The purpose of this Bill is to increase the statutory limit on the amount of grants that may be made to An Bord Tráchtála to enable that body to continue the work of promoting and developing the sale of Irish goods and services.
The Trade and Marketing Promotion Act, 1991, under which ABT was established, fixed the total amount of grants which may be provided by the Oireachtas to the board at £400 million. The Bill proposes to raise this amount to £650 million in order to cover expenditure by ABT over the next four to five years, including that incorporated in theNational Development Plan, 1994-1999. It does not imply any long term commitment to provide funding at a particular level and does not bind either the Government or the Oireachtas to any financial commitments. It should be seen, therefore, as essentially a technical measure.
This ceiling has been raised every few years since the establishment of Córas Tráchtála, An Bord Tráchtála's predecessor, in 1959. The idea of setting such limits is to give the Oireachtas a periodic opportunity to review the agency's operation. However, I should point out that such opportunities also exist through the annual Estimates exercise and the various Oireachtas committees.
The current aggregate or cumulative sum paid from the Exchequer to ABT and its predecessor CTT since 1959 is now in excess of £380 million and will reach the statutory limit of £400 million before the end of this year.
The focus of ABT's work is to enable Irish companies to overcome the disadvantages of peripherality by means of strengthening their marketing capability, identifying new markets, consolidating existing ones and by actively promoting Irish goods and services.
Senators will be aware of the key role of ABT in the promotion of Irish goods and services abroad and will appreciate its major contribution to the growth of Irish exports in the last number of years. Indeed, we must congratulate Irish exporters on their outstanding performance to date and especially in 1993 when most of our major markets were in recession and when the effects of the currency crisis made their task an extremely difficult one — for indigenous companies, in particular. It was a demonstration of exceptional resilience and determination.
Figures indicate that in 1993 world trade grew by only 2.6 per cent, less than half the growth of the previous year. This meant that Irish companies had to significantly increase their market share at the expense of their international competitors. In 1993 our total exports rose by almost 9 per cent to an estimated £18.1 billion; this represents a cumulative increase of 23 per cent over the past five years. Exports from the indigenous sector, where ABT concentrates its efforts, grew to an estimated £3.9 billion — an increase of 8 per cent in 1993 and a cumulative increase of 30 per cent over the past five years. These excellent results are reflected in the remarkable trade surplus of 1993 estimated at £3.8 billion or 12.3 per cent of GDP.
According to the latest information available from the Central Bank, the outlook for world output and trade has improved. Indeed, the evidence from the early part of this year suggests that the US economy is experiencing significant growth and that the UK recovery, although more muted, is also well established. Economic activity in Germany and Japan has also shown signs of improvement. Overall, it is expected that stronger international demand will assist export growth both from the foreign owned and indigenous sectors in 1994.
Meanwhile, the ESRI medium term review for the period 1994-2000 forecasts average annual inflation to remain under 2.5 per cent. This factor, combined with growing competitiveness within the Irish economy, should keep Irish firms well positioned to avail themselves of the ever increasing opportunities which will arise as a result of the completion of the Single Market and the conclusion of the GATT Uruguay Round.
The achievements of Irish exporters in 1993 show that we have the capability to win more business in highly competitive markets and despite adverse conditions. With a brighter trade picture before us and opportunities multiplying, I am confident that ABT's 1994 forecast of further growth in total exports to £19.8 billion will be achieved and, more importantly still, their forecast that indigenous exports will grow to £4.3 billion, an increase of 10 per cent, will be achieved.
The Government recognises that Irish companies must be suitably equipped to succeed in the highly competitive trade arena. It is clear, for example, that the opening up of the public procurement market in Europe will provide tremendous opportunities for Irish companies. Put simply, public procurement means all purchasing done by public bodies and agencies of all sorts, from the largest commercial State company to the smallest local authority.
In an Irish context alone, it amounts to a very large amount of business, over £4 billion a year. However, it is when we translate it into EU terms that its magnitude becomes apparent. It is estimated that throughout the EU spending by Central Government, State bodies, local authorities and other public sector purchasers amounts to the equivalent of over £400 billion a year. Previously, only a small percentage of this business was placed with suppliers from outside the procuring State, although it must be said that the Irish market was open to the tune of about 50 per cent when the comparable figure for some other countries was as low as 2 per cent. The liberalisation of public procurement policy creates a huge area of potential new business for Irish companies. The time has now come for Irish companies to begin to take advantage of these new legislative developments.
It is for this reason that we incorporated in theProgramme for Competitiveness and Work a new ABT programme to assist Irish companies to compete for a greater level of sales to the public sector in Ireland, which will ultimately strengthen their ability to compete in the larger overseas public sector markets. The immediate objective of this initiative is to increase Irish suppliers' sales to the local market by £100 million per annum.
The Government has set ABT a target of increasing the exports of indigenous industry to £5.5 billion by 1996. One crucial element in achieving this target is the commitment in the Programme for a Partnership Government to ensure that more Irish salespeople are located in overseas markets. The EUROPLACE scheme, which I launched last year, aims to double the number of Irish salespeople in overseas markets by 1996. I am glad to say we are on target to achieve this figure.
Other valuable ABT programmes include the business leads campaign which generated sales leads worth over £200 million, while the targeted marketing consultancy scheme, which assists companies to undertake significant marketing investments, plays an important role in the success of indigenous industry. These successful measures will be further enhanced by a drive to diversify Irish exports and target new markets with high growth potential.
Senators will be aware of the importance the Government places on the development of indigenous industry. This is the overriding objective of the new market development programme. This programme will be administered by ABT over the next six years and is assisted by EU Structural Funds. It will promote and develop trade from the indigenous manufacturing and traded services sectors. Identifying and maximising outlets for these sectors is a key component in the Government's strategy for creating employment.
The market development programme will use specific measures to address and correct the structural disadvantages experienced by indigenous exportersvisà-vis their competitors in the rest of the EU. Its target will be to achieve an annual increase of 9 per cent in our indigenous exports and to increase Ireland's share of other EU markets by 25 per cent over the period of the plan.
This Bill will ensure that the statutory framework to support and develop the Irish export sector into the 21st century is in place. This will enable us to provide ABT with whatever level of finance is appropriate.
I commend this Bill to the House for approval.