Dáil Éireann Debate, Thursday - 2 December 2010
4 Deputy Kieran O’Donnell asked the Minister for Enterprise, Trade and Innovation if the cap on the capital expenditures by the enterprise agencies in the National Recovery Plan will impact on the jobs targets; if it is envisaged that the national pension reserve fund can be accessed for investments in four key export areas technology, pharmaceuticals, food and tourism; and if he will make a statement on the matter. [45438/10]
View answerThe Government remains committed to investments which make the greatest contribution to economic recovery and underpin the creation of sustainable employment. My Department's revised capital allocation as set out in the national recovery plan is €2.182 billion for the period 2011 to 2014 with €508 million being invested next year and then €558 million annually between 2012 and 2014.
The 2011 capital allocation in the four year plan is 5.7% up on the 2010 allocation of €480.7 million. The 2012, 2013 and 2014 allocations of €558 million are approximately €80 million or 16% above the 2010 allocation. This sends a clear message of our commitment to supporting job creation and enterprise.
The allocation of capital funding will ensure that the enterprise agencies' core programmes are sustained and targeted. This will include actions to position Ireland as a global innovation hub. With export growth underpinning jobs growth, funding will be used to assist companies to grow exports and will focus on supporting companies in key areas such as building competitive advantage, accessing finance, reinforcing leadership and management development skills.
IDA Ireland investment to embed, transform and grow the FDI base in Ireland in support of jobs and exports has been completely protected. Significant additional funding will be provided to drive the development of innovative enterprise through company research and development grants; to enhance the opportunities for commercialisation to ensure that the best use is made of research with commercial and market potential; and to encourage collaboration between industrial and third level institutions.
Enterprise Ireland will receive a capital allocation of €130 million for activity in the area of science technology and innovation. That is an increase of €9 million or 7% on the 2010 level of funding. An increased allocation to Science Foundation Ireland in 2011 will send a very strong message both nationally and internationally that our focus on driving the smart economy is on track. This investment has been critical to IDA capacity to secure RDI-related investments currently running at €500 million per annum. It also supports indigenous companies reliant on knowledge for growth and job creation.
The capital allocation for my Department and agencies and other measures outlined in the national recovery plan will support the achievement of the targets in the Government's integrated trade, tourism and investment strategy, Trading and Investing in a Smart Economy, including the target to create 300,000 new direct and indirect jobs.
On the second part of the Deputy's question, responsibility for the management of the National Pensions Reserve Fund is a matter solely for the NPRF commission. As indicated in the national recovery plan, the Government will help identify public infrastructure investment opportunities for the NPRF and other private investors.
If it was not so serious it would be very funny.
I wanted to be as comprehensive as I could.
The Minister takes the biscuit. If it was a comedy show it would be great but this is about jobs and the economy and people's real lives. The Minister did not answer any of the questions I asked. The first question was about the national recovery plan. The Minister is cutting the capital budget by another €800 million. What impact will that have on the 150,000 jobs?
The amount in the National Pensions Reserve Fund is €24.5 billion based on figures from 30 September 2010 report. A total of €7 billion has already gone into the banks. Another €12.5 billion of that is being poured into the banks as well. How much will be available from the National Pensions Reserve Fund for job creation projects? How many jobs does the Minister expect will be generated from the €12.5 billion that is going into the banks?
Did Deputy O'Donnell quote a figure of an €80 million reduction in the capital budget?
It was €800 million.
If one looks at the capital——
There is a big difference.
If one looks at the capital——
Is the Minister not aware of what is in the national recovery plan?
I wish to advise Deputy O'Donnell of what is in my capital programme. The capital review for 2011 has an allocation of €508 million. A total of €558 million will be allocated each year up to 2014. That is outlined in the national recovery plan. The revised capital allocation for my Department in the four year recovery plan is a total of approximately €2.2 billion over four years. The allocation of €508 million under the four year national recovery plan is an overall reduction of €37 million or 0.97% from the July capital review. Some Departments have suffered a loss of up to 20% in their capital programme but we have protected this sector.
We have commitments from the agencies, that given the moneys and capital available to them and the staff resources, including an increase in staffing resources during the summer, they are more than confident that they can meet the targets they set themselves. We are sending out a very strong message from a capital funding point of view that this country will be an information hub and a smart economy. If the Deputy wants further proof of that he should examine the FDI coming into this country. In 2008 the value of research and development attached to FDI stood at 10%. In 2010 the value stands at 49.9%. That is a dramatic increase. That is extremely important for us because any multinational company coming to this country with a research and development component will stay here as it is satisfied that we have an outstanding skills pool, that we are productive and competitive and that they can export what they produce in this country. That is a very good story to tell. It is sending out a message to the international community that this country is going to stand by its commitment to a knowledge economy and is prepared to invest the required capital funding.
A total of €12.5 billion will be invested in the banks from the National Pensions Reserve Fund. How many jobs will that create? The European Commission has stated that the growth rates the Government has projected of 1.75% will be less than half of that figure, 0.9%. How many of the 150,000 jobs does the Minister expect will be generated given that the growth rates are excessive and there is a cut in the capital budget? How many jobs will be created from the €12.5 billion that the Government is pouring into the banks out of taxpayer's money? The Minister has said it was a judicious decision to use funds from the National Pensions Reserve Fund. How many jobs will it create?
We are way over time.
I am very surprised at Deputy O'Donnell, as a deputy spokesperson on finance. We are talking about €12.5 billion being put into the banks to ensure that the banks are in a position to lend and provide credit to customers. A country that does not have a proper, functioning banking system cannot trade.
I asked a direct question.
That is not the purpose of the €12.5 billion.
The Minister should be allowed to speak without interruption.
Who does the Minister think he is kidding?
The €12.5 billion being put into the bank does two things.
The Minister is waffling.
The Minister should be allowed to speak without interruption.
I am not waffling.
Yes, the Minister is.
I am not.
We are way over time on this question. We have one more question to get through.
We are entitled to an answer.
The Deputy should allow the Minister to finish his answer.
If Deputy O'Donnell stopped interrupting he would get his answer.
Half the builders were down in Kilkenny a few weeks ago at a golf course.
The Minister should be allowed to speak without interruption.
The Minister should answer the question.
If Deputy O'Donnell gives me a chance I will. The important aspect of the restructuring of the banks is that, first, we can now assure depositors that because of the input into that bank that their money is safe, that there is no need to take their money out.
That was the purpose of the bank guarantee.
Deputy O'Donnell. The Minister should be allowed to speak without interruption.
Deputy O'Donnell asked me to answer the question but he keeps interrupting.
What the Minister said is incorrect.
Will the Deputy give me an opportunity to answer? Can I do it without interruption?
Thank you. The second issue in terms of the recapitalisation of the banks is that they become viable entities, lending institutions that support business, trade and enterprise. That is why we support the banks and that is why we put further recapitalisation into those banks so that this country can trade itself successfully out of the difficulties that exist and that the companies Deputy O'Donnell speaks about can have credit available to them through the initiatives taken by the Government.
They are not getting credit. The Government should have introduced a guarantee. What was NAMA supposed to do? The Minister is avoiding the question.
