It is the Government's intention to introduce in the Seanad the Bill, which gives effect to the agency restructuring following the ratification of the Culliton report, where it will be debated for three to four weeks subject to the usual constraints.
The seriousness of the problem facing this country is evident from the figures contained in Appendix 7 of the report Employment Through Enterprise, which was published in response to the Culliton report. This table gives a breakdown of the job numbers gained and lost in both Irish and foreign firms in the country over the six year period 1987 to 1992, inclusive. During that period we managed to create an impressive total of 118,500 jobs but unfortunately this was accompanied by total losses of 108,600. So effectively, the net change in the period was only just under 10,000 jobs.
In a period when unemployment figures have grown to an unprecedented level of 300,000, this net performance was not good enough, especially as foreign owned firms were responsible for whatever net gains that were made. In fact, Irish owned firms managed to lose 600 jobs in this period. It was against such a background that the Government established a task force in February 1992 to report on the implementation of the Culliton report. The Seanad will recall that it was within a period of approximately seven to eight months that the Culliton committee met and delivered its report to the then Government.
The Culliton review concluded that the performance of indigenous industry had not been adequate and they identified the deficiencies that had to be overcome to address the problem. As Culliton had considered industrial policy in a broader context than had been customary, the Government was set the task of responding in a more integrated way to ensure that our competitiveness was increased. Culliton advised that this be done by improving the working of labour markets, infrastructural services, ports, taxation and education.
The task force was chaired by Dr. Patrick Moriarty of the ESB and it reported, over the period May 1992 to January 1993, on the different issues raised in or arising from the Culliton report. The text of their deliberations together with the response of the Government was published on 3 May 1993 and this report in turn sets out the specific improvements that must be achieved in each policy area.
Every change and reform brings gains to some interests, but losses to others. Unfortunately the losers can usually identify their losses better than those who might gain can identify their own potential to benefit, but in this instance, it is my firm conviction that the gains — in terms of increased numbers of people at work — from doing better and more business will be so pervasive and in the interests of everyone, including the large numbers of people seeking work, that there must be a clear understanding now that these reforms and changes are to be carried through. For that reason, those who read this document and fear that a change or reform mandate by Government will represent a loss to them should realise that they will benefit indirectly or indeed directly, from the improved performance of the economy.
Of course, the reforms and improvements covered in the report, though essential, are not the entire public policy for business and enterprise. For stability, growth and development, the "macro" policies are important. Public expenditure, the exchange rate, the market for money, the wage formation process and the underpinnings of competitiveness are vital, as is the economic health and growth of our partner countries. While this document gives assurance of positive and determined action in upgrading and improving goods and service markets and infrastructural factors, people and businesses need reassurance also in relation to the "marco" policies and directions I have mentioned.
This Government is providing the economic policy and the stable environment for growth and improvement at home. We will contribute to the evolution of co-ordinated EC policies for business investment and expansion in Europe. Such things are not, however, the point of this document. This document is about structural and "micro" policy initiatives at the level of particular markets, and for those who operate in markets, in order to improve our national performance.
Ireland needs more entrepreneurs: people with initiative and ability to innovate and compete with the best in the international marketplace. For this reason I attach a particular importance to the Culliton group's and Moriarty Task Force's recommendations on education and training. With the Minister for Education I will be seeking to add a new enterprise dimension that those two groups correctly identified as lacking in the system at present. I agree with those groups also that a new enterprise orientation will not detract from the attainment of high academic standards or from the full, rounded, cultural, social and spiritual development of young people.
This enterprise orientation is of great importance for our long term development. Without it, other policy changes now proposed will be less effective. We need to take a clear sighted, long term view now on how to achieve a better economic performance. Education must play a role in bringing into sharper perspective what is required so that people and enterprises will work successfully. Education for enterprise is one of the most far-reaching structural changes we can make. It must be truly educating; mere learning of facts, current information or even up to the minute computer applications would be inadequate. Education for enterprise is only part, but an important part, of education for a better life in Ireland.
Training and retraining are also crucial elements of industrial and employment policy. A transition to standards based on higher skill levels will be introduced. The contribution which a highly qualified labour force can make to increase competitiveness, economic growth and employment prospects is well recognised. However, a high quality and flexible training system is also an instrument for promoting social cohesion. It is a means by which vulnerable or disadvantaged groups, including those situated in areas of high unemployment, the disabled or the elderly can be provided with an avenue back into productive and sustrainable employment.
A specific comment is appropriate on the responsibility of businesses for training. If we want to see the dynamic, innovative, competitive, expanding industry which the actions detailed in this report are aimed at promoting, then it is imperative that employees not only equal but surpass the skill levels of trade competitors. Primary responsibility for raising skill levels and improving the technical competence of those at work rests with employers and company management.
The Culliton report comments with respect to the skills gap between practice in Ireland and best practice in competitor countries, as well as the relatively low levels of training afforded to employees generally, indicate clearly a need both for a change of attitude as well as the development of new approaches in this sphere. The Government will do its part in this task. At the end of the day, however, if the deficiencies recognised by the Culliton report are to be put right, a more prominent and pro-active role will have to be undertaken by employers in their own self-interest in relation to training.
Obviously, however, it is not sufficient to have people on the ground who are motivated and capable if the conditions for doing business are not right. I believe, for example, that the Government decisions relating to the introduction of more competition into energy markets and for transparency in relation to industrial tariffs can only be good for business.
Equally, the Government's commitment to accept the recommendations in relation to the movement of goods, people and information through all our networks — roads, rail, air, telecommunications, post and ports — will have the necessary effect of reducing transport and communication costs entailed by our peripheral location. Bodies charged with overseeing these networks will be required to examine their operations with a view to increasing efficiency, introducing competition and cost reduction measures.
As can be seen from the report the Government is also committed to enabling State owned businesses to operate as such. We intend to implement the recommendations which will allow State enterprises pursue agreed strategies and business plans without excessive bureaucratic interferences. These enterprises will, in turn, be required to meet absolute standards for the competitiveness of their prices and services.
A vigorous competitive environment was recognised by the Culliton report as being essential to the successful development of Irish industry. Under the Programme for a Partnership Government, my Department is charged with the development of competition in all sectors of enterprise. The Competition Act, 1991, has created an important vehicle through which competitive conditions can be created. The emphasis in that Act was on putting mechanisms into the hands of business to enable it address anti-competitive behaviour in the market. While there has been some use of these provisions by business, more might have been expected. This is one of the reasons my Department is reviewing the provisions and operation of the Act.
Legislation will not, of itself, remove all restrictions on competition. The Culliton report highlighted the need to ensure that "economic sectors not exposed to international competition should nevertheless be induced to operate in an efficient, low-cost way". My Department is examining how, in particular terms and separate from the Competition Act, this can be done. On the issue of taxation the Government accepts the overall approach of the recommendations in the Culliton report.
What we want is clearly spelled out. We have undertaken to proceed with the changes needed to achieve the broadcasting of the tax base, the reduction of the incidence of tax on the low paid and those approaching average industrial wage levels, closer co-ordination of the tax and social welfare systems and the simplification of the tax code.
These are the objectives set out in the Programme for a Partnership Government in response to the Culliton recommendations. These are the objectives, but no one can realistically expect that the detailed provisions of the coming and subsequent budgets can be laid before this House today. We have set out what we intend to do in the Programme for a Partnership Government and we will follow through on those commitments.
There has been some criticism by the media and elsewhere concerning the delivery of services under the proposed new arrangement for our enterprise support agencies. The logic behind those arrangements is straightforward. The present structure of the agencies is not satisfactory as it does not place the necessary emphasis on the development of indigenous Irish managed firms.
The Government concurs with the Culliton and Moriarty recommendations that all grant giving and advisory supports should be integrated in one agency for the development of indigenous firms. Hence Forbairt, which will be organised sectorally with a strong regional base and an emphasis on developing areas of recognised weakness, such as marketing and innovation. On the other hand, the business of attracting overseas investments to Ireland is a different operation. It involves the selling of a location to companies which already have sufficient strengths in marketing, technology and business know-how. This will be the function of IDA Ireland. It will also operate to a wider brief than heretofore by seeking to attract internationally mobile investment to Ireland not only in the industrial sector but in many service sector areas also.
The function of Forfás will be to play a co-ordinating role and to help ensure greater linkage between the indigenous and international sectors of Irish industry.
I also accept that the Department of Enterprise and Employment has a special role to play in fostering the climate for enterprise in this country. I have accepted the recommendations of the Moriarty Task Force and I am currently working on a programme of implementation covering all issues raised. These include the continued move from grant aid to industry to repayable forms of finance via the agencies, the review of operations in my Department and the achievement of more effective restrictions on State aids for industry in the more developed regions of the European Community.
As chairman of the Cabinet sub-committee on the implementation of the Culliton report which has been retained for a three year period to April 1996, I will be happy to respond to this House on a six monthly basis on the progress made in achieving the implementations of the changes which have now been mandated by the Government.
I welcome the opportunity to open the Oireachtas debate on the Culliton report in the Seanad and to confirm that it is my intention in three to four weeks, subject to the normal constraints, to move the legislation which will give effect to the agency restructuring. I have also provided for the publication of the summary of the Culliton report, copies of which are available from my office for those Senators who wish to obtain the summary rather than the full report which costs £10.