Tairgim:
Go ndeonófar suim nach mó ná £10,862,000 chun slánaithe na suime is gá chun íoctha an mhuirir a thiocfaidh chun bheith iníoctha i rith na bliana dar críoch an 31ú lá de Mhárta, 1969, le haghaidh tuarastail agus costais Oifige an Aire Tionscail agus Tráchtála, lena n-áirítear seirbhísí áirithe atá faoi riaradh na hOifige sin, agus chun Ildeontais-i-gCabhair a íoc.
Feidhm tábhachtach de chuid na Roinne se' agamsa fós isea misniú lucht tionscail agus cabhrú leo iad fhéin a ullmhú fá choinne saorthrádáil. Ag an 30 Meán Fomhair, 1967, an dáta deireannach le hiarrataisí a glacadh le haghaidh deontaisí d'oiriúnú agus d'athghléasadh, bhí tuairim is 2,000 iarratais faighte agus díobh seo ceadaíodh 1,400. Ar bhonn na ndeontaisí ceadaithe sroisfidh infheistiú réamh-bheartaithe i bhfoirgnimh, i bhfearas agus i ngléasra thart faoi £96 milliún. Sí £21 mhilliún iomlán na ndeontaisí ceadaithe faoi choinne seo agus den mhéid sin, íocadh £9.4 milliún cheana féin.
Níl i gcur in oiriúnt don aois seo de ghléasra agus i bhfeabhsú agus i bhforbairt foirgnimh ach gné amháin d'oiriúnú. Tá an oiread céanna tábhachta ag baint leis na gnéithe neamh-ábhardha d'oiriúnú. Níl an dul chun chinn atá déanta againn in aon ghar den mhéid ar chóir bheith déanta againn. Tá mé ag smaoineamh ar an gceist fíor-thábhachtach sin, cóimheasú, pé acu an trí chumascadh agus chónascadh nó trí fhoirm níos scaoilte díolaíochta nó táirgeadh a bhunú idir chomhluchtaí a déantar é.
I rith na bliana seo chaite mhéadaigh an tÚdarás Forbartha Tionscail ar a iarrachtaí chun tionscal nua a mhealladh go dtí an tír seo agus chun bunú agus forbairt tionscail dhúchais a spreagadh. Siad na comhluchtaí nuabhunaithe atá ag cur go suntasach le leas eacnamúil na tíre faoi deara chuid mhaith den fás tapaidh a tháinig ar onnmhuirithe tionsclaíoch le blianta beaga anuas. Tá an tÚdarás Forbartha Tionscail ag tabhairt breis aire fós don fhadhb a bhaineann le forbairt thionscail dhúchais a spreagadh. Léiriú phractaiciúl ar mhian an Rialtais chun chuidiú le tionscal Éireannach isea Feachtas na Miontionscal. Sí aidhm na scéime seo atá faoi scáth an Údaráis Forbartha Tionscal, ná tionscnamh tionsclaíoch a fhorbairt agus áiseanna a chur ar fáil a chuirfidh ar chumas an miontháirgeoir a ghnó a mhéadú agus a fhorbairt.
Soláthair £8 mhilliún atá ann don bhForas Tionscal san bhliain reatha airgeadais. Faoin 31 Márta, 1968, cheadaigh An Foras Tionscal deontaisí de £56 mhilliún mar gharmheas. Íocadh £27 mhilliún den mhéid sin agus fágann san £28 mhilliún d'fhiachaibh ar an bhForas. Sí £109 mhilliún an infheistiú iomlán chaipitil atá i gceist agus meastar go soláthrófar fostaíocht do 44,000. Tá dul chun chinn fós dá ndéanamh ar na heastáit tionsclaíoch i nGaillimh agus i bPort Láirge.
Bunchoinníol d'ár bhfás eacnamúil isea méadú leanúnach ár n-onnmhairithe. Le go mairfeadh muid slán faoi choinníollacha saorthrádála, ní mór táirgeadh tionsclaíoch atá ag fás a bheith againn agus tá an fás seo, ag brath ar fás ár n-onnmhairithe. Ceann de na nithe faoi deara an fás ins na honnmhairithe i 1967 ab ea breis ghníomhaíocht co-oibritheach na n-onnmhaireoirí faoi scáth Córas Tráchtála.
Tá forbairt sásúil dá ndéanamh ar na fionachtanna tabháchtacha mianraí go dtí seo. Tá dul chun chinn sách maith déanta i dTighneatha i gContae na Gaillimhe agus i nGortdrum agus Béal Átha Gobhann i gContae Thiobraid Árainn. Is dóichí go dtuillfidh onnmhairithe óna mianacha san breis is £10 milliún faoi 1970. Chuir an méadú i dtaiscealadh agus i bhforbairt mianraí treise leis an gá atá ann atheagrú a dhéanamh ar an Suirbhéireacht Geolaíoch chun go mbeadh ar a chumas an fhreastail speisialta is gá chun go leanfadh an forbairt mianrach seo. Ceapadh Stiúrthóir nua agus táthar ag leanúint den atheagrú chomh tapaidh agus is féidir.
In the Book of Estimates the net Estimate of £10,862,000 for the year 1968-69 compares with a sum of £10,867,010 granted in 1967-68, including Supplementary Estimates for a total of £2,784,010, and shows a decrease of £5,010.
The principal increase arising in the financial year 1968-69 is in the provision for An Foras Tionscal which is greater by £252,480 than the sum provided in 1967-68. The provision for An Foras Tionscal in 1968-69 is the same as that in the main and supplementary estimates for 1967-68 approved by this House in November last. It was subsequently found that for reasons outside the control of An Foras Tionscal, the full amount of £8,000,000 provided in 1967-68 would not be required, and some £252,480 was used as savings for the third Supplementary Estimate taken on 6th March last. There is an increase of £120,000 in the provision for the Institute for Industrial Research and Standards; £105,250 in the provision for Departmental Salaries and Wages; £68,000 in the provision for Córas Tráchtála; £77,500 in the provision for the National Productivity Year, and £38,400 in the provision for the Industrial Development Authority. Minor increases in other Subheads amount to £8,369 bringing the total increases in expenditure to £669,999.
There are decreases in expenditure under a number of subheads in 1968-69. The provision for Technical Assistance is down by £58,000 on the 1967-68 provision which included a Supplementary Estimate of £60,000. There is no provision this year for flour millers' losses, for which £137,000 was provided last year by way of a Supplementary Estimate. There is only a taken provision of £10 this year for Temporary Assistance for Industry as compared with £320,000 in 1967-68. A token provision of £10 has been provided again this year for Castlecomer Collieries Ltd., for which service a Supplementary Estimate for £64,990 was approved last year. The grant to the Irish National Productivity Committee for general expenses has been reduced by £20,000. Other minor decreases amount to £6,130 bringing the total decreases to £606,110 to which must be added an increase of £68,899 in Appropriations in Aid giving a total of £675,009. The net decrease in the Estimate is therefore £5,010.
The task of encouraging and assisting industry in its preparation to meet conditions of free trade continues to be an important function of my Department. The time limit for making applications for adaptation grants has now terminated. The scheme has been in operation for a period of six years. Up to the final date — 30th September, 1967 — over 2,000 applications for grants were received, and of these 1,400 have been approved. On the basis of grants approved, planned investment in buildings, plant and machinery has been of the order of £96 million. The grants approved towards this total amount to almost £21 million.
The acceleration of activity in 1966, which I mentioned in my Estimate speech last year, was continued in 1967 — the cumulative figure of 1,400 approvals already mentioned showing an increase of 600 over the corresponding figure up to 31st March, 1967. The total of adaptation grants paid to 31st March, 1968 amounts to some £9.4 million or nearly 45 per cent of approvals. These figures indicate that a substantial amount of physical adaptation has been and is in course of being carried out. It must, of course, be recognised that in many cases there will be a substantial time lag between the approval of and the completion of an adaptation project. Delivery of machinery, for example, can take up to 18 months.
When the total capital expenditure already mentioned has been completed I think we can fairly claim that the crash programme of short-term physical adaptation envisaged by the CIO will have been completed. This, however, must clearly be seen as a catching-up phase only. Technological developments, new production techniques and different marketing situations in both home and export markets call for a Committee and the Institute for Industrial Research and Standards. constant process of change if our manufacturers are to achieve and retain competitiveness with their opposite numbers abroad. No industry is in a position to say that further adaptation is unnecessary for it. I have had one or two reports which indicate that some industries may be losing their sense of reality in this matter. I would urge on all concerned with adaptation in industry to regard whatever has been achieved as an initial base on which we must continue to build each year. Competition from imports is an inescapable part of free trade; the task of Irish industry for the future is to equip itself fully to meet this competition.
Modernisation of equipment and expansion and improvement of premises constitutes, of course, only one aspect of adaptation. The non-physical aspects of adaptation are of equal importance, and in this regard, as I have frequently had occasion to point out, we have not made anything like the progress we should have achieved. I have particularly in mind the all important matter of rationalisation whether it takes the form of mergers and amalgamations, or the looser form of inter-firm marketing or production arrangements. The Industrial Reorganisation Branch of my Department which is in close and continuous contact with industry at both sectoral and firm level, is giving special attention to these matters. In particular, officers of the Branch are endeavouring in the course of their contacts to identify situations in which mergers and amalgamations could usefully contribute to the overall strength and efficiency of an industry. Where there are prima facie indications of the existence of such a situation the firms concerned are advised and encouraged to seek specialist advice as to the feasibility of the suggested development. The Branch also makes every effort to promote joint activity in relation to marketing and other matters and encourages firms and, where appropriate, Adaptation Councils for industry, to make the fullest use of the services of agencies such as Córas Tráchtála, the National Productivity Committee and the Institute for Industrial Research and Standards.
It has been said many times before but I feel that it can bear repeating that the main responsibility of preparing for free trade rests with industry itself. The Government have, through various schemes and aids, provided the means by which manufacturers can help themselves, but these will be of little avail if all concerned do not display and bring to bear on their day-to-day activities the determination to maximise their resources and improve their competitive efficiency to the fullest extent.
While I shall continue to lay great stress on the need to make our industry as strong and efficient as possible, I do not intend to neglect distribution, or the other services for which I am responsible. It would be a great mistake to suppose that freed trade poses a threat to the manufacturer only, and that the trader can feel secure of staying in business come what may. Modern developments require a response of initiative and adaptability from commerce no less than from industry, and it will be my concern to help those who are trying to help themselves. I have no intention of trying to bolster up the inefficient against the efficient, but neither do I propose to permit those who have made themselves efficient to be put out of business by unfair trading methods. In the interests both of distributors themselves and of the consumers, the efficiency of the distributive sector must be raised as high as possible.
During the past year the Industrial Development Authority intensified its efforts to attract new industry from abroad and to encourage the establishment and expansion of home-based industries. Promotional campaigns involving both myself and board members as well as senior staff of the IDA were undertaken in a number of countries which appeared to offer good prospects. In 1967, 62 new industrial enterprises commenced manufacturing operations; 44 of these had external participation and accounted for 80 per cent of the estimated capital investment of £14.7 million and of the employment potential of 4,300. In addition, there were 26 new factories under construction at the end of the year and these involve capital investment of the order of £8.9 million and employment of 2,100 at full production. The rapid growth in industrial exports in recent years is due in large measure to the new firms established which are making an invaluable contribution to the nation's economy and have broadened our industrial base. This development in exports is all the more meritorious when regard is had to the rather depressed market conditions which prevailed in our main export outlet.
The Government appreciate that any worthwhile increase in the labour force must be generated principally from the expansion of the industrial sector and we look to the foreign enterprises to provide a significant proportion of this increase. The restraints on overseas investment imposed by the British and American Governments are certainly no help in our endeavour to quicken the tempo of development in industry. I have recently made representations to the United States authorities about the retarding effects which these constraints are likely to have in respect of United States involvement in assisting the growth of our economy and I am hopeful that action will be taken to alleviate the position in so far as industrial investment is involved. Arrangements have been made to ensure that, in the case of any sound industrial project, and shortfall arising from the restrictions by the United States Government on foreign investment will be met by finance from Irish sources.
In this connection, I am very happy to commend the ready response of Irish financial institutions to approaches made to them by the IDA. The wide range of financial incentives and facilities available for the establishment of manufacturing plants here, including the availability of ready-built factories at subsidised rents, should help to modify the impact of external investment restrictions. Furthermore, the expansion of the services of the industrial credit company and developments in the Irish banking world, resulting in the creation of new financial institutions specially geared to provide loan capital for industrial development, are particularly welcome at this stage and should be of assistance in meeting the problem.
In these circumstances, the review of the country's industrial incentives which has been taking place for some time past in the light of a report furnished by a leading international firm of consultants and of the findings of a report on a survey of grant-aided industry, is most opportune. The Government have now examined in detail the proposals which have been formulated for improving our "mix" of incentives and facilities to industry. I hope soon to provide Deputies with a report on the conclusions of the consultants engaged to contribute to the review of measures for industrial and related developments.
As already announced by me, it is intended that An Foras Tionscal will be merged with the Industrial Development Authority. The extended Authority will have the existing powers of both bodies and, in addition, resources of itself and in co-operation with other bodies to offer wider incentives and facilities for industrial projects. The details of these facilities will be set out in legislation to be introduced by me in due course.
As I have already announced, a new scheme of grants for re-equipment involving modernisation or improvement or expansion is being introduced. Under the scheme, approved expenditure on premises or equipment from 1st March, 1968, will be eligible for consideration for grant assistance at the rates of 35 per cent in the undeveloped areas and 25 per cent in the rest of the country excluding Shannon. The differentiation in grant levels is in line with the higher grant levels provided under the industrial grant scheme for new industrial development and is a reflection of the Government's policy of giving special assistance towards resolving the problems of the West. The processing of applications for assistance has already been put in hand in advance of the enactment of the necessary legislation. The new grants scheme is a recognition of the fact that industrial adaptation is a continuing process and of the tendency for adaptation measures to become more sophisticated and expensive. Re-equipment grants are available to industry in Northern Ireland and Britain and I am conscious of the need to ensure that Irish manufacturers do not suffer from any disadvantage in the matter of State aids with their main external competitors.
The IDA has been devoting increasing attention to the problem of stimulating the development of native industry and is doing its utmost to encourage Irish enterprises to expand or branch out into new activities. It has initiated an advertising campaign to bring to the notice of Irish manufacturers the many aids that are available to help them to expand. The Small Industries Programme under the auspices of the IDA is another practical example of the Government's interest in helping Irish industry. This scheme, which has been in operation on an experimental basis in selected areas for the past year, is designed to encourage industrial initiative and to provide facilities to enable the capable small producer to develop and expand. Encouraging progress has been made in the implementation of the scheme and this augurs well for the future. It is hoped to formulate proposals for the extension of the scheme throughout the whole country at the end of the programme test period which is about six months hence.
When introducing last year's estimate I referred to my anxiety that adequate measures should be taken to ensure that our native resources should be used to the maximum extent as the basis for new enterprises. I am very glad, therefore, that our plans in this regard have made significant progress. I announced recently that an eminent firm of international consultants had been engaged to advise the IDA on the direction development should take in the light of advanced technology. This firm has been asked to have particular regard to industries which could be based on our own resources.
The provision for An Foras Tionscal in the current financial year is £8 million, which is substantially the same as that provided last year, taking into account the Supplementary Estimate for £2.5 million taken with the main Estimate for my Department in November last. Actual payments made by An Foras Tionscal in 1967-68 amounted to £7 million approximately made up of —
£m. |
|
(1) Grants under the undeveloped Areas Acts |
1.03 |
(2) Grants for projects outside the Undeveloped Areas |
2.04 |
(3) Adaptation Grants |
3.26 |
(4) Industrial Estates |
0.67 |
Up to 31st March, 1968, An Foras Tionscal had approved grants amounting roughly to £56 million of which some £27 million has been paid. Outstanding commitments at 31st March last amounted to £28 million. In addition, up to 31st March, 1968, expenditure on the development of industrial estates amounted to over £1 million.
The total capital investment required for all new projects both in the undeveloped areas and elsewhere amounted to £109 million and it is anticipated that employment will be provided for about 44,000 persons.
The development of the industrial estates at Galway and Waterford continues to make progress. Factories for renting are now available at Waterford and the first factories will be available at Galway in August next. This should be a major inducement to industry to come to these centres. The availability of ready-built factories for renting can be an important aid to existing industrialists wishing to develop, but prevented from doing so by the inadequacy or unsuitability of their existing premises.
I have already announced that in the Government's view it would be beneficial to avail of the successful experience of the Shannon Free Airport Development Company Limited within the Limerick/Clare/North Tipperary Region. Accordingly, it has been decided that the company will function as an organ of industrial development within this region. The Company will report to me on all industrial and related matters, including those at the Shannon Industrial Estate, but will continue to be responsible to the Minister for Transport and Power on its tourism and aviation activities.
I have spoken earlier of the urgent need for the adaptation of industry to new conditions. Perhaps nowhere is this need more urgent than in the field of technology. The course which our industrial development has historically taken has unfortunately left us with a legacy of comparatively backward technology. It is a pleasure to acknowledge that there are some shining exceptions to this rule, but over the greater part of the industrial spectrum there is, unfortunately, a noticeable weakness in this field. The importance which the Government attach to the place of science in our economy as a whole is evidenced by the establishment some months ago of the National Science Council, from which I hope to receive valuable help in the framing of policy towards science in industry. The Institute for Industrial Research and Standards has been at work in this field for some years, and I intend to provide it with funds which will enable it to extend and intensify its activities in the years to come. Nothing that Government or State bodies can do, however, will be a substitute for action by individual managements. The State and its institutions may be able to lead industry to the water of technological progress but they cannot make it drink. It is essential that a more lively awareness of the need for technological progress should be developed amongst Irish industrialists.
The Institute for Industrial Research and Standards has, of course, been the principal instrument available to me to promote higher standards of technology in industry. The Board of the Institute has submitted to me a five-year plan for expansion in the years 1968 to 1973. The plan has emerged from consideration by the Institute, in the light of experience of its operation since the reorganisation in 1961, of the report "Science and Irish Economic Development" prepared by the Research and Technology Survey Team, in association with OECD, and the review of the activities of the Institute carried out by the international consultants, Arthur D. Little, Incorporated. The plan envisages considerable expansion in the Institute's technical facilities and the involvement of the Institute in new fields of activity on an increasing scale over the next five years.
Before coming to decisions in regard to the plan, I decided to seek the views of the National Science Council. I am satisfied, however, that even though a final decision in regard to the plan may not be possible for some time yet, further expansion of the more important facilities provided by the Institute to Irish industry should not be hampered for want of funds. I have, accordingly, decided to provide for a grant-in-aid of £500,000 in this financial year, which is an increase of £120,000 over the 1967-68 figure.
The Government have long been aware that firms need help to make the necessary changes to meet freer trading conditions and the technical assistance grants scheme continues to be available to firms who are taking the necessary steps to increase efficiency.
For the same reason, substantial financial support is given to the Irish National Productivity Committee and the Irish Management Institute. The tripartite constitution of the INPC representing management, labour and educational interests recognises that productivity increases will best come with the co-operation of all those interests. The IMI is carrying out very valuable work in the education of management which bears special responsibilities and meets special problems in the organising of industry. In addition, the Government have approved the running of a National Productivity Year commencing in September, 1968, so as to increase the consciousness of the need to make better use of our resources of finance, skill, materials and equipment. The promotion of the Year is being undertaken under the charge of a Steering Committee which is representative of the principal sectors of the economic life of the country. As increased productivity benefits all sectors I confidently appeal to all leaders in the community to lend their support to the organisation of National Productivity Year.
Continuing expansion of exports is still a key factor in our economic growth. Survival in conditions of free trade, coming steadily nearer, demands a growing industrial output and this in turn, especially in our circumstances, depends on expansion of exports. The smaller the country the higher the proportion of its output which must be exported to enable industry to pay its way and to build up its work-force. It is in this sense that the growth which took place in our economy in 1967 was export-led and it is for this reason that the trade figures for 1967 are so encouraging.
Total exports amounted to £314 millions, when exports from the Shannon Free Airport Estate are taken into account. This in itself is a record and the increase of the total of industrial exports, again including Shannon area, by £20 millions to £148 millions is the most significant feature of the achievement.
This must be regarded, however, merely as a good beginning. The effort must be continued and intensified and exporters must be urged to make the fullest use of the services provided by Córas Tráchtála.
Among the factors contributing to the export expansion in 1967 was the increased co-operative activity by exporters under the auspices of Córas Tráchtála. This included overseas trade fair participation, department-store promotions and sales displays in Córas Tráchtála's offices abroad. A greatly extended programme of overseas trade promotions has been planned for 1968 including further store promotions in the United States, Britain and Australia.
The encouragement of market diversification has always been part of the policy of Córas Tráchtála and devaluation of sterling in November last gave additional impetus to this policy. The official opening of Córas Tráchtála's new office in Australia was an important step in this direction and it is planned to further this by organisation of group selling missions to the Australian market during 1968. The Board have also recently announced the proposed establishment of a fulltime Paris office in the autumn of this year. An important undertaking by Córas Tráchtála in 1967 was the launching of the New Exporters Programme which aims at bringing into the export field as many as possible of the 1,300 firms not yet exporting. The Programme is based on careful preliminary research and is designed to bring to the notice of such firms, and to help them to utilise fully, the various services already available to exporters from Córas Tráchtála and to place at their disposal special extra services and facilities suited to their particular needs. This Programme is a vital step in the preparation for free trade, both from the point of view of the firms concerned and of the economy as a whole.
The importance of good design in industry can hardly be over-stated, particularly in this country where we are likely to find out best export markets in goods of high quality and known excellence. Design and proto-typing services are provided by Kilkenny Design Workshops in woven and printed textiles, silver and metal work, ceramics, candle-making and wood turning and these services are being increasingly used by industrialists. Major store promotions of Kilkenny designed products in New York and London during 1967 emphasised the importance of Kilkenny Design Workshops' role in raising the standard of industrial design and in establishing the reputation of this country's goods abroad.
Our prospects of early entry to the EEC have receded somewhat as a result of the failure of the Six member states of the Community to reach agreement on the opening of negotiations for the accession of the applicant countries. As Deputies will be aware, efforts have been made within the Community to find an agreed basis for an interim arrangement with the applicant countries, pending ultimate membership. These efforts have also encountered difficulties and at this stage it is not possible to say what will emerge from these discussions or what could be achieved by way of an interim arrangement. In any case our application for membership remains on the agenda of the Council of Ministers and the matter of our accession will continue, therefore, to be a live issue.
Following approval by Dáil Éireann, Ireland signed the Protocol of Accession to the General Agreement on Tariffs and Trade on 22nd November, 1967, and became a full member of that Organisation on 22nd December, 1967. In our future trading arrangements, we will have to have regard to the rules of the GATT. Membership of the GATT, however, confers significant benefits, notably the fact that it gives us a contractual right to all the tariff reductions and trade liberalisation negotiated in the GATT since its inception.
By far the most important of the trade negotiations undertaken in the GATT was the Kennedy Round which was completed last year. The outcome of the Kennedy Round was that the principal participating nations, including the United States, the EEC, Britain, the EFTA countries and Japan, agreed to reduce duties on most industrial products by an average of 35 per cent over the next four years. The remaining developed member countries including, for example, Canada, agreed to make somewhat smaller reductions in the same period on a less extensive range of products. The commitments made by countries other than Britain should, as they become effective, prove of substantial benefit to Irish exports of industrial products. They will provide our exporters with greater opportunities for expanding their business in traditional markets outside Britain. They should also have the effect of creating export possibilities for products which are at present not being exported in significant quantities and of stimulating exports to countries where our existing trade is relatively small.
There has been a marked increase in interest in minerals exploration during the past year. New applications for prospecting licences numbered 450 and more than doubled the figure for the previous year. There were 480 licences current at 31st March, 1968. Expenditure on current prospecting is estimated at £400,000 per annum.
Development of important discoveries to date is proceeding satisfactorily. The year 1967 was one of considerable progress for the lead/zinc/silver mine at Tynagh, County Galway, which commenced production at the end of 1965. The tonnage of ore treated in 1967 totalled 703,511 as compared with 545,693 in 1966. Concentrate output increased from 121,564 tons in 1966 to 190,985 tons. The feasibility of a tailings treatment plant to recover barite, copper, silver and lead from the tailings is under investigation. Exploration has disclosed a new ore body and the total reserves of the mine are now estimated as sufficient for 17 years of operation at the current milling rate. The Company estimated that royalties payable under the State Mining Lease for the year 1967 will exceed 700,000 Canadian dollars as against 420,000 for 1966. Production commenced at the copper/silver deposit at Gortdrum, Co. Tipperary in July, 1967, and at the lead/zinc mine at Silvermines, County Tipperary in mid-May, 1968. Promising lead/zinc deposits at Keel, County Longford are still under detailed investigation.
Exports from these mines are likely to amount to over £10 million by 1970 and further expansion may be expected from deposits likely to be disclosed by the intense exploration now taking place. Direct employment in mining is expected to reach 1,300 by 1970. The State will also benefit by increased revenue from royalties and dead rents.
The Consortium, which were granted in 1966 an option for a total period of 30 months to purchase the assets of St. Patrick's Copper Mines Ltd., Avoca, are continuing their feasibility study of the mine's potential with a view to resumption of operations. They have not yet indicated whether or not they propose to exercise the option.
Results of exploration for petroleum and natural gas within the State carried out by Marathon Petroleum Ltd. have not been encouraging. Activities in the past year were confined to a thorough re-examination of all geological and geophysical work conducted to date in order to determine the most prospective areas for oil and gas.
The increase in mineral exploration and development in recent years has highlighted the need for an adequate Geological Survey to provide the specialist services necessary in connection with this work. Considerable difficulty has been experienced in recruiting and retaining the necessary technical personnel for our Survey but a new Director for the Survey has been appointed and the steps necessary for the re-organisation and expansion of the Survey to meet present and future needs have been decided upon, and are being put into effect as rapidly as possible.
The Government have already decided to extend for a further period the operation of the Prices Stabilisation Order, 1965, and I will continue to exercise my functions under the Prices Acts to ensure that there are no unjustified price increases during the present year.
I need hardly emphasise the value of price stability to the economy as a whole and the continuing need to keep cost and price increases tightly in check. Recent major developments in the external scene, which have led to a very uncertain international situation, mean that we must take every care to safeguard the competitiveness of our products. The recent devaluation of sterling favours the expansion of exports to a number of markets and it is most desirable that the extra competitive edge given to Irish products by devaluation should not be lost through increases in domestic costs and prices.
I quite realise that, in certain circumstances, firms could not hope to survive without a compensatory price increase for substantial unavoidable increases in costs. However, I shall continue to expect firms to use all possible means to avoid or minimise price increases and to absorb part of the increases in costs, wherever they can reasonably do so. In this regard, I should hope that there will be an increasing consciousness on the part of both management and workers that any action which they take, through increasing productivity or otherwise, towards price stability is to their ultimate advantage and that of the whole community.
Alertness to prices on the part of the purchasers in general might also be mentioned as an essential aspect of price stabilisation. Here, too, I might re-emphasise the fundamental Government view that, in normal circumstances, there is no substitute for free and fair competition. I feel that the price control measures which I have taken to date have helped to promote competition, partly through heightening public awareness to prices, and I would urge both management and workers to play their part by continuing to seek greater mutual understanding with a view to minimising production costs and restraining prices. Only by such combined efforts can we hope to meet the growing threat of foreign competition and maintain the growth of our exports.
Subsidies have been paid on ships built in Verolme, Cork, Dockyard from the commencement of shipbuilding operations. A total of nine ships have either been built or are under construction and payments are made from time to time on the recommendations of a Special Committee.
The sum provided for such subsidies in the year 1967-68 was £350,000 of which £150,000 was paid. Total subsidy payment to 31st March, 1968, amounted to £1,176,000.
The Government have approved proposals for the reorganisation of the Cork Dockyard as recommended by the Special Committee following their examination of the report of a firm of consultants on the present activities and future prospects of the yard. These proposals envisage, as well as the continuation of shipbuilding activities, an extension into ship repair work and into certain fields of general engineering work not now subject to duty.
This new scheme will involve the provision of £1,390,000 from State funds, partly by subscription for ordinary shares, partly by loans and partly by grant. It also envisages (i) the continuation of subsidy at the existing level for a further five years, when the position will again, at the latest, be reviewed and (ii) the continued waiver of interest on loans to the Company until such time as it has reached the profit stage. The waiver of interest is, of course, a form of additional subsidy. This interest amounts to some £87,000 annually and the accumulated amount waived so far is £550,000.
The works involved in the new scheme for the dockyard are already well advanced and I am confident that the implementation of these proposals will, by fuller and more effective utilisation of the manpower and equipment available, lead to optimum economic operation having due regard to the intense competition which currently confronts shipyards throughout the world.
The new scheme of grants for Irish shipowners proposed by the Minister for Transport and Power will, I hope, also afford increased opportunities for the shipbuilding industry in this country.
In January of this year, the Government issued a statement in which they drew attention to the move towards the metric system which was already beginning to manifest itself in this country, urged all sectors of the economy to prepare themselves for the change-over which would be complete by 1975, and outlined the steps which the Government were taking to promote conversion. As Minister for Industry and Commerce, I have been charged with the general overseeing of the conversion process, with the exception of the construction industry. Outside the construction industry, conditions in this country do not in general require that any rigid time-table of metrication be imposed, and I intend to a large extent to leave it to each industry or trade — and often indeed to each individual firm within an industry or trade — to time its own moves. It will be my concern, however, to ensure that a general forward momentum is maintained and, where joint action within or between groups is required, that the necessary consultations and co-operative decisions are undertaken in good time.
In my speech on the Estimates last year, I ended on an optimistic note and the record growth in exports already mentioned fully justified my optimism. Each year is creating greater opportunities for industry but at the same time an increasing threat to the survival of firms which continue to be inefficient or non-progressive. It is essential for the growth of industry that prices of the finished products remain competitive and this can be achieved only with the greatest co-operation between organised workers and efficient management.
As the Minister responsible for the future growth of industry, and, may I add, the growth of industrial employment, I feel it is my duty to refer to the recent unhappy developments in the industrial sphere. Unofficial and lightning strikes which are becoming so prevalent in this country today, particularly in the essential services, are, I fear, going to worsen the position of workers in the industrial sector. The future development of the country depends on the growth of industrial employment which in turn depends on the growth of exports.
Millions have been spent by the Government on the development of industry. Our exports depend on our ability to fulfil our commitments promptly. Any delay due to labour unrest, no matter what the cause, could result in the loss of highly competitive markets. All our efforts and investment in the past could be nullified by lack of harmony between employers and employees and the trend of emigration, which has been gradually dropping, could be completely reversed. I earnestly appeal to all parties concerned to consider the harm likely to be caused to the community generally by unofficial strike action.
In accordance with undertakings previously given to Dáil Éireann, I wish to make a statement regarding the financial assistance given by the State to Potez Aerospace Ltd., and its associated company, Aviation Development, and on the present manufacturing activities of the company.
The initial decision to provide financial assistance from State funds for this enterprise was taken in 1961. The proposal was to produce in Ireland the Potez 840 a new short and medium-range aircraft seating 16-24 people. The aircraft had not been produced commercially at that stage but three prototypes had been built in France. Independent experts who were consulted regarded the plane as a first-class aircraft. Inquiries for the plane had been received from several countries and a provisional order for 24 planes was on hands from a US company.
The State assistance proposed for the undertaking was to be provided in two ways, an investment in the development costs of the plane — in accordance with Government practice in other countries — and a grant towards the cost of the building machinery, et cetera, to be provided in Ireland. The development costs involved design, drawings, special tooling, production of prototypes, et cetera.
Following negotiations with the principals, two companies were established, Aviation Development and an operating company, Potez Aerospace Ltd. The arrangement regarding the two companies provided that Aviation Development would finance the development of the aircraft; the special tooling, prototypes, et cetera, would be the property of that company, and a State investment would be made in it. Potez Aerospace Ltd., would be the operating company, manufacturing the aircraft.
The arrangement further provided that a fixed amount of the profit earned by the operating company, Potez Aerospace, would accrue to the development company, and that no dividend would be paid to the private interests in the operating company until the amounts subscribed in the development company had been recovered.
The development costs were estimated, at the time, at £3 million, and the Government undertook to subscribe through Taiscí Stáit a maximum of £1½ million, which was the cost of the special tooling. Messrs. Potez undertook that any excess in the tooling costs would be provided by them. The construction and equipment of the factory here by Potez Aerospace Ltd. was estimated to cost £926,000 — £696,000 of which was for the construction of the factory — and a grant towards this of £463,000 was approved.
The actual amount which has been invested by Taiscí Stáit in Aviation Development is £955,105. With regard to the grant position for the operating company, Potez Aerospace, the certified expenditure on buildings, machinery and equipment amounted to £824,513, including the buildings figure at £696,000 on which the grant was based, and the actual grant that has been paid amounts to £405,000 out of the £463,000 approved. On the basis of the certified eligible expenditure, a sum of £7,000 grant is still payable to the promoters.
The total amounts, accordingly, that have been contributed by the State to this undertaking are £1,360,105, consisting of an investment of £955,105 in Aviation Development and grant of £405,000 to Potez Aerospace. There must be strong reservations as to the value of the investment held by Taiscí Stáit in Aviation Development. The extent to which State money can be recovered out of this investment is being investigated. A further statement on this matter will be made in due course.
In September, 1965, it was estimated by consultants employed by the Industrial Development Authority that by that date £4,368,000 had been spent on the project. Allowing for the contributions from the State, which at that date amounted to £1,319,900, the private promoters had spent £3,048,000 from their own resources. It is estimated that up to the present time, approximately £5 million has been spent on the project. Making allowance for the total State contribution £1,360,105, sums totalling approximately £3,640,000 have been provided by the Potez sponsors of the undertaking. This amount includes £125,000, together with certain machinery, which have been provided by Messrs. Potez to Potez Aerospace Ltd. up to the end of 1967 in connection with the company's current activities on sub-contract work.
It had been anticipated at the outset that production of the P840 would commence in Ireland towards the end of 1963 and that a production level of four planes per month would be reached in 1964, giving, at that level employment to 1,000 production workers and 700 other staff, including draughtsmen, administration, et cetera. The building of the factory was completed in 1964.
In the following year it became clear that the project was running into serious difficulties. There were financial difficulties including the steeply rising development costs to which I have referred and a substantial increase in the price at which the aircraft would have to be sold. There were difficulties regarding delay in the production of the engine on which the plane had been based, and the development of an alternative. Most important of all was the emergence of other aircraft catering for the same market resulting in the loss of orders expected for the P840.
Four of these aircraft have been produced in France and sold there but there has not been any production of aircraft in the Irish factory. In 1966, the Government decided they would not be justified in issuing any further money or continuing their support for the production of the P840 or its successor plane.
The Industrial Development Authority has been in touch with leading aircraft companies throughout the world to interest them in associating themselves with the undertaking here. Serious interest has been shown by certain extern companies in this and contacts are continuing.
Early last year a new managing director took up duty with the company. He is a highly experienced aircraft engineer, with many years top level experience in the aircraft industry both in Britain and in Australia. The company then decided to enter the sub-contract business within the aircraft industry.
The Industrial Development Authority recently commissioned industrial consultants to examine this new aspect of the company's activities and to report on immediate prospects in this respect. I can say that the findings of the consultants and the report by the Industrial Development Authority are favourable. The consultants speak highly of the competence of the new management. They consider that the company's plans to develop their existing sub-contract work for the aircraft industry are sound and that the undertaking in this respect should become profitable before 1970. The project is subject to normal commercial risk but the prospects of success are good.
The company have already done acceptable work for important external aircraft firms and over half of their sales budget for 1968 is assured. Contract work, however, is, of its nature, subject to fluctuations according as work is being phased out or taken on— indeed I understand that a number of men were let go temporarily in recent months — but there are sound prospects that the work force of 113 now employed will be built up to 250 around the middle of next year and substantially expanded later on. The company are actually starting to recruit skilled workers and expect to reach an employment figure of 150 in a couple of months.
The development of this sub-contracting work has involved the training of new workers and the acquisition of additional plant and machinery. The costs of this were carried by the private promoters of this industry until the end of 1967, and have been substantial. An application for Government assistance towards this new development was made by the company. The application was supported by budgetary information in relation to the company's programme.
It was at this point that the Industrial Development Authority commissioned the study to which I have just referred. The recommendation made by the Industrial Development Authority is that further State finance to the extent of £258,000 should be provided for Potez Aerospace Limited to enable this sub-contracting work to go forward. A small portion of this, some £7,000, represents grant moneys remaining unissued to the company under earlier commitments and the balance represents —
A grant towards the excess of £69,000 by which the actual cost of the buildings exceeded the estimate of £696,000 on which the original grant was approved;
a contribution towards the cost of the necessary additional machinery;
the extra costs arising in the work through having to train workers; and
the provision of facilities for continuing training.
The Government have accepted this recommendation, and additional finance to the extent I have mentioned, that is, £258,000, will be provided. This additional finance is being provided by way of grant from An Foras Tionscal to the extent of £120,346 and by way of State loan to the extent of £137,654. This will bring the State's total contribution to this industry to £1,618,105, comprising grants of £525,346, loan of £137,654 and investment of £955,105. The additional money being provided will be used for the acquisition of plant, the provision of training facilities and support of the extra costs that are involved in the work through having to train workers.
In the present year and pending the receipt of the consultant's report, it was necessary for Potez Aerospace to get loan accommodation to keep the factory in operation, and a guarantee on behalf of the Government that State funds would be made temporarily available to cover advances to the extent of £90,000 was given. This sum of £90,000 will be discharged from the £258,000 which the Industrial Development Authority has recommended should be provided for the company, and is not additional to the latter amount.
The consultants have pointed out that, at the beginning of 1969, the company should be in a much stronger position to undertake still more contract work. By that time they will have
(a) a trained work force,
(b) a name and reputation for reliable quality work and,
(c) a profit earning position.