I move:
That a supplementary sum not exceeding £10 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1976, for the salaries and expenses of the Office of the Minister for Industry and Commerce, including certain services administered by that Office, and for payment of certain subsidies, grants and sundry grants-in-aid.
This Supplementary Estimate is needed in order to provide additional funds for some of the services operated by my Department or organisations for which I have responsibility and arising from commitments and circumstances which could not have been foreseen when the Estimates were prepared originally. The details are as follows:
Consultancy Services—The sum of £25,000 provided for under this subhead is required to meet the additional cost arising from the employment of consultants in connection with the negotiations in regard to the purchase of shares in the Bula mine.
Travelling and Subsistence—The additional £40,000 sought under this heading arises principally from an increase in travelling by the Department's inspectors, mainly on price control duties. It also reflects the additional costs which arose from increased air fares and subsistence and mileage allowances.
Institute for Industrial Research and Standards—The additional grant of £40,000 which I am proposing in this case is for administration and general expenses. This sum is required to enable the institute to meet the cost of their pay commitments arising from the implementation of the interim national wage agreement.
Subscription to International Organisations—In addition to the sum of £50,000 already provided for subscriptions to international organisations, a further £86,000 is required. This additional provision is intended to cover the cost in 1976 of Ireland's subscription to the European Space Agency under an interim agreement which covers the period up to the coming into full operation of the Convention relating to the agency; the convention would become fully operational following ratification by member countries. The subscription entitles Ireland to participate in the agency's educational documentation and future projects and technical research activities.
Benefits are expected to be derived in the form of industrial contracts to industry, universities and research institutions as well as providing access for Irish scientists to a broad range of the agency's scientific and technical information and services. As the House is aware, I dealt with this matter in detail yesterday when seeking approval for Ireland's signing of the interim agreement with this body.
Córas Tráchtála—This year's Estimate provided £3.350 million towards the Grant-in-Aid for Córas Tráchtála, who now require an additional £225,000. Following a very difficult period in which Ireland felt the full effect of the worst economic recession Western Europe has known since the Second World War, there are encouraging signs of a return to growth in our economy. Exports in the first ten months of 1976 amounted to £1,491 million and on the assumption that this trend will continue they will, by the end of 1976, have reached an estimated £1,790 million, an increase of 24 per cent over 1975 and representing an almost threefold increase in value since our accession to the EEC. This would be equivalent to a growth rate of about 4 per cent in volume of real terms.
Overall growth in export earnings in 1975 derived mainly from the agricultural sector while exports of manufactured goods decreased somewhat in volume terms. In 1976 the main impetus of increasing exports is once more coming from industrial exports, which in the first nine months of this year are estimated to have accounted for about two-thirds of total exports.
This encouraging position is a reflection of the determination and initiative of Irish industrial exporters, but it has not been effected without extreme pressure on the financial resources of Córas Tráchtála, who, conscious of the limitation on the availability of public funds in present economic circumstances, have curtailed their assistance programme in order to keep their supplementary requirements to a minimum. Nevertheless, the £225,000 now sought represents the minimum needed to enable Córas Tráchtála to meet the cost of providing an effective service to exporters throughout 1976. Of the £225,000 now sought, £120,000 is needed to offset the effects on CTT operations of the devaluation of sterling and a further £80,000 is to ensure the maintenance of the existing level of export activities planned for 1976. The balance of £25,000 is to pay the cost of implementing the 1976 Interim National Pay Agreement.
I am confident that Deputies will agree that there should be no diminution of the assistance and encouragement to be afforded to our exporters.
Kilkenny Design Workshops—The estimates for the current financial year provided £300,000 towards the Grant-in-Aid for the Kilkenny Design Workshops Ltd., who now require an additional £9,000. This additional sum is needed to cover the cost of implementing the interim national wage agreement.
Industrial Development Authority— The original allocation to the authority for administration and general expenses was £4,500,000. An additional £300,000 is required to meet salary increases as a result of the interim national pay agreement——£50,000—as well as the increased cost of advertising, promotion and marketing, provision of new offices in Europe and promotional literature, incurred mainly overseas as a result of inflation and adverse movements in exchange rates—£250,000.
Industrial Housing—I propose to include a new provision for £600,000 for industrial housing. This is a provision necessitated by a decision of the Government to transfer to the Industrial Development Authority the responsibility formerly carried by the National Building Agency for the provision and financing of industrial housing for new industry.
Since sanction has not been given to the authority to use money for this scheme out of their voted capital resources it has been found necessary to introduce a new subhead under which the authority will be given a voted repayable grant for this project.
Technical Assistance—From 1st January, 1976, the rate of grant in respect of a consultancy scheme or study visit abroad was reduced from 50 per cent to 33? per cent of the estimated cost of the consultancy scheme or study visit. Also a limit of £10,000 in respect of any one consultancy project was imposed. In the light of these alterations in the administration of the technical assistance grants scheme and having regard to the usual period of time which it was expected would elapse between the approval and payment of grants, it was estimated that a sum of £370,000 would be adequate to meet payments under the scheme in 1976.
However, over the past 11 months the time between approval and payments of grants has shortened with the result that grant payments have arisen, or are expected to arise in 1976 which had not been expected to arise until 1977 at the earliest. The net effect is that it is estimated that an additional £110,000 on the original estimate of £370,000 will be required to meet payments falling due before 31st December, 1976.
Shipping Finance Corporation Limited—This subhead provides for the payment to Shipping Finance Corporation Limited, which is a subsidiary of the Industrial Credit Company Limited, of an interest subsidy of the difference between the rate at which the corporation borrows and the rate at which they finance the construction of vessels at Verolme Cork Dockyard.
The extra provision of £40,000 is necessary to meet the increased expenditure arising principally from the increase in the Exchequer lending rate from 10 per cent to 12 per cent which led to a resultant increase in the interest subsidy on shipbuilding loans.
Bread and Flour Subsidies—Consumer subsidies on standard bread and household flour were introduced by the Government in July, 1975. The subsidisation of these products has resulted in higher consumption than was expected when the scheme was introduced. The cost of these subsidies, originally estimated at £10,750,000 for bread and £1,750,000 for flour, for the full year 1976, is now likely to amount to £14,000,000 and £2,125,000 respectively.
The House will appreciate that in the present difficult economic situation consumption of staple commodities such as bread and flour has tended to increase. Among other factors consumption of standard bread has been affected by the high price of potatoes and, probably, by a swing from fancy breads, which are unsubsidised, to subsidised standard bread.
Additional sums of £3,250,000 for bread subsidy and £375,000 for household flour subsidy are required to meet the increased cost of these subsidies during the current year.
The total amount of the increased expenditure is £5,171,000 but there is an offset of £5,170,990 in savings made up of £2,085,990 on subhead I.2—Industrial Development Authority; capital expenditure on grants to industries—£3,000,000 on subhead T —Investment in mining concerns— and a surplus of £85,000 from Appropriations in Aid. I should mention however that the saving on the IDA capital expenditure does not mean any falling off in the authority's level of activity in providing grants for industry but is merely a deferment in the payment of grants for industry because some had not reached payment stage within the year due to technical problems. The saving of £3 million on investment in mining concerns arises from the fact that the findings of the board of consultants who were employed to assess the value of the Bula mines were not available in time to involve any payments in the current year. Accordingly, the net amount required is £10.
I have explained briefly in the case of each subhead the reason for the increased expenditure but I am, of course, prepared to expand on these explanations if Deputies consider this necessary or desirable.
I recommend this Supplementary Estimate to the House.
