I welcome the Minister to the House and thank him for discussing the decisions to implement the changes recommended in the Culliton report, which are also in accordance with the Moriarty Task Force report.
Economic and industrial policy in Ireland has been a victim of paralysis by analysis; many Governments have come and gone without taking much action in the important area of job creation. I welcome the fact that we have action now, and a promise, with timetables and targets, of further action in response to Culliton and Moriarty. The timetable and target dates in this response from Government are crucial to this discussion because they provide a yardstick with which to measure progress. The Government's response does not simply talk about what we may or may not do but specifically identifies when we will do them. The Minister's assurance today that he will report on progress at six monthly intervals indicates the Government's intention to carry through these targets and timetables and answers Senator Howard's concern that there should be a sense of urgency in this area.
I agree with Senator Hillery that support for employment and enterprise is the business not just of the Department represented by the Minister but of all Departments and particularly the Departments whose Ministers are members of the group set up to monitor progress — the Ministers for Enterprise and Employment, Agriculture, Food and Forestry, Finance and Tourism and Trade. It is important that these four Ministers continue to meet and monitor the progress of the implementation of the report. Culliton said that there were no quick fixes in this area and we have to recognise that progress cannot be immediate. The Culliton report contained 60 recommendations. The huge problem of unemployment, in many cases passing from one generation to another, has caused many families and communities to feel useless and hopeless and this cannot be allowed to continue.
I support the points made by Senator Howard about a climate for enterprise and the importance of allowing risk taking. It is important that risks taken are based firmly on a business and marketing plan and exact knowledge of the manner in which the business is to be made a success. It is not enough simply to take risks without having that strong foundation.
I am pleased that the report is based on a clear understanding of what firms need. The policy will have to be based on what firms need to be successful. Many speakers referred to the division of the IDA, between IDA Ireland, which deals with foreign investment, and Forbairt which is to strengthen the home based and home managed industries and the umbrella organisation Forfas, which is to co-ordinate both organisations. Marketing abroad will also be dealt with by An Bord Tráchtála.
Senator Quinn considers there is too much bureaucracy. I know he has wide experience in this area but it seems to me that the different areas of responsibility are fairly clearly mapped out. The Culliton report recommended that basic division between responsibility for foreign investment and responsibility for encouraging Irish enterprise. The particular weakness to date has been in relation to Irish owned firms as the Minister spelt out clearly in his opening speech with the statistics he gave us.
Direct State support for business in Ireland is high. For example, in 1988 we had the second highest level of support in the EC in terms of gross domestic product. Irish owned firms have had a bad record in terms of increasing their level of employment. In 1992, for example, employment in grant aided Irish owned industry fell by 1,600 while it rose by 800 in foreign owned companies. The Minister also gave us figures in that regard.
Another aspect to be taken into account is that the labour force increased by 60,000 since 1990, the same number as in the entire decade of the 1980s. Therefore, the increase has been dramatic since the beginning of the 1990s. It is crucial that we strengthen our Irish based industrial jobs policy, which is the purpose of Forbairt but the question facing us is how is it to be done?
The Culliton report referred to an unhealthy dependency mentality but the Government's response has not produced jobs. I had discussions with someone who advises small industries who told me that, when he discusses with small industries the problems that face them, usually it is not a cash injection that they need — although sometimes that is part of the problem — but advice on areas such as marketing, research, training, efficiency and management. Those areas are pinpointed in the Culliton report and in the Government's response to the report.
The decision to consider what is referred to as participative forms of finance rather than grants is crucial to the future proper use of Government money, which is limited. The right response is to use equity and seed capital as the means of financial support rather than throwing money at problems.
Approximately 80 to 90 per cent of Irish industry consists of enterprises of 50 people or fewer. It is important that these small and medium sized firms get the support they need. It is suggested that we have cluster industries, particularly in the food sector. This will be crucial from the point of view of selling abroad especially where Irish industry is seen to have a competitive edge and where our image as a green producer of food can be positively used to develop markets abroad. The Government has responded positively to the suggestion in the Culliton report that we cluster industries and respond to their group needs, for example, by helping provide training, management efficiency, research and marketing, rather than expecting each industry to cope with those areas on their own. One of the major problems in the past has been that industries have been too small to take on many of those areas on their own and, as Senator Hillery said, some of the incentives in the Finance Bill target that issue.
The Moriarty report says that emphasis should be put on areas of recognised weakness and it specifies marketing and innovation, to which the Minister referred in his speech.
I share Senator Quinn's view that marketing is crucial. We have a positive image and well trained young people who can sell our products abroad; we have a good reputation abroad as people who can be trusted. We need to get into the markets and the distribution mechanisms abroad and we need to set up structures that will facilitate small firms who could not possibly sell their products themselves on the various world markets. It is vital that they can channel into links that are already there. The only way we can improve our productivity is to extend our markets abroad because the home market is limited.
I will briefly refer to the education issues which have been covered by other speakers. I support the decision to integrate rather than separate a vocational stream in the education system. Mr. Culliton supported the Government decision to do this rather than the original suggestion of having a separate vocational stream. It is important that education produces for the jobs market people who have vocational and other elements of education. I also support the further emphasis on foreign languages. As regards training, the division between on-the-job training and other areas of training will clarify the role of FÁS.
I would particularly like to stress the importance of targeting black spot areas where unemployment is high — up to 80 and 90 per cent in some urban areas. I know they will be targeted in the national plan in the application for EC Structural Funds. It is important that we target incentives in those areas where, as I said earlier, successive generations are experiencing a culture of unemployment and we have to break that hold.
I would like to refer to the points made earlier regarding the increases in and the restructuring of phone charges. We all regret that there will be increases in certain areas. It was proposed in the Culliton report that in order to reduce overseas charges there would have to be increases in domestic charges. When that was an abstract proposal, it was strongly welcomed by commentators and by other political parties. Now that it is to become a concrete proposal, it is being criticised. I hope, when it comes to the taxation changes, people who now welcome the abstract idea of changes in taxation will be equally willing to welcome the downside of those changes. There will have to be a downside since money does not come like manna from Heaven.
I welcome the fact that we have clear policy identified in this area, that we have targets and timetables and that the Government has indicated its intention to fulfil those targets by coming back to us at regular intervals and by continuing the monitoring committee of the Ministers involved.
