation. There is a mismatching of funds for new industry. It is hoped that the NDC in itself will be a major vehicle in providing this seed or patient money for such companies.

Senator Honan suggested that the NDC backed companies would have an advantage because, being State backed, they would get better credit terms and so on. The NDC will not encourage or seek such favouritism. Indeed, neither would I encourage them nor would it be desirable; it would be a departure from the commercial orientation of the NDC. It is not a valid criticism and the Fourth Company Law EEC Directive, which was introduced into the Dáil yesterday and which will require substantial disclosure by companies, will resolve any problem in this area. I do not think suppliers and bankers will regard such companies as different from any other companies who have non-State shareholders.

Senator Higgins spoke of the structure created in Sweden in the early seventies for channelling insurance funds to industry. In this country also a much greater proportion of the £450 million annually available to insurance and pension funds should be targeted at productive sectors of the economy. There is a bias for investment funds to go into gilts. There is a need to move these funds into industrial ventures. When I say industries I also mean service industry and commercial ventures. A team of consultants within my Department are currently examining this whole area. Their report is almost complete and I am confident that it will enlighten us as to the best method to be employed to achieve this aim.

Senator Higgins was also critical of the conservative nature of our banking organisations. The Senator will, no doubt, be pleased to learn that it is my Department's intention to renew dialogue with the principal banking concerns to discuss their potential contribution to our future industrial prosperity. It would be wrong of me to be critical of the commercial banks. If one reads the annual reports of the main banks, one will see in recent years substantial writeoffs in their accounts of finance provided to industry and commerce. However, there is a need for the financial institutions to change their attitude. They have a somewhat conservative approach compared with, say, their American counterparts. Investment by financial institutions in industry and commerce needs to be looked at. The banks themselves need to adopt a different view of investment.

Senator Higgins in a very wide-ranging and interesting contribution welcomed the Bill. His contribution was far more wide-ranging than that and he showed his intellectual preference for, I think, a centrally planned economy. I think that is the best way of summing up his argument in favour of a centrally planned economy or central planning in a very deep sense. It is a view he sincerely holds and is entitled to hold and I suggest that the Bill goes a long way in the industrial and natural resources area to meet the Senator's requirements in relation to the development of industry and commerce.

The Senator raised a number of points in relation to sections 8, 11 and 13 of the Bill. I have noted his comments. I do not think it would be appropriate for me to reply on Second Stage. I will be happy to deal with them on Committee Stage.

Senator Ross, who opposes the Bill on ideological grounds, doubted if commercial criteria would be applied to all investments by the NDC. This is not so. Section 10 of the Bill sets out the type of investment that the corporation can make. It will be seen quite clearly from this section that every investment by the NDC is governed by rigid criteria. Investments can only be made in enterprises which are either profitable or capable of becoming profitable. This enshrines in legislation and requirement on the corporation to act at all times in a commercial manner. It is quite clearly enshrined in the Bill and should alleviate any doubts the Senator has in that regard.

Section 13 (b) of the Bill requires the corporation to carry out their objectives in such a manner as to earn a reasonable return on any investment made by them. These criteria should be sufficient to erase any doubts which the Senator might have as to the operation of the corporation.

Senator Ross also stated that an impression is being created by Government that the NDC is the panacea for all our ills. This is not true. In both Houses Government spokesmen have been at pains to make clear that the NDC is not perceived by them to be such a panacea. It is only one, albeit a very important one, in a number of initiatives which have been taken to combat unemployment by the Government.

There has been considerable political debate on the whole question and philosophy of the NDC since the Government introduced it as a policy option in 1981. However, there is a danger of letting oneself be blinded by much ill-informed public comment on the proposal to establish the NDC. I would urge Senators on the Opposition side of this House, therefore, to reassess this legislation and to think carefully on it in the cold light of day and in the light of the debate which took place both here and in the Dáil.

It is a good, constructive and positive piece of legislation. The NDC is a new departure in terms of State involvement in industry. It can and will work. We should not allow ourselves to be frightened by the prospect of doing something new, of the State partaking in a new initiative in the provision and creation of industry, prosperity and employment. Most Senators have agreed that what we need is a climate for enterprise, and entrepreneurial spirit and a willingness to invest in the future. That is what this Bill is all about.

The Government took the reins of office in the latter end of 1982 in very difficult times and after a period of gross mismanagement of the economy from 1977 to 1981, a period which I would consider as the saddest days and years in the history of the State from a governmental and economic point of view. The Government were faced coming into office with a major budgetary crisis, a major employment crisis and a crisis of confidence.

We have made strides in relation to many fronts and in particular to inflation. We have begun our revision of the tax code. In relation to industry, we have taken many measures which I have mentioned in my response to create an environment in which industry and commerce can prosper. Our efforts will be seen to be very successful and seen to be productive.

This legislation is a major and central piece in the armoury of this Government to ensure our indigenous industry will be given an avenue for expansion. Therefore, I reject the arguments put forward by the Opposition in opposing this Bill. Their opposition to the Bill is ill-founded, ill-argued and ill-considered. They opposed the Bill in the Dáil and I understand they are opposing it here. It is unfortunate but I think it will be seen by the people as being a very narrow stance to take. This Bill is a very positive piece of legislation and I commend it to the House.

Question put.
The Seanad divided: Tá, 21; Níl, 11.

  • Belton, Luke.
  • Bulbulia, Katharine.
  • Connor, John.
  • Conway, Timmy.
  • Cregan, Denis (Dino).
  • Daly, Jack.
  • Deenihan, Jimmy.
  • Ferris, Michael.
  • FitzGerald, Alexis J.G.
  • Harte, John.
  • Higgins, Jim.
  • Higgins, Michael D.
  • Hourigan, Richard V.
  • Howlin, Brendan.
  • Kelleher, Peter.
  • Lennon, Joseph.
  • McGonagle, Stephen.
  • O'Mahony, Flor.
  • Quealy, Michael A.
  • Rogers, Brid.


  • Cassidy, Donie.
  • Ellis, John.
  • Fitzsimons, Jack.
  • Hanafin, Des.
  • Honan, Tras.
  • Lanigan, Mick.
  • Lynch, Michael.
  • McAuliffe-Ennis
  • Helena.
  • O'Toole, Martin J.
  • Ross, Shane P.N.
  • Ryan, William.
Tellers: Tá, Senators Belton and Harte; Níl, Senators Ross and Cassidy.
Question declared carried.
Committee Stage ordered for Wednesday, 26 February 1986.