Select Committee on Enterprise and Economic Strategy debate -
Friday, 4 Jun 1993

Vote 35 — Tourism and Trade.

Chairman

First, I welcome the Minister for Tourism and Trade, Deputy McCreevy, and his officials and also the members of the Committee. We have a few substitutions this morning as some of our regular members are unable to attend. A copy of the proposed agenda is before you. If anybody has any remarks to make about it they should feel free to do so. If not, we will proceed on the basis of previous committee meetings and take it programme by programme. If there are many speakers offering I propose to take them in groups of three and then ask the Minister to respond on each individual programme. I would ask the members of the Committee to stick to the programme if at all possible so that we can do our business more efficiently. This has worked well on previous occasions. I hope to be able to conclude before 1 p.m. It is not my intention to be too rigid in my application of Standing Orders but your full co-operation would be very helpful. I now call on the Minister to make the opening statement.

Minister for Tourism and Trade (Mr. McCreevy): I am very glad to come before this Committee as the first Minister for Tourism and Trade to discuss the Estimates for my Department.

Before going through the main provisions of the Estimate, I would like to say a few words about where I see my Department, its agencies and this Estimate of almost £100 million fitting into the scheme of the Government's economic policies.

Economic growth and especially economic growth which can cut into the unemployment figures is the central focus of Government policy. Other Ministers have, and will at future meetings of this Committee, indicate to you how their areas of spending are contributing to the Government's efforts.

For my part, I think I can summarise my focus in two words — foreign earnings. We have long accepted that economic Sinn Féinism will not provide an acceptable level of economic growth for our people, especially our young people looking for employment. The establishment of a new Ministry for Tourism and Trade provides us with an opportunity to devise and implement focused policies which will lead to increased foreign earnings from export development and inward tourism. I want my Department and agencies to be firmly focused on the market, on trends in the market and on what the market is looking for. It is this market-led focus which underpins the thrust of the spending Estimates which we are debating today.

What we are about is helping exporters and the tourism industry to identify and avail of opportunities arising in the international marketplace. It is essentially a supporting role to the efforts of the private sector; in their work abroad, agencies like Bord Fáilte and An Bord Tráchtála are primarily helping hands, contact makers, path smoothers and group organisers for Irish businesses whose size and remoteness from the marketplace make it hard for them to achieve the breakthrough.

Tourism is now one of our major contributors to the creation of wealth and employment. Our share of the world tourism market has improved by almost 60 per cent since 1987. Overseas visitors to Ireland are growing at an annual average of almost 9 per cent — a figure which is more than double the world average. Tourist numbers are up by over 50 per cent and their spending up by almost 70 per cent since 1987. Home holiday spending — an ever-improving section of the tourism industry — has increased by 150 per cent. These are all very impressive figures but more importantly, tourism now sustains almost 80 per cent of total employment or 13 per cent of the services sector.

The turn around in the tourism industry in recent years did not happen by chance. It came about because the Government achieved: inflation rates amongst the lowest in Europe; a liberal competitive air and sea access policy which led to a reduction in fares and the opening of new routes into Ireland; the largest ever investment programme in Irish tourism and a more focused marketing by Bord Fáilte.

Of equal importance to having the right policies is of course having the right structures and people in place to implement them. Bord Fáilte, Shannon Development and CERT working with the industry have played a crucial part in the sector's performance.

Despite the great strides made since 1987 it has to be recorded that like most other places Ireland has been suffering the fallout of the Gulf War in 1991 and the worldwide economic recession which is only now beginning to ease. Nevertheless, despite a drop of 28 per cent in visitors in 1991 there was an increase of 4 per cent in 1992 to 3.128 million — a new all-time high.

I am confident that 1993 will signal the return to the strong growth levels we know the industry can deliver. Already the indications are good and the latest estimates show an 8 per cent growth in overseas visitors to Ireland in the first three months of this year. However, our main markets are still suffering from recession and this presents challenges.

The more sophisticated market-led approach to marketing and promotion adopted in recent years has been a key factor in the turn around in tourism performance. Through the pursuit of identified market niches and segments our efforts have succeeded in bringing on stream products for which there is a recognised demand. Tourists now have access to a range of top quality hotels and guest houses at competitive prices. Also at their disposal are leisure centres, golf resorts, weather independent facilities and products based on history, culture and environment. This year our marketing efforts will be concentrated in seven major markets which offer potential for growth and will focus on activity holidays, heritage tours, city breaks, conference and incentive business and cruising holidays.

Bord Fáilte are proceeding with the creation of co-operative marketing groups along the lines of the concept recommended by the Tourism Task Force. Already one such company, to market golf products, has been established and others are on the way.

My Department's Estimates include an allocation this year of £21.804 million to Bord Fáilte towards their overseas marketing and promotion. The increase in the Estimate is to facilitate a special marketing programme this year for off-peak and shoulder business to which the EC will be contributing another £1.5 million. This will be supplemented by a £10 million EC-assisted marketing package by the industry directed at selling the new range of quality products in overseas markets.

My Department's Estimate this year also includes a special provision of £150,000 to assist the Mayo 5000 programme of events whose impact will undoubtedly continue to benefit tourism in the region long after 1993 has ended.

Shannon Development who are responsible for tourism development in the mid West region are being provided with £1.579 million.

The company takes a comprehensive approach to tourism development in the region, with activities ranging from financial support for new tourism projects through the European Regional Development Fund and other funding to a tourism entrepreneurs programme to support the preparation of business plans, search for partners and negotiations with financiers.

The company also operates a network of tourist information offices and, through its subsidiaries, Shannon Castle Banquets Ltd., Shannon Heritage Ltd., manages a range of tourism attractions in the region.

The proposed provision for CERT is £3.580 million, which along with European Social Fund receipts of £5.198 million and other income of almost £1 million, gives CERT a total non capital budget of £9.730 million for 1993. This will enable it to intensify its full-time and short term training programme which are identified and designed in close co-operation with the industry.

Over the last ten years over 85,000 people have pursued training programmes with CERT. In 1992 alone, over 10,000 tourism and catering personnel were trained through college and industry-based courses. It is expected that a similar number will be trained this year as a result of the increased Exchequer and European Social Fund allocations.

One of the primary objectives of the EC-funded Operational Programme for Tourism 1989-1993 is to provide a range of quality tourism amenities and products which may be enjoyed and sold throughout the year. The success of this programme is clear for all to see. Improved conference facilities, new heritage centres, golf, equestrian and angling facilities to give but a few examples are being provided throughout the country on a scale never witnessed before. Both the public and private sectors have availed of the generous grants available and have become committed to long term development of our tourism industry.

In addition to the funding available under the Tourism Operational Programme, assistance is also available for tourism development in the six Border counties under the separate INTERREG programme. This programme is designed to assist internal border areas within the Community to overcome the special development programme problems arising from their relative isolation within national economies and within the Community as a whole.

The International Fund for Ireland (IFI) is also helping tourism investment in the Border counties under a number of schemes administered on the fund's behalf by Bord Fáilte. To date the fund has committed about £14 million to capital projects in the South, while generous assistance has been made available for various cross Border projects of a tourism character such as joint marketing, the development of the Gulliver computerised reservations system and the Ballinamore-Ballyconnell Canal.

The Ballinamore-Ballyconnell Canal project is a major £30 million project which is being funded by the Irish and British Governments, the European Regional Development Fund and the International Fund for Ireland. This project, I am pleased to say, is proceeding on schedule and within budget. Completion of the major work is expected within the next few weeks and the formal opening ceremony is scheduled for May 1994.

This project, when completed, will provide a cross-Border link between Shannon and Erne navigation systems. This will help to regenerate tourism in its entire catchment area through Counties Leitrim, Cavan and on into County Fermanagh.

I am at present examining proposals from a number of representative bodies and agencies on the preparation of a new development plan for the tourism sector for the period 1994 to 1999.

There will be a strong emphasis on marketing and promoting the extensive range of new facilities developed under the current programme, and on using these facilities to access new markets for Irish tourism. I want to assist the industry in meeting product gaps that still exist and in helping to overcome the problems associated with peaking of tourist demand. Finally, I am in discussions with CERT on training to meet anticipated manpower requests, and consumer demand for continued improvement in quality and standards of service — important elements which must be dealt with in any future plans for the tourism industry.

The next round of EC Structural Funds will be a critical factor in the achievement of my goal.

Now let me move on to the other main area for which I have responsibility, namely trade. I am putting in place at present an extensive programme of action designed to exploit the full potential of foreign markets for Irish business and to extend the range of market opportunities both at home and abroad.

Let me first of all give you a brief resume of our recent trading performance. In 1992 Irish exports grew — despite trading in declining markets caused by the international recession — by 9.3 per cent to £16.4 billion. Indigenous exports increased by 11 per cent to £3.7 billion during the same period, bringing the increase over the last four years to 41 per cent.

If our ambitions for indigenous exports are to be realised, it will be essential to maintain or even exceed growth rates of recent years. I have set a target for 1993 of an increase of 12 per cent in indigenous exports and I am confident that with the recent pick up in the international economy plus the hard work and enthusiasm of our Irish business people this increase will be achieved.

The 1993 Estimate allocation for An Bord Tráchtála of £37.82 milion as against the 1992 outturn of £34.053 million. I might in passing mention that the figure of £37.828 million represents an increase of some 83 per cent over the 1988 provision for marketing.

This support for the marketing programmes of An Bord Tráchtáala is assisted by the European Regional Development Fund and attracts the highest support rate available — 75 per cent of eligible expenditure. This shows our wholehearted commitment to get behind and support the marketing efforts of Irish industry.

The marketing sub-programme of the National Development Plan (1994-99) which is now being put together will seek to build on the success of the 1989 programme. It will have as its main aim to promote and develop trade from the Irish indigenous industrial and services sectors through a market-led approach.

A number of specific measures are envisaged. These include aid for the marketing capability of indigenous Irish firms, increasing the awareness of Irish products overseas, support for small and medium-sized firms to develop their capacity to introduce new products and services in the marketplace and assistance for market entry, consolidation and development for companies already established or seeking entry to national or regional markets. The measures will address the market needs of Irish indigenous industry and will aim to reduce the difficulties affecting SMEs trading in and from Ireland.

The opportunities and challenges of the Internal Market have been well documented by now.

I am determined that Irish exporters will be in a position to take full advantage of these opportunities. I have, therefore, established a Steering Committee on the Single Market to ensure co-ordination and co-operation between the relevant Government Departments and agencies which are concerned in any way with getting our products to the market place.

I have also established a Single Market Unit within my own Department to be the primary co-ordinating and contact point at both national and EC level on Single Market issues. The unit will advise and give practical assistance to Irish companies arising from doubtful applications of the Single Market legislation in other member states and it will assist liaison units in other member states dealing with problems experienced by their companies in Ireland.

In the past, the efforts of Irish exporters to develop sales in continental European markets were hampered by the fact that they did not have full-time sales people in the marketplace. This is not good enough in 1993. The Europlace programme which I established earlier this year will increase the number of full-time salespeople on the ground from 60 to 150 over three years. Each new salesperson can readily generate up to £3 million per annum in new businesses when fully operational.

Another initiative to assist Irish exporters is the Regional Markets Programme operated by An Bord Tráchtála. This programme focuses on the most dynamic and fastest growing regions of Europe. It aims to achieve an intensive involvement for Irish companies in these regions through the facilitation of marketing alliances, joint ventures, technology transfers and other forms of co-operative business alliances. The response to date from Irish companies to this programme has been very encouraging with over 1,500 companies participating annually in it.

In addition to developing and strengthening our trading ties in our major markets in Europe and North America, I am anxious that Irish companies should be in a position to compete in new and exciting markets in the Asia-Pacific region and in Eastern Europe. The Asia-Pacific region is experiencing phenomenal growth rates at present and provides tremendous opportunities for Irish exporters. I want to help Irish companies, particularly those in the services sector, to penetrate these markets. A few short weeks ago I led a very successful Irish aviation mission to China and on that mission I was accompanied by executives representing 13 Irish businesses.

I have only this week returned from a highly successful trade mission to Malaysia. The mission, the biggest ever, involved 19 Irish companies mainly involved in the healthcare, education, aviation and engineering sectors. Contracts worth over £40 million are expected to flow from agreements signed in the last week with further substantial contracts expected to arise from other contacts made during the visit.

The development of the newly emerging democracies of Central and Eastern Europe provides further opportunities for Irish companies. Trade in goods with Eastern Europe grew by £40 million last year to a most impressive £154 million. Our forte in these regions at present seems to be in the area of consultancy contracts under EC-managed programmes. Irish companies are also participating in projects funded by the World Bank and the European Bank for Reconstruction and Development.

To my mind the developing markets of the Asia-Pacific region and Central and Eastern Europe provide a window of opportunity for Irish exporters which we must not let pass us by.

One of the most significant difficulties facing Irish exporters in the past year was the uncertainty in the money markets. The Market Development Fund was established to help firms whose employment and output were under threat due to the currency crisis. This fund has proven to be highly successful. Its success can be judged from the fact that practically all the companies benefiting under the fund maintained their employment at the original levels.

The Foreign Earnings Committee, which I have recently restructured, will concentrate on the promotional aspects of the foreign earnings brief. It brings together, under my chairmanship, the chief executives of the major overseas promotional agencies and the senior administrators of their parent Departments. The Department of Foreign Affairs is also represented on the committee.

This committee is helping me to take a hard look at the way in which the various promotional agencies go about their task of selling Ireland abroad. To assist the committee, I have commissioned a team of independent consultants to carry out an external review of existing promotional mechanisms. The committee will consider the views of the consultants and will make recommendations to Government to improve the operational effectiveness of our overseas representation in the commercial and economic fields.

It goes without saying of course that the success of the Government's strategy in relation to exports is dependent on the international trading environment. In this context a satisfactory and balanced outcome to the Uruguay Round is of major importance for Ireland. As a small open economy which exports over 60 per cent of its Gross Domestic Product we stand to gain significantly from the economic boost the world economy would get from the successful conclusion of this Uruguay Round.

Ireland is fully committed to an early conclusion of the negotiations but the outcome must be a global and balanced one involving concessions by all and adequately protect our trade interests, particularly in agriculture and textiles.

I have already commissioned a consultancy study on the possible impact of the Uruguay Round on Ireland. The purpose of this study is to ensure that Government and exporters will be fully aware of the economic implications of the Uruguay Round for Ireland and that we will be well prepared to take advantage of the opportunities and to defend ourselves against any difficulties which may arise.

It is my intention to give a new focus to the promotion and development of our tourism and trade sectors. This is both an exciting and a demanding brief.

Let me finish off by saying how pleased I am to have had this opportunity to share with you my plans for the Department in 1993.

I will be pleased to respond to any questions or queries you may have.

Mr. Deenihan

The 1993 Estimate for Bord Fáilte highlights in the starkest way possible the policy contradictions inherent in the Government's approach to the tourism industry. The Fianna Fáil and Labour Programme for a Partnership Government 1993-97 identified tourism as having a proven potential for additional large-scale job creation. The Government indicated it was determined to realise this potential and spread its beneficial effects throughout the country. Its stated aim over five years is to increase foreign earnings in real terms by 50 per cent and to provide an additional 35,000 jobs. Among the key recommendations of the report of the tourism task force which the Government said it would proceed with was that Bord Fáilte would continue to have primary responsibility for co-ordinating overseas marketing and promotion.

The tourism industry has invested substantial funds in the development of the product over the last five years. The level of funding allocated to promotion of the product overseas has also increased dramatically in that period. This industry expenditure has not been matched by Exchequer spending, however, and this 1993 Estimate is another indication of further Government cutbacks in this crucial area.

The achievement of the ambitious Government targets for tourism will require a continuing increase in Ireland's market share of world tourism promotion. In the case of Ireland's product above normal spending is required because of the impact of issues such as the Northern Ireland problem and the acute seasonality problem which the industry experiences. Strength in promotion is essential if the new facilities and products which have now been put in place are to succeed. There is no point in developing these new products if they cannot be successfully marketed.

At a minimum both Government and industry expenditure on tourism should increase in line with the target tourism growth. The Government, however, is proposing to cut once again its expenditure on promotion in the marketplace. The allocation to Bord Fáilte for such expenditure has been cut from £11.7 million in 1992 to £10.2 million in 1993. This 13 per cent reduction is matched only by the Estimate for the reduction in the development schemes under the capital heading which was estimated to reduce by 15 per cent in the course of this year. When all sources of income are taken into account we find the 1993 Estimate for Bord Fáilte represents a reduction of 9 per cent over last year.

In regard to CERT — the Council for Education, Recruitment and Training for the hotel, catering and tourism industries — the biggest percentage change in expenditure is a further reduction of 13 per cent on industry-based training. This must be contrasted again with the Government's stated aims for tourism, particularly that of providing an additional 35,000 new jobs in the industry. As stated earlier one can only wonder at the policy contradictions which are inherent in any comparison of the Government's own aims for tourism and these Estimates which we are new reviewing.

The importance of marketing Ireland abroad cannot be overstated. Since 1960 Ireland's share of the world tourism market has declined from 2 per cent to approximately 0.9 per cent despite the good performance from 1988 to 1992. Similarly, Ireland's share of the European mainland market declined from 2.7 per cent in 1960 to approximately 1.4 per cent in 1992. Ireland's share of US visitors to Europe has declined from 6.5 per cent in 1987 to 5.2 per cent in 1991. In contrast, in the period 1981 to 1990 Scotland attracted 20 per cent more North American tourists than Ireland. Ireland attracts only 203,000, or 1 per cent, of visitors from Germany out of a total of 22.2 million Germans who travel worldwide.

The potential for increased numbers is evident from the above figures. If we could regain the market share that we held in the sixties it would help us achieve our job creation targets. However, we must have a greater presence in the marketplace. This requires increased funding from the Government for Bord Fáilte. Ireland's tourism industry is essentially dependent on the cost and quality of access. Apart from low air fares and sea fares which have operated for some years between mainland Britain and Ireland, access costs from other markets remain high. Hence the importance of attracting more charter companies to sell Ireland as a destination.

Ireland must also become more accessible to the long haul markets which are of increasing importance but from which we are virtually excluded by not having direct links. Dublin should be common-rated with London in respect of these markets. In other words, international airlines should be convinced to include Dublin at the same fare as that to London. Our capacity to gain a market share of traffic into London from Japan, South America, South Africa, the west coast of America, Canada and the Far East could be dramatically increased if appropriate common-rating with London could be achieved. I realise this is an objective of the Minister and the present chairman of Bord Fáilte. As three out of four visitors who come to Ireland by air use Aer Lingus, it is vital that the company be restored to full viability. It is important that the Government take equity in the company and that it receives EC funding in 1994 to upgrade its ageing fleet.

The 1994-97 EC operational programme for tourism grants and the agri-tourism grant scheme under the EC operational programme for rural development will be crucial for the future of the tourist industry. It is of vital importance that steps be taken immediately by the Minister to ensure that major investors in the industry, such as hoteliers, the Irish Tourist Industry Confederation, the incoming tour operators association and so on are fully consulted in advance of the finalisation of the tourism aspect of the national plan. I am convinced that several barriers facing the industry can be overcome to a considerable extent by the strategic use of funding that will become available.

Seasonality is a major problem for tourism. Some 30 per cent of overseas visitors arrive here during the months of July and August. In the period May to September, inclusive, 60 per cent of tourists arrive here. By contrast, in the six months from October to March only 34 per cent of foreign visitors come here. While all tourist destinations experience a seasonality problem, this problem is greater in Ireland because of the excessive concentration on two months of the year and the failure to date to successfully adopt measures to correct this imbalance.

A strategy must be devised to increase sales of existing tourism products at offseason times. This will require two approaches, one of which includes tapping a new customer base but with existing products. This could be achieved through differential pricing policies and an enhanced marketing effort by Bord Fáilte and Shannon Development. The second approach is to develop new products for new customers, particularly in off-peak seasons. This would require substantial investment in new markets and in new quality products. The new Waterworld in Tralee is a typical example. This facility should attract people throughout the year.

The changing pattern of tourism tastes in the next decade could provide opportunities for Ireland to overcome seasonality problems. Second holidays will become more frequent, growth in international short breaks will become more popular, and the popularity of activity, cultural and nature orientated holidays will increase. I introduced a Bill to the Dáil, which is under discussion at present, about which the Minister gave a recent commitment to the IFA that he would support. It is very important that the spirit of that Bill is supported in next Wednesday's vote. Otherwise the Irish countryside will be closed off to many people who seek activity, culture and nature oriented holidays. Responsibility now rests with the Government in this regard.

Retired people are increasingly taking offseason holidays to avoid the congestion and overcrowding of the peak season. The provision of a national conference centre for up to 3,000 people is a prerequisite to combat the problem of seasonality. All the capital cities of Europe have major conference facilities which are considered significant income earners thoughout the year, as conferences are not dictated by weather.

I wish to refer to a very important and sensitive issue, that of car hire. A potential disaster faces Irish tourism this summer if cars are not available for hire for foreign tour operators for the peak tourist season from 25 July to 20 August. At present the car hire industry here has a fleet of about 10,500 cars. The tourism requirement for the peak period during this summer is estimated to be in the region of 14,000 cars. If there is a shortage of 3,500 cars at peak season, according to Bord Fáilte the loss of revenue could be in the region of £28 million. Those depending on tourism for their livelihood in rural Ireland will be most affected. Tourists who hire cars travel more extensively. They are the principal source of tourist revenue in most cases in areas that are cut off from public transport and are not visited by bus tours. The car hire fleet has decreased in the past five years by approximately 4,000 cars due to the departure of two of the major multinational fleet operators, Avis and Hertz. Tipperary Car Hire went out of business in 1991, leading to a further decline of 800 cars.

The introduction of a car hire grant scheme in 1992 added about 1,260 extra cars to the fleet for last summer's peak season. While helpful, this did not resolve the problem. The vehicle registration tax refund scheme makes no provision to require car hire companies to put on-stream this summer additional cars over and above their base fleet and time will tell whether this scheme will be effective.

The availability of car hire is essential for the French, German, Italian and US markets. There could be large scale cancellations if a sufficient number of cars are not available and potential visitors may decide on destinations such as Scotland or Belfast where car hire is readily available. Bord Fáilte strongly advocates the introduction of a temporary importation option for a restricted period during the peak season. This measure would not interfere with the motor industry as under its terms car rental companies would be allowed, under controlled circumstances, to import cars into Ireland for predetermined periods to supplement the existing car hire fleet and export them at the end of a given period without financial penalties. This seems to be a reasonable solution and I see no reason that it should not be tried.

I am very concerned about the almost daily reports in our national newspapers about attacks on tourists and theft of their personal belongings. On 17 May two British pensioners were the subject of a vicious attack in broad daylight by a gang of four youths as they strolled in the Phoenix Park. Cars have been broken into and goods stolen at some of our most famous archaeological sites and national monuments. The majority of these crimes are never reported. In 1992, crimes against tourists amounted to about 1,200 in the greater Dublin area alone. These involved mostly larceny from cars. In about 10 per cent of cases force was used against the tourist. Convictions are difficult to obtain as most tourists are reluctant to return to give evidence in court. Ireland's reputation will be severely damaged if this trend of attacks on defenceless tourists continues. Already sources in the international press point to New York, Rio de Janeiro and Dublin as dangerous cities to visit. We are talking about protecting a multimillion pound industry. Surely the Government should provide more resources to the Garda to protect our visitors.

The Estimate for Shannon Free Airport Development Company Limited for administration and general expenses, involving tourism-traffic development grant in aid, has been reduced by £346,000, a reduction of 13 per cent. Recently the Tánaiste, Deputy Dick Spring, announced that SFADCo would be responsible for the marketing of Kerry International Airport for charter traffic and that this marketing process would start immediately. I pose the question: how can Shannon Development be expected to maintain the level of charter traffic through Shannon Airport at its present number of about 64,000 while at the same time creating new business for Kerry International Airport with a drastically reduced budget? I look forward to the Minister's response to this question.

In relation to the report of the tourism task force presented to the Minister's predecessor in October 1992, when will decisions be made in respect of the several recommendations contained in the report, including the establishment of a tourism council of Ireland, taxation incentives for the industry to encourage the use of labour rather than capital, the reintroduction of accelerated capital allowances for tourism investment, the creation of product development companies, the development of a national conference centre with the capacity for 3,000 people, the establishment of an entertainments committee, the grading of hotels and food outlets for quality and the introduction of differential pricing policies to increase the sales of existing tourism products in shoulder and off-peak seasons. These are but some of the recommendations made by the task force. Is it now the Minister's intention to allow this report to gather dust like previous reports and be conveniently forgotten about?

With regard to trade, the Government has set a target for an increase in exports by indigenous Irish companies from £3.7 billion, the 1992 level, to £5.5 billion by 1996. Over 1,200 indigenous Irish companies export their products to European and world markets. These companies employ up to 100,000 workers. It is generally acknowledged that every pound from the export of a product from an indigenous Irish company has double the value of a product exported by our multinationals in terms of added value for our economy, including the creation of jobs. To capitalise on the advantages of the Single Market we must pursue a very aggressive marketing campaign in Europe. Adequate funding is essential to ensure a high impact, focussed marketing drive to double our indigenous exports into the Single Market by 1995, as predicted. I recognise the efforts being made by the Minister to sell more Irish products in places like Malaysia and North America. However we must not neglect the European Single Market, where lies our greatest opportunity.

I would refer briefly to the Green Spot campaign in Germany which may have implications for Irish exporters to the German market. The Green Spot campaign is part of a campaign to reduce waste by half. If the German campaign works other countries will follow suit and some already are. Germany has the strictest environmental protection laws in Europe. Since the latest packaging rules came into effect quite a number of other European countries have decided to follow the German example with some alterations. Denmark has announced similar activities. Sweden is considering copying the German regulations and Austria has announced that they will introduce the Green Spot.

It is important that Irish exporters to Germany should be familiar with the Green Spot campaign and respond accordingly. One can only wonder at the policy contradictions inherent in any comparison of the Government's aims for tourism and the Estimates we are now reviewing.

Mr. M. McDowell

The first issue we should focus on in terms of economic importance is our trade performance and the figures given to us by the Minister in that regard. The Minister in his speech today said that in 1992 Irish exports grew by 9.3 per cent to £16.4 billion despite trading in declining markets. A more startling fact is that indigenous exports in the same period increased to £3.7 billion. That means in crude terms that the difference between our indigenous and total exports is accounted for by highly volatile non-indigenous exports. That is something to which we must pay close attention because it suggests that two economies are functioning here — a real economy, in which the indigenous export sector provides a far greater reward to Irish industry and to the Irish economy and society in general, and a paper economy in which, by transfer pricing and highly mobile investment in this country, very different figures emerge which have very little to do with the inherent strength or prospects of the Irish economy and little enough to do with our prospects for increasing employment.

Deputy Molloy reminded me that in the case of the Digital plant in Galway we are dealing with a company whose exports were £900 million per annum. The loss of that industry in Galway means that, at a stroke, a proportion of this £16 billion of non-indigenous exports is lost from this paper economy with which we are dealing. I am not questioning the importance of the multinational and trans-national business investment programme here, but we have to look closely at global figures, when they are thrust at us on occasions like this, to see the realities from the point of view of this country and its economic prospects.

We must go back to the fundamentals. The fundamentals to which I would draw this Committee's attention are those highlighted as recently as the other day by the Central Bank report. There is no point in talking in terms of aggregates and a global figure of £16 billion if we are not in a position in our economy to translate those figures into jobs. As long as we fail to realise that fundamental reform of our taxation system is essential to transforming our economic and growth into real employment in our economy, we will be involved in collective political failure. The Central Bank report points out the huge dangers to employment posed by our system of taxation and our anti-employment laws. That needs to be tackled first. There is no point in speaking in global terms about employment prospects without taking action in this area. Trade and tourism are only of significance in the last analysis in so far as they affect employment, if we do not at some stage face up to the Central Bank report.

I notice that An Bord Tráchtála is receiving a reasonable increase in its budget this year. Is the Minister satisfied that An Bord Tráchtála as presently constituted should monitor the Irish export trade? Is there any point in having An Bord Bia as a separate institution to market food? Does it make sense that Ireland should divide its exports into food and non-food exports for the purpose of international export promotion? I query whether it would not be wiser to have one single agency covering both of those areas.

Will the Minister explain to the House in general terms how he proposes to translate growth in exports into growth in jobs? I want to hear the Minister's views particularly, because he is a man who prides himself on his practicality and his down to earth approach to economic matters.

In relation to the market development fund, I notice that the combined 1992 and 1993 expenditure on market development will be £28 million. This fund was established on an emergency basis to assist Irish companies which were adversely affected by the currency fluctuations and the extremely adverse trading situations that resulted from those fluctuations. With hindsight it seems to me that that whole episode was badly handled. There was manifest overvaluation of the Irish pound over a number of months, and possibly for up to a year, which culminated last autumn in the unbearable strain of maintaining parity within the ERM. I do not claim to speak with anything other than hindsight, which of course is 20-20 vision. We should have had a different approach to the currency crisis and we should have realised earlier that the overvaluation of the Irish pound would inevitably lead to the difficulties which the Irish pound faced in the last analysis. It is a pity, in an economy which is sorely pressed for cash, in which we have now the infamous tax amnesty as a way of gathering in money along with the 1 per cent income levy that £28 million should be effectively frittered away endeavouring to prevent the inevitable, endeavouring to assist exporters to defy the economic laws of gravity which they discovered was costing them exports last autumn.

In future, if we ever find ourselves in a similar position, I question whether there should not be a much more urgent response, whether, in such circumstances, we should hesitate before ever considering establishing temporary funds of that kind which really have no prospect of reversing the underlying economic realities. I say all of that conscious of the fact that my party was in Government at the time when many of the decisions in question were taken. Nonetheless, there are lessons to be learned. Some of the Minister's Vote here of £28 million over two years is money which was needlessly expended because of an inadequate grasp of the realities our economy faced.

I tabled a number of parliamentary questions about our detailed plans for tourism development in 1993. I received a number of very curt replies to the effect that this was a matter for Bord Fáilte and does not fall within the Minister's remit. That begs the question: what are we doing here today if the Minister can evade parliamentary responsibility in respect of individual questions put to him on the plans of one of the two largest agencies under his Department's control? I ask the Minister to change the practice of his Department now, to answer questions put to him in the Dáil about plans for the development of our tourist industry, and not hide behind the skirts of a semi-State agency since, when it comes to occasions like this, he appears to be quite happy to be responsible for them and talk about his plans in that area.

I am not at all satisfied that the tourism industry is being well managed. I noted what Deputy Deenihan said about the effective, real cutback in funds going to Bord Fáilte and SFADCo in its tourism capacity. I am not worried by a cutback in funds. I am much more concerned about value for money. Again, I am not satisfied that the tourism expenditure on the part of the Irish State is yielding value for money. In particular, the report of the tourism task force, which sets out a number of very significant changes in the structure of the Irish State's intervention in tourism, seems to me to have been stalled in its implementation. There are, for example, the recommendations in relation to the tourism council, the regional tourism organisations, the registration and expansion of accommodation and a national entertainment committee, all still the subject of study long after the report has been received. I should like to ascertain whether the Minister is serious about the development of tourism here. I should like the Minister to indicate that he is acknowledging the inadequacies of our present tourism development programme and proposes to do something about them.

I echo what Deputy Deenihan said about car hire. If the trade is seasonal, which, unfortunately, it is at present, the suggestion that there should be temporary importation of fleet vehicles to augment the national fleet during the peak tourist season seems entirely sensible. Car hire charges in Ireland are very high indeed. Perhaps that is a result of the overall problem of insurance costs, the generally high costs of Irish motoring. People do not get good value when they hire cars in Ireland, which must be a frightening aspect from a tourists' point of view when they see the cost of Irish car hire compared with that of the EC countries.

In this year's budget the VAT rate was raised at a time when most hotels had already marketed their product abroad, had issued their brochures and committed themselves on the international market to specific prices. Quite apart from the inconsistency of saying that tourism is a major growth area and then raising taxes on that precise industry, whenever there is to be any change effected in the taxation of the hotel industry, at least it should be done with a sufficient time lag, or at a time of the year that enables hotels and tourism agencies generally — obviously engaged in a very seasonal business — to indicate in advance to their foreign customers, in particular, what will be the real price of availing of services in Ireland. It is a matter of huge embarrassment to Irish hotels that, effectively, they had to rewrite their tariffs on an international basis because of a decision taken by the Irish Government. Again that indicates a carelessness in the Government's approach to the tourism business.

Economic power in the world is shifting increasingly to the East and Far East, to the Pacific-rim countries which have a huge tourism potential from this country's point of view in particular. One of the matters of which I have been apprised, and which would be well worth the Minister investigating, is that it is immensely difficult for people coming from those countries to obtain visas to visit Ireland as tourists. For instance, in Thailand and in Malaysia, where the Taoiseach and Minister have been recently, I understand that, in order for a native of either of those countries to seek a visa to visit Ireland they must follow a most complicated procedure, being suspect, effectively, because of their ethnic background. It is much more difficult for a person living in Thailand to obtain a visa to visit Ireland than it is for, say, a North American. This approach to tourism is crazy, based on a completely false premise, that if one's skin is of a particular colour and one comes from a particular country, one is much more likely to abuse tourism to gain access to the EC than if one comes from somewhere else. There is a huge discrepancy in the ease with which a person will obtain a visa to travel from Malaysia to Britain rather than to Ireland, that nobody would come directly to Ireland on a visa if they could avoid the difficulty put in their way by our bureaucracy.

To revert to the question I posed initially in relation to employment — I believe, and my party has been saying for some time past, that the time has come to massively expand our social employment schemes, to provide part-time employment, two or three days a week, for those now stuck in the poverty trap, those stuck in the category of long term unemployment, and also for young unemployed people. I believe that if one travels around Ireland, to virtually every tourist spot, one will find places where there is a clear opportunity for employment. There is virtually not one national monument, or place of that kind, where there are not clear opportunities to use people as guides, on basic maintenance work, or in tidying up these places, rendering them more attractive. In that context there is an enormous opportunity to provide direct employment by the State related to tourism projects. I ask the Minister to bear in mind that, whenever one goes to most foreign countries, one finds young people in the summer acting as guides in tourist locations there, whereas for some reason one does not find that in Ireland. This practice could easly be expanded, and the long term unemployed could have a role to play in tourism at cultural and heritage sites which would be easy to administer, thus making our tourist product more acceptable.

I have raised a number of points and do not want to delay the Committee any further. But I should like to reiterate my basic point, that the figures given by the Minister today demonstrate the vulnerability of this economy and demonstrate the difference between the paper economy and the real one. They also show that Ireland's indigenous exports account for a small fraction of total exports and the only way in which we can hope to translate growth in exports into real jobs is to take the advice of the Central Bank which it reiterated so fervently in its last report, which is, to reform the tax system fundamentally.

Mr. Rabbitte

First, I want to take up the final point made by Deputy McDowell. We have not had an opportunity to debate in any detail the issue of the reliability of trade statistics and output and export volumes. I have attempted to raise it with the Minister by way of parliamentary question on a few occu-asions and dealt with it to some extent on budget day because it is fundamental to the health of the economy. As Deputy McDowell pointed out, indigenous exports account for a small fraction of total exports and this in itself is a cause for concern and was focused on in the Culliton report and several other reviews. There is a separate point and it relates to the reliability of the statistics we have been working on.

We have been working on the basis that the fundamentals of our economy are sound. This has become the cliché of Irish politics during the past few years and it always follows the statement that we have a problem on the employment side. The 1992 NESC report deals with the association between economic growth and employment and with the question why our apparent buoyant trade figures and balance of payments surplus have not been translated into jobs. That study was long overdue and merits careful consideration because for a long time people have been puzzled in trying to explain the phenomenon of buoyant trade figures, and increasing unemployment. The presumed traditional relationship between growth and job creation does not seem to have been borne out.

On the parliamentary question I tabled to the Minister on this matter I said Ireland has a trade surplus of just over £300 million in 1985 but that in 1992 the figure stood at £3.5 billion. By any yardstick that represents a considerable performance; yet, as we are aware, the position in relation to employment has got worse. We are deluding ourselves if we think that the fundamentals of the economy are sound and it is only a matter of time before the jobs will come, because they have not. Apart from the Estimates, which we are debating today, this Committee could well put that NESC report on the agenda for further meetings.

I mention that report because it would appear that we have to have some respectable source which indicts the reliability of data before Government Ministers and officialdom will accept that there is a case to answer. The NESC is very careful and measured in the language it uses in highlighting difficulties in this area. For example, it states that there can be little doubt but that the productivity data for Irish manufacturing industry are artificially inflated by transfer pricing practices carried out by some multinational corporations.

Deputy McDowell said that he sounded like a broken record when speaking about the need for tax reform. I, too, sound like a broken record when I speak on the question of the phenomenon of transfer pricing. Everybody is prepared to admit privately that this is a major factor in measuring the economy but no one is prepared to talk about it; rather we turn a blind eye and claim that it is not as bad as Left wing commentators and politicians say it is. It would appear that it is considerably worse; therein lies the danger as regards the performance of the indigenous sector and what is referred to as the enclave or the multinational manufacturing sector. They have been engaging in wholesale transfer pricing with the result that our exports and output are grossly exaggerated. They have been using the relatively benign tax regime in this economy to optimise their profits, from a corporate point of view.

I wish to make it clear that I very much welcome the jobs which have been created over the years by multinational companies here and I do not want us to start a new fashion or fad which is what we seem to be well on the way to doing at present that our only hope in tackling our unemployment problems lies in promoting the development of small companies. I do not believe that is the solution to our problems but it is a part of it. Unless we have big companies we will not have small companies. Therefore the multinational companies are very important. However we must assess the extent to which they are engaged transfer pricing in the economy.

The NESC report shows that Irish productivity levels are dramatically above those in other member states in three sectors: Pharmaceuticals, Office and DP, and Other Food. The Other Food sector is absolutely mind-blowing but I think we all know what it refers to. In regard to GVA per employee, the NESC provides tables showing the output per employee in this country as compared to other member states under those three sectoral headings. In all cases not only is Ireland at the top of the league but it is way ahead. Under the heading of "Pharmaceuticals" the figure for Ireland is 166 compared to a figure of 56.5 for Belgium, 67.7 for Denmark, 52.4 for Germany, and 50.3 for France. The figure for Ireland, as a percentage of the EC average, is 305.7 per cent.

The figures are similar under the heading of "Office and DP". Under the heading of "Other Food" the figure for Ireland is 347.8 and, without going through all the figures, the figure as a percentage of the EC average is 818.4 per cent. I know this is very boring but it is very important. I recommend that we come back to this point and try to assemble whatever expertise is available to us to examine it. We will continue to delude ourselves if we think that our trade buoyancy and all that flows from that is as good as it seems. This helps to explain why jobs have not been created. The multinationals are very practised in this area.

Shortly after the publication of that report by the NESC an announcement was made by the CSO which bore out the fact that the strength of our economy has been grossly exaggerated in recent times. I do not blame the CSO and I welcome the fact that it has now apparently put the matter right. I wish to quote from an article in The Irish Times of 27 February last, which states:

Major inaccuracies in Government statistics, which overstated the strength of the Irish economy during the last five years, have been detected by the Central Statistics Office. The discovery has destroyed the belief that inflows of money from trade and services to the economy have been much stronger than outflows and has forced substantial revisions of the State's balance-of-payments figures since 1986.

As well as shedding light on the real strength of the economic fundamentals, the detection of the inaccuracies has highlighted the size of the payments being taken out by the State by US multinationals. Although the amount of profits being repatriated by the multinationals was known, the CSO has now discovered that hundreds of millions of pounds are annually taken out by international firms in management fees and charges for research and advertising.

The fault in the old balance-of-payments survey system is that it relied on exchange-controls information from the Central Bank.

"The quality and coverage of the exchange-control data has seriously deteriorated in recent years as the controls were progressively relaxed," the CSO bulletin says.

Those remarks were not made by any leftie commentator; they were made by Jackie Gallagher of The Irish Times on the CSO revelation. The page in the Minister’s statement — I apologise for not being in the House to hear the statement, I thought the Committee was meeting at 10.30 a.m.; I had a late night last night dealing with the amnesty——

Mr. Deenihan

Was the Deputy leading the protests against it?

Mr. Rabbitte

The Minister's statement gives a very complacent picture of the trading performance of this economy. This is something upon which we must focus.

I ask the Minister to comment on the efficacy of the market development fund. I am not talking about this fund in an historical sense, for the purpose of accountability or anything like that. I am talking about it because I believe it is something which may well happen again. What is the present view of the Minister and the Government on the issues which surrounded the setting-up of the market development fund? Government Ministers seemed to argue at the time that the real answer was to ignore the weakness of sterling and to urge exporters to shift the focus of exports to other EC trading partners. During the early days of the currency crisis several commentators seemed to go along with that view — for example, "We have been warning people who have been trading into the UK for years that they will have to shift the focus, and now they are paying the price. Sterling is weak, the British economy is in permanent decline and there is no future for us in that market. We should and must align ourselves to the hard core group of trading partners. That is where the future of Ireland lies."

I question the wisdom of those conclusions. I might like things to be that way but, regardless of the view one holds, I suggest that in the aftermath of the currency devaluation experience the situation is blatantly otherwise. So far as the international trading community is concerned we are now viewed as being in the sterling zone. Therefore, any further weakness of the pound will inevitably impact adversely on us. Try as we might, we have not been able to associate ourselves with the hard core group of currencies. It is almost irrelevant how we view the situation. That is the way the marketplace views the matter and we have to provide for that situation. How realistic is it to suggest that we will or should get our exports to our neighbouring island down below 30 per cent? It seems to be the most natural thing in the world for business people who share a common language, common legal and accounting practices, etc. to continue to do business. It seems logical for us to pursue that policy.

I should like the Minister to comment on the philosophy of his Department over and above what he said in his statement. Some questions have to be asked about the chart — I do not know if it was got from the Moriarty report or some other report. Questions have to be asked about the restructuring of the agencies, the fact that An Bord Tráchtála is reporting to the Department of Tourism and Trade, where this leaves Forbairt and why Forbairt come into existence in the first instance. I am not trying to spark off — I know this would be impossible — any dispute between the Minister for Tourism and Trade and the Minister for Enterprise and Employment, but questions have to be asked about whether this is the best way forward.

I note from the papers which were circulated that a sum of £111 million is allocated for Ireland's subscriptions to the International Rubber Organisation——

Chairman

The Deputy should refrain from asking such questions until we deal with that subhead.

Mr. Rabbitte

I was going to ask if the International Rubber Organisation had anything to do with the Bill we put through the House yesterday.

Chairman

I have received a statement from the Committee of Selection informing me that Deputy Ó Cuív has been discharged from the Select Committee on Enterprise and Economic Strategy and has been replaced by Deputy Ned O'Keeffe.

Before we consider the various subheads, I ask the Minister to refrain from responding to some of the questions which have been posed until we reach the appropriate subhead. Alternatively, he can reply to these questions in his concluding remarks. Are there any questions on subheads A.1-A.8, Administration?

Mr. Deenihan

With regard to subhead A.7, there seems to be a rather generous increase from £157,000 to £220,000 for consultants who provide professional advice. Will the Minister explain this increase? On Advertising and Publicity, what type of publicity is undertaken by his Deparment? I am aware of an increase from £9,000 to £32,000. Is there an overlap between this publicity and that of Bord Fáilte.

Mr. McCreevy

On the administration heads I would make the following points. Since the new Government came into office in early January this is a totally new Department, the Estimates for which had commenced under the former Department heads in mid 1992. Therefore, a start had to be made on what the Administration heads would be; they were already under the former Departments of Industry and Commerce and Tourism, Transport and Communications. Some staff from the Department of Foreign Affairs were transferred to my Department. The allocations here are the best that could be made at the time for the Book of Estimates. As this is a new Department the heads had been agreed under other Departments; therefore an adjustment had to be made to set up the new Department of Tourism and Trade.

Deputy Deenihan asked about subhead A.7 — Consultancy Services. This subhead relates to the fees and expenses for consultancy assignments of the Department this year. I have announced in my speech that we had commissioned consultants to assess the impact of the Uruguay Round of GATT. The foreign earnings committee has asked consultants to examine Irish overseas representation abroad and to report to it. We also have approval to go ahead with an hotel accommodation and investment study. I am satisfied that the consultancy figure provided for those studies will be adequate.

The Deputy asked also about the figure for advertising and publicity. We are now obliged under various European statutes etc., to publish quite a number of Government notices. Up to now my Department has not got involved with any other type of publicity. Basically all that money will be used on the publication of Government notices.

Chairman

We now move to the second programme — Other Services, Tourism — subheads B.1-B.6.

Mr. Haughey

There are two issues I want to raise on the question of tourism. The first relates to the whole question of regional tourism organisations. During the past few years the policy of Government and Bord Fáilte on regional tourism organisations has changed on a number of occasions. With the bringing forward of the enterprise boards, as proposed in the budget, there was a question of the survival of regional tourism organisations. Can the Minister clarify his own views regarding the role of regional tourism organisations and confirm that they have a major role to play in tourism promotion. They have a necessary democratic input into the whole question of tourism services. When we come to examine the question of spending Structural Funds the democratic input by the tourism organisations will be very important.

Second, what is the Minister's policy in relation to the Shannon stopover? I am looking around very carefully to see what colleagues are present from the various areas. This is all very tied in with tourism. There is no doubt that Ireland is losing a percentage share of the US market to Europe. Our share of US tourism to Europe is declining substantially because there are no direct flights into Dublin. Dublin is the only EC capital which does not have direct flights from America. I suggest that the future of transatlantic flights to this country as a whole is in jeopardy because of the maintenance of the Shannon stopover. The time has come to seriously consider this question if tourism is to be promoted and expanded. There is no doubt we are losing hundreds of thousands of tourists because we do not have some direct flights to Dublin. I know the Government policy as of now is to maintain the Shannon stopover but I think that will have to be reviewed. It does not make economic sense from the point of view of the country as a whole or of the philosophy of the EC, free markets and competition. There is no question of throwing Shannon to the wolves; all we are asking for is some direct flights to Dublin. I know the Minister for Trade and Tourism must have some views on that issue given its importance to the tourism industry.

Mr. Costello

I welcome the Minister to the House and congratulate him on being the first Minister for Tourism and Trade. Both the Minister's remarks and the date before us suggest a considerable improvement and development in the tourism and trade areas. While the 9 per cent increase in tourism is welcome I would ask the Minister whether that accurately reflects the situation. Certainly it seems we are operating from a very low base at present, that we have got a disproportionate amount of the increase in the world trade; we have not gone on to the situation that existed 30 years ago when we had a proportionately higher percentage of world tourism coming to Ireland. While the figures look good in terms of a percentage increase, in terms of the overall world increase in tourism they mean we have a very small segment of the market and less than we had 30 years ago.

On marketing Ireland abroad — subhead B.1 — the budget of £21,800 is spent largely on the promotion of Ireland abroad. Does the Minister consider that Ireland is adequately marketed abroad? I still believe from what I see of the promotion of Ireland, from brochures here or from flights out of the country, that it is still very much the green Ireland — green in the rural sense not in the Republican sense — that is being marketed and the development of an urban culture and heritage that has taken place is not reflected. That is particularly disadvantageous to an area such as Dublin which has one-third of the population and a disproportionate amount of employment in the city. The whole area of pubs, rock and roll music, our architectural heritage dating from the Christian, the Viking and the Georgian eras, is not being properly marketed. In Clontarf local residents put on "a battle of Clontarf" every year, for which they have never been able to get any money from Bord Fáilte to assist them, to tap into the Scandinavian market.

Activities to attract tourists during the offpeak and shoulder periods are covered under subhead B.1. The homecoming festival, which was to entice people of Irish extraction to visit Ireland, was organised last September. I believe it was badly planned and marketed and indeed it happened without anybody knowing of its existence. Why are the tourism proposals not properly prepared, researched and marketed? There are approximately 40 million people of Irish extraction living abroad and they could be encouraged to visit areas where their ancestors came from to find their roots. This could be a focus for marketing our tourism product, but last year the effort was a damp squib. I do not know if it will ever be tried again.

Will the Minister explain how this type of proposals come about, because they shoot up and then disappear?

The Minister referred to the opening up of the Shannon-Erne waterway, with the work being carried out on the Ballinamore-Ballyconnell canal. This is at a cost of £36 million and is funded by the EC, Britain and Ireland. The inland waterways are a very valuable resource that could be used throughout the 12 months of the year as they can be used for boating and fishing. At present the management of this resource is left entirely to the private sector. We should establish a co-ordinating body to promote tourism on our inland waterways. Will the Minister have this examined?

Mr. Hughes

I welcome the Minister to this Committee. I join with other members in wishing him well in his challenging portfolios.

I thank the Minister for providing £150,000 for the continued marketing of "Mayo 5000". He was not creating a precedent when he provided this money for Mayo because money was provided for the marketing of the Dublin Millennium and the Limerick Treaty celebrations. It is right and proper that when Mayo is celebrating 5,000 years of rural development "Mayo 5000" should be similarly facilitated. It was a great moment when the Minister of State at the Department of the Taoiseach, Deputy Noel Dempsey, opened the interpretative centre at Céide Fields last Friday. This magnificent centre, very sensitively designed by the Office of Public Works, is on the edge of a cliff, which is higher than the Cliffs of Moher. It is located in thousands of acres of bogland and one could not imagine a more desolate area. This interpretative centre is supported fully by the local community and was erected without a murmur of dissent. Indeed if there is any spare cash as a result of a lack of uptake elsewhere, we will be delighted with it because there are plans for an interpretative centre at the bottom of Croagh Patrick. The entire community in Mayo is anxious to further progress the county's standing in the tourism stakes. Tourism is emerging as one of the most important revenue earners and the employment it creates helps to stabilise the rural populations in Mayo.

I know the Minister is presently drawing up a policy for which he is seeking funding under the Operational Programme for Tourism. Will the Minister comment on the ability of large urban centres to draw down funding under the last programme which expired this year vis-�-vis rural area which cannot avail of these funds because they do not have the ability to put up matching funds? Apart from tourism, centres like Galway, Cork, Limerick and Dublin have a large population, a large business community which ensures that facilities such as golf courses and other leisure facilities are supported. Places like Mayo are extremely disadvantaged in this respect. I am extremely concerned that unless policy is changed, areas that have great tourism potential but whose facilities do not match those available in larger areas will not be able to avail of moneys from the next tranche. The Minister is aware of this point and has sole responsibility for drafting the policy that determines where Bord Fáilte provides grant aid. It is important that the policy is sufficiently flexible to take account of particular situations that may arise over the next few years. I accept that there is a need for a standard framework but we must make provision for projects that do not fall within this framework.

We now place great emphasis on marketing. Bord Fáilte has a large marketing budget and I recognise the necessity of that. It is extremely costly for the Irish indigenous tourism sector to market its product abroad, apart from having a presence at Bord Fáilte workshops. I believe we have failed to attract the major international tourism operators, with the exception of Club Med, to invest in Ireland. We have heavily manned IDA offices strung all over the world trying to attract manufacturing industries to locate in Ireland and I believe it has a role in attracting the mobile investment of the major players in the tourism field. Surely we should be trying to get them to locate in Ireland. Let me give an example: the Burlington Hotel employs up to 1,000 people at peak season; surely we should be trying to attract the major players on the world stage and pointing out to them our infrastructural advantages, the ease of access either by air or sea and the potential of "green tourism". We should provide incentives for them to locate here. Part of Bord Fáilte's brief — I am sure it is part of their brief, but perhaps there are not enough resources attaching to it — should be to target directly the large tourism operators so that we can build on the success of Club Med and the one or two international investors in Ireland. They have the muscle to market their companies worldwide and Ireland will benefit from that.

Mr. Deasy

Do not forget the Jurys Hotel Group.

Miss Harney

Or Buswells.

Mr. Deasy

And the Berkeley Court. The Deputy should not be selective.

Mr. Hughes

I thank the Deputies for reminding me of some of the other large hoteliers. Will the Minister indicate how tourism statistics are calculated and if there has been any refinement in establishing the number of tourists who visit this country. How does one differentiate in the statistics between a businessman returning from abroad and the tourists who may be travelling on the same plane?

Mr. McCreevy

Deputy Haughey raised two matters, one of which related to regional tourism organisations. I accept that in the past number of years opinions have differed in regard to the role of those organisations. In the context of establishing the county enterprise boards towards the end of last year, it was decided that the regional tourism organisation should cease to exist. There is a commitment in the Programme for Government to consider the regionalisation of tourism policy. When I took up office I met members of the regional tourism organisations and I had consultations with other people following which I announced that the regional tourism organisations would continue to exist. However, it was agreed that there would be significant changes in their composition and role. Negotiations have taken place between officials of my Department and members of those organisations and we hope to be able to announce those changes shortly. The regional tourism organisations have a role to play in the tourism sector but I accept that in various counties opinions differ in that regard. People in my county, which up to now has not been synonymous with tourism, have mixed feelings about the role of the regional tourism organisations and people in other counties hold similar views. In some regions the regional tourism organisations play an active role whereas in others they are unheard of and the public representatives from counties where such organisations do not play an active role do not care if they live or die. When the negotiations regarding the new structures for the regional tourism organisations are concluded I hope people in every county will feel they are getting a fair deal.

The Government's position on the Shannon stop-over is that it shall be retained. Public representatives and TDs are inclined to look after their own constituents because if they do not they will be left out in the cold. Public representatives from various parts of the country tend to view the Shannon stop-over as it relates to their particular county or region. That is a natural tendency. Of the members present today I could say who is in favour of the Shannon stop-over and who is not, and that applies to members from all parties. There are pluses and minuses to the Shannon stop-over and in reaching its decision the Government decided that the balance of advantage lay in retaining it and that remains the position. Deputy Haughey may say that its retention will affect the Dublin region, but if it is discontinued Deputy Killeen could say that it would affect his region. The matter has become a thorny issue over the past number of years but, having considered all matters, the Government concluded that the balance of advantage lay in retaining the stop-over.

Deputy Costello raised a few interesting matters. I am not sure who originally said "there are lies, damn lies and statistics" but all statistics can be altered to suit the circumstances. Deputy Costello stated that our tourism figures look very impressive but when different comparisons are made the figures may not be the same. In other words, world tourism has increased and our figures in Irish terms have increased, but when our share of world tourism now is compared with that of 25 years ago it has decreased. The figures can be calculated in various ways. However, regardless of what way the figures are calculated the denominator regarding world tourism will increase in the future. By the end of this decade world tourism will be the largest economic activity globally. That is a statistical fact.

The growth in Irish tourism figures in the past five years, impressive through they may be, has mostly come from continental Europe, excluding the United Kingdom which is our main source in regard to tourism. The figure has increased from approximately 408,000 tourists five years ago to a figure of 875,000 in 1992. Of those 875,000 visitors, approximately 235,000 come from Germany. Prior to the unification of Germany, of the 60 million people in the former West Germany approximately 27 million went on holidays every year. Therefore, a figure of 235,000 visitors out of 27 million people is relatively small in percentage terms. However, the increase in German tourists is the main engine in the growth of our tourism market. I have played around with statistics for a number of years, frequently to my benefit, to back up arguments. If we can secure a small percentage of the total world growth in tourism it will be colossal in Irish terms. That is my Department's objective.

Deputy Costello referred to the traditional marketing of Ireland. He stated that very few people were aware of the Homecoming Festival. I must confess I had not heard of that festival until today and there is no point in pretending otherwise. I did not know that that festival took place in 1992 and I am sure the same applies to many other Deputies.

Mr. Costello

Most people have not heard of it, yet it was a month long tourist festival.

Mr. McCreevy

It must not have been marketed effectively otherwise I would have read about it in the papers.

Mr. Deenihan

The present Commissioner was made chieftain of the O'Flynns during that festival.

Mr. McCreevy

I recall that occasion.

Chairman

The Chair can only afford the Minister a certain amount of protection.

Mr. McCreevy

I recall seeing on a television programme the former Minister for the Environment, Pádraig Flynn, parading in Castlerea and I am sure Deputy Hughes recalls that also. Deputy Costello made a valid point regarding the marketing of Dublin as a tourist centre. He considered that the growth in Irish tourism has not been confined to areas along our coastline. There has been an increase in the number of tourists interested in our heritage. This has come about because of the works of great writers such as, James Joyce, who was born in Dublin. Thousands of people, particularly from continental Europe, are interested in holidays of that nature. Heritage Ireland is an organisation who have been promoting that market for the past number of years with great results. Bord Fáilte is also promoting this area of tourism.

A tourism task force recommended, among other things, the setting up of product development companies, one of which will deal with heritage and cultural tourism. There is a market for all kinds of tourism. A group in Ireland is now going into the business of religious tourism. That is the kind of market that Ireland must tap into. There is no point in fooling ourselves that people will come here because we are lovely, friendly people who stand a round in the pubs, tell jokes and drink until after hours and get up the next morning with sore heads if at the same time we charge them too much. The fact is that people are coming to Ireland to pursue special interests such as the areas the Deputy mentioned. One of my plans, which I will be bringing forward, in conjunction with Bord Fáilte, is to exploit the tourism market which is the fastest growing market in the world.

The question of waterways, including the Erne waterway, was raised. The waterways are dear to my heart. My people have been associated with the Grand Canal line since it was built. They have lived in the same house at the 14th lock on the Grand Canal and I spent most of my younger life canoeing and fishing there, so I have a great interest in that area. The opening of the Ballinamore-Ballyconnell navigation system means that Ireland will have the longest stretch of inland waterway and that must be exploited and marketed. It will open officially in May 1994. I met with my Northern Ireland counterpart with a view to marketing this waterway as a unit. It would be ridiculous to market it separately as between different sides of the Border. I am not pre-judging what will happen but I hope that is what will take place. Cruising is another growth area of European tourism and I will bear the Deputy's comments on that in mind.

I was glad to be in a position to assist Mayo 5000. I was at the press conference some time ago and I know that the number of activities taking place down there as a result of Mayo 5000 will benefit County Mayo for many years to come. The question of EC funding was also mentioned. There are many thousands of groups connected with tourism and I have met a fair cross-section of them. The point was made by Deputy Hughes and others that there should be some flexibility in EC funding as some part of the country do not have the population and businesses to enable them to put up the matching funding. This is something I am considering in the context of the new 1994-99 programme. I know the point the Deputy is making and I will try to be flexible in that regard.

Marketing and overseas representation were raised. I am responsible for Bord Fáilte, the Trade Board and CERT. Two of those agencies have bodies overseas. The IDA have representation overseas. Our embassy structure has representation overseas, CBF and Shannon have representation overseas. Before I became Minister I was convinced, and I am even more convinced now, that there will have to be some rationalisation of our overseas representation. The former leader of my party, Mr. Haughey, highlighted this need at least ten years ago. Some changes have taken place with the concept of Ireland House in London which is very successful and, shortly, there will be an Ireland House in New York. However, it is not just a question of having Ireland Houses. Other countries have rationalised their overseas representation. So many of the organisations are so touchy about their own organisations, including my own Department, that one must be very careful, so I will refer to the whole area of overseas representation. A committee which I reconstituted since I became Minister has commissioned outside consultants to look at overseas representation and they will be reporting very shortly. However, I am convinced of the need to rationalise and focus our activities abroad.

There was a question about the compilation of statistical information. I came to the Department of Tourism and Trade with deep scepticism about how these figures were compiled. However, an interdepartmental group which was set up some years ago was satisfied about the method of compilation. It is not the function of my Department to calculate the tourist figures for this country. That is the remit of the Central Statistics Office. I am satisfied with the basis on which these figures are enumerated. The figures are compiled using international standards and surveys, just as in other countries. If there is any way of improving matters I will be willing to look at the matter again, as I said in reply to a Dáil question some time ago.

Chairman

I would like to draw your attention to the fact that eight other members have indicated that they wish to put questions to the Minister. It was intended to conclude at 1 p.m. We have yet to deal with the trade Estimate. It is a matter for the Committee, but if you want to adjourn and reconvene after lunch, that will be in order. However, if we want to get through the business as proposed in the programme here, I would ask members to confine themselves to asking questions and not to make statements; statements have been made on behalf of all the parties at this stage. I must also appeal to the Minister, who is obviously enjoying himself.

The next group of speakers are Deputies Molloy, Deenihan and E. O'Keeffe, in that order.

Mr. Molloy

I would like to join with the other members in extending a welcome to the Minister in his new office. I welcome him to this Committee and I wish him well in his period of office. Having said that, I was disappointed with the Minister's statement, particularly what he said about being here today to share his Department's plans with us. Having listened carefully, I heard no evidence of the Minister's plans for the development of tourism. This is part of the problem. The Minister's title is "Minister for Tourism" but, in effect, the job of promoting tourism in this country has been given by the Oireachtas to Bord Fáilte and the Minister is in the invidious position of not being answerable to the House for the day-to-day operations of Bord Fáilte. At least that is the answer we get when questions are asked. At the same time, members and the general public look to him as the person formulating policy on tourism and therefore responsible for the implementation of that policy. There are many difficulties that need to be ironed out. Bord Fáilte have a problem in implementing their policy at ground level where much of the quality of the tourism product is greatly dependent on the performance of the local authority.

There is a need for close co-operation and co-ordination between the various authorities to ensure that we develop our tourist product in the best possible way to gain the maximum revenue from this industry which has a major revenue-earning and employment-creation capacity. I had hoped that the Minister would indicate his plans for the future. We had an excellent period of growth in tourism when Mr. Dully was Chairman of Bord Fáilte. Bord Fáilte was given very ambitious targets by the then Government and came close to achieving those targets in nearly all respects. Great credit was due to Mr. Dully for the enthusiastic manner in which he set about achieving his task.

I do not wish to make a speech, I understand I should confine my contributions to questions. Would the Minister indicate his views on the difficulties that have arisen in regard to the changes in the industry where there has been a growth in demand for bed and breakfast type accommodation and a substantial decrease in the number of tourists who avail of the better quality facilities, for example, hotels? The RDTO published a development plan for the years 1993 to 1997. The report states that in the period 1988 to 1992 the number of hotel rooms in the Ireland west region dropped by 7 per cent while guesthouse rooms showed a decrease of 9 per cent. From those statistics one might consider that tourism was a dying industry in the western region.

However, the town and country homes in the region have shown an increase of 37 per cent and self-catering accommodation has shown a substantial growth of 26 per cent. During the years 1987 to 1991 tourism revenue in the Ireland west region grew by 50 per cent. A major change is taking place in the type of accommodation being availed of by tourists coming to the region. There is a demand for bed and breakfast accommodation which is generally accepted to be the backbone of the tourism industry in the west.

A major difficulty has arisen in respect of a recent planning decision whereby people cannot now operate bed and breakfast accommodation unless they have obtained formal planning permission from the local authority. Thousands of people in this industry do not have planning permission. Is the Minister's Department concerned about this problem and would he indicate what action he and the Government intend taking to deal with this matter which is of major concern. It will be necessary to improve the standard of bed and breakfast accommodation, to obtain planning permission and to register with Bord Fáilte. To obtain planning permission standards will have to be achieved. Would the Minister consider introducing any form of grant aid or diverting funds towards this lower level of accommodation within the industry? We are aware that EC grants with Department and Bord Fáilte approval have been obtained for the development of modern, high standard hotels with amenity and recreational facilities. That is all very well and adds to the quality of product available but the bulk of tourists are availing of lower standard accommodation. The people who provide lower standard accommodation cannot afford to improve the standard of their accommodation. Therefore, it is important for the Minister and his Department to consider the policy in this area and divert some EC funds towards improving the quality of lower standard accommodation which is availed of to such a great extent.

Deputy McDowell referred to the difficulty experienced by people from the Middle East and Far East in obtaining visas to enter this country. This is a matter of concern and I would like the Minister to indicate how this position can be improved? I know this matter does not relate specifically to his Department but it affects the success of his plans for the development of tourism. Some members attended a recent parliamentary delegation in the Indo-China area and this matter was raised frequently. We heard that people who were interested in promoting Ireland had thrown in the towel because of the delay encountered in obtaining a visa to visit this country. The impression appeared to be given that we were not anxious to attract tourists. A visa could be obtained for the United Kingdom within a matter of hours but it would take a period of months to obtain one for Ireland. There appears to be an in-built resistance to extending a welcome to people in that part of the world and that is regrettable and that is something that requires attention. Even though this is a matter which has been brought to the attention of the authorities nothing appears to have been done about it.

I ask the Minister to co-ordinate his Departments plans and those of local authorities, regional tourism authorities and Bord Fáilte. Some 200,000 tourists visit an island in my area which has 800 residents. The island is not capable of adequately catering for this high level of tourists. It does not have the infrastructure. Yet, every brochure published by Bord Fáilte advocates the charms of the Aran Islands. Hundreds of thousands of people pour on to the islands and the facilities are not there to cater for them. No authority has responsibility for providing the necessary facilities. There is no public sewerage in Kilronan, which is the main village on Inis Mór. The road structure is totally inadequate. There is congestion on the narrow roads with pedestrians, cars and minibuses. No attention has been paid to these problems by anybody in authority. If we do not improve the produce we cannot expect to obtain the required levels of growth in the industry.

Coming from a regional tourist constituency I find it tragic to see the extent of the facilities that are left unused for long periods of the year. Too much of our tourism industry is dependent on a very short season. July-August is the period when the greatest amount of revenue is collected by the tourist industry. Tourist facilities are available for the remainder of the year. The marketing of tourism in Ireland must concentrate on expanding into the shoulder of the season and into the period that is now considered off-season. People do not come here to lie on the beaches in the sun, they come for other reasons. Our climate is not a disadvantage but an advantage. New tourist activities have been developed, for example, hillwalking and interest in heritage and culture. A new tourist area is being developed which is not dependent on the finer days in July and August. The tourism season can easily be extended if this area is properly marketed. A weak marketing effort appears to have been undertaken in regard to expanding the season and attracting tourists in the off-peak period. The tourist facilities are still available, they are lying idle and those people who could be locally employed are let go during this period. It would be a major advance if those facilities could be used to full potential and I ask the Minister to examine this. When will the Minister publish details of his plans for the tourist industry? Will the next phase in the development of tourism start in 1993 or will we have to wait for a 1994 programme? It is important that time is not wasted. If we allow a lacuna to develop it will be difficult to maintain the levels of growth achieved to date.

Mr. Broughan

Chairman, I request that speakers be confined to asking questions as the remaining time is short.

Chairman

I do not want to rule out any speakers. The Minister is giving detailed responses as quickly as possible. I am of the view that we may have to forego the opening statements; everybody appears to be making either an opening or closing statement. I appeal to speakers to confine their contributions to questions.

Mr. Deenihan

I wish to ask the Minister some questions. In view of the growth forecast for the tourist industry, would the Minister indicate if he expects an increase in revenue from foreign earnings of approximately £800 million and that 35,000 jobs will be created in the next five years. The Minister cannot expect this to happen with the present budget for marketing. For example, in 1985 Bord Fáilte received something in the order of £31.6 million. This has been reduced to £21.8 million in 1993. Since last year, promotion in the market place has been reduced from £11.7 million to £10.2 million. It is difficult to explain how, on the one hand, we put so much money into developing tourism products throughout the country while, on the other hand, we cannot sell them adequately in our niche markets around the world due to lack of funding. I would like the Minister to address that issue.

Reference has been made to two markets in particular, the US market and the German market. Can the Minister explain why our take of visitors coming to Europe from the US market declined from 6.5 per cent in 1987 to approximately 5.4 per cent in 1992? On the other hand, Scotland has considerably increased its numbers of American tourists. Is there something wrong with our marketing programme in the United States? I suggest to the Minister that we should consider establishing regional boards in the US to market the various areas of tourism here. I am sure many Irish Americans involved in the tourist industry in America would be happy to become involved in this. Regional boards could be set up in the west, east and mid-west of the United States. Our marketing programme could be focused there.

Regarding Germany, the figures quoted, for last year are that 22.6 million Germans travelled outside their country. I realise they share a border with other countries, such as Austria and so on, but despite this a large proportion of Germans leave the Continent of Europe to travel abroad. We attract only 220,000 or 230,000, approximately 1 per cent, of this figure. There must be some explanation for that. I would like to ask the Minister whether he considers that our lack of language skills inhibits our marketing expertise and our penetration of the markets abroad? It is certainly inhibiting our reception of tourists here.

Recently I witnessed a group of German tourists and their guide, who had limited English, arrive at an hotel an hour ahead of schedule. Total confusion ensued due to lack of communication; the hotel personnel could not speak German and the tourists could speak only limited English. That incident brought home to me quite forcibly the value of foreign languages. Through our education system we must place more emphasis on competency in foreign languages.

I agree with the comments made by Deputy Molloy about activity holidays. There is great potential in activity holidays and this has been identified in almost every tourism report over the past ten years. But unless we address the problem of occupiers' liability the countryside will be closed to tourists, as well as to urban dwellers and sporting organisations. I am unhappy with the attitude taken by the Government to the Bill I have before the Dáil at present. A few weeks ago the Minister gave a firm commitment to the IFA that people who enter a person's land will be deemed to have done so at their own risk. I am sure the Minister supports my views and I see no reason why this Government cannot accept my Bill which would resolve the difficulties that exist in this area.

Chairman

May I suggest to the Deputy that his Bill is still under consideration in the Dáil?

Mr. Deenihan

The tourism task force produced a comprehensive report last October. It was one of the better reports which focused on the real issues although it was criticised by a number of experts in the field. I believe it was a realistic report but what has happened to it? When will the various recommendations proposed in that report be implemented? There are several reports gathering dust on shelves around this country on which no action has ever been taken.

I would ask the Minister to comment also on the problem of crime against tourists and the steps we are taking to offset the bad image created by this problem. I accept there may not be as many incidents of this type as the media would have us believe but nevertheless they are significant and are reported, particularly in the English media which is our main market.

There are several other questions I would have wished to ask but I will not delay the Committee's time. I would ask the Minister to address also the points I raised earlier.

Chairman

In view of the time constraints I would ask the five remaining speakers to make their contributions and the Minister to respond after that.

Mr. McCreevy

That is satisfactory.

Chairman

The remaining speakers are Deputies Ned O'Keeffe, Smith, Deasy, Broughan and Killeen. I now call Deputy Ned O'Keeffe who I wish to welcome to the Committee.

Mr. E. O'Keeffe

I wish to congratulate the Chairman on his appointment to this Committee. I had the privilege of working with him in the past and I have no doubt we will enjoy an excellent relationship due to his even-handed approach in all matters. I also welcome the Minister here. The last occasion on which I spoke in this Chamber was during my short apprenticeship back in 1982. I have been a Member of the other House since that time.

I wish to make several points on this issue. In regard to subhead B.3. of the Estimates one aspect that surprised me was the substantial loss incurred in the course of a currency transaction where the figure reduced to £352,000 from a provisional issue for £1.3 million. I would like to ask the Minister what safeguards are being put in place to avoid this occurring in future? Can the Minister indicate what currencies were borrowed, whether only one currency was involved and why other currencies were not borrowed? We should have greater expertise in this area to avoid losses such as this occurring in the future. We are all aware of the volatility of currency markets and this transaction involved a substantial amount of money. It may be only £1 million that is being provided but it represents a substantial amount of money. We all refer to value for taxpayers' money but we must ensure that there are better safeguards in this area.

I wish to refer now to a project which was to commence in Youghal in east Cork called the water world project. It was withdrawn last year because of Bord Fáiltef's failure to grant-aid the project. This represented an important project for this seaside town. I understand this was an American idea and the promoters had reached the final planning stage only to have the project withdrawn at the eleventh hour. A town such as Youghal, offering substantial employment, and which has always been a hospitable town suffered severely and morale in the area was reduced. Youghal is on the main tourist route from Rosslare to west Cork and beyond and we have been developing many projects in that area. These include the Midleton Jameson Centre and the Cobh Queenstown project which add to the economic viability of the area in terms of tourism. If this project was to proceed it would represent a great tourist attraction in the area. I would like the Minister to give a commitment this afternoon as to the future of that project and give his assurance that the programme will go ahead. The town is anxious to have the project get underway.

One attraction here enjoyed in particular by German tourists is our traditional music and culture. In the southeast it is becoming difficult to provide Irish music and culture activities as readily as we would wish. There should be some incentive given to organisations such as Comhaltas in areas where there is a resource of talent which can be kept alive and utilised as a tourist attraction. German tourists have been big spenders in this country and we should continue to promote Ireland in that country.

I agree with Deputy Haughey that this country is losing out as a result of the Shannon stop-over. We must change our whole attitude to this matter. Because of the delays involved, many American visitors opt to travel to London and Manchester and spend a few days there rather than travel to Ireland. This matter will have to be reviewed in a mature way. As well as the delays involved there is also a cost factor for flights stopping at Shannon. I have come under some pressure about this issue but it must be considered on its merits. At the end of the day we must be efficient and offer a good service. The transatlantic service is inefficient for business people and others who are looking for alternative ways of coming here so as to avoid the delays involved.

Mr. B. Smith

I am glad the Minister referred on a number of occasions to the restoration of the Ballyconnel-Ballinamore canal. I particularly welcome his announcement that there will be proper, co-ordinated marketing of this major cross-Border resource. As the project will finish within budget I request the Minister to advance, as rapidly as possible, another inland waterways project, the need to extend the Erne navigation from Belturbet, through Lough Oughter, to Killeshandra and Killykeen Forest Park. That project will be complementary to the restoration of the Ballyconnell-Ballinamore canal and it also has a cross-Border dimension. The people of Cavan, Fermanagh and Leitrim are very appreciative of the work of former Taoiseach, Charles Haughey, and former Tánaiste, John Wilson, in setting in motion the restoration of the Ballyconnell-Ballinamore canal. They will be equally grateful to this Minister when he secures the necessary funding to commence the restoration of this part of the Erne. I appeal to the Minister to advance this project from the next tranche of Structural Funds.

Mr. Deasy

Deputy Smith has put me under pressure because having listened to a series of Second Stage speeches we now have to do a bit of a sprint. I take the point made by the Minister that the Central Statistics Office compiles the tourism figures. In conjunction with that office the Minister should attempt to break down the figures to determine the number of tourists visiting the country. It is not acceptable to have a figure incorporating people coming here on business and Irish people coming home on holidays or to events such as funerals and weddings. As Deputy Nealon pointed out some years ago, a local footballer coming home to play in a club championship on six occasions would be classified as six tourists. Therefore the figures are incorrect and a true attempt should be made to break them down. Deputy Dennihan made a frightening statement, that more tourists came here in the sixties than are coming at present——

Mr. Deenihan

A greater percentage.

Mr. Deasy

Basically we avoid saying what should be said, that the basis of the tourism problem is the troubles in Northern Ireland. I travel a lot — although not as much as the Minister and not to such exotic spots as Malaysia — and as a member of the Council of Europe I am astonished at the lack of knowledge of continentals — the people on whom our tourism primarily depends, with the exception of the British and Americans — about this country. They cannot differentiate between Southern and Northern Ireland. They regard this island as being in flames, an island where there is continuous warfare, with nothing but bombs and bullets. These people over-estimate the degree of violence in this country and that prevents them from coming here. This is a question that must be addressed if we are to attract these tourists. That perception of violence is worldwide although we are not willing to admit it. The number of highly intelligent and informed people who do not come to Ireland because of the troubles is astonishing. That is the main reason our tourist industry is labouring.

I agree with Deputy Haughey and Deputy Ned O'Keeffe that the Shannon stop-over is seriously detrimental to the tourist industry. We will have to deal with this matter maturely. I am not saying we should get rid of the stop-over immediately but there should be some compromise whereby a phased change-over could take place with certain operators being allowed to fly direct to Dublin. Many Americans who come here say they will not come again because of the delay at Shannon, which adds further to the length of their journey. Instead, these people travel to London or Paris. One can take it from what I and Deputy O'Keeffe have said that we are not going forward for the European elections next year, although that is not an official announcement. We must be honest about this matter and if parochial politics enter into matters of national interest everybody should be willing to say so — I do not expect people such as Deputy Killeen who is living on the doorstep to say so, but the rest of us should.

Another fact we do not like to admit is that tourists are shocked at the price structure here. High prices prevent people from coming here. Tourists expect a relatively low price structure and are taken aback by the charges they have to pay here. This matter is relevent to an interview I heard recently on the "Gay Byrne Show" with the former chief executive of Bord Fáilte, Martin Dully, who agreed that we have a very low rate of repeat tourists. Surely that fact speaks for itself. As much as people enjoy Ireland — as previous speakers have pointed out, tourists love this country — the cost structure is so severe that they are not inclined to return. As Deputy Molloy and others pointed out, the weather does not prevent tourists from coming here. They are glad to get away from the scorching sun and unbearable heat and, despite the weather in the last couple of weeks they find the climate here bearable.

There is a bad perception of Bord Fáilte among people in the tourist trade. If Bord Fáilte is mentioned to them they say: "Bord Fáilte, God help us". Many hotelier and people in the catering trade carry out their own promotion in Britain, America and on the Continent. They have no confidence in Bord Fáilte and believe it is not capable of meeting their requirements. That is a serious indictment of that company. There are many medium-sized hoteliers in my constituency who go abroad at their own expense to promote their businesses. Appointing a veteran civil servant as chairman of Bord Fáilte was an extraordinary retrograde step. A person with an intimate knowledge of the business should have been appointed to a position like that. Despite the fact that the chairman is an excellent civil servant, his appointment was a slap in the face to the people in Bord Fáilte who are working very hard. It must demoralise the organisation.

Mr. Broughan

I welcome the Minister to this new Department and I am glad we have such a dynamic Minister in charge of it. It deals with 70 per cent of our GNP. I hope he can develop the ideas he has outlined.

Does the Minister agree that the real figure for holiday visitors is less than 1.5 million? Dublin people in general are unhappy with the marketing of Dublin by the Dublin Tourist Board and with the approach of Bord Fáilte to Dublin. While watching the Eurovision Song Contest I felt that the older images of Ireland were being reinforced. Many of us feel that Coolock, Ballymun and Clondalkin are just as representative of Ireland as Kerry, and these areas combined have a far greater population than Kerry. There is scope for promoting Dublin but it has not been promoted abroad by Dublin Tourism. Will the Minister consider abolishing Dublin Tourism and rethinking the way in which Bord Fáilte sells the capital? Throughout Europe capital cities are proudly sold as places in which to take a break of three or four days or even a holiday.

I was interested to hear the Minister refer to his ancestors on the Grand Canal. Some of my ancestors come from the same area. Those are the areas we should promote. Edinburgh is a significantly smaller city than Dublin and it has drawbacks, but it is promoted by the British Tourist Board. It attracts substantially more tourists than Dublin does. Why should Dublin not do as well? It is a national capital whereas Edinburgh is a provincial city, despite what the Scots might think. Our capital is not marketed in the right way. We should emulate in relation to Dublin what other tourist boards are doing.

I am totally in favour of abolishing the Shannon stop-over. Many people on Dublin local authorities have raised the point as to whether Dublin County Council and Dublin City Council should apply to take over the running of Dublin Airport because we could put forward the case for Dublin in a more effective way than Aer Rianta. Dublin Airport is central to the development of this region.

The Minister referred to the fact that his portfolio was so important because it related to jobs. Will the Minister examine the conditions and wages of people in the tourism industry, particularly in the offpeak seasons? I have been informed by representatives of joint labour committees that the conditions endured, particularly by young workers, in this area is totally unsatisfactory. Does the Minister have any intention of taking action in those areas?

Mr. Killeen

I was interested in the Minister's commitment to examine the co-ordination and rationalisation of the overseas offices. People in the private sector have told me that the office-based marketing procedure, the method generally used by State bodies, has become obsolete and extremely ineffective. They have more success in approaching firms directly and using a more aggressive marketing technique. This has fairly major implications for the kind of operation that traditionally has been the marketing system used by most countries in their overseas efforts. I would be interested to hear the Minister's views and on the success he has had in co-ordinating the efforts of the various agencies and in changing the emphasis and approach to marketing.

Subhead E. refers to the grant for a car hire sector in 1992 but there is no provision for 1993. People in this area have come up against major difficulties in financing their operations for 1993. The lending institutions appear to be taking an inflexible line. They have had at least one bad experience of which we are aware. There may be a need to consider some support for this sector in 1993. This is an extremely important sector. If tourism has been successfully marketed and the tourists arrive it is most unhelpful if they find themselves without access to transport when they arrive.

Another problem relates to the lack of infrastructure in some places. We need to prepare integrated tourism plans for particular areas. The agencies in my area in north Clare are in the process of preparing an integrated tourism plan for the Burren which I hope the Minister will support. The initial draft plan is now available. It points up the difficulties in the area. We need several plans of this type and support for them.

With regard to the Shannon stop-over issues I am confident that while the Government continue to do as the Minister has said and examine the issues on the balance of national advantage, it will come down in Shannon's favour. The people in my region have never said that the Shannon status as the transatlantic airport must be eternal. We have been saying that it is an enormous prop for our region. When better provision is made we will be prepared to look at it. In the meantime there is no such prospect.

The greatest difficulty in terms of access to Ireland is not where one arrives but the cost of arriving there. I live about 20 miles from Shannon Airport but I can go to America more cheaply by flying from Shannon to London and then to America than by going directly from anywhere in Ireland. Our greatest disadvantage is cost. There is a difference of about £200 between flying from any Irish destination to America and from London or Manchester. That has implications for Aer Lingus. This matter will be discussed in the context of Aer Lingus. It is not just a matter of access. There are factors such as cost and the enormous range of destinations which are available from London and Manchester. I am disappointed that Deputies from my province are so easily fooled by the propaganda of some elements of the Dublin lobby, but maybe that is to be expected.

Mr. S. Ryan

On tourism and the need to sell Ireland and the difficulties being experienced in that area, the Minister and other Deputies referred to places like England, America and growth areas in Germany. But there is an area in the Far East in which there is great potential. As somebody who, over a year ago, availed of the opportunity to visit that region I was amazed to discover that there was absolutely no tourist literature available or being marketed there to sell the tourism potential of this country to them. While An Bord Tráchtála and their people out there were doing their best there was no evidence whatsoever of Bord Fáilte's presence. As the Minister said, we should endeavour to tie all our efforts together so that we have one body or agency providing all the requisite information. The Far East is a particular potential growth area for tourism here. I suspect many people there do not even know our geographic position and that many travel only as far as England. It should not be an enormous selling task for us.

While appreciating that the Government must take concrete decisions within budgetary constraints, I ask the Minister, within the context of next year's budget, to examine the amount of VAT imposed on car hire here because it acts as a disincentive to potential tourists, particularly bearing in mind the competition in England and other European countries.

I would ask the Minister also to examine the general unapproved bed and breakfast accommodation here. There may be many reasons people do not register but it would be in all our interests if as many as possible of those bed and breakfast houses were brought under the umbrella of Bord Fáilte. There is a need also for a graded system of guesthouses here. In an endeavour to encourage such grading I would ask the Minister to examine the high costs of affiliation to and inspection by Bord Fáilte, two factors that might inhibit people from registering. Nonetheless, it is essential that everybody be involved and interested in standards generally.

Various members correctly referred this morning to easy access to this country. While it may not fall within the Minister's immediate brief a short term decision will have to be taken in relation to Aer Lingus and its role in attracting tourists here. In relation to the Shannon stop-over, I have always held that there was need for a slight modification of that arrangement. I know Government decisions have been taken on the matter but at the end of the day if the Government should decide in the national interest that the Shannon stop-over should remain, then Aer Lingus would be entitled to certain compensation for the effects and costs of maintaining that stop-over. This decision in relation to Aer Lingus will be a most important one for the country generally, when the social and regional implications are borne in mind. We must ensure that the correct decision is taken, one that will secure the future of Aer Lingus while being of benefit to our tourism industry generally.

Miss Flaherty

The Dublin scene has featured in this debate. I welcome the regional support, apart from Dublin, for the need to change and develop tourism policy. It is great to hear members from Cork and Waterford accept that the time has come for a change in this policy, of which we in Dublin have been convinced for a long time. Very interestingly I heard, at one of the other Select Committees when the subject of decentralisation was being debated, my colleague from Dublin North, Deputy Burke, make a passionate plea for the Dublin region which has suffered enormously as a result of unemployment. It has lost more jobs than any other region nationwide. If the Shannon stop-over is perceived as a regional policy, then I might point out that the Dublin region suffers very badly from loss of employment and investment. This is not generally understood and I do not expect much sympathy from around the country. Nonetheless, I welcome the fact that people seem to feel that the national interest would be served by a moderation of the policy, allowing at least some direct flights into Dublin Airport. Many members speaking on this subject referred to the use by American tourists of London or Paris as access points rather than Shannon. Similarly, many of our business people use London to fly to the States because, in many ways, it is handier for them to do so. Taking everything into account, the greater choice of destinations at those points, in addition to the inconvenience of the Shannon stop-over, the cost factors referred to by others, all militate against their using the Irish airline, which is what we would all like to see them do.

There is one area of development about which we in Fine Gael are very concerned, that is the need to devote special attention to co-ordinating promotion. This is all the more important given the huge growth there has been in the development of local attractions, outdoor activities, the heritage area etc., by local communities.

I had my first holiday outside the country in ten years last year. I almost always holiday in Ireland and I observe tremendous activity in local areas of private enterprise, community-based programmes and so on. Their greatest weakness is in the manner they are organised, publicised and promoted. We should like to see two things happen in that respect, first, a specific provision in the tourism section of the Structural Funds programme for the promotion and marketing of locally based tourism activities and, second, a concerted drive to coordinate marketing and promotion within their sector of our tourist industry. I should like the Minister to give us an assurance that he will include those two factors within the context of the Structural Funds programme.

I had the opportunity recently of deputising for the Lord Mayor at an Irish-Argentinian Society function. I know that Bord Fáilte have opened an office in South America, or have established some type of contact there and perhaps the Minister might elaborate on that. But I was astounded to discover that in Argentina there are 300,000 people of Irish descent, most of them wealthy and well established. I am sure that fact is mirrored throughout the South American Continent. While I had known of Admiral Browne from my history books, I had not realised there were so many second sons of prosperous families sent out there in difficult times, to make a living, over the past two centuries. There is a tremendous potential market in the whole Continent. I do not know whether it has been adequately tapped but it is certainly something we should examine and endeavour to actively develop.

The Minister gave us some percentages in relation to the gross share of tourism in the services employment. Can the Minister give us some figures in relation to employment generally, on the types of targets set in the past, whether or not they have been achieved and what type of employment targets we might expect from the anticipated growth?

I should also like the Minister to give us some figures with regard to domestic tourism, for the Irish person holidaying in Ireland. My colleague here has told me that £800 million was spent by Irish tourists travelling abroad. Obviously we should endeavour to attract back a share of that. I know the bad weather of the past month has not helped but this is a huge potential market which should be actively and vigorously tapped.

Having regularly taken holidays at home I know that for the cost of a cottage or a self-catering home in Ireland for two weeks in the high season, one could have one's choice of continental holidays, perhaps at a better time, certainly not in the peak period, showing clearly that costs here are a very real factor and act as a deterrent. This area should be targeted to encourage more people to holiday at home. Does the Minister have any figures which show what the present trend is?

One of the problems in promoting Ireland as a tourist destination is that all the research shows that it seems to be regarded as a cultural desert. The Minister mentioned that a number of areas will be targeted. Is there any evidence to show that we are denting that image, because there is much to do and to see in Ireland? Does the Minister intend to try to present a different image of Ireland to potential international tourists?

Chairman

Before the Minister responds, I ask him to note the points which have been made on the question of the Shannon stop-over as it does not form part of his brief.

Miss Flaherty

Are you afraid of what he will say?

Chairman

Not quite, but I allowed a certain amount of latitude. While I appreciate that each Deputy has to make a case for his or her own area it is not part of the Minister's brief and I do not think he should be asked to respond. However, he could note the points which have been made in that regard.

Mr. Deenihan

In referring to SFADCo, would the Minister deal briefly with the question of marketing Kerry International Airport?

Chairman

I have no doubt that the Minister will bear that in mind when the matter is being discussed at the Cabinet table.

Mr. McCreevy

Deputy Molloy made an interesting point in regard to the role of the Minister for Tourism and Trade vis-�-vis Bord Fáilte. One could take the legitimate view that Bord Fáilte is the executive arm of the relevant Government Department and should have sole responsibility in the tourism area, but I hope in my time as Minister that Bord Fáilte and the Department will work closely together. I cannot disagree with the point made by the Deputy in this regard because if things go wrong in the tourism sector it is the unfortunate Minister of the day who will be blamed whereas if things go well he will not get credit. Furthermore, if things go wrong the Department’s officials will be held responsible when they are questioned at the Committee of Public Accounts about the agencies which operate under its aegis. While one would not want to see the Minister and the Department involved in every activity I would like to see the Department and Bord Fáilte and, indeed, other State agencies co-operating more closely. The position is that we set the policy while Bord Fáilte implements it. In my time as Minister I would like to see us work in harmony.

Deputy Molloy also made the point that much depends on local authorities in regard to tourist facilities. In this regard he mentioned the Aran Islands in particular. What he said is true; what the local authorities do will determine whether tourists will continue to visit particular areas. This presents a difficulty but local authorities, such as Galway County Council, are conscious of the importance of tourism to the regions.

Mr. Molloy

Thousands of tourists but no public sewerage system.

Chairman

The Minister to continue without interruption.

Mr. McCreevy

The Deputy has often raised that particular matter in another forum. He also raised the question of accommodation in bed and breakfast establishments as against hotels. Since I became Minister I paid particular attention to this matter. Certain people in the industry hold the view that we should continue to upgrade our facilities and have the most expensive hotels in which one would pay a couple of hundred pounds a night for a room while in hotels with beautiful leisure cenres one could be charged £80 to £100 a night. The theory is that in this way will be able to attract upmarket and high spending tourists, but the figures for the past two years seem to indicate that many of the tourists that we attract are low spending.

Some people in the industry and State agencies say that we are not going after the right person but common sense tells me that right throughout the world people, including corporate entities, are trading downwards in respect of all activities; the chief executives of the best run companies in Europe do not always travel first class, they are just as likely to be found at the back of a plane and to look for reasonably priced accommodation. The same applies in the tourism industry; people throughout Europe and America are trading downwards and looking for good value for money. As Deputy Molloy said, this raises the question of whether facilities at the lower end of the market should be grant-aided. As the Deputy is aware, since 1987 facilities offering accommodation have not been grant-aided. However, I will consider this matter in the context of the plan that will be drawn up for the period 1994-99.

As I said, some people in the industry hold the view that we should try to attract the high spending tourist to maintain revenue levels but a balance has to be struck. We are never going to attract the large numbers of tourists who visit the Canaries and other locations; if we did, our tourism product would be downgraded with the result that peole would not come here in the same numbers because that place would be cluttered with tourists. That is not what we want. Therefore, a balance has to be struck and it will be difficult to achieve this.

The question of visas was raised. In this regard countries which rim the Pacific were mentioned. As it has been pointed out, I have no responsibility in this area but this question was raised with me last week during my visit to Malaysia and Bahrain. For good reasons the Department of Justice operate a restrictive policy in this area. On occasion it has the effect of limiting access to the country for tourists.

Mr. Molloy

What are the reasons?

Mr. McCreevy

As the Deputy is aware, having served in many Governments, we operate common travel arrangements with the United Kingdom and would be reticent to upset the balance.

(Interruptions.)

Chairman

The Minister to continue without interruption, please.

Mr. McCreevy

Other Deputies raised the question of marketing and indicated we are not targeting non-traditional markets in the Far East. Earlier I raised the question of overseas representation. In this regard there should be co-operation between State organisations. Regardless of whether the head of the mission abroad is a representative of the Department of Tourism and Trade, the Department of Foreign Affairs or the Industrial Development Authority the aim should be to promote Irish tourism as the market in those countries has potential.

Deputy Flaherty referred to South America. The number of tourists who visit this country from South America is not registered. However, millions of people from South America visit the United Kingdom and Europe each year.

Mr. Deenihan

The figure is one million.

Mr. McCreevy

This raises the question of the ways in which they can be attracted here. We seem to think, like every family, that everyone knows about us and that we are the centre of the universe. The people of Clare and Kildare think that they are the centre of the universe in Ireland, because wall maps in schools depict Ireland as being at the centre of the globe. However, we should remember that in other countries Ireland is depicted on maps as dot off the coast of the United Kingdom. Even well educated people in the Far East and Japan do not know where Ireland is located.

As Deputy Flaherty said, there are many descendants of Irish people living in South America but we get very little of that market. Many of these people visit Europe and we need to examine the question of access to Ireland. I have been advocating the notion of a common fare rating to Ireland. Deputy Deenihan kindly gave me some credit for my efforts in this regard. Major airlines will not set up specific routes to Ireland. We need a common fare rating with London, Paris and other destinations in Europe if we are to develop Irish tourism. I hope some airlines will be able to reach an inter-airline agreement on a common far rating.

There is a problem with access to Ireland, and there is no point in fooling ourselves that it is easy to get to this country. Many Americans who visit this country have to have a great desire do to so as they have to get a connecting flight from where they live to New York or Boston where they catch a flight to London. They then have to catch a flight to Dublin or Shannon. People who go on a vacation want a rest, they do not want to spend their time on planes. Visitors in many countries also have the same problems about getting to Ireland. We have a common fare rating with Quantas airline which has brought a considerable number of tourists to this country.

Chairman

I beg the indulgence of the Minister to make a point to the Committee. It was agreed that we would conclude at 1 p.m. and we have yet to consider the Estimate for trade. The Minister has also to complete his response to questions about tourism. Is it agreed that we adjourn when the Minister has completed his reply and reconvene either later today or on another day? I suggest that we allow the Minister to complete his replies to questions on tourism and reconvene another day to consider the Estimates for trade. Is that agreed? Agreed. I call on the convenor of the Committee to make a point regarding the next meeting.

Mr. Lawlor

The Seanad has decided that it will sit on Tuesdays. The Committee was scheduled to meet on 11 June to deal with the Estimates for the Department of Enterprise and Employment. That meeting will now be held on Friday, 25 June. Otherwise, it will not be possible to televise the debate on these Estimates. Is that agreed?

Deputies

Agreed.

Mr. McCreevy

Will the Committee meet another day to deal with the Estimates for Trade?

Chairman

Yes, on a date which is mutually acceptable to the Committee, the Minister and his officials.

Mr. McCreevy

Deputy Deenihan has a Private Members' Bill before the Dáil regarding occupiers' liability.

Mr. Molloy

The purpose of this debate is to get answers to questions. The Minister is moving onto a different subject. Is he going to deal with the question of visas? Access by air is one thing but the inability to get a visa, which is another obstacle to tourists coming to this country, is another matter. The Minister has not addressed issue.

Mr. McCreevy

I have addressed it. I am not responsible for visas.

Chairman

The Minister is not responsible for visas and I do not think he can respond to the question.

Mr. Molloy

The inability to get a visa is a major obstacle to the development of tourism.

Chairman

The Deputy has made his point and I have no doubt the Minister can note the point but he does not have to respond to it.

Mr. Molloy

He has no role——

Mr. McCreevy

The question of visas would be way down the list of problems in the tourism area.

Mr. Molloy

Certain parts of the world——

Mr. McCreevy

We cannot get people from certain parts of the world to visit Ireland for the other reasons I have mentioned. Deputy Deenihan referred to the question of occupiers' liability. This poses a problem in terms of access to the countryside and places of interest to visitors. My colleague, the Minister for Equality and Law Reform, Deputy Taylor, is awaiting the report of the Law Reform Commission on this matter. I have been interested in this matter for some time and I have asked the Attorney General and the Minister for Equality and Law Reform to speed up the publication of the report. I understand that that report will be published in the very near future. The Government will take the necessary steps as soon as possible thereafter to regularise the position in this regard.

Deputy Deenihan and other speakers referred to attacks on tourists, which give Ireland a very bad name abroad. Many people visit Ireland because we have the reputation of being very friendly people. Even one attack on a tourist is likely to give the impression that Ireland is not as friendly a country as it is supposed to be. This has a damaging effect on our tourist industry. The people who can best promote Ireland as a tourist destination are the people who visit Ireland, get good value for money and tell their friends that it is a great place to visit. I deplore the attacks on tourists which have taken place over the last number of years. However, this problem has to be seen in the proper context — the number of attacks on visitors is very small. Of course, it should be said that any attack on tourists is to be deplored.

Miss Flaherty

Do these attacks receive much publicity in the home countries of these visitors?

Mr. McCreevy

Thankfully not. Deputy O'Keeffe was somewhat concerned at the provision of £1.3 million this year as against £352,000 last year under subhead B.3. This subhead covers currency exchange losses on certain ICC Bank foreign borrowings for tourism development. While this increase may seem alarming, it is not, it is to cover the termination of schemes which existed since 1981. Provision has been made in 1993 to terminate the WCT facilities, the ICC working capital scheme. The termination of this scheme means that moneys borrowed by the ICC for the WCT scheme will be repaid by way of a refinancing arranged with clients. It was originally intended to terminate the scheme in 1992 and the Estimates for 1992 included a provision to cover the loss on exchange incurred on the termination of the scheme. However, the Department of Finance decided not to terminate the scheme in 1992 and a saving of approximately £600,000 was made in that Department's Vote for that year. The amount was originally set at £300,000 but was revised upwards to £1.3 million due to the decision to terminate the scheme this year and the devaluation of the Irish pound.

Miss Flaherty

Will the Minister circulate that note?

Mr. McCreevy

Yes. Deputy O'Keeffe referred to the Youghal water works project. When I visited Cork some weeks ago I met the people involved in this project. They are very concerned because they believe other water work projects have gone ahead while their's has been left out. Hopefully this project will be considered under the next tranche of EC Structural Funding. This project ran into some difficulties. No grant was offered by Bord Fáilte for this project but some people were led to believe that the scheme would be up and running as soon as possible. Deputy Brendan Smith referred to the Ballinamore-Ballyconnell canal and inquired about the extension of the waterway to other places. A special task force comprising representatives of Bord Fáilte and the Northern Ireland Tourist Board was established to handle the marketing of this area and there is talk also of connecting into the Shannon waterway. I hope that will work out. I will also ask the tourism agencies to consider the extension of the Ballinamore-Ballyconnell canal to Lough Oughter.

Deputy Deasy was among the members who questioned the statistics. In 1992, 50 per cent of the total visitor numbers to Ireland of 3.129 million were "pure tourists"; in 1991 they accounted for 49 per cent and in 1990 they were 43 per cent. Approximately half of the total visitor numbers to Ireland are regarded as "pure tourists". Earlier I referred to the difficulty of defining "pure tourists" and the difficulty the definition presents to the Central Statistics Office, but these are the figures supplied to us by the Central Statistics Office.

Deputy Deasy also questioned the impact that the situation in Northern Ireland has had on our tourism. He is correct in say that it is hard to underestimate the effects of the problems in Northern Ireland on tourism for the whole island of Ireland. As he pointed out, no matter who you are speaking to when you are abroad, they know about the Northern Ireland troubles as they get international attention.

When you consider that on the map we are a dot somewhere off the United Kingdom, it is very difficult to explain to people that the troubles on this little "dot of an island" are confined to a segment of the island. Many people had no comprehension of Ireland but they perceive us as a small dot somewhere near London. If there was peace on this island an undoubted benefit would be an increase in earnings from tourism.

While I agree with Deputy Deasy's view on the impact of the Northern Ireland troubles I disagree with his views on the appointment of Mr. Ó hUiginn as chairman of Bord Fáilte. I am the Minister responsible for appointing the current chairman of Bord Fáilte. Deputy Deasy did not cast any reflection on Mr. Ó hUiginn as a public servant but he thought that someone from the industry should have been appointed as chairman of Bord Fáilte. I am quite satisfied that I could not have picked a better chairman, as Mr. Ó hUiginn had more than an active part in the preparation of the tourism task force. If there is a higher public servant who has been more interested in tourism over a long number of years than the present chairman of Bord Fáilte, Mr. Ó hUiginn, I would like to hear about him or her.

Let me remind Deputies that we were criticised some years ago for appointing people directly connected with the industry. Deputy Deasy also said that people connected with the industry were critical of Bord Fáilte. I hear those criticisms also, not from Bord Fáilte, of course, but from the ordinary people who are at the receiving end of Bord Fáilte.

Bord Fáilte has now a new chairman and a new director general who I hope will put their imprimatur on the organisation, as did the outgoing chairman, Mr. Martin Dully. As other speakers said, he brought tourism into the 20th century and I am sure the new chairman and chief executive will build on the progress that has been made over the past five years.

Deputy Broughan was among the speakers who suggested that Dublin was being left out from the development of the tourism project. Another speaker referred to the need to exploit and develop Viking Dublin and this brings to mind a deal that was struck on the spot by one of the Bord Fáilte executives. Approximately 7,000 Icelandic visitors come to Dublin in November of every year. They are big spenders. Stores in some parts of the city will tell you that they would spend more in half an hour than we would spend in two years. This year a city in the United Kingdom bid a considerable amount of money to bring them to their city during the off-peak season because they realised the spending potential of this group.

The waterways are very dear to my heart and it was suggested that a body should be established to co-ordinate and market our inland waterways. One of the recommendations of the tourism task force plan is to set up a product development company to deal with this and I hope this will be done.

I was asked about wages and conditions in the industry but this is not within my remit. One hears complaints about this but it is a matter for the existing legislation and I am sure the relevant Government Department will act on receipt on complaints.

Deputy Killeen asked me to support an integrated tourism plan for part of County Clare and I will be glad to do so. He was among the various speakers who raised the question of car hire. This year we decided to take a different approach to car hire and there is no figure for car hire in the 1993 Estimate. In a four to six week period in the summer there is peak demand for car hire and there are not enough cars in the fleet to meet the demand. The other problem is that the cost of car hire in Ireland is extraordinarily high, it is the highest by a long shot in the EC. This is not because car hire companies are mad to make money, in fact a great many are trying to get out of the business and, indeed, one knows the companies who have retired from the operation here because they cannot make money.

Reports were commissioned on the car hire business and the problems identified were the cost of car hire and the peaking of demand for car hire. Last year it was decided to tackle the problem by giving a grant to encourage operators to bring down costs and provide more vehicles. This was reasonably successful but it was not a great success. However, this year it was decided to take a different approach and we have introduced a VRT rebate scheme. We hope that this will be an improvement on last year's scheme and will encourage operators to provide more vehicles in their fleets. I would not like to give the impression that car hire is an ongoing problem because the problem of peaking is for a very short time, although high costs are ongoing. There are pluses and minuses to every method of tackling the problem and it cannot be solved that easily. There are other high cost factors involved so people do not rush into this business. I hope this scheme works satisfactorily this year, if not we will re-examine it next year. It is a problem that has bedevilled the tourist industry for some time.

Deputy Seán Ryan referred to the Far East, car hire and unapproved accommodation. There is a commitment in the Programme for Government regarding regulations and legislation on unapproved accommodation. I have been considering it for some time and I will bring forward some ideas shortly. It is not my intention to bring in a body of law and an army of inspectors to regulate poor Mrs. Jones who keeps a few visitors for, say, two weeks of the year. I could employ hundreds of people to do that and they would all fill up reports and we would be browbeaten. I hope that whatever changes have to be made regarding registration can be made through Bord Fáilte. I will not have an army of policemen going around the byroads of the country knocking on people's doors. That is one thing I will not do, but how I will operate it I am not sure. I am sure that will not please everybody but that is how I feel about it. Some future Minister can do it whatever way he wishes but that is my view on it.

Deputy Flaherty raised the question of the Dublin region, about which I spoke earlier. She asked for co-ordinating mechanisms to sell various ideas. When the product development companies are set up by Bord Fáilte it should be possible to do this. The idea is that if one wants a golfing or angling package holiday or, if one wants to visit the heritage centres throughout the country, one must come to Ireland. Nobody can say: "These are the places one can visit on Tuesdays, Wednesdays and Thursdays and one can stay in a particular house." After Bord Fáilte has set up these companies it should be possible to do that.

I was asked about the number of jobs sustained in the industry. In 1991 the number of jobs was 87,000 and in 1992 was 92,000. The method of deciding the number of jobs sustained by tourism is complicated. This method is worked out by statistics and by a working group, comprising various Government agencies, set up some years ago. Some of these people work in hotel bars and pubs but there is a difficulty as to whether they are all tourist-related. It is difficult calculating mechanism which was decided some years ago.

Some general questions were raised by Deputy Rabbitte relating to the trade side but the Chairman has decided that we will come back to that another day. I should like to say in passing in regard to transfer pricing, as I said in reply to a question in the Dáil, that I would not object to a debate in the House on the NESC report because this is a question to which I have given some thought over a long number of years.

Deputy Michael McDowell spoke mostly about the trade side of the Estimate and raised some questions in relation to tourism, car hire and VAT on accommodation. The VAT rate on hotel accommodation increased from 10 per cent to 12.5 per cent in the budget and we had the customary outcry from those affected, which is understandable. I take the point that for people in the tourist industry a change in mid-stream is very difficult. On the other hand, one must appreciate the Government's viewpoint. If a Minister for Finance announced in July that from 1 March next year he was going to increase VAT rates on accommodation from X to Y, or if he announced a taxation package or the 1 per cent levy — which the Government introduced in the budget — in advance he would not be able to get home any night of the week. There is a conflict between what the Government must retain to itself, whereby it can announce changes at the time of the budget and, on the other hand, recognise the point that people in the tourist industry cannot change their package brochures in mid-stream. In regard to that change the Minister for Finance announced that the individual inspectors of taxes will take a liberal view as to what constituted a contract before budget day. If one can show an explicit contract at a particular price in the previous September-October one will not be caught by the increase from 10 per cent to 12.5 per cent. The difficulty is that many people would not have an explicit contract and it could be a grey area. I understand from the Revenue Commissioners that a liberal interpretation will be taken of those grey areas for this year.

In his earlier remarks Deputy Deenihan raised various questions regarding trade and the recommendation put forward by the tourism task force. Some of the recommendations have been implemented. What needs to be done in the tourist industry is to put some of the recommendations in place. There must have been more reports written on the tourist industry in the past ten years than for any other area. I could fill a room in the Department with the number of tourist reports complied by the Department, hotel industries, bed and breakfast people, as well as one from the tourism task force, all of which were expensively produced and have cost various organisations hundreds of thousands of pounds. It is a matter of taking a chance with some of the recommendations rather than producing a whole new plan. Plans have been drawn up by all sectors of the tourist trade on how tourism should be developed and if stacked up could fill half of this lovely Chamber.

I hope to put some of the tourism task force recommendations into effect. I am considering the matter of a tourist council as recommended by the task force. The conference centre is a project which will be sponsored by my Department. We will be bringing a recommendation to the Government in the near future, part of which we hope can be funded from the next tranche of EC funding. Certainly, Ireland needs a conference centre. We shall take the other matters into account. I hope the 1993 season will be good for employers, owners of hotels and guest-houses, employees and all those involved in the industry.

I thank the Deputies who contributed to the debate. We will come back another day to deal with the trade Estimate when I am sure there will be more interesting contributions in that regard.

Chairman

On behalf of the Committee I thank the Minister and his officials. I thank the Minister for the very detailed, fortright and courteous way in which he dealt with the questions from the members of the Committee. That concludes consideration of the section of the Estimates dealing specifically with tourism. We will adjourn consideration of the trade Estimate until another day, yet to be agreed.

The Select Committee adjourned at 1.30 p.m.