I move that the Bill be now read a Second Time. The purpose of this Bill is to provide for the payment of additional funds to Bord Fáilte Éireann to enable the Board to operate a programme of financial assistance for the development of major tourist resorts and the provision of additional bedroom accommodation in tourist hotels.
In the general plan to expand the tourist industry, considerable importance must obviously be attached to the proper development of our tourist resorts. Many Irish tourist resorts are lacking in the facilities and amenities which holiday makers expect to find when they go on holidays. We are all aware and proud of the fact that nature has endowed our country with a wealth of natural beauty and other attractions for visitors, but we must realise that if the tourist industry is to be properly developed, these natural assets must be supplemented by the provision of practical facilities such as promenades, parks and outdoor recreational facilities of various kinds. I think we can take justifiable pride, too, in the fact that we have roads capable of attracting a certain type of tourist trade — that is, motorist traffic — which are better than the roads found in many other European countries. Furthermore, having regard to the uncertainty of the Irish climate, it is essential that adequate indoor recreational facilities should also be available.
Under the Tourist Traffic Act, 1952, the Minister for Industry and Commerce may, on the recommendation Bord Fáilte Éireann and with the concurrence of the Minister for Finance guarantee loans required for the purpose of providing amenities and services at tourist resorts. In addition, he may authorise the Board to make grants to meet the interest charges arising on such loans for a number of years. A scheme for the giving of these guarantees and grants has been in operation since October, 1953, but although resort development proposals have been formulated by local interests in some cases, little real progress has been made in carrying out major improvements. The failure of the guaranteed loan scheme to promote resort development may be attributed to the fact that it can of necessity be used only in the case of works which will earn the revenue needed to repay loan and interest.
Examples of revenue earning works are ballrooms, entertainment halls, amusement parks, boating lakes, pitch and putt courses and tennis courts. There are, however, many improvement works which are essential for the proper and orderly development of tourist resorts, but which are not directly revenue earning, and consequently cannot, in the ordinary way, be financed by means of loans. Works of this kind include basic site development, provision of promenades, parks, river-side walks and pathways. The past experience of Bord Fáilte Éireann in relation to resort development works supports the view that substantial capital investment of a non-remunerative type is essential in order that profit earning activities may later be established. It is the opinion of the Board that in many centres local interests are unlikely to be in a position to proceed with revenue earning projects unless basic amenities of a non-revenue earning character are first provided; and it is clear that non-revenue earning works of this kind will have to be financed other than by way of loan if the general development of our tourist resorts is to be achieved within a reasonable time
It was precisely for this reason that, as announced in the White Paper on Economic Expansion, the Government have decided to set aside a sum of £1 million to assist, by way of grants, the financing of a 10-year programme for the development of major resorts. The new grants, which will supplement expenditure from local resources and the guaranteed loan facilities already available through Bord Fáilte Éireann, will be confined to non-revenue earning works of the kind I have mentioned. The grants will be subject to two conditions, namely, that the works to be carried out at a resort shall form part of a fully co-ordinated plan of development for that resort, and that a substantial local contribution will be forthcoming either from a local development group or from the local authority concerned. The scheme will be administered by Bord Fáilte Éireann and its operation will be limited to 10 years so as to ensure that development of resorts will take place as rapidly as possible.
It is visualised that the works to be undertaken with the help of these grants will constitute part of an overall development plan to be prepared by the local authority and the local development company or other local interests concerned, in consultation with Bord Fáilte Éireann. In the normal way the responsibility for the execution of the grant works will rest upon the local authority, to whom the grant moneys will be issued; and the revenue-earning portion of the project will be undertaken by the local development company with whatever funds are raised locally, as well as by means of loans guaranteed by the Minister under the Tourist Traffic Act, 1952.
It must be realised that the task of developing our resorts is primarily one for local enterprise, even though some assistance from the State is obviously necessary if the job is to be done quickly and properly. I must emphasise, however, that while the State and Bord Fáilte Éireann will continue to assist financially and otherwise in the carrying out of the necessary development works, the main initiative and effort must come from local interests. Local authorities in particular must play their part and adopt a more positive attitude towards the development of the tourist traffic.
Deputies who are interested in tourist development can render the industry no greater service than to use their influence to persuade members and officials of local authorities of the importance of the industry and of the necessity for active local co-operation in order that the potentialities of the tourist traffic may be exploited to the full. Under this Bill, local authorities and other local interests in major resorts will, in the course of the next 10 years, have a golden opportunity of developing and improving local amenities with generous assistance from the State. By availing themselves of the opportunity they can lay the foundation for the establishment of a thriving tourist trade that can bring much needed employment and prosperity to their locality. This Bill provides that over the next ten years Bord Fáilte Éireann will be able to draw a sum of up to £1 million from the Exchequer to be paid in the form of grants to local authorities and other agencies who are willing to prepare and execute suitable schemes for the improvement of local amenities.
About eighteen months ago the then Minister introduced in this House another Tourist Traffic Bill, the purpose of which, inter alia, was to renew the power of the Minister for Industry and Commerce to guarantee loans required for the construction, extension and improvement of hotels and other forms of holiday accommodation. The Minister said on that occasion that hotel accommodation continued to be a major bottleneck in the tourist industry and that further substantial private investment would be necessary in order that the tourist industry might be enabled to meet the demand for more and better accommodation. Over the past two years there has been a small increase in the total number of registered bedrooms in hotels and guest houses, but the rate of progress is painfully slow and far from adequate to cope with the growth in international travel which experts say we may expect in the next few years.
It would appear that one of the biggest deterrents to the expansion of accommodation is the heavy capital cost involved in relation to the comparatively short duration of the tourist season and the consequent low rate of occupancy in hotels and guest houses in tourist centres. Accordingly, in order to provide further encouragement and assistance for the expansion of hotel accommodation, the Government last year decided to authorise Bord Fáilte Éireann to introduce a scheme of grants to cover portion of the cost of additional bedrooms and bedroom/ bathroom units in tourist hotels and motels. The scheme was introduced in May of last year. The grants cover 20% of the cost involved, subject to maximum limits which range from £275 for a double bedroom with bath to £175 for a single bedroom without bath. Where central heating is installed in the new accommodation a further grant of one-third of the cost, subject to an upper limit of £25 per bedroom, is payable.
The scheme of grants can be altered to suit changing conditions and I understand that the Board are proposing certain changes in the scheme as it has operated up to the present. I hope to be able to consider these proposals very soon, but my consideration of them will be influenced by the fact that the Government have already provided a very generous measure of assistance in a number of ways to the hotel industry. In order to finance the scheme to which I already referred over the next 10 years this Bill provides for the payment to Bord Fáilte Éireann of a total sum of half a million pounds in that period.
The House will, I think, agree that the State is being generous in the financial assistance which it is providing for the expansion and improvement of hotel premises. Hoteliers already have the advantages of a State guaranteed loan scheme which assures them that the capital required for the carrying out of improvement works will be readily available. They also have the benefit of the grants made by Bord Fáilte Éireann to cover the interest charges arising on State guaranteed and other loans for the first 5 years during which the loans are in operation. If they carry out improvements to their premises they qualify for remission for seven years of two-thirds of the local rates attributable to the improvements and there is also the concession that 10% of the capital expenditure incurred is allowable as a deduction in computing profits for income tax and corporation profits tax. Furthermore, as announced by the Minister for Finance in his Budget speech, it is the intention to provide in the Finance Bill for the granting of a 2% annual wear and tear allowance for capital expenditure on hotel buildings with effect from 6th April, 1960. Last, but not least, hoteliers benefit directly from the expenditure of almost half a million pounds which is incurred each year by Bord Fáilte Éireann on the general development of tourism and the publicising of Irish tourist attractions.
The special funds which are being made available to Bord Fáilte Éireann under this Bill for the development of tourist resorts and the expansion of hotel accommodation are, of course, in addition to the existing annual maximum grant of £500,000 which is available to the Board under the Tourist Traffic Act, 1955, for the general development and publicising of the tourist industry.
The foreign experts who surveyed our tourist industry some years ago stated that among the best assets which we have for expanding the tourist industry is the capacity of our people to treat visitors with cordiality and good humour, to make them feel at home and to send them away talking of Irish hospitality and kindness. If to these qualities we can add the advantages of well-equipped and well-managed hotels and properly developed holiday amenities, there can be no doubt that the tourist trade will grow and prosper.
I am satisfied that this Bill will make a most important contribution to the development of our tourist traffic industry, and I recommend it confidently for the consideration of the House.